Many consumers value goods produced in a socially and environmentally responsible manner. As a result, welfare gains are possible from credible third-party certifications, like Fair Trade, that provide consumers with information about the production process.

Raluca Dragusanu and Nathan Nunn (Harvard University) and COSA President Daniele Giovannucci provide a critical overview of the economic theory behind Fair Trade. The paper, published in the prestigious Journal of Economic Perspectives and by the US National Bureau of Economic Research describes the potential benefits and pitfalls and offers an assessment of the current empirical evidence of the impacts of Fair Trade.