IDEAS home Printed from https://ideas.repec.org/a/kap/jcopol/v43y2020i2d10.1007_s10603-018-9396-x.html
   My bibliography  Save this article

Evidence from Retail Food Markets That Consumers Are Confused by Natural and Organic Food Labels

Author

Listed:
  • F. Kuchler

    (Economic Research Service)

  • M. Bowman

    (Economic Research Service)

  • M. Sweitzer

    (Economic Research Service)

  • C. Greene

    (Economic Research Service)

Abstract

In the USA, food producers can label their products as organic only if they are certified by the United States Department of Agriculture (USDA) as having met comprehensive regulatory standards for environmental stewardship. In contrast, the Federal Government has not defined the term natural for most food products. Survey and experimental studies suggest that consumers are confused by the meanings of natural and USDA Organic on food labels, and often believe that these two label claims have similar meanings. In this paper, we examine whether this confusion influences aggregate retail food expenditures. High-frequency Google Trends data on the volume of web searches for “organic food” and for “natural food” are used as indicators of consumer interest in those food attributes. Results from a vector autoregression model show that web searches for both terms are correlated with retail purchases of organic food. Web searches for both help predict retail purchases. If consumers were aware of differences implied by the two label claims, searches for natural food would be uncorrelated with decisions to purchase organic products. These results are therefore evidence that consumers view the two claims as related, or even view the two claims as identical.

