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Are Eco-Labels Valuable? Evidence from the Apparel Industry

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  • Nimon, W.
  • Beghin, John C.

Abstract

Using U.S. apparel catalog data, we estimate hedonic price functions to identify market valuation of environmental attributes of apparel goods. We identify a significant and robust premium for the organic fibers embodied in the apparel goods. We also find a discount for the "no-dye" label. We do not, however, find any evidence of a premium for environment-friendly dyes. We further investigate the pricing behavior of apparel suppliers for potential heterogenous pricing of the organic-fiber attribute and find no evidence of different premia across firms. A reprint of an article in the AJAE in 1999.

Suggested Citation

  • Nimon, W. & Beghin, John C., 2008. "Are Eco-Labels Valuable? Evidence from the Apparel Industry," Staff General Research Papers Archive 12741, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12741
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    References listed on IDEAS

    as
    1. Feenstra, Robert C, 1995. "Exact Hedonic Price Indexes," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 634-653, November.
    2. Teisl, Mario F. & Roe, Brian & Hicks, Robert L., 2002. "Can Eco-Labels Tune a Market? Evidence from Dolphin-Safe Labeling," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 339-359, May.
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    4. Daniel M. G. Raff & Manuel Trajtenberg, 1996. "Quality-Adjusted Prices for the American Automobile Industry: 1906-1940," NBER Chapters, in: The Economics of New Goods, pages 71-108, National Bureau of Economic Research, Inc.
    5. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    6. Phil Graves & James C. Murdoch & Mark A. Thayer & Don Waldman, 1988. "The Robustness of Hedonic Price Estimation: Urban Air Quality," Land Economics, University of Wisconsin Press, vol. 64(3), pages 220-233.
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    9. Osborne, Laura L. & Smith, V. Kerry, 1996. "Environmental Amenities as Sources for Product Differentiation and Market Power," Working Papers 96-08, Duke University, Department of Economics.
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    More about this item

    Keywords

    eco-labels; organic-cotton apparel; dyes; hedonic price; labeling; textiles; green label;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment

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