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Can Eco-Labeling Do More Harm Than Good? A Comparative Statics Analysis

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  • Athearn, Kevin R.

Abstract

This paper uses a two-product partial equilibrium model with demand- and supply-side substitution effects to identify supply and demand conditions under which eco-labeling would be most and least effective. The results suggest that eco-labeling is most effective at reducing environmentally harmful production when it leads to a decrease in demand for unlabeled products and producers respond to non-price incentives in adopting the certified methods. The analysis demonstrates that consumer willingness-to-pay a premium and the potential demand for an eco-labeled product do not provide the best indication of an eco-labeling program's effectiveness at reducing adverse environmental impacts.

Suggested Citation

  • Athearn, Kevin R., 2003. "Can Eco-Labeling Do More Harm Than Good? A Comparative Statics Analysis," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35105, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saeatm:35105
    DOI: 10.22004/ag.econ.35105
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    References listed on IDEAS

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    Cited by:

    1. Colyer, Dale, 2004. "Environmental Provisions in Trade Agreements," Conference Papers 19103, West Virginia University, Department of Agricultural Resource Economics.
    2. Colyer, Dale, 2004. "Environmental Regulations And Competitiveness," Working Papers 19100, West Virginia University, Department of Agricultural Resource Economics.
    3. Colyer, Dale, 2004. "Environmental Regulations and Agricultural Competitiveness," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 5(1), pages 1-17.

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    Keywords

    Environmental Economics and Policy;

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