Suggested Citation

  • F. Kuchler & M. Bowman & M. Sweitzer & C. Greene, 2020. "Evidence from Retail Food Markets That Consumers Are Confused by Natural and Organic Food Labels," Journal of Consumer Policy, Springer, vol. 43(2), pages 379-395, June.
    • Handle: RePEc:kap:jcopol:v:43:y:2020:i:2:d:10.1007_s10603-018-9396-x
    DOI: 10.1007/s10603-018-9396-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10603-018-9396-x
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10603-018-9396-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nikolaos Askitas & Klaus F. Zimmermann, 2009. "Google Econometrics and Unemployment Forecasting," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 55(2), pages 107-120.
    2. Katie Abrams & Courtney Meyers & Tracy Irani, 2010. "Naturally confused: consumers’ perceptions of all-natural and organic pork products," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 27(3), pages 365-374, September.
    3. McBride, William D. & Greene, Catherine & Foreman, Linda & Ali, Mir, 2015. "The Profit Potential of Certified Organic Field Crop Production," Economic Research Report 262208, United States Department of Agriculture, Economic Research Service.
    4. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    5. Kuchler, Fred & Greene, Catherine & Bowman, Maria & Marshall, Kandice K. & Bovay, John & Lynch, Lori, 2017. "Beyond Nutrition and Organic Labels—30 Years of Experience With Intervening in Food Labels," Economic Research Report 291967, United States Department of Agriculture, Economic Research Service.
    6. Price, Charlene C. & Brown, Judy, 1984. "Growth In The Health And Natural Foods Industry," Staff Reports 277593, United States Department of Agriculture, Economic Research Service.
    7. McBride, William & Greene, Catherine, 2015. "Despite Profit Potential, Organic Field Crop Acreage Remains Low," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 10, pages 1-1, November.
    8. Soham Baksi & Pinaki Bose & Di Xiang, 2017. "Credence Goods, Misleading Labels, and Quality Differentiation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 377-396, October.
    9. Hyunyoung Choi & Hal Varian, 2012. "Predicting the Present with Google Trends," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 2-9, June.
    10. Frederick V. Waugh & Morton M. Miller, 1970. "Fish Cycles: A Harmonic Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(3), pages 422-430.
    11. James H. Stock & Mark W. Watson, 2001. "Vector Autoregressions," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 101-115, Fall.
    12. Onken, Kathryn A. & Bernard, John C. & Pesek, John D., Jr., 2011. "Comparing Willingness to Pay for Organic, Natural, Locally Grown, and State Marketing Program Promoted Foods in the Mid-Atlantic Region," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(1), pages 1-15, April.
    13. Phillips, Peter C. B., 1998. "Impulse response and forecast error variance asymptotics in nonstationary VARs," Journal of Econometrics, Elsevier, vol. 83(1-2), pages 21-56.
    14. Muth, Mary K. & Sweitzer, Megan & Brown, Derick & Capogrossi, Kristen & Karns, Shawn A. & Levin, David & Okrent, Abigail & Siegel, Peter & Zhen, Chen, 2016. "Understanding IRI Household-Based and Store-Based Scanner Data," Technical Bulletins 234905, United States Department of Agriculture, Economic Research Service.
    15. McFadden, Jonathan R. & Huffman, Wallace E., 2017. "Willingness-to-pay for natural, organic, and conventional foods: The effects of information and meaningful labels," Food Policy, Elsevier, vol. 68(C), pages 214-232.
    16. Julianna M. Butler & Christian A. Vossler, 2018. "What is an Unregulated and Potentially Misleading Label Worth? The case of “Natural”-Labelled Groceries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 545-564, June.
    17. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    18. Sigrid A Troelstra & Jizzo R Bosdriesz & Michiel R de Boer & Anton E Kunst, 2016. "Effect of Tobacco Control Policies on Information Seeking for Smoking Cessation in the Netherlands: A Google Trends Study," PLOS ONE, Public Library of Science, vol. 11(2), pages 1-16, February.
    19. Klein, Lisa R., 1998. "Evaluating the Potential of Interactive Media through a New Lens: Search versus Experience Goods," Journal of Business Research, Elsevier, vol. 41(3), pages 195-203, March.
    20. Onken, Kathryn A. & Bernard, John C. & Pesek, John D., 2011. "Comparing Willingness to Pay for Organic, Natural, Locally Grown, and State Marketing Program Promoted Foods in the Mid-Atlantic Region," Agricultural and Resource Economics Review, Cambridge University Press, vol. 40(1), pages 33-47, April.
    21. Tao Chen & Erin Pik Ki So & Liang Wu & Isabel Kit Ming Yan, 2015. "The 2007–2008 U.S. Recession: What Did The Real-Time Google Trends Data Tell The United States?," Contemporary Economic Policy, Western Economic Association International, vol. 33(2), pages 395-403, April.
    22. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-144, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kelly R. Wilson & Robert L. Myers & Mary K. Hendrickson & Emily A. Heaton, 2022. "Different Stakeholders’ Conceptualizations and Perspectives of Regenerative Agriculture Reveals More Consensus Than Discord," Sustainability, MDPI, vol. 14(22), pages 1-14, November.
