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Determinants of Participation versus Consumption in the Nordic Swan Eco-labeled Market

  • Brouhle, Keith
  • Khanna, Madhu

This paper uses data on purchases of Nordic Swan Eco-labeled toilet paper and paper towels by individual Danish households to analyze the determinants of demand for eco-labeled goods and the decision process underlying it. Among several models that are estimated, a double-hurdle model that distinguishes between factors influencing the discrete decision to participate by purchasing an eco-labeled good and the continuous decision about the quantity of the eco-labeled good to be purchased is found to fit the data best. We find that prices as well as consumer tastes and preferences, proxied by their socio-demographic characteristics, have a much stronger impact on the participation decision than on quantity consumed for both Swan-labeled toilet paper and paper towels. The quantity consumed of Swan-labeled goods, on the other hand, is strongly affected by factors such as availability of Swan goods in shops, discount sales on Swan goods, and household size.

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File URL: http://purl.umn.edu/19443
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Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2005 Annual meeting, July 24-27, Providence, RI with number 19443.

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Date of creation: 2005
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Handle: RePEc:ags:aaea05:19443
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