International Review of Environmental and Resource Economics > Vol 6 > Issue 4

The Economics of Eco-Labeling: Theory and Empirical Implications

Charles F. Mason, Department of Economics & Finance, University of Wyoming, bambuzlr@uwyo.edu
 
Suggested Citation
Charles F. Mason (2013), "The Economics of Eco-Labeling: Theory and Empirical Implications", International Review of Environmental and Resource Economics: Vol. 6: No. 4, pp 341-372. http://dx.doi.org/10.1561/101.00000054

Published: 09 Apr 2013
© 2013 C. F. Mazon
 
Subjects
Environmental Economics
 
Keywords
Q5D8L15
Asymmetric informationEco-labelingEnvironmental economicsSignalingTesting
 

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In this article:
1 Introduction
2 Deterministic Certification
3 Probabilistic Certification
4 Ecolabeling and Endogenous Types
5 Heterogeneous Costs
6 Endogenous Labels
7 Empirical Implications
8 Conclusion
References

Abstract

Over the past several years, environmental economists have been increasingly attracted to the use of information as an alternative to traditional methods for regulating externalities. An example of this approach is "eco-labeling," where a third party certifies firms' products; this approach is particularly popular in practice, having been adopted in a variety of countries. With this widespread adoption of eco-labeling, a literature has developed in environmental economics. In this paper, I survey the equilibria that may occur with eco-labeling, and discuss the resultant welfare effects.

DOI:10.1561/101.00000054