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Public, Private and Nonprofit Regulation for Environmental Quality

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  • Lucie Bottega
  • Jenny De Freitas

Abstract

"This paper studies the welfare implications of different institutions certifying environmental quality supplied by a monopoly. The monopolist can voluntarily certify the quality of the product through an eco-label provided either by an NGO or a for-profit private certifier (PC). The NGO and the PC may use advertisement to promote the label. We compare the NGO and PC regimes with the regime where the regulator imposes a minimum quality standard. The presence of a private certifier in the market decreases the scope for public intervention. The availability of green advertisement reinforces the above result." Copyright (c) 2009, The Author(s) Journal Compilation (c) 2009 Wiley Periodicals, Inc..

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.

Volume (Year): 18 (2009)
Issue (Month): 1 (03)
Pages: 105-123

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Handle: RePEc:bla:jemstr:v:18:y:2009:i:1:p:105-123

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Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/

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References

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  1. Cremer, Helmuth & Thisse, Jacques-Francois, 1999. "On the taxation of polluting products in a differentiated industry," European Economic Review, Elsevier, vol. 43(3), pages 575-594, March.
  2. Crampes, Claude & Hollander, Abraham, 1995. "Duopoly and quality standards," European Economic Review, Elsevier, vol. 39(1), pages 71-82, January.
  3. Oren Bar-Gill & Chaim Fershtman, 2005. "Public Policy with Endogenous Preferences," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(5), pages 841-857, December.
  4. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
  5. Petrakis Emmanuel & Sartzetakis Eftichios Sophocles & Xepapadeas Anastasios, 2005. "Environmental Information Provision as a Public Policy Instrument," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-33, November.
  6. Cremer, H. & Thisse, J.-F., . "Commodity taxation in a differentiated oligopoly," CORE Discussion Papers RP -1112, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Cason, Timothy N. & Gangadharan, Lata, 2002. "Environmental Labeling and Incomplete Consumer Information in Laboratory Markets," Journal of Environmental Economics and Management, Elsevier, vol. 43(1), pages 113-134, January.
  8. Anthony Heyes and John Maxwell, 2003. "Private vs. Public Regulation: Political Economy of the International Environment," Royal Holloway, University of London: Discussion Papers in Economics 03/5, Department of Economics, Royal Holloway University of London, revised Dec 2003.
  9. Brekke, Kjell Arne & Kverndokk, Snorre & Nyborg, Karine, 2003. "An economic model of moral motivation," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1967-1983, September.
  10. Auriol, Emmanuelle & Schilizzi, Steven, 2003. "Quality Signaling through Certification. Theory and an Application to Agricultural Seed Market," IDEI Working Papers 165, Institut d'Économie Industrielle (IDEI), Toulouse.
  11. Lambertini, Luca & Mosca, Manuela, 1999. "On the Regulation of a Vertically Differentiated Market," Australian Economic Papers, Wiley Blackwell, vol. 38(4), pages 354-66, December.
  12. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
  13. Marcus Alexander & Matthew C. Harding, 2003. "Self-regulation and the Certification of the European Information Economy The Case of e-Healthcare Information Provision," Economics Series Working Papers 154, University of Oxford, Department of Economics.
  14. Ibanez, Lisette & Stenger, Anne, 2000. "Environment and Food Safety in Agriculture: Are Labels Efficient?," Australian Economic Papers, Wiley Blackwell, vol. 39(4), pages 452-64, December.
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Citations

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Cited by:
  1. Bonroy, Olivier & Lemarié, Stéphane, 2012. "Downstream labeling and upstream price competition," European Economic Review, Elsevier, vol. 56(3), pages 347-360.
  2. Aleix Calveras & Juan José Ganuza, 2014. "Building a reputation as a socially responsible firm," Economics Working Papers 1421, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Baron, David P., 2011. "Credence attributes, voluntary organizations, and social pressure," Journal of Public Economics, Elsevier, vol. 95(11), pages 1331-1338.
  4. Andrea Podhorsky, 2009. "Environmental Labeling," Working Papers 2009_3, York University, Department of Economics.
  5. Bonroy, O. & Constantatos, C., 2013. "On the economics of labels : a review of the theoretical literature," Working Papers 2013-01, Grenoble Applied Economics Laboratory (GAEL).
  6. Rousseau, Sandra & Vranken, Liesbet, 2013. "Green market expansion by reducing information asymmetries: Evidence for labeled organic food products," Food Policy, Elsevier, vol. 40(C), pages 31-43.
  7. Matthieu Glachant & Gabrielle Moineville, 2012. "The informational role of nongovernmental organizations to induce self-regulation: Cheering the leaders or booing the laggards?," Working Papers hal-00716864, HAL.

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