Minimum quality standards and compulsory labeling when environmental quality is not observable

Birg, Laura; Voßwinkel, Jan S.

doi:10.1016/j.reseneeco.2018.01.003

Cited by 9 publications

(4 citation statements)

References 12 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Regulation is useful, because market imperfection may lead to an excess of quality differentiation compared with what is socially optimal (Bansal & Gangopadhyay, 2003). Birg & Voßwinkel (2018) theoretically showed that social welfare is higher under the combination of both minimum quality standards and mandatory labeling than under either no regulation or each instrument applied in isolation.…”

Section: Version Preprintmentioning

confidence: 99%

A Review of Eco-labels and their Economic Impact

Yokessa

Marette

2019

IRERE

View full text Add to dashboard Cite

In many countries, various eco-labels have emerged for informing consumers about the environmental impact of the offered products. Using recent advances in the empirical and theoretical literature, this review questions the efficiency of eco-labeling. We combine a literature review with discussions of empirical examples. We underline the limitations of eco-labels for signaling credible information to consumers. In particular, both the complexity and the proliferation of eco-labels are likely to hamper their efficiency in guiding consumers. From a regulatory perspective, several studies show that eco-labels are useful, but they cannot be considered a panacea for improving environmental quality. Indeed, it is often socially optimal to combine eco-labels with other regulatory tools such as standards banning polluting products and tax/subsidy mechanisms depending on the environmental quality. The conclusion suggests research priorities for tackling unanswered questions.

show abstract

Section: Version Preprintmentioning

confidence: 99%

A Review of Eco-labels and their Economic Impact

Yokessa

Marette

2019

IRERE

View full text Add to dashboard Cite

show abstract

“…Chen (2001), in fact, develops a model that explicitly assumes a negative correlation between environmental and regular quality attributes, pointing to real-world trade-offs between fuel efficiency and safety of cars and between recyclability and quality consistency of durables as motivating examples. Conversely, Birg & Voßwinkel (2018) develop a model in which firms vertically differentiate through raising both environmental and regular quality simultaneously, implying a positive correlation between the attributes. Halo and stigma effects may, in other words, just be forms of statistical discriminationreasonable Bayesian inferences based on reasonable priors about how quality dimensions might be correlated.…”

Section: Consumers May Merely Imagine Qmentioning

confidence: 99%

“…Most papers that adopt the benefit approach and treat abstainers as providing no environmental benefit avoid the coexistence issue by ignoring use value, thus implicitly setting v = 0. Three exceptions are Bagnoli & Watts (2003), Hamilton & Zilberman (2006), and Birg & Voßwinkel (2018), who treat v as positive. All three papers finesse the coexistence issue, however, by writing the private component of utility as θ (v + q) rather than v + θ q.…”

Section: Benefits Versus Avoided Damagesmentioning

confidence: 99%

Eco-Labels: Modeling the Consumer Side

Veld

2020

Annu. Rev. Resour. Econ.

View full text Add to dashboard Cite

The theoretical literature analyzing eco-label programs has focused mainly on how intricate interactions between firms, eco-label certifiers, and regulators shape these programs’ economic and environmental outcomes. Far less attention has been paid to the consumer side, which has typically been modeled very simply. Meanwhile, empirical researchers in behavioral economics, social psychology, and market research have accumulated a large body of empirical evidence that paints a rich, complex picture of that consumer. In this review, I survey a range of these empirical findings, as well as attempts by theorists to incorporate them in their models. The survey is organized around three themes: ( a) varieties of consumer ignorance, ( b) context dependence of consumer motivations, and ( c) motivational spillover effects across time and people. I also touch on the relative importance of private and public benefits of eco-label programs and on the debate over whether the private benefits should even be counted in welfare. Expected final online publication date for the Annual Review of Resource Economics, Volume 12 is October 5, 2020. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

show abstract

“…To the best of our knowledge, only a few papers consider the joint effect of the policies analysed (for instance,Birg and Voßwinkel 2018). For one of the most recent papers considering a quality-related subsidy and a consumers education campaign as separate policies, seeGarella (2021).22 For instance, according to our numerical simulation, with the granting of a subsidy equal to ρ = 0.158 we get the same level of the greenness of a policy increasing consumers' awareness to λ = 1.7.…”

mentioning

confidence: 99%

Green Consumerism and Firms’ Environmental Behaviour Under Monopolistic Competition: A Two-Sector Model

Giallonardo

Mulino

2023

Ital Econ J

View full text Add to dashboard Cite

We investigate the pro-environmental behavior of green firms in a context where consumers value the goods’ eco-quality features. We present a two-sector monopolistic competition model with green and brown goods displaying both horizontal and vertical differentiation. Using analytical and quantitative techniques, we derive the optimal eco-quality level selected by green firms and the industry structure both in the short- and long-run equilibrium. We then study the effectiveness of three policy tools (green incentives, the imposition of a minimum quality standard, and green awareness campaigns) with respect to the policymaker’s objective of increasing the overall level of greenness, which we measure through a specific indicator. We find that each policy alone is apt to stimulate an increase in the greenness intensity compared to the unregulated equilibrium. Yet, their side effects in terms of market structure and the possibility that the intensity of application of a single tool may hit budgetary, political, or social limits call for a combination of two or more policies to overcome the above limits and get a higher overall level of greenness than that resulting from just one of them.

show abstract

Minimum quality standards and compulsory labeling when environmental quality is not observable

Cited by 9 publications

References 12 publications

A Review of Eco-labels and their Economic Impact

A Review of Eco-labels and their Economic Impact

Eco-Labels: Modeling the Consumer Side

Green Consumerism and Firms’ Environmental Behaviour Under Monopolistic Competition: A Two-Sector Model

Contact Info

Product

Resources

About