Does the use of eco-labels affect income distribution and income inequality of aquaculture producers in Taiwan?

The purpose of eco-labels is to encourage a move towards more environmentally friendly consumption patterns. The eco-label has been recognized as a means of promoting products with lower environmental impact. A considerable body of literature has focused on consumer demand for eco-label use: however, little attention has been paid to producers. Because the adoption decision is voluntary, a better understanding of producers' adoption behaviors towards eco-labels could significantly determine the effectiveness of the program. This paper contributes to this policy issue by assessing the impacts of the Taiwan Good Agricultural Products program, a combined eco-label and food traceability system, on the distribution of aquaculture producers' income in Taiwan. Using a unique aquaculture producer survey in Taiwan, we examine the extent to which label use may affect the level of income, income variability and income inequality of the producers. Our findings suggest that eco-label use increases income and that the effect is more pronounced for producers at the higher percentile range of income distribution. Label use also increases income variability, but no significant effect on income inequality is evident. © 2012 Elsevier B.V.