Are Fair Trade Goods Credence Goods? A New Proposal, with French Illustrations

Summary

In the literature, Fair Trade (FT) goods areusually associated with other products differentiated byprocess attributes such as organic food, genetically mod-ified (GM) food or child labour-free clothing. All of theseproducts are regarded ascredence goods. This classificationrefers to the simplified definition of credence goods,which describes product attributes which consumerscannot evaluate, even after having consumed the good.Focusing on the characteristics of FT goods, this articleproposes a reassessment of the link between FT goods andcredence properties as defined by Darby and Karni. Wefirst demonstrate that (1) the usual classification masksimportant particularities of FT goods compared to othergoods with process attributes and (2) the full definition ofcredence goods may even provide a better description ofthe quality of FT goods. However – and this is our secondtheoretical contribution – the lack of consensus amongexperts concerning FT standards and their level of effi-ciency encourage us to consider FT goods asindeterminategoodsas defined by Lupton. This result leads us to suggesta new typology of product attributes summarized in aninnovative diagram. It sheds light on how competitionbetween the different FT approaches works and why theFT market is still confined to a niche, if not threatenedwith collapse. We mainly illustrate our theoretical analysiswith observations relating to the French FT market andinstitutions.