Fair trade

Leonardo BecchettiUniversity of Rome Tor Vergata

“In recent years we saw many times government and corporations forced to reconsider and change their policies for the bottom up pressure from grassroot movements and civil societies… This is the kind of pressure we need in order to achieve the Millennium Development Goals“[1]

Kofi Annan UN General Secretary Quote from “La Repubblica” 18 December 2002.

Structure of the presentation

Facts Debate Competition effects The demand of consumers The impact on producers

A definition

Fair trade schemes use consumption and trade in an aim to promote inclusion of poor farmers in global product markets through a package of benefits which include anti-cyclical mark-ups on prices, long-term relationships, credit facilities and business angel consultancy to build producers’ capacity

NOT TO BE CONFUSED WITH fair trade generally referring to the absence of duties, controls and dumping practices in international trade (Mendoza - Bahadur, 2002; Bhagwati, 1996; Stiglitz, 2002; Suranovic, 2002)

IFAT criteria

Creating opportunities for economically disadvantaged producers. Transparency and accountability. Capacity building. Promoting Fair Trade. Payment of a fair price. Gender Equity. Working conditions.

(healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context.)

The environment. Trade Relations.

Fair Trade Organizations trade with concern for the social, economic and environmental well-being of marginalized small producers and do not maximise profit at their expense. They maintain long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. Whenever possible producers are assisted with access to pre-harvest or pre-production advance payment.

Prezzi medi mensili in USD per 1000 Kg di fave di cacao

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Cocoa world prices

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Coffee world prices (Us cents for 100 coffee pounds)

Euro %

To the farmer 0.55 22.6

To UCIRI general expenses 0.16 6.4

A UCIRI social projects 0.13 5.5

A UCIRI biological component 0.08 3.4

Tranportation costs to the transformer 0.06 2.4

Tariff and custom expenses 0.04 1.7

Toasting and packaging 0.46 18.8

Distribution costs and financial expenses

0.13 5.2

Importer (CTM) margin 0.29 12

Retailers (World shops) margin 0.54 22

Sale price 2.45 100

VAT 0.49 20

Total 2.94

Price of 250 gr UCIRI - Union Comunidad Indigenas de la Region de Istmo (Messico) -coffee

Price breakdown of a FT product

FT growth

in 2005, sales of products certified as fair trade ones were estimated at €1.1 billion worldwide, a 37 % year-to-year increase

European FT net sales grew by 20 percent per year in the last five years and that in 2005,

Significant market shares in specific sectors such as bananas in Switzerland (47%) and the ground coffee (20%), tea (5%) and bananas (5.5%) in the UK

Institutional support

European Parliament resolution on Fair Trade and Development (July the 6th 2006) asking the European Commission a recommendation and steps up public support for Fair Trade

Rapporteur, MEP Frithjof Schmidt, "This resolution responds to the impressive growth of Fair Trade, showing the increasing interest of European consumers in responsible purchasing.”

Peter Mandelson, EU Commissioner for External Trade, "Fair Trade makes the consumers think and therefore it is even more valuable. We need to develop a coherent policy framework and this resolution will help us."

Fair Trade and the solution to market Fair Trade and the solution to market failures (1)failures (1)

• Theoretical and empirical research shows that Fair trade provides solutions to several types of “market failures”:

• 1) Prefinancing small producers, contributing to the solution of their credit rationing problems and breaking the monopoly of local moneylenders

• 2) Investing surplus in local public goods which are fundamental prerequisites for self-development (education, health , etc)

• 3) Insuring producers from price fluctuations

• 4) Breaking monopoly rent of local intermediaries which brings 4) Breaking monopoly rent of local intermediaries which brings prices to monopsonistic levels below the value of the marginal prices to monopsonistic levels below the value of the marginal product product

Fair Trade and the solution to market Fair Trade and the solution to market failures (2)failures (2)

• For points 1 and 4 FT acts compensates the absence of a functioning antitrust in these markets and deserves the “Adam Smith” prize…

  • 5) Creating stable partnerships and providing services

which ease access to our markets

• 6) Reducing child labour not through bans but through integration of household income

 • 7) Creating indirect effects and pushing profit corporations

to be more socially responsible (see the three pillar story)

Critique 1: the price distortion fallacy

A main criticism to fair trade is that it would generate a price distortion on the market price of a given commodity, say coffee, providing a wrong incentive to producers to invest inefficiently resources for a product for which there is scarce demand.

