Can Eco-Labeling Do More Harm Than Good? A Comparative Statics Analysis
AbstractThis paper uses a two-product partial equilibrium model with demand- and supply-side substitution effects to identify supply and demand conditions under which eco-labeling would be most and least effective. The results suggest that eco-labeling is most effective at reducing environmentally harmful production when it leads to a decrease in demand for unlabeled products and producers respond to non-price incentives in adopting the certified methods. The analysis demonstrates that consumer willingness-to-pay a premium and the potential demand for an eco-labeled product do not provide the best indication of an eco-labeling program's effectiveness at reducing adverse environmental impacts.
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Bibliographic InfoPaper provided by Southern Agricultural Economics Association in its series 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama with number 35105.
Date of creation: 2003
Date of revision:
Environmental Economics and Policy;
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