Does Quality Matter in the Iron and Scrap Trade?

This paper sheds light on the iron and steel (IS) scrap trade to examine how economic development affects the quality demanded of recyclable resource. A simple model is presented that show a mechanism of how scrap quality impacts the direction of trade due to comparative advantage. We find that economic development in both importing and exporting countries has a positive effect on the quality of traded recyclables. Developed countries that intend to improve the domestic recovery of recyclables should raise the quality of separating recyclables while developing countries should tighten environmental regulations to help decrease the import of recyclables that cause pollution.

Is there any premium for unobservable quality? : a hedonic price analysis of the Malagasy rice market

This paper examines if consumers pay a premium for unobservable quality in the absence of quality standards and/or quality grading systems and, if so, how they assess that unobservable quality, using a rice retail market in Madagascar as an example. In Madagascar, the lack of quality standards and/or grading systems for rice makes is considered to be one of the causes of the rice market's spatial disintegration. Thus, quality standards and grading systems will be necessary to increase the market's efficiency. We hypothesize that consumers and retailers use product origin and rice name as observable indictors of unobservable quality and test the hypothesis using hedonic price regressions. We find that the interaction terms of product origin and rice name significantly affect the price after controlling for both observable quality and spatial and temporal price variation, but that the contribution of product origin and rice name to rice price variation is smaller than spatial and temporal factors. We thus conclude that consumers pay a premium for unobservable quality throughout Madagascar. This finding implies that quality standards and/or grading systems will work in the Malagasy market and that improving market infrastructure such as roads and storage will make them even more effective.