To Display or Not to Display the Environmental Benefits on Ecolabels : Evidence from Consumers' Willingness to Pay for Best Management Practices (Bmps) Labels

Despite the growing popularity of environmental labels in the food market, the effectiveness of a generic environmental label without specifying benefits compared to a label explicitly stating the associated benefits of relevant production practices remains unclear. We examine this issue by estimating consumer willingness to pay (WTP) for three Best Management Practices (BMPs) labels. These labels include one generic label and two benefit-specific labels with varying wording, all indicating that the products originate from farms implementing BMPs. Additionally, we examine the impact of different informational messages regarding the connection between agricultural production and water pollution on consumer WTP. An online consumer survey of a nationally representative US sample shows that consumers are willing to pay a higher premium for benefit-specific than generic BMP labels. Additionally, the wording of environmental claims in the BMP labels affects WTP. Furthermore, when consumers receive an educational message that combines the importance of agriculture for society (positive information) and the negative impact of agriculture on the environment and its consequences (negative information), WTP for the BMP labels increases compared to no information or partial information scenario. These findings suggest that regulators should identify the appropriate label design and educational messages to promote sustainable consumption effectively