Pricing of eco-labels with retailer heterogeneity

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© 2015 Elsevier Ltd. All rights reserved.Eco-labels are important features of many natural resource and food markets. They certify that a product has some desirable unobserved quality, typically related to a public good such as being sustainably produced. Two issues that have received limited attention are whether pricing varies across different eco-labels that may compete with each other and to what extent different retailers charge different prices. Using a unique data set of salmon prices in eight different United Kingdom retail chains, we investigate these issues by estimating a price-attribute model that includes two eco-labels and one country-of-origin label. Results show substantial variation in the prices of the different eco-labels and that eco-label premiums vary across retail chains. Specifically, salmon certified with the Marine Stewardship Council (MSC) label has a high premium in low-end retail chains but no statistically significant premium in the high-end chains. These findings question the ability of the MSC label to transmit consumer willingness-to-pay for public goods through the supply chain to incentivize sustainable management. In contrast, premiums for organic certification are similar in magnitude across retailer types. In general, failure to account for retailer heterogeneity will over- or under-estimate a label's premium.






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Asche, F, TA Larsen, MD Smith, G Sogn-Grundvåg and JA Young (2015). Pricing of eco-labels with retailer heterogeneity. Food Policy, 53. pp. 82–93. 10.1016/j.foodpol.2015.04.004 Retrieved from

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Martin D. Smith

George M. Woodwell Distinguished Professor of Environmental Economics

Smith studies the economics of the oceans, including fisheries, marine ecosystems, seafood markets, and coastal climate adaptation. He has written on a range of policy-relevant topics, including economics of marine reserves, seasonal closures in fisheries, ecosystem-based management, catch shares, nutrient pollution, aquaculture, genetically modified foods, the global seafood trade, organic agriculture, coastal property markets, and coastal responses to climate change. He is best known for identifying unintended consequences of marine and coastal policies that ignore human behavioral feedbacks. Smith’s methodological interests span micro-econometrics, optimal control theory, time series analysis, and numerical modeling of coupled human-natural systems. Smith’s published work appears in The American Economic Review, Nature, Science, Proceedings of the National Academy of Sciences, Journal of Environmental Economics and Management, the Review of Economics and Statistics, and a number of other scholarly journals that span environmental economics, fisheries science, marine policy, ecology, and the geo-sciences. Smith has received national and international awards, including the Quality of Research Discovery from the Agricultural and Applied Economics Association, Outstanding Article in Marine Resource Economics, and an Aldo Leopold Leadership Fellowship. His research has been funded by the National Science Foundation, the National Oceanic and Atmospheric Administration, the National Center for Ecological Analysis and Synthesis, and the Research Council of Norway. Smith has served as Editor-in-Chief of the journal Marine Resource Economics, Co-Editor of the Journal of the Association of Environmental and Resource Economists, and Co-Editor of the Journal of Environmental Economics and Management. He served as a member of the Scientific and Statistical Committee of the Mid-Atlantic Fishery Management Council and currently serves on the Ocean Studies Board of the National Academies.

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