Reply to the critique

First, in many cases the exchange between producers and intermediaries does not occur in a competitive framework. In such case the market price is a distortion because it does not reflect the productivity of producers but their lower market power.

Second, the food industry produces highly differentiated products with a continuous wave of innovations which create new variety. There is not one coffee but many different coffee products which differentiate each other in terms of quality, blends, packaging and now also “social responsibility” features. For any of these products exists a specific and different market prices which is determined by consumer tastes for that kind of products (and that for fair trade coffees does not seem to be weak or declining). In this sense fair trade is an innovation in the food industry which creates a new range of products.

Critique 2: difference between socially responsible consumption of FT products and charity

LeClair (2002) argument

A smaller donation creates

the same welfare improvement

of consumer than the price

premium but does

create distorted incentives

Reply to critique (2) Difference between socially responsible consumption of FT products and charity

STRONGER ARGUMENTS only the fair trade purchase generates the positive indirect

effects on social responsibility of traditional producers;

fair trade, differently from charity, provides a minimum wage measure needed to solve market failures in case of monopsonistic labour markets (or may reduce intermediary rents in local transportation market) (donations have no antitrust effects);

Fair trade create a new variety of product and satisfies Fair trade create a new variety of product and satisfies tastes of fairness or inequity aversion of consumers tastes of fairness or inequity aversion of consumers

Difference between socially responsible consumption of FT products and charity(3)(3)

                              WEAKER ARGUMENTS fair trade contributes with anticipated financing to reduce uncollateralised producers’ credit

constraints together with their dependence from monopolistic local moneylenders;

fair trade channels provide learning through export, price stabilization services and promote inclusion of unskilled but potentially productive workers (producers) in international labour (product) markets;

Andreoni (1989) argument of “warm glow” preferences

charity does not necessarily reward productive people; the FT bottom-up mechanism may be more efficient than government subsidies in targeting the

poor; joining consumption and social transfer reduces transaction costs of aid to the poor with respect to the traditional tax financed government aid scheme.

FT, CSR and globalisation

social responsibility emerged as an “endogenous reaction” of the socioeconomic environment to the fall of the old system of checks and balances through which corporations, domestic trade unions and domestic institutions ensured the joint pursuit of economic development and social cohesion.

The ICT revolution and the ensuing global market integration was the leading force which caused the crisis of the old equilibrium.

The positive consequence of the new equilibrium is that, while citizen’s action cannot be seen as a substitute but as a complement of new (global or globalization consistent) governance rules, it represents a step ahead in economic democracy.

With socially responsible consumption citizens learned to vote everyday with their portfolio, thereby significantly increasing their degree of active participation to the political and economic life.

Their bottom-up pressure stimulated socially responsible practices of corporations which aimed to conquer the emerging group of “concerned” consumers.

FT and CSR beyond “reductionism”

Beyond the dichotomy of the self-worker and the self-consumer Positive market share and empirical findings of nonzero

willingness to pay for the ST features of FT products reveals that consumers are not homines economicy or “rational fools” (Sen, 1976)

Among alternative microfundation of economic agents our findings seem to support especially altruism, fairness and inequity aversion (Fehr-Schmidt, 1999; Fehr and Schmidt, 2002; Sobel, 2002) or long-sighted self interst [and less reciprocity]

FT and the rise of “social market entreprises”

Firm with a specific social goal (promoting inclusion) which compete in the market with profit maximisers and are “contagious” generating partial imitation

SME overcome the traditional dichotomy between creation of economic value (with likely negative externalities) and redistributive or inclusive policies aimed to correct the distortions introduced in the moment in which economic value is created

They increase work satisfaction of intrinsically motivated workers

Fair trade and the reputation of the market

Does the market erodes social virtues ? “commodification” (Marx and Hirsh, 1976), “depleting moral legacy” and “tyranny of small decisions” (Hirsch, 1976) crowding our of intrinsic motivations (Frey)

The market has not always negative moral consequences: moral consequences of growth (Friedman, 2006), self generating flow of altruism (Arrow, 1972), “countermovement” (Polanyj, 1957)

FAIR TRADE REVOLUTION: creates value with values and uses “commodification” to generate social values

“Pioneers” and second movers: contagion effects of fair trade

BBC 7 October 2005 (1)

Nestle has launched a fair trade instant coffee as it looks to tap into growing demand among consumers. The firm is the first of the four major global coffee firms - the others are Kraft, Sara Lee, and Procter & Gamble - to put out such a product in the UK.

