Eco-Labeling and the Price Premium

Roger A. Sedjo and Stephen K. Swallow

No 10826, Discussion Papers 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.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 17
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ags:rffdps:10826

DOI: 10.22004/ag.econ.10826

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