Ecolabels: Is More Information Better?

Hend Ghazzai () and Rim Lahmandi-Ayed

Working Papers from HAL

Abstract: We study in this paper the effect of the type of information provided by an ecolabel. For this purpose, in the framework of a model of vertical differentiation, we compare the effects of a partial information label (Type I) and a complete information label (Type III) on firms' profits, industry profit, consumers' surplus, environmental damage and social welfare. A partial information label indicates that the environmental quality of a good exceeds some given threshold. The authority issuing a partial information label chooses its labeling criteria while maximizing the social welfare. A complete information label indicates the exact environmental quality chosen by firms. We prove that while a partial information label always improves the social welfare and deteriorates the green firm profit compared to a complete information label, the preferences of the brown firm, the industry, the consumers and the impact on the environment depend on the marginal cost of quality and on the environmental sensitivity to quality.

Keywords: Ecolabel; Complete Information; Partial Information; Environmental Quality; Ver-tical Differentiation JEL Classification L11; Q58 (search for similar items in EconPapers)
Date: 2018-09-20
New Economics Papers: this item is included in nep-env
Note: View the original document on HAL open archive server: https://hal.science/hal-01877934
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hal.science/hal-01877934/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01877934

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().