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Can Labeling and Information Policies Harm Consumers?

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Author Info

  • Lusk Jayson L.

    ()
    (Oklahoma State University)

  • Marette Stéphan

    (UMR Economie Publique INRA AgroParisTech)

Abstract

Information and labeling are popular food policy instruments because of their presumed positive influence on consumer welfare. In a one-good case with unlimited attention, we show consumer welfare is always improved with the provision of accurate information. However, in a two-good case with limited attention, we show that consumer welfare is not always improved with the provision of accurate information. When attention is constrained, welfare may fall with information provision policies irrespective of their costs. The results suggest information and labeling polices may sometimes be counterproductive when attention is limited.

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File URL: http://www.degruyter.com/view/j/jafio.2012.10.issue-1/1542-0485.1373/1542-0485.1373.xml?format=INT
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Bibliographic Info

Article provided by De Gruyter in its journal Journal of Agricultural & Food Industrial Organization.

Volume (Year): 10 (2012)
Issue (Month): 1 (October)
Pages: 1-15

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Handle: RePEc:bpj:bjafio:v:10:y:2012:i:1:n:7

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Web page: http://www.degruyter.com

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Web: http://www.degruyter.com/view/j/jafio

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Cited by:
  1. Joseph, Siny & Lavoie, Nathalie & Caswell, Julie A., 2014. "Implementing COOL: Comparative welfare effects of different labeling schemes," Food Policy, Elsevier, vol. 44(C), pages 14-25.

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