Credence attributes and land use: Eco-labeled coffee

Date of Completion

January 2007


Business Administration, Marketing|Geography|Economics, Agricultural|Environmental Sciences




International non-profit organizations have started to implement eco-labeling for credence attributes programs aimed to inform consumers about environmentally sound or "sustainable" production standards for various products. Using coffee labeled as "shade grown" as an example, this dissertation analyzes the impact such labeling programs may have on local land use patterns in coffee producing regions. Shade grown coffee farms should provide a variety of external benefits, including the preservation of biodiversity, carbon sequestration, the prevention of soil erosion and aquifer recharge. Those externalities, however, are not expected to have observable land use impacts unless they are capitalized in the coffee market. The prospect of market capitalization of externalities suggests the extension of the conventional von Thünen model to the calculation of social location rent. Using the maximization of social location rent as a criterion allows the externality effect to play a direct role in market-based land use allocation of land between eco-labeled shade grown coffee production and other activities. The theoretical models developed in this dissertation are informed by a case study focused on a coffee producing region in Guatemala. A major contribution of this research is the integration of eco-friendly production practices into the basic land use models of economic geography, namely the Ricardo and von Thünen models.^