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How can labeling for health concerns improve environmental public good provisioning?

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  • Letort, Elodie
  • Le Gloux, Fanny
  • Dupraz Pierre

Abstract

Although consumers are increasingly willing to pay for the environment, the private provision of public goods from the consumption of green goods remains limited. We propose in this paper to exploit an additional private attribute of green goods, the health benefits, in order to increase the provision of public good. Health can be seen as a positive internality associated with the consumption of some green goods. We show that correcting this internality by offering labels describing these health benefits can increase the supply of public goods. The level of public good remains underprovided from the perspective of a social planner, but, under certain conditions, may equalize or exceed the optimal level of the public good from the perspective of an environmental agency. A simulation is performed to illustrate the impact of consumer preferences on the provisioning of public good at market equilibrium.

Suggested Citation

  • Letort, Elodie & Le Gloux, Fanny & Dupraz Pierre, 2023. "How can labeling for health concerns improve environmental public good provisioning?," Working Papers 338910, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    • Handle: RePEc:ags:inrasl:338910
    DOI: 10.22004/ag.econ.338910
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    References listed on IDEAS

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    Keywords

    Demand and Price Analysis; Environmental Economics and Policy; Food Consumption/Nutrition/Food Safety;
    All these keywords.

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