Interaction between Food Attributes in Markets: The Case of Environmental Labeling
University of Massachusetts, Amherst Resource Economics Working Paper No. 2005-5
30 Pages Posted: 28 Apr 2005
Date Written: April 2005
Some consumers derive utility from using products produced with specific processes, such as environmentally friendly practices. Means of verifying these credence attributes, such as certification, are necessary for the market to function effectively. A substitute or complementary solution may exist when consumers perceive a relationship between a process attribute and other verifiable product attributes. We present a model where the level of search and experience attributes influences the likelihood of production of eco-friendly products. Our results suggest that the market success of eco-friendly food products requires a mix of environmental and other verifiable attributes that together signal credibility.
Keywords: Environmental labeling, food attributes, food marketing, quality perception
JEL Classification: L15, Q13, Q18
Suggested Citation: Suggested Citation