Eco-Labeling and the Price Premium

Roger Sedjo (sedjo@rff.org) and Stephen Swallow (stephen.swallow@uconn.edu)

RFF Working Paper Series from Resources for the Future

Abstract: 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.

Date: 1999-12-01
New Economics Papers: this item is included in nep-env
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Citations: View citations in EconPapers (16)

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