    2. Ralf Buckley, 2023. "Sector-Scale Proliferation of CSR Quality Label Programs via Mimicry: The Rotkäppchen Effect," Sustainability, MDPI, vol. 15(14), pages 1-11, July.
    3. Karolina Woś & Lisa Marie Borghoff & Andrijana Horvat & Flavio Paoletti & Eleonora Saggia Civitelli & Ewa Rembiałkowska, 2022. "Preliminary Analysis of Voluntary Information on Organic Milk Labels in Four European Union Countries," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    4. Carlson, Andrea & Greene, Catherine & Raszap Skorbiansky, Sharon & Hitaj, Claudia & Ha, Kim & Cavigelli, Michel & Ferrier, Peyton & McBride, William, 2023. "U.S. Organic Production, Markets, Consumers, and Policy, 2000-21," USDA Miscellaneous 333551, United States Department of Agriculture.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. András István Kun & Marietta Kiss, 2021. "On the Mechanics of the Organic Label Effect: How Does Organic Labeling Change Consumer Evaluation of Food Products?," Sustainability, MDPI, vol. 13(3), pages 1-25, January.
    2. Ying, Jiahui & Shonkwiler, Vanessa P. & Campbell, Benjamin L., 2018. "Willingness to Pay or Not to Pay: Valuing Foods Some Respondents Find Distasteful," 2018 Annual Meeting, August 5-7, Washington, D.C. 274065, Agricultural and Applied Economics Association.
    3. Basher, Syed Abul & Haug, Alfred A. & Sadorsky, Perry, 2012. "Oil prices, exchange rates and emerging stock markets," Energy Economics, Elsevier, vol. 34(1), pages 227-240.
    4. Nikolaos Askitas & Klaus F. Zimmermann, 2015. "The internet as a data source for advancement in social sciences," International Journal of Manpower, Emerald Group Publishing Limited, vol. 36(1), pages 2-12, April.
    5. Kim Abildgren, 2012. "Financial structures and the real effects of credit-supply shocks in Denmark 1922-2011," European Review of Economic History, European Historical Economics Society, vol. 16(4), pages 490-510, November.
    6. Long Wen & Chang Liu & Haiyan Song, 2019. "Forecasting tourism demand using search query data: A hybrid modelling approach," Tourism Economics, , vol. 25(3), pages 309-329, May.
    7. Stephen L. France & Yuying Shi, 2017. "Aggregating Google Trends: Multivariate Testing and Analysis," Papers 1712.03152, arXiv.org, revised Mar 2018.
    8. Chi, Tsung-Li & Liu, Hung-Tsen & Chang, Chia-Chien, 2023. "Hedging performance using google Trends–Evidence from the indian forex options market," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 107-123.
    9. Julianna M. Butler & Christian A. Vossler, 2018. "What is an Unregulated and Potentially Misleading Label Worth? The case of “Natural”-Labelled Groceries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 545-564, June.
    10. Inoue, Atsushi & Kilian, Lutz, 2020. "The uniform validity of impulse response inference in autoregressions," Journal of Econometrics, Elsevier, vol. 215(2), pages 450-472.
    11. Pierre St-Amant & David Tessier, 2000. "Résultats empiriques multi-pays relatifs à l'impact des cibles d'inflation sur la crédibilité de la politique monétaire," Canadian Public Policy, University of Toronto Press, vol. 26(3), pages 295-310, September.
    12. Benedikt Maas, 2020. "Short‐term forecasting of the US unemployment rate," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(3), pages 394-411, April.
    13. Simionescu, Mihaela & Zimmermann, Klaus F., 2017. "Big Data and Unemployment Analysis," GLO Discussion Paper Series 81, Global Labor Organization (GLO).
    14. France, Stephen L. & Shi, Yuying & Kazandjian, Brett, 2021. "Web Trends: A valuable tool for business research," Journal of Business Research, Elsevier, vol. 132(C), pages 666-679.
    15. McFadden, Jonathan R. & Huffman, Wallace E., 2017. "Willingness-to-pay for natural, organic, and conventional foods: The effects of information and meaningful labels," Food Policy, Elsevier, vol. 68(C), pages 214-232.
    16. Khachatryan, Hayk & Rihn, Alicia & Wei, Xuan, 2021. "Consumers’ Preferences for Eco-labels on Plants: The Influence of Trust and Consequentiality Perceptions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 91(C).
    17. Fabo, B., 2017. "Towards an understanding of job matching using web data," Other publications TiSEM b8b877f2-ae6a-495f-b6cc-9, Tilburg University, School of Economics and Management.
    18. José Luis Montiel Olea & Mikkel Plagborg‐Møller, 2021. "Local Projection Inference Is Simpler and More Robust Than You Think," Econometrica, Econometric Society, vol. 89(4), pages 1789-1823, July.
    19. Karolien Lenaerts & Miroslav Beblavý & Brian Fabo, 2016. "Prospects for utilisation of non-vacancy Internet data in labour market analysis—an overview," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-18, December.
    20. Parcell, Joseph L. & Gedikoglu, Haluk, 2012. "Consumer Preference Variation between Domestic and Imported Food," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124183, Agricultural and Applied Economics Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jcopol:v:43:y:2020:i:2:d:10.1007_s10603-018-9396-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.