Ethical shopping is an increasing trend in the UK, as consumers pay more to ensure poor farmers get a better deal.

But the involvement of a leading multinational has proved controversial among the aid and development workers.

'Turning point' The decision represents a turn-around for the Fairtrade Foundation which has endorsed

the move. This represents a fundamental, serious commitment to help some of the poorest

farmers Nestle"This is a turning point for us and for the coffee growers," said Harriet Lamb, director of the Fairtrade Foundation, which helps regulate and mark fair trade products. "This just shows what we, the public, can achieve," she said. "Here is a major multinational listening to people and giving them what they want."

Development charity Oxfam cautiously welcomed the move, but said that it was only a small step in the right direction.

BBC 7 October 2005 (2)

Fair Trade is quite clearly growing enormously in terms of its awareness," said Fiona Kendrick, Nestle's UK head of beverages.

"Specifically in terms of coffee, fair trade is 3% of the instant market and has been growing at good double-digit growth and continues to grow."

Other companies have also recognised the importance of ethical brands.

Proctor and Gamble launched a FairTrade coffee brand in the United States in 2004 under its Millstone label.

The model

Ethical distance is the distance in monetary terms between the transfer, which is considered fair by the consumer (indicated by his location on the segment) and the transfer provided by the producer (indicated by producer’s location on the segment).

The coefficient t maps this objective measure into consumers preferences.

Why horizontal and not vertical differentiation

heterogeneity violates a fundamental element of vertical product di.erentiation models in which more of a given product feature is better for everyone.

Empirical support for our hypothesis on the heterogeneity of individual attitudes toward social responsibility is confirmed by descriptive evidence from the World Value Survey database - 65,660 (15,443) individuals interviewed between 1980 and 1990 (1990 and 2000) in representative samples of 30 (7) different countries.

In both surveys around 45 (49) percent of sample respondents declare that they are not willing to pay in excess for environmentally responsible features of a product.

The same survey documents that the share of those arguing that the poor are to be blamed is around 29 percent in both surveys. This simple evidence confirms heterogeneity in the willingness to pay for social and environmental responsibility, rejecting the assumption that more of SR may be better for all individuals.

Why asymmetric costs of ethical distance

Empirical findings discussed in the previous slide clearly evidence that a nonzero share of consumers which are not willing to pay extra money for the social or environmental features of the product exists.

These consumers are either indifferent (asymmetric distance) or even find a disutility in buying a product above their ethical standards (i.e., they may believe that this money is waisted) (symmetric distance).

Even though we believe that the asymmetric distance hypothesis is the most faithful representation of consumers’ preferences on SR, the simmetry/asymmetry of distance costs may be open to debate.

The model

Three differences with respect to the traditional vintage of Hotelling (1929), Economides (1986), D’aspremont et al. (1976) models of horizontal product differentiation

i.      the different goals of the two: PMP is a profit () maximising and FT is a zero profit: he fixes a price Pb=w(1+s) and chooses his ethical location s

that maximises transfers to the South.   ii.      the asymmetric costs of "ethical" distance only consumers buying from PMP have costs, so the consumers indifference

condition is:  -PA-t(x-a)2=-PB            iii.      the lack of independence between ethical location and prices.

The specific nature of the two players in our game, the relationship between the (ethical) space and price variables and the asymmetry and linearity in the costs of ethical distance are all features which differentiate our game from the traditional horizontal differentiation game in which equilibria may be found only when price and location are chosen sequentially and not simultaneously (Anderson, 1987; Lambertini, 1997).

The switch from maximum ethical differentiation to partial ethical imitation

Proposition 1. If the PMP jointly chooses price and ethical location after the socially responsible entry, the model switches from an equilibrium with maximum ethical differentiation with no imitation to an equilibrium with partial ethical imitation when consumers marginal costs of ethical distance are higher enough than producer costs of ethical imitation t=3ws/4 is the threshold of consumers costs of ethical distance which triggers PMP imitation

The dogmatism paradox

Proposition 3. The fair trader optimal position on the SR segment in the simultaneous game with the PMP is more “socially responsible” when he maximizes his own and not total market transfers to the South. In this case, and under given parametric conditions, such position may reduce the likelihood of PMP imitation and total SR transfers to the South.

