Determinants of Participation versus Consumption in the Nordic Swan Eco-labeled Market

This paper uses data on purchases of Nordic Swan Eco-labeled toilet paper and paper towels by individual Danish households to analyze the determinants of demand for eco-labeled goods and the decision process underlying it. Among several models that are estimated, a double-hurdle model that distinguishes between factors influencing the discrete decision to participate by purchasing an eco-labeled good and the continuous decision about the quantity of the eco-labeled good to be purchased is found to fit the data best. We find that prices as well as consumer tastes and preferences, proxied by their socio-demographic characteristics, have a much stronger impact on the participation decision than on quantity consumed for both Swan-labeled toilet paper and paper towels. The quantity consumed of Swan-labeled goods, on the other hand, is strongly affected by factors such as availability of Swan goods in shops, discount sales on Swan goods, and household size.Environmental Economics and Policy,

Evaluating the role of EPA policy levers: An examination of a voluntary program and regulatory threat in the metal-finishing industry

In this paper, we evaluate the influence of two environmental policy levers on emissions in the metal-finishing industry: a voluntary program- the Strategic Goals Program (SGP)- and the threat of formal regulation. While voluntary approaches are increasingly utilized as policy tools, the effectiveness of such programs is often questioned, and the impact of a voluntary program in tandem with a regulatory threat is not well understood. We examine the decision to participate in the SGP and regulatory threat had on facility emission behavior. Participation in the program appears related to several forms of external pressure: the regulatory threat, industry trade association membership, the level of environmental giving in a state, and a number of neighborhood characteristics. However, over the entire study period, participation in the SGP yielded little, if any, additional reductions in emissions, while the regulatory threat is correlated with significant emission reductions by both participants and non-participants. Splitting our study period into two time periods reveals a more nuanced relationship between SGP participation and emission behavior than is evident over the entire study period. While participants do not appear to take advantage of the program initially, they make greater strides in reducing emission than non-participants in later years. The split sample results also indicate that both participants and non-participants react strongly to the initial threat of regulation and to increase in its relative stringency

Local Residential Sorting and Public Goods Provision: A Classroom Demonstration

This classroom exercise illustrates the Tiebout (1956) hypothesis that residential sorting across multiple jurisdictions leads to a more efficient allocation of local public goods. The exercise places students with heterogeneous preferences over a public good into a single classroom community. A simple voting mechanism determines the level of public good provision in the community. Next the classroom is divided in two, and students may choose to move between the two smaller communities, sorting themselves according to their preferences for public goods. The exercise places a cost on movement at first, then allows for costless sorting. Students have the opportunity to observe how social welfare rises through successive rounds of the exercise, as sorting becomes more complete. One may also observe how immobile individuals can become worse off because of incomplete sorting when the Tiebout assumptions do not hold perfectly.classroom experiments, public goods, residential sorting, Tiebout hypothesis.

Local Residential Sorting and Public Goods Provision: A Classroom Demonstration

This classroom exercise illustrates the Tiebout (1956) hypothesis that residential sorting across multiple jurisdictions leads to a more efficient allocation of local public goods. The exercise places students with heterogeneous preferences over a public good into a single classroom community. A simple voting mechanism determines the level of public good provision in the community. Next, the classroom is divided in two, and students may choose to move between the two smaller communities, sorting themselves according to their preferences for public goods. The exercise places cost on movement at first, then allows for costless sorting. Students have the opportunity to observe how social welfare rises through successive rounds of the exercise, as sorting becomes more complete. They may also observe how immobile individuals can become worse off because of incomplete sorting when the Tiebout assumptions do not hold perfectly

Information Sharing Devices in Environmental Policy: the EU ECO-lable and EMAS

[From the Introduction]. In this paper, I will focus on two voluntary agreements in the European Union, the EU eco-label and Eco-Management and Audit Scheme (EMAS). These voluntary agreements are interesting as they both attempt to facilitate the exchange of information between producers and consumers. The premise of the programs is that the parties, once informed, will use the information to make decisions that will improve the environment. Thus, there are two key steps. First, the voluntary agreements focus on the provision of information. Second, but equally important, the programs rely on the ability of the agents to use the information. Section two introduces the important role that information plays in a market economy. While both producers and consumers are integral in determining the market outcome, the two programs are geared toward different parties. The EU eco-label focuses on consumers as the impetus that will lead to change while the EMAS program places attention on producers. Sections three and four, then, discuss the information provisions of the EU eco-label and EMAS programs. Section five concludes with lessons to be learned from the two programs