How can labeling for health concerns improve environmental public good provisioning?

Elodie Letort, Fanny Le Gloux and Pierre Dupraz

No 338910, Working Papers from Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2)

Abstract: Although consumers are increasingly willing to pay for the environment, the private provision of public goods from the consumption of green goods remains limited. We propose in this paper to exploit an additional private attribute of green goods, the health benefits, in order to increase the provision of public good. Health can be seen as a positive internality associated with the consumption of some green goods. We show that correcting this internality by offering labels describing these health benefits can increase the supply of public goods. The level of public good remains underprovided from the perspective of a social planner, but, under certain conditions, may equalize or exceed the optimal level of the public good from the perspective of an environmental agency. A simulation is performed to illustrate the impact of consumer preferences on the provisioning of public good at market equilibrium.

Keywords: Demand and Price Analysis; Environmental Economics and Policy; Food Consumption/Nutrition/Food Safety (search for similar items in EconPapers)
Pages: 25 p.
Date: 2023-11-22
New Economics Papers: this item is included in nep-agr, nep-env and nep-res
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Persistent link: https://EconPapers.repec.org/RePEc:ags:inrasl:338910

DOI: 10.22004/ag.econ.338910

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