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Are Eco-Labels Valuable? Evidence from the Apparel Industry

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Author Info
Nimon, Wesley
Beghin, John

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Abstract

Using U.S. apparel catalogue data, we estimate hedonic price functions to identify market valuation of environmental attributes of apparel goods. We identify a significant and robust premium for the organic fibers embodied in the apparel goods. We also find a discount for the "no-dye" label. We do not, however, find any evidence of a premium for environment-friendly dyes. We further investigate the pricing behavior of apparel suppliers for potential heterogenous pricing of the organic-fiber attribute and find no evidence of different premia across firms.

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File URL: http://www.econ.iastate.edu/research/webpapers/NDN0014.doc
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Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 4048.

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Date of creation: 01 Mar 1999
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Handle: RePEc:isu:genres:4048

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Related research
Keywords: labeling; ecolabel; eco-label; organic cotton; textiles; apparel; dyes;

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Find related papers by JEL classification:
L6 - Industrial Organization - - Industry Studies: Manufacturing
L8 - Industrial Organization - - Industry Studies: Services
Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

References listed on IDEAS
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  1. Michaels, R. Gregory & Smith, V. Kerry, 1990. "Market segmentation and valuing amenities with hedonic models: The case of hazardous waste sites," Journal of Urban Economics, Elsevier, vol. 28(2), pages 223-242, September. [Downloadable!] (restricted)
  2. Feenstra, R.C., 1995. "Exact Hedonic Price Indexes," Department of Economics 95-11, California Davis - Department of Economics.
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  3. Daniel M.G. Raff & Manuel Trajtenberg, 1995. "Quality-Adjusted Prices for the American Automobile Industry: 1906-1940," NBER Working Papers 5035, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June. [Downloadable!] (restricted)
  5. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb.. [Downloadable!] (restricted)
  6. Teisl, Mario F. & Roe, Brian & Hicks, Robert L., 2002. "Can Eco-Labels Tune a Market? Evidence from Dolphin-Safe Labeling," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 339-359, May. [Downloadable!] (restricted)
  7. Cropper, Maureen L & Deck, Leland B & McConnell, Kenneth E, 1988. "On the Choice of Functional Form for Hedonic Price Functions," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 668-75, November. [Downloadable!] (restricted)
  8. Feenstra, Robert C & Levinsohn, James A, 1995. "Estimating Markups and Market Conduct with Multidimensional Product Attributes," Review of Economic Studies, Blackwell Publishing, vol. 62(1), pages 19-52, January. [Downloadable!] (restricted)
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