The Economics of Eco-Labeling: Theory and Empirical Implications
Charles F. Mason, Department of Economics & Finance, University of Wyoming, email@example.com
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
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.