| Although there is increasing use of eco-labeling, conditions under which eco-labels can command price premiums are not fully understood. The first chapter demonstrates that the certification of environmental practices by a third party should be analyzed as a strategy distinct from -- although related to -- the disclosure of the eco-certification through a label posted on the product. By assessing the two strategies separately, benefits associated with the certification process are identified independently from those associated with the actual label. In the context of the wine industry, this research shows that eco-certification leads to a price premium while the use of the eco-label does not.;In the other two chapters, I study information and contributions to charities, organizations that often supply public goods. The quality of goods and services produced by charities is typically unknown to donors and is costly to verify. Third-parties provide standardized ratings to diminish the asymmetric information. By assessing one such ratings agency and data from the 5,400 rated charities, I estimate a higher star-rating, from 0-stars to 4-stars, significantly increases contributions. However, charities receive fewer contributions after being rated than before, from a negligible amount for 4-star charities to a 25% cut for 0-star charities. The results provide market-based valuation for the ratings of public goods providers and suggest that greater financial quality is expected of charities.;With ratings increasingly available, concerns arise about behavioral responses of those rated. In the last chapter, I consider how third-party ratings affect the decisions of rated charities, and consequently, overall giving. Fundraising expenses increase contributions, but the expense in doing so hurts ratings. I develop a theoretical model of this trade-off, demonstrating rated charities will reduce fundraising relative to being unrated. The data confirm decreasing fundraising expenses, which causes losses in contributions and account for most of the ratings effects on giving. Furthermore, the estimated parameters imply the decreases are disproportionately large and charities could earn more in contributions without damaging ratings. These results have implications for improving the supply of public goods and services. |