Rationale: If the FT goal is to maximise his own transfers he will be more radical in social responsibility, while, if the goal is to maximise total transfers to the South, he will be more pragmatic and reduce his own activity in order to elicit more imitation from the PMP.

Does the PMP adopt the same level of imitation without the presence of the FT ?

The PMP alone, if free to choose both prices and ethical location, behaves exactly as when the FT is on the market under the assumption that the FT exogenously set PB = Rp.

Shall we conclude that the FT is not at the root of the partial SR choice of the PMP? We say no for two reasons.

First, it may be assumed, as it is likely to have happened in the reality, that information on consumers tastes is ex ante incomplete, that the existence of consumers preferences in favour of specific products such as FT products is revealed only once these products have been present in the market.

Second, but this goes behind this specific model, it may be reasonably assumed that consumers sensitivity to the SR issues grows in SR consumption habits. Becchetti, Solferino and Tessitore (2005) find that, under reasonable parametric conditions, the PMP alone chooses a significantly lower level of SR with respect to the case in which he reacts to FT’s entry.

Recent evidence of it in the empirical analysis of the determinants of FT expenditure may be found in Becchetti and Rosati (2007). In a related paper which incorporates the law of motion of consumer tastes for SR

The welfare paradox: a (duopolistic) market which creates more social value than the benevolent planner !!

The welfare paradox (2)

all equilibria in the game exhibit too much social responsibility from a domestic welfare perspective. Such result is crucially affected by our assumption of a duopolistic market and by the complementarity between prices and ethical location.

the result of excess social responsibility might be reversed if we incorporate preferences of South producers to the social planner problem. In that case we might obtain an interesting result of an oligopolistic market equilibrium which attains the international socially optimal level of social responsibility. We would have therefore an (oligopolistic) market mechanism based on the strategic complementarity between prices and social responsibility which compensates with entirely private and voluntary mechanisms the absence of an international social planner

In the dynamic model the incumbent is more aggressive …

If consumers’ tastes for social responsibility vary according to a law of motion in which “ethical concern” is positively affected by consumption habits (and more if the product is bought in the world shops) the incumbent will try to conquer a higher share of the market in order to reduce the process of increased sensitiveness to the issue

Problems in future expansion

Informational asymmetries and conflicts of interest are a serious problem

The CSR element of the product is not and “experience good”. Labels are essentials

Conflicts of interest in the fair tradevalue chain

ATOs

World shop (exclusive retailers)

Flo label

Imitators

Supermarkets

Ifat label1

23

3

45

Does fair trade maintain its promises: an impact analysis on Kenyan farmers

The four groups (1)

BIO: organic farmers with long term relationship with Meru Herbs

CONVERSION: farmers with long term relationship with Meru Herbs under conversion to organic production

ONLY FRUIT: fruit farmers who have a commercial relationship with Meru Herbs that is not fully a Fair Trade relationship

CONTROL: no relationship with Meru Herbs but benefits from the irrigation project

Methodological issues (1)

Composition effects and heterogeneous characteristics of the four groups may influence some of our findings. I.e. Control group farmers may have lower household consumption expenditure because they have on average a lower number of children, a slightly lower surface of cultivated land and are relatively younger (if age and, presumably correlated, working experience have some effects on performance and standard of living).

Endogeneity and a selection bias in the affiliation to Meru Herbs seem difficult, in principle, to disentangle from the concurring interpretation of the positive impact of FT.

Even though Meru does not create access restrictions for membership, a process of self selection may equally arise if the opportunity of affiliation is taken by farmers with more entrepreneurial spirit (mandalai in Swahili) and if such variable is related with socioeconomic indicators.

Methodological issues (2)

If the Meru Herbs project generates positive spillovers in the area, differences between the three project groups and the control group may result flattened, thereby leading to an underestimation of the FT contribution.

A project survivorship bias may also arise since the most successful farmers may be likely to get out of the project.

Results on the Price premium (1)

i) FT, in cooperation with Meru, introduces four new products (mango, karkade, guava and lemon) which are cultivated only by affiliated farmers.

It is therefore impossible to make a price comparison with the control group on these products; i) Sorghum, maize, millet and okra are produced by all of the four groups and sold only on the local market, not to FT. For these products there is no evidence of better price conditions for affiliated farmers; ii) pilipili (red pepper in Swahili) is the only product which is both sold to FT by affiliated farmers and produced (and sold through traditional trade channels) by control group farmers. For this product the price premium is strong and significant (see also confidence intervals in Table II).

