TY  - JOUR
AU  - Dranove,David
AU  - Jin,Ginger Zhe
TI  - Quality Disclosure and Certification: Theory and Practice
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15644
PY  - 2010
Y2  - January 2010
UR  - http://www.nber.org/papers/w15644
L1  - http://www.nber.org/papers/w15644.pdf
N1  - Author contact info:
David Dranove
Department of Management and Strategy
Kellogg School of Management
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
E-Mail: d-dranove@kellogg.northwestern.edu

Ginger Z. Jin
University of Maryland
Department of Economics
3115F Tydings Hall
College Park, MD  20742-7211
Tel: 301/405-3484
Fax: 301/405-3542
E-Mail: jin@econ.umd.edu
AB  - This essay reviews the theoretical and empirical literature on quality disclosure and certification. After comparing quality disclosure with other quality assurance mechanisms and describing a brief history of quality disclosure,  we address three key theoretical issues: (i) Why don't sellers voluntarily disclose through a process of "unraveling?" (ii) When should government mandate disclosure? and (iii) Do certifiers necessarily report unbiased and accurate information?   We further review empirical evidence on these issues, with a particular focus on healthcare, education, and finance.  The empirical review covers quality measurement, the effect of third party disclosure on consumer choice and seller behavior, as well as the economics of certifiers.
ER  -