Eco-Labeling and the Price Premium
International environmental and government organizations propose eco-labeling as a market incentive to cause industry to operate in an ecologically sustainable and biodiversity-friendly manner. A microeconomic analysis questions whether eco-labeling will cause producer profits in a competitive industry to decline, even under a voluntary system, and whether eco-labeling will necessarily generate different prices for labeled and unlabeled product. Using wood product as an example, results identify conditions that may exist when firms lose profits, even under a voluntary system, and where existing production constraints may lead to a single price, regardless of labeling.
References listed on IDEAS
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- Kiker, Clyde F. & Putz, Francis E., 1997. "Ecolocical certification of forest products: Economic challenges," Ecological Economics, Elsevier, vol. 20(1), pages 37-51, January.
- Roheim, Cathy A. & Kline, Jeffrey D. & Anderson, Joan Gray, 1996. "Seafood Safety Perceptions And Their Effects On Anticipated Consumption Under Varying Information Treatments," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(1), April.
- Stephen K. Swallow & Roger A. Sedjo, 2000. "Eco-Labeling Consequences in General Equilibrium: A Graphical Assessment," Land Economics, University of Wisconsin Press, vol. 76(1), pages 28-36.
- Anderson, Siwan & Francois, Patrick, 1997. "Environmental Cleanliness as a Public Good: Welfare and Policy Implications of Nonconvex Preferences," Journal of Environmental Economics and Management, Elsevier, vol. 34(3), pages 256-274, November.
- Holland, Daniel S. & Roheim, Cathy A., 1998. "Predicting Consumer Preferences For Fresh Salmon: The Influence Of Safety Inspection And Production Method Attributes," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(1), April.
- Mattoo, Aaditya & Singh, Harsha V, 1994. "Eco-labelling: Policy Considerations," Kyklos, Wiley Blackwell, vol. 47(1), pages 53-65.
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