CAN ECO-LABELING DO MORE HARM THAN GOOD? A COMPARATIVE STATICS ANALYSIS

This paper uses a two-product partial equilibrium model with demand- and supply-side substitution effects to identify supply and demand conditions under which eco-labeling would be most and least effective. The results suggest that eco-labeling is most effective at reducing environmentally harmful production when it leads to a decrease in demand for unlabeled products and producers respond to non-price incentives in adopting the certified methods. The analysis demonstrates that consumer willingness-to-pay a premium and the potential demand for an eco-labeled product do not provide the best indication of an eco-labeling program's effectiveness at reducing adverse environmental impacts.


Issue Date:
2003
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/35105
Total Pages:
24
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-25

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