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Ecolabels and The Economic Recession

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  • Jibonayan Raychaudhuri
  • Ada Wossink

Abstract

We consider products that vary in socio-economic quality, reflected in different eco-labels, like carbon, organic and fair trade. We find that in violation of traditional price theory, the expenditure shares on organic products declined while the expenditure shares of fair trade products increased. We evaluate alternative psychological models of decision making (a salience model and a model of reputation signalling) both of which give a plausible account of our empirical results.

Suggested Citation

  • Jibonayan Raychaudhuri & Ada Wossink, 2018. "Ecolabels and The Economic Recession," Economics Discussion Paper Series 1807, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:1807
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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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