Hostname: page-component-586b7cd67f-t7fkt Total loading time: 0 Render date: 2024-11-23T22:34:30.342Z Has data issue: false hasContentIssue false
  • English
  • Français

Eco-Labels as a Signal of Quality*

Published online by Cambridge University Press:  08 June 2012

Lester M.K. Kwong
Lester M.K. Kwong
Affiliation:
Department of Economics and Fellow of the Cool Climate, Oenology and Viticulture Institute, Brock University, 500 Glenridge Ave., St. Catharines, Ontario, Canada, L2S 3A1. email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Using a canonical model of signaling, we show that if the cost of organic viticulture is strictly increasing in the quality dimension, then the use of eco-labels as a signal for quality cannot possibly occur as an equilibrium outcome. Conditions for the existence of such a signalling equilibrium as well as some general properties regarding its configuration are herein characterized. (JEL Classification: L15, L66, M3)

Type
Articles
Information
Journal of Wine Economics , Volume 6 , Issue 2 , Autumn 2011 , pp. 179 - 192
Copyright
Copyright © American Association of Wine Economists 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abe, K., Higashida, K. and Ishikawa, J. (2002). Eco-labelling, environment, and international trade. In: Stern, R. (ed.), Issues and options for U.S.-Japan trade policies, Ann Arbor: University of Michigan Press.Google Scholar
Ashenfelter, O. (2008). Predicting the quality and prices of Bordeaux wine. The Economic Journal, 118, F174–F184.Google Scholar
Bjørner, T., Hansen, L. and Russell, C. (2004). Environmental labeling and consumers’ choice – an empirical analysis of the effect of the Nordic Swan. Journal of Environmental Economics and Management, 47, 411–434.Google Scholar
Cason, T. and Gangadharan, L. (2002). Environmental labeling and incomplete consumer information in laboratory markets. Journal of Environmental Economics and Management, 43, 113–134.Google Scholar
Corsi, A. and Strøm, S. (2009). The premium for organic wines: estimating a hedonic price equation from the producer side. Working Paper, University of Oslo.Google Scholar
Delmas, M. and Grant, L. (2010). Eco-labeling strategies and price-premium: the wine industry puzzle. Business and Society, forthcoming. doi: 10.1177/0007650310362254Google Scholar
Demeter-International e.V. (2010). Processing Standards: For the use of Demeter, Biodynamic and Related Trademarks. Retrieved from http://demeter.net/standards/st_processing_e.pdfGoogle Scholar
Dosi, C. and Moretto, M. (2001). Is ecolabelling a reliable environmental policy measure? Environmental and Resource Economics, 18, 113–127.CrossRefGoogle Scholar
Fudenberg, D. and Tirole, J. (1998). Game Theory. MIT Press: London.Google Scholar
Gergaud, O. and Livat, F. (2007). How do consumers use signals to assess quality? American Association of Wine Economists, AAWE Working Paper No. 3.Google Scholar
Johnston, R., Wessells, C., Donath, H. and Asche, F. (2001). Measuring consumer preferences for ecolabeled seafood: An international comparison. Journal of Agricultural and Resource Economics, 26, 20–39.Google Scholar
Kirchhoff, S. (2000). Green business and blue angels: A model of voluntary overcompliance with asymmetric information. Environmental and Resource Economics, 15, 403–420.CrossRefGoogle Scholar
Mailath, G. (1987). Incentive compatibility in signaling games with a continuum of types. Econometrica, 55, 1349–1365.Google Scholar
Mattoo, A. and Singh, H. (1994). Eco-labelling: policy considerations. Kyklos, 47, 53–65.Google Scholar
Mattoo, A. and Singh, H. (1997). Eco-labelling, the environment and international trade. In: Zarrilli, S., Jha, V. and Vossenaar, R. (eds.), Eco-labelling and international trade, New York: Macmillan Press.Google Scholar
Nimon, W. and Behgin, J. (1999). Are eco-labels valuable? Evidence from the apparel industry. American Journal of Agricultural Economics, 81, 801–811.Google Scholar
Rege, M. (2000). Strategic policy and environmental quality: helping the domestic industry to provide credible information. Environmental and Resource Economics, 15, 279–296.Google Scholar
Teisl, M., Roe, B. and Hicks, R. (2002). Can eco-labels tune a market? Evidence from dolphin-safe labeling. Journal of Environmental Economics and Management, 43, 339–359.CrossRefGoogle Scholar