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Interaction Between Food Attributes in Markets: The Case of Environmental Labeling

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  • Grolleau, Gilles
  • Caswell, Julie A.

Abstract

Some consumers derive utility from using products produced with specific processes, such as environmentally friendly practices. Means of verifying these credence attributes, such as certification, are necessary for the market to function effectively. A substitute or complementary solution may exist when consumers perceive a relationship between a process attribute and other verifiable product attributes. We present a model where the level of search and experience attributes influences the likelihood of production of eco-friendly products. Our results suggest that the market success of eco-friendly food products requires a mix of environmental and other verifiable attributes that together signal credibility.

Suggested Citation

  • Grolleau, Gilles & Caswell, Julie A., 2005. "Interaction Between Food Attributes in Markets: The Case of Environmental Labeling," Working Paper Series 14536, University of Massachusetts, Amherst, Department of Resource Economics.
    • Handle: RePEc:ags:umamwp:14536
    DOI: 10.22004/ag.econ.14536
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    More about this item

    Keywords

    Environmental Economics and Policy; Marketing;

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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