Ecolabels and The Economic Recession

Jibonayan Raychaudhuri, Grada Wossink

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We examine the effect of the 2008 economic recession on consumers' observed expenditures for eco-labelled grocery products. Traditional price theory predicts that consumers change their spending during an economic downturn and we would expect the sales share of eco-labelled products to fall since these are relatively more expensive than non-labelled products. We use supermarket loyalty card data from the UK and show that the recession had widely different effects on the expenditure share of different eco-labelled grocery products. We confirm, empirically, that expenditure shares on organic products declined over the time period under study but the expenditures share for fair-trade products increased over the same period. We evaluate alternative models of decision making to explain our results, viz., a salience model and a model of reputation signalling. We find that both of these models give a plausible explanation of our empirical results.
Original languageEnglish
Article numbere0294167
JournalPLoS ONE
Issue number12
Early online date4 Dec 2023
Publication statusE-pub ahead of print - 4 Dec 2023


  • eco-labels, public goods, recession, scanner data, non-parametric regression, salience, reputation signalling


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