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Eco-labelling, Competition and Environment: Endogenization of Labelling Criteria

  • Adel Ben Youssef

    ()

  • Rim Lahmandi-Ayed

    ()

This paper suggests a modelling of the labelling procedure consistent with empirical observations, that allows the endogenous calculation of labelling criteria. The authority in charge of the labelling program chooses the level of labelling criteria so as to maximise the social surplus, anticipating competition between firms in environmental qualities and prices. While accounting simply for the informational role of labels, this model allows to understand observed behavior such as firms' ignorance of a label, resistance, support or indifference of firms to the labelling program and the decision of the authority not to set up a label.

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File URL: http://hdl.handle.net/10.1007/s10640-007-9184-6
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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 41 (2008)
Issue (Month): 2 (October)
Pages: 133-154

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Handle: RePEc:kap:enreec:v:41:y:2008:i:2:p:133-154
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  1. 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.
  2. Thomas Bue Bjorner & Lars Garn Hansen & Clifford S. Russell, 2002. "Environmental Labelling and Consumer's Choice - An Empirical Analysis of the Effect of the Nordic Swan," Vanderbilt University Department of Economics Working Papers 0203, Vanderbilt University Department of Economics.
  3. Mattoo, Aaditya & Singh, Harsha V, 1994. "Eco-labelling: Policy Considerations," Kyklos, Wiley Blackwell, vol. 47(1), pages 53-65.
  4. Cesare Dosi & Michele Moretto, 1999. "Is Ecolabelling a Reliable Environmental Policy Measure?," Working Papers 1999.9, Fondazione Eni Enrico Mattei.
  5. Amacher, Gregory S. & Koskela, Erkki & Ollikainen, Markku, 2004. "Environmental quality competition and eco-labeling," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 284-306, March.
  6. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-83, December.
  7. Lahmandi-Ayed, Rim, 2000. "Natural Oligopolies: A Vertical Differentiation Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(4), pages 971-87, November.
  8. Anthony Heyes and John Maxwell, 2003. "Private vs. Public Regulation: Political Economy of the International Environment," Royal Holloway, University of London: Discussion Papers in Economics 03/5, Department of Economics, Royal Holloway University of London, revised Dec 2003.
  9. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
  10. Shapiro, Carl, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, MIT Press, vol. 98(4), pages 659-79, November.
  11. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
  12. Roe, Brian & Teisl, Mario F. & Levy, Alan & Russell, Matthew, 2001. "US consumers' willingness to pay for green electricity," Energy Policy, Elsevier, vol. 29(11), pages 917-925, September.
  13. Ibanez, Lisette & Stenger, Anne, 2000. "Environment and Food Safety in Agriculture: Are Labels Efficient?," Australian Economic Papers, Wiley Blackwell, vol. 39(4), pages 452-64, December.
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