Does Eco-Labeling of Services Matter? Evidence from Higher Education

Eco-labeling of services has become increasingly common, yet little empirical evidence exists concerning its effectiveness. We address this gap in the literature by analyzing a highly visible eco-label, the American College and University Presidents' Climate Commitment (ACUPCC), in the sector of higher education. We match information about the ACUPCC to the US Department of Education IPEDS database to examine the impact of signing on student applications, admissions, and enrollment. We utilize two estimation strategies each involving distinct counterfactuals to identify the effects of interest. Difference-in-difference and interrupted time series approaches both find that signing the ACUPCC increases applications and admitted students by 2.5-3.5%. However, the evidence regarding enrollment is weaker with only some specifications finding increases of around 1-2%. These results show that, at the minimum, voluntary and information based approaches (VIBAs) for services can be effective in generating visibility and influencing less-costly consumer behavior