But What Does It Mean? Competition between Products Carrying Alternative Green Labels When Consumers Are Active Acquirers of Information
Anthony Heyes (),
Peter W. Kennedy,
Steve Martin and
John W. Maxwell
Journal of the Association of Environmental and Resource Economists, 2020, vol. 7, issue 2, 243 - 277
Programs that certify the environmental (or other social) attributes of firms are common. But the proliferation of labeling schemes makes it difficult for consumers to know what each one means—what level of “greenness” does a particular label imply? We provide the first model in which consumers can expend effort to learn what labels mean. The relationship between information acquisition costs, firm pricing decisions, the market shares obtained by alternatively labeled goods and a brown “backstop” good, and total environmental impact proves complex. Consumer informedness can have perverse implications. In plausible cases a reduction in the cost of information damages environmental outcomes. Our results challenge the presumption that provision of environmental information to the public is necessarily good for welfare or the environment.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Access to the online full text or PDF requires a subscription.
Working Paper: But What Does it Mean? Competition between Products Carrying Alternative Green Labels when Consumers are Active Acquirers of Information (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ucp:jaerec:doi:10.1086/706548
Access Statistics for this article
More articles in Journal of the Association of Environmental and Resource Economists from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().