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Public, Private and Nonprofit Regulation for Environmental Quality
Author(s) -
Bottega Lucie,
De Freitas Jenny
Publication year - 2009
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1530-9134.2009.00209.x
Subject(s) - monopoly , scope (computer science) , business , quality (philosophy) , profit (economics) , product (mathematics) , welfare , public economics , advertising , industrial organization , marketing , economics , microeconomics , market economy , philosophy , geometry , mathematics , epistemology , computer science , programming language
This paper studies the welfare implications of different institutions certifying environmental quality supplied by a monopoly. The monopolist can voluntarily certify the quality of the product through an eco‐label provided either by an NGO or a for‐profit private certifier (PC). The NGO and the PC may use advertisement to promote the label. We compare the NGO and PC regimes with the regime where the regulator imposes a minimum quality standard. The presence of a private certifier in the market decreases the scope for public intervention. The availability of green advertisement reinforces the above result.