On Price premium (2)

Three main findings may be drawn from price comparisons: i) the price premium seems to exist when we compare products cultivated by all farmers and for which affiliated farmers have the additional FT trading channel (though our observation is based on only one product); ii) a more generalised effect of FT in the area seems to be product diversification rather than price premium; iii) FT and Meru affiliation does not help to reinforce (as it often happens when producers’ organisations are formed) bargaining power when selling products on local markets (affiliated farmers do not have significantly better price conditions on the four products sold on the local market).

To control for Meru Herbs selection biases, we specify a treatment regression model in which the previously estimated model equation is re-estimated together with a selection equation in which affiliation/no affiliation to FT is regressed on a set of individual characteristics.

The estimated two equation model is:

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5

9 10 11 12 13 14 151

16

hom

i

l ll

i

Perform Income Workyears Male Birth Married Schoolyears Famsize Catholic

Tharaka Meru Acres Employees Othincome People e Noothact Cattle

Ftrade

(7.1)

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9 10 11 12

i

i

Ftrade Income Workyears Male Birth Married Schoolyears Famsize Catholic

Tharaka Meru Acres Employees v

(7.2)

In the two equation system (v) and (ε) are bivariate normal random variables with zero mean and

covariance matrix 1

. The likelihood function for the joint estimation of (7.1) and (7.2) is

provided by Maddala (1983) and Greene (2003).

General interpretation of results on higher price and income satisfaction

Higher price and income satisfaction i) combination of in-kind benefits which are now described in detail in the paper ii) the reduction of risk that affiliated farmers have for the more diversified product

portfolio, the stability of prices and purchases from Meru Herbs and from Fair Trade in the export channel (a lower risk premium may be asked by farmers for their activity which implies relatively higher price and income satisfaction for a given level of price and income)

Higher weekly food consumption expenditure i) in kind services of FT reduce investment costs of farmers and ii) the reduction of risk generated by product diversification and price stabilisation raises permanent income (i.e. reducing current or expected precautionary savings in monetary or nonmonetary forms), thereby increasing the level of consumption for a given monthly wage

IN KIND BENEFITS Meru Herbs i) provides complimentary seeds and organic fertilisers to farmers; ii) sells

them fruit trees for production at subsidised prices; iii) organises complimentary training courses in the implementation of organic farming techniques and iv) offers the services of two of its employees (the Farmer manager and vice-manager) with the specific task of supervising and providing technical assistance to the affiliated farmers.

Conclusions (1)

Over 4,000 small-scale and marginalised producer groups in more than 50 developing countries participate to Fair Trade supply chains. More than five million people in Africa, Latin America and Asia benefit from Fair Trade terms (Fair Trade Advocacy Office, 2005).

It is therefore not cautious to draw general conclusions about the FT impact from an analysis developed on just one of these projects.

Findings from this paper may at the most give an indication on whether the partnership with Meru Herbs was a good choice for FT and whether the joint impact of FT criteria and Meru Herbs activity had a positive influence on affiliated farmers.

We believe, however, that our results, even though project specific, provide interesting evidence to the Fair Trade debate.

Conclusions (2)

Fair trade affiliation seems to be associated with superior capabilities, economic and social wellbeing in the case of the observed Kenyan farmers, but also that more can be done on the human capital side.

In the project that was investigated, fair trade is definitely responsible for crop diversification, creation of an additional trade channel and higher price satisfaction of marginalised producers.

Fair trade and Meru Herbs affiliated have also been shown to have relatively higher food consumption expenditure and dietary quality, with the latter being seemingly related to the previously mentioned FT direct effects on price satisfaction.

Another interesting result is the marked difference between fair trade affiliated and control farmers in terms of income satisfaction. Such difference is not only due to the higher perceived income, but also to a relatively lower desired income which is likely to be determined by a higher supply of complimentary (or cheaper) goods, services and technical assistance.

Among these findings, those of higher living satisfaction and superior nutritional quality seem to be the most robust since the two variables are positively related to the seniority of FT affiliation and are robust to controls for the FT selection bias in a two equation treatment regression model.

Conclusions (3)

A less clear cut result is the one related to the impact of fair trade on human capital investment. We may note in this case the positive (negative) association between affiliation to the younger Conversion project and human capital investment (child labour), but there is no significant association of the same variables to affiliation to the other projects.

