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

Kevin R. Athearn

No 35105, 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama from Southern Agricultural Economics Association

Abstract: 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.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 24
Date: 2003
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:saeatm:35105

DOI: 10.22004/ag.econ.35105

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