diminishing its appeal. For example, while green consumers might receive a glow” from “warm eco-consumption, they might also view the eco-label as a signal of lower quality therefore limiting their willingness to pay a premium for such an eco-labeled product. We tested this empirically with an online discrete choice experiment focused on choices over eco-labeled wines. In the US there are two government certified eco-labels for wine. One label is associated with potentially lower quality production techniques, while the other is not. The majority of the 830 participants in our experiment were unaware of the difference between these two labels. We found that respondents preferred eco-labeled wines over an otherwise identical counterpart, when the price was lower and the wine was from a lower quality region. However these relative preferences were reversed if the wine was expensive and from a higher quality region. These results indicate that respondents obtain some warm glow value from eco-labeled wine, but also possibly interpret it as a signal of lower quality. If respondents made no inferences over wine quality, they would always prefer an eco-labeled wine over an otherwise identical wine, regardless of other attributes. One interpretation of these results is that when respondents have already inferred that a wine is lower quality from price and other attributes, then the additional lower quality signal from the eco-label is unimportant, and respondents receive just the warm glow of eco-consumption. However, as price and other quality signals increase, the eco-labels quality signal becomes more pertinent and outweighs the warm-glow of eco-consumption, shifting preferences towards non-eco-labeled wine. This eco-quality penalty holds for both types of eco-labels, even though it should only apply to the eco-label associated with quality concerns. By ignoring potential quality signals from eco-labels, the market for eco-labeled wine has been
diminishing its appeal. For example, while green consumers might receive a “warm glow” from eco-consumption, they might also view the eco-label as a signal of lower quality therefore limiting their willingness to pay a premium for such an eco-labeled product. We tested this empirically with an online discrete choice experiment focused on choices over eco-labeled wines. In the US there are two government certified eco-labels for wine. One label is associated with potentially lower quality production techniques, while the other is not. The majority of the 830 participants in our experiment were unaware of the difference between these two labels. We found that respondents preferred eco-labeled wines over an otherwise identical counterpart, when the price was lower and the wine was from a lower quality region. However these relative preferences were reversed if the wine was expensive and from a higher quality region. These results indicate that respondents obtain some warm glow value from eco-labeled wine, but also possibly interpret it as a signal of lower quality. If respondents made no inferences over wine quality, they would always prefer an eco-labeled wine over an otherwise identical wine, regardless of other attributes. One interpretation of these results is that when respondents have already inferred that a wine is lower quality from price and other attributes, then the additional lower quality signal from the eco-label is unimportant, and respondents receive just the warm glow of eco-consumption. However, as price and other quality signals increase, the eco-labels quality signal becomes more pertinent and outweighs the warm-glow of eco-consumption, shifting preferences towards non-eco-labeled wine. This eco-quality penalty holds for both types of eco-labels, even though it should only apply to the eco-label associated with quality concerns. By ignoring potential quality signals from eco-labels, the market for eco-labeled wine has been
Delmas-Lessem-Eco-Label.docx