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Brockmann, Karl Ludwig
Hemmelskamp, Jens
Year of Publication: 
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ZEW Discussion Papers 95-25
Environmental considerations are becoming increasingly important in the decision making process of consumers and producers. A credible environmental label can only be established if it is issued by a neutral or state organisation on the basis of scientifically derived criteria. This holds true for the Blue Angel issued by the German Institute for Quality Control and Designation e.V. (RAL, Deutsches Institut für Gütesicherung und Kennzeichnungen). A growing number of environmental labels are being introduced through internal declarations of single companies or groups choosing their own criteria. The credibility of such declarations, in the opinion of consumers, is generally slight. A case study of dispersion paints labelled with the Blue Angel indicates that environmental consciousness of' consumers can, with the help of a credible environmental label be transformed into higher market penetration of a labelled product. Proce differences between labelled and competing non-labelled products should be moderate, as in general the willingness to pay more for an environmentally friendly product is not pronounced. Applying the results of the case study on dispersion paints to other products is restricted by the fact that consumers are not necessarily as directly affected by negative environmental effects of these products as they are by the toxic fumes emitted by paints containing solvents. Given a less significant direct effect on consumers, the sales and price dynamics should be lower than the behaviour observed for dispersion paints.
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