Are Eco-Labels Valuable? Evidence from the Apparel Industry

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American Journal of Agricultural Economics, ISSN: 0002-9092, Vol: 81, Issue: 4, Page: 801-811

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W. Nimon; J. Beghin; Wesley Nimon; John Beghin
Oxford University Press (OUP)
Agricultural and Biological Sciences; Economics, Econometrics and Finance; dyes; eco-labels; hedonic price; organic-cotton apparel
article description
Using apparel catalog data from the United States, we estimate hedonic price functions to identify market valuation of environmental attributes of apparel goods. We identify a significant and robust premium for the organic fibers embodied in the apparel goods. We also find a discount for the 'no-dye' label. We do not, however, find any evidence of a premium for environment-friendly dyes. We further investigate the pricing behavior of apparel suppliers for potential heterogeneous pricing of the organic-fiber attribute and find no evidence of different premia across firms.