Journal of the Korean Society of Food Culture (한국식생활문화학회지)

Korean Society of Food Culture (한국식생활문화학회)
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Analysis of the Consumer's Intentions and Effects on the Introduction of Kimchi into a Geographical Indication System in Major Export Markets

김치 지리적표시제 도입에 대한 주요 수출시장 소비자 의향 및 효과 분석

  • Received : 2019.03.25
  • Accepted : 2019.04.22
  • Published : 2019.04.30
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Abstract

Although Kimchi is a Korean traditional food, domestic consumption has been decreasing steadily and the trade inversion phenomenon has reached a serious level due to the surge of Chinese Kimchi imports. Moreover, cases where foreign Kimchi is transformed illegally into Korean Kimchi are frequent, which impedes the expansion of Korean Kimchi exports. To sustain the Korean Kimchi industry in a situation where the domestic and overseas conditions are deteriorating, it is necessary to positively review the introduction of Kimchi into a geographical indication (GI) system. This study examined the intention of foreign consumers to purchase Korean Kimchi with GI and analyzed the impact on the trade balance. Approximately 42.8% of 500 Japanese consumers answered that they would purchase Korean Kimchi with GI and they were willing to pay 7.8% more than the present price. Approximately 78.7% of 300 Taiwanese consumers replied that they purchase it and would pay 25.1% more. In addition, Japanese and Taiwanese consumers reported that they expected to increase their Korean Kimchi purchases by 21.9 and 22.4%, respectively. Based on the survey results, the effects of the trade balance were measured using the methodology of a preliminary impact assessment using the KREI-KASMO model. The trade balance of Kimchi is expected to improve slightly at an annual average of 11.718.6 million US$ to as much as 27.7~35.8 million US$.

Keywords

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KREI-KASMO Model flow diagrams

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The impact of the introduction of Kimchi into GI on exports 1)Dd is domestic demand curve and De is overseas demand curve for Kimchi before the introduction into GI. P is an equilibrium price and Q is an equilibrium quantity where total demand curve (=Dd+De) intersects with supply curve (=S). Q is total consumption before the introduction into GI, which is Qd (=domestic consumption) plus Qe (=overseas consumption) 2)Dd’ is domestic demand curve and De’ is overseas demand curve for Kimchi after the introduction into GI. P’ is an equilibrium price and Q’ is an equilibrium quantity where total demand curve (=Dd’+De’) intersects with supply curve (=S). Q’ is total consumption after the introduction into GI, which is Qd’ (=domestic consumption) plus Qe’ (=overseas consumption)

General characteristics of the subjects

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Change in purchases upon the introduction of Kimchi into GI

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Reasons for purchasing Kimchi with GI

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Willingness to pay for Korean Baechu-Kimchi with GI

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Scenarios for the analysis on the trade balance effects

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The method of calculating the coefficient (β3)

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Estimated effects of Kimchi with GI on trade balance

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