Andrea Podhorsky

Department of Economics

Assistant Professor

Office: Vari Hall, 1058
Phone: (416)736-2100 Ext: 77030
Emailandrea@yorku.ca
Primary websiteandreapodhorsky.com

I am an Assistant Professor of Economics at York University. My research has been concerned with studying information-based environmental and social policy measures. My work contributes directly to the fields of environmental economics, development economics and international trade, and it could be more generally categorized as research in applied microeconomic theory with an emphasis on environmental policy. I obtained my PhD from Princeton University in 2008.

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Despite the popularity of environmental certification programs, little research had been undertaken to understand their properties. My work has addressed numerous open questions about environmental certification such as how to best choose the standard of environmental quality disclosed by a program’s label, how certification programs impact consumer welfare and the environment relative to more traditional policy instruments, and how they impact international trade and the welfare of less developed countries. With regard to Fairtrade certification, my work guides policy makers to best choose the wage that is guaranteed to farmers who participate in the program and to determine whether the program is a more efficient way to transfer income to farmers than a direct transfer. I also study the hypothetical case where the Fairtrade program is large and therefore has an effect on the world price of the commodity to determine its potential future impact on farmers and consumers.

Area of Specialization

Economics

Degrees

Ph.D., Princeton University
M.A., University of British Columbia
B. Comm., University of Windsor


Research Interests

Environmental Economics, Development Economics, International Trade, Applied Microeconomics

Selected Publications

A Positive Analysis of Fairtrade Certification
Journal of Development Economics, Vol. 116, pp. 169-185, September 2015.
Abstract:
The Fairtrade program transfers income to farmers by establishing a price floor and an alternate distribution channel that bypasses intermediaries between the raw commodity and world markets. I develop a model of the international commodity supply chain, with monopolistic ally competitive final goods producers and consumers who value the ethical quality of goods. A small number of oligopsonistic intermediaries purchase the raw commodity from farmers in given country and then sell to final goods producers in the world market. I consider the effects of a Fairtrade program that is too small to have an effect on the world price of the commodity. I show that the Fairtrade program decreases the intermediaries' market power and consequently, even farmers that are not selected into the program receive a higher wage than in the absence of the program. I establish the Pareto optimal Fairtrade price and assess the overall efficiency of the program. The program is a more efficient way to transfer income to farmers than a direct transfer equal to the premium commanded by certified products if the Fairtrade price is not set too high above the efficient wage for farmers. If the number of intermediaries were large, however, then the direct transfer is more efficient than the program even for small binding price floors.

Certification Programs and North-South Trade
Journal of Public Economics, Vol. 108, pp. 90-104, December 2013.
Abstract:
This paper studies how the voluntary standards established by certification programs affect consumer welfare and international trade in an open world economy. I develop a two-country model with differentiated products and imperfectly-informed consumers. Consumers in both countries value the quality of goods, but cannot discern their quality unless they are certified. Firms in each country differ in their abilities to produce quality, and the distribution of technological ability is superior in the home country. I first consider the circumstance in which the home country's government unilaterally administers a certification program. I show that the home country's terms of trade are increasing in the standard. It follows that the standard chosen by the home country is protectionist in the sense that it is greater than the standard that would be chosen by a world welfare maximizing authority. Also, the volume of trade is lower under the home country's program than if the standard were chosen by a world authority. The volume of trade and foreign welfare, however, are greater under the home country's program than if there is no certification program at all. Next, I consider the case where a certification program is administered by each country, and standards are set non-cooperatively. I show that the home and foreign country standards are strategic complements. The paper concludes with a discussion of the global inefficiencies that result from the non-cooperative setting of voluntary standards and their policy implications.

A Survey of Environmental Labeling
Essays on Environmental Labeling (Dissertation), Princeton University, ProQuest/UMI, Ann Arbor (Publication No. 3338691), 2008.
Abstract:
This paper critically assesses the literature on environmental labeling.

All Publications

Journal Articles

A Positive Analysis of Fairtrade Certification
Journal of Development Economics, Vol. 116, pp. 169-185, September 2015.
Abstract:
The Fairtrade program transfers income to farmers by establishing a price floor and an alternate distribution channel that bypasses intermediaries between the raw commodity and world markets. I develop a model of the international commodity supply chain, with monopolistic ally competitive final goods producers and consumers who value the ethical quality of goods. A small number of oligopsonistic intermediaries purchase the raw commodity from farmers in given country and then sell to final goods producers in the world market. I consider the effects of a Fairtrade program that is too small to have an effect on the world price of the commodity. I show that the Fairtrade program decreases the intermediaries' market power and consequently, even farmers that are not selected into the program receive a higher wage than in the absence of the program. I establish the Pareto optimal Fairtrade price and assess the overall efficiency of the program. The program is a more efficient way to transfer income to farmers than a direct transfer equal to the premium commanded by certified products if the Fairtrade price is not set too high above the efficient wage for farmers. If the number of intermediaries were large, however, then the direct transfer is more efficient than the program even for small binding price floors.

