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Pricing of eco-labels with retailer heterogeneity

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  • Asche, Frank
  • Larsen, Thomas A.
  • Smith, Martin D.
  • Sogn-Grundvåg, Geir
  • Young, James A.

Abstract

Eco-labels are important features of many natural resource and food markets. They certify that a product has some desirable unobserved quality, typically related to a public good such as being sustainably produced. Two issues that have received limited attention are whether pricing varies across different eco-labels that may compete with each other and to what extent different retailers charge different prices. Using a unique data set of salmon prices in eight different United Kingdom retail chains, we investigate these issues by estimating a price-attribute model that includes two eco-labels and one country-of-origin label. Results show substantial variation in the prices of the different eco-labels and that eco-label premiums vary across retail chains. Specifically, salmon certified with the Marine Stewardship Council (MSC) label has a high premium in low-end retail chains but no statistically significant premium in the high-end chains. These findings question the ability of the MSC label to transmit consumer willingness-to-pay for public goods through the supply chain to incentivize sustainable management. In contrast, premiums for organic certification are similar in magnitude across retailer types. In general, failure to account for retailer heterogeneity will over- or under-estimate a label’s premium.

Suggested Citation

  • Asche, Frank & Larsen, Thomas A. & Smith, Martin D. & Sogn-Grundvåg, Geir & Young, James A., 2015. "Pricing of eco-labels with retailer heterogeneity," Food Policy, Elsevier, vol. 53(C), pages 82-93.
  • Handle: RePEc:eee:jfpoli:v:53:y:2015:i:c:p:82-93
    DOI: 10.1016/j.foodpol.2015.04.004
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    Cited by:

    1. Zander, Katrin & Feucht, Yvonne, 2018. "Who is Prepared to Pay For Sustainable Fish? Evidence from a Transnational Consumer Survey in Europe," 2018 International European Forum (163rd EAAE Seminar), February 5-9, 2018, Innsbruck-Igls, Austria 276859, International European Forum on System Dynamics and Innovation in Food Networks.
    2. Pettersen, Ingrid Kristine & Brækkan, Eivind Hestvik & Myrland, Øystein, 2018. "Are Norwegian fishermen selling in the same market?," Journal of Commodity Markets, Elsevier, vol. 12(C), pages 9-18.
    3. Wenjing Nie & David Abler & Liqun Zhu & Taiping Li & Guanghua Lin, 2018. "Consumer Preferences and Welfare Evaluation under Current Food Inspection Measures in China: Evidence from Real Experiment Choice of Rice Labels," Sustainability, MDPI, Open Access Journal, vol. 10(11), pages 1-1, November.
    4. Wang, Xiaojin, 2016. "The Value of Country-of-Origin and Wild-Caught Labels: A Hedonic Analysis of Shrimp Retail Prices in the United States," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230197, Southern Agricultural Economics Association.
    5. Kate Barclay & Alice Miller, 2018. "The Sustainable Seafood Movement Is a Governance Concert, with the Audience Playing a Key Role," Sustainability, MDPI, Open Access Journal, vol. 10(1), pages 1-1, January.
    6. Wakamatsu, Hiroki, 2019. "Heterogeneous Consumer Preference for Seafood Sustainability in Japan," MPRA Paper 92390, University Library of Munich, Germany.
    7. James Hilger & Eric Hallstein & Andrew W. Stevens & Sofia B. Villas-Boas, 2019. "Measuring Willingness to Pay for Environmental Attributes in Seafood," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 307-332, May.
    8. Adam Pawlewicz, 2020. "Change of Price Premiums Trend for Organic Food Products: The Example of the Polish Egg Market," Agriculture, MDPI, Open Access Journal, vol. 10(2), pages 1-1, February.
    9. Santeramo, Fabio Gaetano & Carlucci, Domenico & De Devitiis, Biagia & Nardone, Gianluca & Viscecchia, Rosaria, 2017. "On consumption patterns in oyster markets: the role of attitudes," MPRA Paper 76789, University Library of Munich, Germany.
    10. Nesar Ahmed & Shirley Thompson & Giovanni M. Turchini, 2020. "Organic aquaculture productivity, environmental sustainability, and food security: insights from organic agriculture," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(6), pages 1253-1267, December.
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    12. Frank Wijen & Mireille Chiroleu-Assouline, 2019. "Controversy Over Voluntary Environmental Standards: A Socioeconomic Analysis of the Marine Stewardship Council," PSE-Ecole d'économie de Paris (Postprint) halshs-02071504, HAL.
    13. Hirotsugu Uchida & Cathy A. Roheim & Robert J. Johnston, 2017. "Balancing the Health Risks and Benefits of Seafood: How Does Available Guidance Affect Consumer Choices?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(4), pages 1056-1077.
    14. Roheim, Cathy A. & Zhang, Dengjun, 2018. "Sustainability certification and product substitutability: Evidence from the seafood market," Food Policy, Elsevier, vol. 79(C), pages 92-100.
    15. Kyrre Rickertsen & Frode Alfnes & Pierre Combris & Géraldine Enderli & Sylvie Issanchou & Jason F. Shogren, 2017. "French Consumers' Attitudes and Preferences toward Wild and Farmed Fish," Marine Resource Economics, University of Chicago Press, vol. 32(1), pages 59-81.
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    17. Fabio Boncinelli & Francesca Gerini & Benedetta Neri & Leonardo Casini, 2018. "Consumer willingness to pay for non‐mandatory indication of the fish catch zone," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 728-741, October.
    18. Fang, Yingkai & Asche, Frank & Gao, Zhifeng, 2020. "Can ecolabel certifications for restaurants influence consumer choices away from home?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304268, Agricultural and Applied Economics Association.
    19. Lin, Yu-Hsuan & Kim, KyungJa, 2017. "Willingness to Pay for Government-Certified Agri-Products in South Korea," MPRA Paper 84100, University Library of Munich, Germany.
    20. Dengjun Zhang & Geir Sogn-Grundvåg & Frank Asche & James A. Young, 2018. "Eco-Labeling and Retailer Pricing Strategies: The U.K. Haddock Market," Sustainability, MDPI, Open Access Journal, vol. 10(5), pages 1-1, May.
    21. Domenico Carlucci & Biagia De Devitiis & Gianluca Nardone & Fabio Gaetano Santeramo, 2017. "Certification Labels Versus Convenience Formats: What Drives the Market in Aquaculture Products?," Marine Resource Economics, University of Chicago Press, vol. 32(3), pages 295-310.
    22. Elofsson, Katarina & Bengtsson, Niklas & Matsdotter, Elina & Arntyr, Johan, 2016. "The impact of climate information on milk demand: Evidence from a field experiment," Food Policy, Elsevier, vol. 58(C), pages 14-23.
    23. Bronnmann, Julia & Asche, Frank, 2017. "Sustainable Seafood From Aquaculture and Wild Fisheries: Insights From a Discrete Choice Experiment in Germany," Ecological Economics, Elsevier, vol. 142(C), pages 113-119.
    24. Ankamah-Yeboah, Isaac & Nielsen, Max & Nielsen, Rasmus, 2016. "Price premium of organic salmon in Danish retail sale," Ecological Economics, Elsevier, vol. 122(C), pages 54-60.
    25. Carlucci, Domenico & Dedevitiis, Biagia & Nardone, Gianluca & Santeramo, Fabio Gaetano, 2016. "Certification Labels Vs Convenience Formats: What drives the market in aquaculture products?," MPRA Paper 75448, University Library of Munich, Germany.

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    Keywords

    Seafood; Eco-labels; Salmon;

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