Department of Agricultural and Resource Economics

Conservation organizations seeking to reduce over-fishing and promote better fishingpractices have increasingly turned to market-based mechanisms such as environmentalsustainability labels (eco-labels) in order to shift patterns of household consumption.This paper presents an analysis of consumer response to an advisory for sustainableseafood adopted by a regional supermarket in the United States. The advisory con-sisted of a label in which one of three traffic light colors was placed on each freshseafood product to inform consumers about its relative environmental sustainability.Green meant “best” choice, yellow meant “proceed with caution,” and red meant “worstchoice”. Using a unique product-level panel scanner data set of weekly sales and takingadvantage of the random phase-in of the advisory by the retailer, we apply a difference-in-differences identification strategy to estimate the effect of the advisory on overallseafood sales as well as the heterogeneous impact of the advisory by label color andwhether the seafood met additional health-related criteria. We find evidence that theadvisory led to a statistically significant 15.3% decline in overall seafood sales, a statis-tically significant 34.9% decline in the sale of yellow labeled seafood, and a statisticallysignificant 41.3% decline in the sale of yellow labeled seafood on a mercury safe list.We find no statistically significant difference in sales of green or red labeled seafood.