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A Review of Eco-labels and their Economic Impact

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  • Yokessa, Maïmouna
  • Marette, Stéphan
Abstract
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.

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  • Yokessa, Maïmouna & Marette, Stéphan, 2019. "A Review of Eco-labels and their Economic Impact," International Review of Environmental and Resource Economics, now publishers, vol. 13(1-2), pages 119-163, April.
    • Handle: RePEc:now:jirere:101.00000107
    DOI: 10.1561/101.00000107
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    9. Marette, Stephan, 2017. "Quality, market mechanisms and regulation in the food chain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(3), February.
    10. Poret, Sylvaine, 2019. "Label wars: Competition among NGOs as sustainability standard setters," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 1-18.
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    More about this item

    Keywords

    Environment; information; consumers’ behaviors; firms’ strategies;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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    Access and download statistics

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