Effects of Country-of-origin Labeling (Cool) in the U.s. Meat Industry

Abstract

The study investigates the effects of Country-of-Origin Labeling (COOL) in the U.S. meat industry. Theoretical analysis is provided about how domestic producers' derived demand would change due to the COOL. The COOL impacts on domestic livestock producers are estimated empirically using three-sector equilibrium displacement model under various scenarios of COOL cost, market power, and own and cross price elasticities.Empirical results indicate that beef and pork producers will be worse off unless consumer demand increases significantly for the U.S. COOL products while the COOL policy makes the own price elasticity of domestic products significantly more inelastic and the cross price elasticity more elastic.