The state and consumer confidence in eco-labeling: Organic labeling in Denmark, Sweden, The United Kingdom and The United States

Abstract

Trustworthy eco-labels provide consumers with valuable information on environmentally friendly products and thus promote green consumerism. But what makes an eco-label trustworthy and what can government do to increase consumer confidence? The scant existing literature indicates that low governmental involvement increases confidence. This suggests that government should just provide the basic legal framework for eco-labeling and leave the rest to non-governmental organizations. However, the empirical underpinning of this conclusion is insufficient. This paper analyses consumer confidence in different organic food labeling regimes with varying degrees of governmental involvement. Using unique and detailed survey data from the US, United Kingdom, Denmark, and Sweden, the analysis shows that confidence is highest in countries with substantial state involvement. This suggests that governments can increase green consumerism through active and substantial involvement in eco-labeling. Show more