Epsilon Archive for Student Projects

Abstract

There is currently no consensus among authorities and organizations on whether seafood consumption in Sweden should increase or decrease, with health and environmental concerns as underlying factors. However, all agree on the need to increase the share of eco-labeled products. Given the limited impact of eco-labels alone on consumer behavior, this study analyzes the role of economic instruments in promoting more sustainable consumption. Using scanner data from a single supermarket, demand equations for four salmon categories are estimated through the LA-AIDS model. The analysis includes demand elasticities, fiscal costs, and compensated variation (CV) to evaluate the market and welfare effects of proposed interventions. Two policy approaches reflecting the separate viewpoints are examined. Results suggest that a combined tax-subsidy instrument can effectively shift consumption toward eco-labeled salmon, while a single subsidy approach appears less feasible due to high fiscal costs. The overall economic impact remains uncertain, due to potential regressive outcomes and unintended shifts in consumption.