Eco-Labelling, the State and Consumer Confidence

Summary

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 seems to argue that low governmental involvement increases confidence. According to this, government should just provide the basic legal framework for eco-labelling and leave the rest to non-governmental organizations. However, the empirical underpinning of this recommendation is insufficient. This paper analyses consumer confidence in different organic food labelling regimes with varying degrees of governmental involvement. Using unique and detailed survey data from USA, 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-labelling.