Heyes, A. and Kapur, Sandeep and Kennedy, P. and Martin, S. (2020) But what does it mean? Competition between products carrying alternative green labels when consumers are active acquirers of information. Journal of the Association of Environmental and Resource Economists 7 (2), pp. 243-277. ISSN 2333-5955.
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Abstract
Programs that certify the environmental (or other social) attributes of firms are common. But the proliferation of labeling schemes makes it difficult for consumers to know what each one means -- what level of 'greenness' does a particular label imply? We provide the first model in which consumers can expend effort to learn what labels mean. The relationship between information acquisition costs, firm pricing decisions, the market shares obtained by alternatively-labeled goods and a brown backstop good, and total environmental impact proves complex. Consumer informedness can have perverse implications. In plausible cases a reduction in the cost of information damages environmental outcomes. Our results challenge the presumption that provision of environmental information to the public is necessarily good for welfare or the environment.
Metadata
| Item Type: | Article |
|---|---|
| Keyword(s) / Subject(s): | Eco-labeling, green consumerism, information-based instruments |
| School: | Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School |
| Depositing User: | Sandeep Kapur |
| Date Deposited: | 23 Oct 2019 17:39 |
| Last Modified: | 30 Jul 2025 11:02 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/29610 |
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