Given the scientific uncertainties and differing arguments for and against genetically modified food, perceptions and valuation may depend on information about their different and conflicting potential effects. In this study we explore generic attitudes towards genetically modified organisms, particularly in food, and adopt an economic contingent valuation approach to highlight the relevance of information provision. The study focuses on young college students, who are more scientifically informed than the rest of the population. It explores perceptions and economic valuation of genetically modified food, and exposes respondents randomly to three information treatments concerning genetically modified organisms’ impacts (negative, positive or mixed). Applying the contingent valuation methodology allows us to expose individuals to a situation where they can express their willingness to accept a genetically modified ingredient in exchange for lower prices. We observe that exposing respondents to critical arguments about this kind of food negatively affects their economic valuations, whereas positive or mixed information have no impact. Albeit the conclusions are limited in terms of generalizability to the rest of the population, the results suggest there may still be scope for information provision. Furthermore, both policy-makers and firms may benefit from a more informed public. Policy-makers can gauge public opinion to legitimize policy options and firms can shape market decisions based on more informed and stable consumer preferences.

In surveys consumers express preferences for ethical goods. Some authors claim, however, that survey responses do not translate into actual costly purchase behavior. To study if ethical consumption and differentiation occur in an incentive-compatible setting, this paper implements a design of an incentivized market experiment, which has been studied in the context of homogenous goods and both theoretically and experimentally engenders a dynamic of price decrease. This experiment establishes that ethical differentiation can be an effective strategy for sellers with ethically motivated buyers; and, although there is an ethical price premium, it accrues to the charity rather than to the seller.

In a green goods market a combination of individual and corporate social responsibility may lead to the internalization of externalities. This economics experiment implements a market for green credence goods in the presence of externalities on other buyers and explores whether a combination of individual and corporate social responsibility may lead to the internalization of externalities. Under information asymmetry, we observe widespread false claims and an apparently pro-environmental market, when in reality green goods are sparingly sold. When a credible label is possible or when the information asymmetry is removed, the provision of actual green goods increases, but is roughly 20% to 25% of the market share. While this share is non-negligible, the niche market that ensues does not ensure that less environmentally damaging consumption options will be widespread, nor that social welfare will be maximized once the information asymmetry is removed.

In markets where ethical goods are available, consumers and producers can voluntarily address the negative externality market failure. However, in reality, these goods are often credence goods and the claims are not verifiable by consumers. We design an experiment to explore whether there can be voluntary internalization of negative externalities in markets controlling for different types of information asymmetry, namely credence claims with the potential for false advertisements, the possibility of certifying claims and finally mandatory truthful claims. We observe that there is a limited scope for ethical goods to be traded and negative externalities reduced in all informational setups. However, when false claims can be made, markets will appear very prosocial to the outside observer who will see widespread concerns for externalities and a price premium on allegedly ethical goods relative to conventional ones. In fact, conventional goods are just being falsely advertised as ethical. In addition, the price premium is seldom enough to cover the additional cost of producing a good that minimizes externalities. Even when credence claims are not allowed, the market will only partially internalize negative externalities, leaving thus room for some form of regulatory intervention.

In a context where sustainable consumption and production need to be encouraged, economic experiments can provide significant insights into how individuals consider environmental externalities in their choices and how public policy can foster the environmental public good. Experimental studies aiming to evaluate market mitigation of externalities through the provision of green goods usually choose to adopt neutral language in terms of framing. Our study implements an incentivized economics experiment to explore how supply and demand consider negative externalities. Furthermore, the study addresses the impact of using non-abstract wording when describing negative externalities. Two types of goods can be produced and bought, namely goods generating negative externalities on other consumers (either labelled as B or brown) and goods that cause no harm to others (either labelled A or green). We conclude that the provision of green goods increases from 18.1% in the abstract frame to 70% in the environmental frame. Framing is, therefore, a relevant variable for the outcome of this experimental market. This has important implications for economic experiments aiming to evaluate pro-environmental behaviours and provide policy orientations for the provision of green goods.

An impure public good is a commodity that combines public and private characteristics in fixed proportions. Green goods such as dolphin-friendly tuna or green electricity programmes provide increasingly popular examples of impure public goods. We design an experiment to test how the presence of impure public goods affects pro-social behaviour. We set parameters, such that from a theoretical point of view the presence of the impure public good is behaviourally irrelevant. In a baseline setting, where the impure public good provides only small contributions to the public good, we observe that on aggregate pro-social behaviour, defined as total contributions to the public good, is lower in the presence of the impure good. Some individuals do not alter their decisions, but roughly two fifths of subjects make a lower contribution to the public good in the presence of the impure public good. On the contrary, in the case where the impure public good favours the public good component at the expense of private earnings, individuals are unaffected in their behaviour. We conclude that the presence of green goods which have only a small environmental component may reduce pro-environmental behaviour.

In a context where sustainable consumption and production need to be encouraged, economic experiments can provide significant insights into how individuals consider environmental externalities in their choices and how public policy can foster the environmental public good. Experimental studies aiming to evaluate market mitigation of externalities through the provision of green goods usually choose to adopt neutral language in terms of framing. Our study implements an incentivized economics experiment to explore how supply and demand consider negative externalities. Furthermore, the study addresses the impact of using non-abstract wording when describing negative externalities. Two types of goods can be produced and bought, namely goods generating negative externalities on other consumers (either labelled as B or brown) and goods that cause no harm to others (either labelled A or green). We conclude that the provision of green goods increases from 18.1% in the abstract frame to 70% in the environmental frame. Framing is, therefore, a relevant variable for the outcome of this experimental market. This has important implications for economic experiments aiming to evaluate pro-environmental behaviours and provide policy orientations for the provision of green goods.

Green goods such as recycled paper stationary or carbon-neutral flights provide increasingly popular examples of impure public goods. Motivated by theoretical treatments of green goods as a bundle of private and public characteristics in proportions fixed by the provider, we design an experiment with two linked treatments to test how the presence of impure public goods affects behaviour towards public good causes. We set parameters, such that from a standard economic perspective the presence of the impure public good is behaviourally irrelevant. In a treatment where the impure public good provides only small contributions to the public good, we observe that on aggregate pro-social behaviour is lower in the presence of the impure public good. On the contrary, in the treatment where the impure public good is more generous towards the public good component at the expense of private earnings, individuals are unaffected in their behaviour. We observe that impure public goods, that are theoretically irrelevant and are mostly self-interested, may hinder pro-social behaviour and look for explanations in social psychology, such as the phenomenon of thoughtful anchoring, motivated reasoning and reluctant altruism. The results from this experiment question the role of green goods in enhancing environmentally friendly behaviours.

The 3rd Annual Conference of the Portuguese Association of Energy Economics – APEEN and the International Meeting on Energy and Environmental Economics – ME3 took place on the 18-19 October 2018 in Braga, Portugal. The event was hosted by the Universidade do Minho and gathered the contributions of specialists in Energy and Environmental Economics to enrich the debate about the many issues raised by the management of resources and waste. The main topic was Managing Resources and Waste: challenges for Energy and Environmental Economics beyond 2030. ​Natural resources are the keystone in environmental and energy economics. Nowadays, resource management cannot ignore waste, traditionally seen as a by-product of consumption and production decisions, but increasingly recognized as a source of energy or as new type of resource.