Overall, our findings seem to indicate that FT works quite well in the static perspective and that its specific features directly contribute to the improvement of farmers wellbeing, but also that the dynamic aspect (support for human capital investment) may be further improved.

In addition to these specific results, we believe that a fundamental contribution of this paper consists in the development of a full blown methodology for impact analysis which can be usefully applied to similar projects. Such methodology tackles all phases of the impact study providing guidance for the survey design, the construction of the control sample and the descriptive and econometric analysis which can be developed from survey answers.

Further work in this direction may be needed to enrich the dataset and allow the researcher to disentangle the pure impact of FT affiliation effect from the local producer and control sample selection bias effects.

Global social preferences and the demand for socially responsible products: empirical

evidence from a pilot study on fair trade consumers

The treatment regression model

Demand for FT products depends from a series of factors including as crucial one the awareness of FT criteria

Awareness of FT criteria is in turn conditioned by a series of additional factors

The treatment regression model of demand for FT products

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3

7 81 1

log( ) log log log log

log

i i i i i

m

i k k k i ik k

Y Male Distance Income Age School FidelWS

FidelLS Awareness Macroarea X

*1 0

0

if AwarenessAwareness

else

* 'Awareness Z v where

1

Where v and ε are bivariate normal with

mean zero and covariance matrix

Additional insights from the treatment regression model

By estimating a demand function without the treatment regression model …

The (positive) direct income effect on expenditure is underestimated (as it incorporates the negative impact via lower awareness of FT criteria)

The (positive) direct age effect on expenditure is underestimated (as it incorporates the negative impact via lower awareness of FT criteria)

Conclusions from these insights

High potential for expansion if awareness of FT criteria grows among adults and wealthier

Cohort effect: potential for expansion related to the aging of the current and relatively more aware young generation

GENERAL CONCLUSIONS (1)

Future development of FT crucially depends on two issues :

i) the capacity of investing in education and promoting awareness of FT criteria;

ii) the solution to the problem of geographical distance and distributional bottlenecks.

Fair trade and Keynes prophecy

"For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.“

John Maynard Keynes"The Future", Essays in Persuasion (1931) Ch. 5

With FT and SMEs which create economic value in SR way fair is also useful and we can see the light beyond the tunnel …

Leonardo BECCHETTI

La felicità sostenibile

Economia della responsabilità sociale

Donzelli editore

In uscita a Settembre 2005

Author’s references (1)

Author’s references (2)

L.Becchetti F.C. Rosati, 2006, Globalisation and the death of distance in social preferences ad inequity aversion: empirical evidence from a pilot study on fair trade consumers, CEIS Working Paper, n.216 and World Economy (forth.)

L. Becchetti, S. Di Giacomo, D. Pinnacchio, 2006, The impact of Social Responsibility on productivity and efficiency of US listed companies, CEIS Working Paper n.210 and Applied Financial Economics (forth.)

Becchetti L., Trovato, G., 2005, The determinants of child labour: the role of primary product specialization,CEIS Working Paper, n. 170 Labour 

Becchetti L., Giallonardo L., Tessitore E., Corporate Social Responsibility and Profit Maximizing Behaviour, CEIS Working Paper (forth.)

Becchetti, L., Costantino M., The effects of Fair Trade on marginalised producers: an impact analysis on Kenyan farmers, CEIS Working Paper (forth.)

Becchetti, L. Solferino, N., 2003, On ethical product differentiation, CEIS Working Paper n.188 Becchetti, L. Solferino, N., 2003, A virtuous interaction between pressure groups, firms and institutions: a

subsidiarity principle in a horizontal differentiation model CEIS Working Paper n. 194. Adriani F. Becchetti L., 2005, Fair trade: a “third generation welfare” mechanism to make globalisation

sustainable. Becchetti L., Giallonardo L., and Tessitore M.E., 2006, Consumer driven market mechanisms to fight

inequality: the case of CSR/product differentiation models with asymmetric information, ECINEQ working paper forth.

Leonardo Becchetti, Luisa Giallonardo, and Elisabetta Tessitore, 2006, "Consumer driven market mechanisms to fight inequality: the case of CSR/product differentiation models with asymmetric information" ECINEQ working paper n. 50

Becchetti L. Gianfreda G., 2007, Consumer driven market mechanisms to promote equity and inclusion, CEIS working paper forth.

Policy suggestions

Social advertising on CSR CSR oriented procurement rules From discriminatory to preferntial VAT “Social track” of the value chain