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.
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- 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.
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- 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.
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