Eco-Labeling Strategies and Price-Premium

Abstract

Although there is increasing use of eco-labeling, conditions under which eco-labels can command price premiums are not fully understood. In this article, we demonstrate that the certification of environmental practices by a third party should be analyzed as a strategy distinct from-although related to-the disclosure of the eco-certification through a label posted on the product. By assessing eco-labeling and eco-certification strategies separately, researchers can identify benefits associated with the certification process, such as improved reputation in the industry or increased product quality, independently from those associated with the actual label. In the context of the wine industry, we show that eco-certification leads to a price premium while the use of the eco-label does not.

Information strategies and energy conservation behavior: A meta-analysis of experimental studies from 1975 to 2012

“…Information strategies are based on the principle that more and better information about the environmental impact of activities will encourage consumers to conserve. While theory suggests that information programs may be effective, the empirical evidence seems to indicate important differences in effectiveness according to type of information provided and the context in which the information is communicated (Delmas and Grant, 2010;.…”

Category Signaling and Reputation

“…Formal certification also affects prices significantly, positively for biodynamic and negatively for organic wines in the American market (see also Delmas and Grant (2011)). Given that the clearest signal of membership in these categories comes from formal certification, this pair of results also supports our interpretation of the situation.…”

“…In fact, it tends to be regarded with favor in the wine world. Results from a consumer survey indicated that the majority of American respondents who had tasted organic wines had a positive opinion of their quality (Delmas and Grant, 2011). The French government and the European Commission also explicitly favor the use of organic practices and define them as "good for nature and good for consumer" (European Commission, 2010).…”

Spanish wines in the US market: What attributes do US consumers look for in Spanish wines?

“…For some authors it has little or no influence (Schamel & Anderson, 2003;Schamel, 2006;Luppe et al, 2009), and for others it is a determining factor (Angulo et al, 2000;Lecocq & Visser, 2006;Schroeter et al, 2011) Finally, the inclusion of the winery size variable enables assessment of the impact of the scale factor on wine prices, as well as quantification of the exclusiveness that consumers can award to wines. Winery size is expected to be inversely related to price (Rodríguez & Castillo, 2009;Kwong et al, 2011;or Delmas & Grant, 2014). Size classification was in accordance with the European Commission (EC) recommendation 6 .…”

“…This explains the widespread use of hedonic price models to determine the relative importance of the intrinsic characteristics of wine 1 . Some studies are focused on traditional markets, such as France (Landon & Smith, 1997;Lecocq & Visser, 2006;Ali & Nauges, 2007;Cardebat & Figuet, 2009;Carew & Florkowski, 2010), Italy (Brentari et al, 2011 and2015;Caracciolo et al, 2013;Roma et al, 2013;Levaggi & Brentari, 2014;Cacchiarelli et al, 2014) or Germany (Schamel, 2003), as well as new producers, such as Australia (Oczkowski, 1994(Oczkowski, , 2015Steiner, 2004;Davis & Ahmadi-Esfahani, 2005), New Zealand (Bicknell et al, 2005;Bicknell & MacDonald, 2012), US (Yang et al, 2012;Cuellar & Claps, 2013;Delmas & Grant, 2014), Chile (Melo et al, 2005;Troncoso & Aguirre, 2006;Ortuzar & Alfranca, 2010) or Argentina (San Martin et al, 2008;Estrella, 2014).…”