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http://hdl.handle.net/10419/18497
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| Title: | | Ecological Labelling in North-South Trade  |
| Authors: | | Althammer, Wilhelm Dröge, Susanne |
| Issue Date: | | 2006 |
| Series/Report no.: | | DIW-Diskussionspapiere 604 |
| Abstract: | | We investigate in a horizontal product differentiation model with North-South trade the implications of a home bias in consumers' demand for labelled goods. We compare mutual recognition and international harmonisation of ecological labels with respect to firms' profits and welfare. Northern consumers perceive a warm glow from buying green, but have information problems with imported labelled products. Firms differ in labelling costs which could help a Southern firm to compensate for the home bias under mutual recognition. Under harmonisation the home bias disappears. Welfare analysis of harmonised labelling shows that a Southern firm gains from adopting a harmonised label { even if there is "eco-imperialism". Given the specific trade structure in our model, harmonisation is a beneficial regime except for the case that labelling costs reach a specific treshold. |
| Subjects: | | Ecological Labels Product Differentiation North-South Trade WTO Rules |
| JEL: | | L13 Q56 F13 F18 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des DIW DIW-Diskussionspapiere
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