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Environment and Food Safety in Agriculture: Are Labels Efficient?


  • Ibanez, Lisette
  • Stenger, Anne


In this article, we try to elicit whether an information on food safety is consistent with a more environmental-friendly agriculture. As the policy makers generally intervene to limit negative externalities in agriculture on the supply side, is a labeling policy an efficient way to reduce pollution levels in this sector? The intuitive reason of a food safety label rests on the fact that consumers seem to be more concerned with information on food safety aspects than on environmental ones. In a vertical differentiation model, we analyse the impacts of labels mentioning food safety and environmental aspects, on firms' profits, consumers' surplus and pollution levels. Given our main assumption that food safety and environmental consequences are directly linked, our principal results show that a labeling policy on food safety can be efficient from an environmental point of view, depending on the initial healthy products proportion in the market. Another result is based on the fact that a label policy can reduce consumer's surplus. Copyright 2000 by Blackwell Publishers Ltd/University of Adelaide and Flinders University of South Australia

Suggested Citation

  • Ibanez, Lisette & Stenger, Anne, 2000. "Environment and Food Safety in Agriculture: Are Labels Efficient?," Australian Economic Papers, Wiley Blackwell, vol. 39(4), pages 452-464, December.
  • Handle: RePEc:bla:ausecp:v:39:y:2000:i:4:p:452-64

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    References listed on IDEAS

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    2. Engle, Robert F & Ng, Victor K, 1993. " Measuring and Testing the Impact of News on Volatility," Journal of Finance, American Finance Association, vol. 48(5), pages 1749-1778, December.
    3. Gallo Giampiero M. & Pacini Barbara, 1998. "Early News is Good News: The Effects of Market Opening on Market Volatility," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 2(4), pages 1-19, January.
    4. Gerety, Mason S & Mulherin, J Harold, 1994. "Price Formation on Stock Exchanges: The Evolution of Trading within the Day," Review of Financial Studies, Society for Financial Studies, vol. 7(3), pages 609-629.
    5. Romer, David, 1993. "Rational Asset-Price Movements without News," American Economic Review, American Economic Association, vol. 83(5), pages 1112-1130, December.
    6. Amihud, Yakov & Mendelson, Haim, 1987. " Trading Mechanisms and Stock Returns: An Empirical Investigation," Journal of Finance, American Finance Association, vol. 42(3), pages 533-553, July.
    7. Stoll, Hans R & Whaley, Robert E, 1990. "Stock Market Structure and Volatility," Review of Financial Studies, Society for Financial Studies, vol. 3(1), pages 37-71.
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    Cited by:

    1. Hammoudi, Abdelhakim & Nguyen, Huong-Hue & Soler, Louis-Georges, 2009. "Food safety and nutritional quality – Firms’ strategies and Public intervention," 2009 Conference, August 16-22, 2009, Beijing, China 51749, International Association of Agricultural Economists.
    2. Lucie Bottega & Jenny De Freitas, 2009. "Public, Private and Nonprofit Regulation for Environmental Quality," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(1), pages 105-123, March.
    3. Ben Youssef Adel & Abderrazak Chema, 2009. "Multiplicity of Eco-Labels, Competition, and the Environment," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 7(2), pages 1-24, December.
    4. Grolleau, Gilles & Ibanez, Lisette & Mzoughi, Naoufel, 2009. "Too much of a good thing? Why altruism can harm the environment?," Ecological Economics, Elsevier, vol. 68(7), pages 2145-2149, May.
    5. repec:dau:papers:123456789/12755 is not listed on IDEAS
    6. Adel Ben Youssef & Rim Lahmandi-Ayed, 2008. "Eco-labelling, Competition and Environment: Endogenization of Labelling Criteria," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(2), pages 133-154, October.
    7. Cole, Anne & Harris, Jane, 2005. "Rising interest in credence qualities in agricultural products and the role for government," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 137828, Australian Agricultural and Resource Economics Society.
    8. Bodo E. Steiner, 2004. "Australian wines in the British wine market: A hedonic price analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 287-307.
    9. Steiner, Bodo E., 2002. "The Valuation Of Labelling Attributes In A Wine Market," 2002 Annual meeting, July 28-31, Long Beach, CA 19718, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Larceneux, Fabrice & Carpenter, Marie, 2008. "Third party labeling and the consumer decision process," Les Cahiers de Recherche 891, HEC Paris.

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