Certification Programs and North-South Trade
Journal of Public Economics, Vol. 108, pp. 90-104, December 2013.
Abstract:
This paper studies how the voluntary standards established by certification programs affect consumer welfare and international trade in an open world economy. I develop a two-country model with differentiated products and imperfectly-informed consumers. Consumers in both countries value the quality of goods, but cannot discern their quality unless they are certified. Firms in each country differ in their abilities to produce quality, and the distribution of technological ability is superior in the home country. I first consider the circumstance in which the home country's government unilaterally administers a certification program. I show that the home country's terms of trade are increasing in the standard. It follows that the standard chosen by the home country is protectionist in the sense that it is greater than the standard that would be chosen by a world welfare maximizing authority. Also, the volume of trade is lower under the home country's program than if the standard were chosen by a world authority. The volume of trade and foreign welfare, however, are greater under the home country's program than if there is no certification program at all. Next, I consider the case where a certification program is administered by each country, and standards are set non-cooperatively. I show that the home and foreign country standards are strategic complements. The paper concludes with a discussion of the global inefficiencies that result from the non-cooperative setting of voluntary standards and their policy implications.

A Survey of Environmental Labeling
Essays on Environmental Labeling (Dissertation), Princeton University, ProQuest/UMI, Ann Arbor (Publication No. 3338691), 2008.
Abstract:
This paper critically assesses the literature on environmental labeling.

Upcoming Courses

TermCourse NumberSectionTitleType 
Fall 2017 AP/ECON1000 3.0  Introduction to Microeconomics LECT  
Fall 2017 AP/ECON3550 3.0  Economic Growth and Development LECT  


I am an Assistant Professor of Economics at York University. My research has been concerned with studying information-based environmental and social policy measures. My work contributes directly to the fields of environmental economics, development economics and international trade, and it could be more generally categorized as research in applied microeconomic theory with an emphasis on environmental policy. I obtained my PhD from Princeton University in 2008.


Despite the popularity of environmental certification programs, little research had been undertaken to understand their properties. My work has addressed numerous open questions about environmental certification such as how to best choose the standard of environmental quality disclosed by a program’s label, how certification programs impact consumer welfare and the environment relative to more traditional policy instruments, and how they impact international trade and the welfare of less developed countries. With regard to Fairtrade certification, my work guides policy makers to best choose the wage that is guaranteed to farmers who participate in the program and to determine whether the program is a more efficient way to transfer income to farmers than a direct transfer. I also study the hypothetical case where the Fairtrade program is large and therefore has an effect on the world price of the commodity to determine its potential future impact on farmers and consumers.

Area of Specialization

Economics

Degrees

Ph.D., Princeton University
M.A., University of British Columbia
B. Comm., University of Windsor

Research Interests:

Environmental Economics, Development Economics, International Trade, Applied Microeconomics

All Publications

Journal Articles

A Positive Analysis of Fairtrade Certification
Journal of Development Economics, Vol. 116, pp. 169-185, September 2015.
Abstract:
The Fairtrade program transfers income to farmers by establishing a price floor and an alternate distribution channel that bypasses intermediaries between the raw commodity and world markets. I develop a model of the international commodity supply chain, with monopolistic ally competitive final goods producers and consumers who value the ethical quality of goods. A small number of oligopsonistic intermediaries purchase the raw commodity from farmers in given country and then sell to final goods producers in the world market. I consider the effects of a Fairtrade program that is too small to have an effect on the world price of the commodity. I show that the Fairtrade program decreases the intermediaries' market power and consequently, even farmers that are not selected into the program receive a higher wage than in the absence of the program. I establish the Pareto optimal Fairtrade price and assess the overall efficiency of the program. The program is a more efficient way to transfer income to farmers than a direct transfer equal to the premium commanded by certified products if the Fairtrade price is not set too high above the efficient wage for farmers. If the number of intermediaries were large, however, then the direct transfer is more efficient than the program even for small binding price floors.

Certification Programs and North-South Trade
Journal of Public Economics, Vol. 108, pp. 90-104, December 2013.
Abstract:
This paper studies how the voluntary standards established by certification programs affect consumer welfare and international trade in an open world economy. I develop a two-country model with differentiated products and imperfectly-informed consumers. Consumers in both countries value the quality of goods, but cannot discern their quality unless they are certified. Firms in each country differ in their abilities to produce quality, and the distribution of technological ability is superior in the home country. I first consider the circumstance in which the home country's government unilaterally administers a certification program. I show that the home country's terms of trade are increasing in the standard. It follows that the standard chosen by the home country is protectionist in the sense that it is greater than the standard that would be chosen by a world welfare maximizing authority. Also, the volume of trade is lower under the home country's program than if the standard were chosen by a world authority. The volume of trade and foreign welfare, however, are greater under the home country's program than if there is no certification program at all. Next, I consider the case where a certification program is administered by each country, and standards are set non-cooperatively. I show that the home and foreign country standards are strategic complements. The paper concludes with a discussion of the global inefficiencies that result from the non-cooperative setting of voluntary standards and their policy implications.

A Survey of Environmental Labeling
Essays on Environmental Labeling (Dissertation), Princeton University, ProQuest/UMI, Ann Arbor (Publication No. 3338691), 2008.
Abstract:
This paper critically assesses the literature on environmental labeling.


Teaching:

Upcoming Courses

TermCourse NumberSectionTitleType 
Fall 2017 AP/ECON1000 3.0  Introduction to Microeconomics LECT  
Fall 2017 AP/ECON3550 3.0  Economic Growth and Development LECT