Voluntary Eco-Labeling and the Price Premium
Roger Sedjo () and
Stephen Swallow ()
Land Economics, 2002, vol. 78, issue 2, 272-284
International environmental organizations propose voluntary eco-labeling as a market incentive to promote industry to operate in an ecologically sustainable and environmentally friendly manner. A microeconomic analysis questions whether voluntary eco-labeling will cause producer profits in a competitive industry to decline 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.
JEL-codes: Q28 (search for similar items in EconPapers)
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