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Public, Private and Nonprofit Regulation for Environmental Quality

Author

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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..

Suggested Citation

  • 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.
  • Handle: RePEc:bla:jemstr:v:18:y:2009:i:1:p:105-123
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    References listed on IDEAS

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    1. Crampes, Claude & Hollander, Abraham, 1995. "Duopoly and quality standards," European Economic Review, Elsevier, vol. 39(1), pages 71-82, January.
    2. Stephen Noel Broadberry & John Wallis, 2017. "Growing, Shrinking and Long Run Economic Performance: Historical Perspectives on Economic Development," Economics Series Working Papers 154, University of Oxford, Department of Economics.
    3. 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.
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    7. 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.
    8. Lambertini, Luca & Mosca, Manuela, 1999. "On the Regulation of a Vertically Differentiated Market," Australian Economic Papers, Wiley Blackwell, vol. 38(4), pages 354-366, December.
    9. 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.
    10. 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.
    11. Auriol, Emmanuelle & Schilizzi, Steven G.M., 2003. "Quality Signaling through Certification. Theory and an Application to Agricultural Seed Market," IDEI Working Papers 165, Institut d'Économie Industrielle (IDEI), Toulouse.
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    Citations

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    Cited by:

    1. Brécard, Dorothée, 2014. "Consumer confusion over the profusion of eco-labels: Lessons from a double differentiation model," Resource and Energy Economics, Elsevier, vol. 37(C), pages 64-84.
    2. Andrea Podhorsky, 2009. "Environmental Labeling," Working Papers 2009_3, York University, Department of Economics.
    3. Luca Lambertini & Giuseppe Pignataro & Alessandro Tampieri, 2014. "Green Consumers, Greenwashing and the Misperception of Environmental Quality," CREA Discussion Paper Series 14-21, Center for Research in Economic Analysis, University of Luxembourg.
    4. Pio Baake & Helene Naegele, 2017. "Competition between For-Profit and Industry Labels: The Case of Social Labels in the Coffee Market," Discussion Papers of DIW Berlin 1686, DIW Berlin, German Institute for Economic Research.
    5. 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.
    6. Olivier Bonroy & Christos Constantatos, 2015. "On the Economics of Labels: How Their Introduction Affects the Functioning of Markets and the Welfare of All Participants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 239-259.
    7. Aleix Calveras & Juan José Ganuza, 2015. "The role of public information in corporate social responsibility," Economics Working Papers 1491, Department of Economics and Business, Universitat Pompeu Fabra.
    8. Dorothée Brécard, 2017. "Consumer misperception of eco-labels, green market structure and welfare," Journal of Regulatory Economics, Springer, vol. 51(3), pages 340-364, June.
    9. Vasileiou, Efi & Georgantzís, Nikolaos, 2015. "An experiment on energy-saving competition with socially responsible consumers: Opening the black box," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 58(C), pages 1-10.
    10. 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.
    11. repec:gbl:wpaper:2014-07 is not listed on IDEAS
    12. repec:gbl:wpaper:2013-01 is not listed on IDEAS
    13. Bonroy, Olivier & Lemarié, Stéphane, 2012. "Downstream labeling and upstream price competition," European Economic Review, Elsevier, vol. 56(3), pages 347-360.
    14. Ibrahima BARRY & Olivier BONROY & Paolo G. GARELLA, 2014. "Labelling by a for-Profit Certifier," Departmental Working Papers 2014-07, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano, revised 27 Feb 2016.
    15. Baron, David P., 2011. "Credence attributes, voluntary organizations, and social pressure," Journal of Public Economics, Elsevier, vol. 95(11), pages 1331-1338.
    16. 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.
    17. Li, Yi, 2016. "Competing eco-labels and product market competition," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235389, Agricultural and Applied Economics Association.
    18. Barry, I. & Bonroy, O. & Garella, P.G., 2015. "On taxes and subsidies with private eco-labeling," Working Papers 2015-09, Grenoble Applied Economics Laboratory (GAEL).
    19. repec:kap:regeco:v:52:y:2017:i:3:d:10.1007_s11149-017-9339-5 is not listed on IDEAS
    20. Luca Lambertini & Giuseppe Pignataro & Alessandro Tampieri, 2015. "The effect of Environmental Quality Misperception on Investments and Regulation," CREA Discussion Paper Series 15-01, Center for Research in Economic Analysis, University of Luxembourg.
    21. Mireille Chiroleu-Assouline, 2016. "Multiple Standards: the Case of the French Building Industry," Policy Papers 2016.08, FAERE - French Association of Environmental and Resource Economists.
    22. Aldashev, Gani & Limardi, Michela & Verdier, Thierry, 2015. "Watchdogs of the Invisible Hand: NGO monitoring and industry equilibrium," Journal of Development Economics, Elsevier, vol. 116(C), pages 28-42.

    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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