Can eco-labels tune a market? Evidence from dolphin-safe labeling

In this paper we test whether the dolphin-safe labels altered consumer purchases of tuna. We also provide a partial measure of the total welfare effects of the dolphin-safe labeling policy. The results confirm our hypothesis that the dolphin-tuna controversy and the subsequent implementation of dolphin-safe labeling affected consumer behavior. Further, the paper provide, market-based evidence that consumers can respond to eco-labels: the dolphin-safe label increased the market share of canned tuna. The welfare analysis provides a partial measure of society's willingness to pay to avoid personally contributing to dolphin mortality as a result of tuna fishing. (C) 2001 Elsevier Science (USA).