The Market For Quality

Abstract

There is a lingering suspicion that the market is unable to provide for quality or seeks some lowest common denominator of quality. This has led to the need for, according to some, government intervention to ensure quality in terms of minimum standards.

Seldom observed or often only casually dealt with in the literature is the emergence, without coercion, of numerous market arrangements to provide consumers with information on product quality and/or help in processing that information. The market itself, in a number of ways, provides its own standards and enforcement of those standards. Explicit voluntary quality standards especially have received virtually no attention from academics. The most up-to-date industrial organization textbooks ignore the concept. Voluntary quality standards and the organizations which provide them, however, have not escaped the scrutiny of the Senate of the United States.