Are Eco‐Labels Valuable? Evidence From the Apparel Industry

TLDR

The study estimates hedonic price functions using U.S. apparel catalog data to assess the market valuation of environmental attributes. Authors apply hedonic pricing to catalog data and examine supplier pricing for organic‑fiber attributes, finding no firm‑specific premia.

Abstract

Abstract 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.