Analysis of Marketing Margins in Eco-Labeled Products
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This article aims to explain the marketing margins in the eco-labeled products market in Thailand and the Philippines. It focuses on labeled organic agricultural commodities that are commonly exported especially in Europe, which has demand for this type of products. Understanding the interplay of economic variables influencing marketing margins in the eco-labeled market as compared to its conventional counterpart is relevant in understanding how this growing niche market works. The analytical framework developed by Gardner (1975) was used in the analysis to provide a basic understanding of how marketing margins behave. Econometric results show that changes in demand rather than the changes in supply explain most of the variations in margins particularly in labeled commodities. Contrary to what was expected, the coefficients of marketing costs and their significance are generally higher in conventional commodities than in labeled commodities.