DOES ORGANIC WINE TASTE BETTER? AN ANALYSIS OF EXPERTS’ RATINGS Magali A. Delmas, Olivier Gergaud, and Jinghui Lim1 Abstract Eco-labels are part of a new wave of environmental policy that emphasizes information disclosure as a tool to induce environmentally friendly behavior by both firms and consumers. Little consensus exists as to whether eco-certified products are actually better than their conventional counterparts. This paper seeks to understand the link between eco-certification and product quality. We use data from three leading wine rating publications (Wine Advocate, Wine Enthusiast, and Wine Spectator) to assess quality for 74,148 wines produced in California between 1998 and 2009. Our results indicate that eco-certification is associated with a statistically significant increase in wine quality rating. Keywords: eco-labels, credence goods, information disclosure policy, asymmetric information, product quality. JEL: Q56, Q13, L15, L66, Q21 1 Magali Delmas, Professor of Management, UCLA Institute of the Environment and Sustainability & Anderson School of Management. UCLA La Kretz Hall, Suite 300. Los Angeles CA 90095-1496. Email:
[email protected]; Olivier Gergaud, Professor of Economics, KEDGE Business School (Bordeaux campus), 680 Cours de la Libération, 33405 Talence Cedex, France. Email:
[email protected] ; Jinghui Lim, UCLA Anderson School of Management, La Kretz Hall, Suite 300 Los Angeles CA 90095-1496, Email:
[email protected]. Eco-labels are part of a new wave of environmental policy that emphasizes information disclosure as a tool to induce environmentally conscious behavior by both firms and consumers. The goal of eco-labels is to provide easily understood information, and thereby elicit increased demand for products perceived as environmentally friendly.