What to Choose? The Value of Label Claims to Produce Consumers
AbstractThis paper addresses three key empirical questions related to health, nutrient, and process claims on front-label packaging; namely, 1) How do consumers value alternative claims on product and process-based attributes for fresh produce; 2) Are these values additively separable; and 3) To what degree is there heterogeneity between consumers on these values? We use a hypothetical choice experiment on red leaf lettuce attribute bundles, and estimate several logit models (MNL and ML) that provide estimates of marginal utilities (and with the inclusion of varying prices, marginal values) of various attributes related to general health claims, specific nutrition and health claims, certification logos related to health and nutrition currently found in the marketplace, as well as certified organic claims (relative to the conventional reference group). The results showed that consumers do distinguish between competing claims and logos, though the impacts are not always as expected, likely due to the information set used at the time of the choice. We found some evidence of attribute bundling between the health claims and the familiar Five-a-day program logo, and between organic production and a claim regarding vitamin C content. Finally, we found that use of the unconditional distributions (relative to the conditional)in a ML model overstates the degree of preference heterogeneity across the sample and overstates the magnitude of the marginal effects of the random parameters. This may create misleading impressions regarding the existence and size of specialized niche markets, the response of consumers to varying health, nutrition, or process claims, and/or the response of consumers to the introduction of new products with these (or similar) claims.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN with number 9704.
Date of creation: 2007
Date of revision:
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Consumer/Household Economics; Demand and Price Analysis;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jayson L. Lusk & F. Bailey Norwood, 2005. "Effect of Experimental Design on Choice-Based Conjoint Valuation Estimates," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 771-785.
- Jayson L. Lusk & Ted C. Schroeder, 2004.
"Are Choice Experiments Incentive Compatible? A Test with Quality Differentiated Beef Steaks,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 86(2), pages 467-482.
- Jayson Lusk & T Schroeder, 2004. "Are choice experiments incentive compatible? A test with quality differentiated beef steaks," Artefactual Field Experiments 00096, The Field Experiments Website.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Kaye-Blake, William & Bicknell, Kathryn & Saunders, Caroline M., 2005. "Process versus product: which determines consumer demand for genetically modified apples?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), December.
- Lusk, Jayson L. & Roosen, Jutta & Fox, John A., 2001.
"Demand For Beef From Cattle Administered Growth Hormones Or Fed Genetically Modified Corn: A Comparison Of Consumers In France, Germany, The United Kingdom, And The United States,"
2001 Annual meeting, August 5-8, Chicago, IL
20684, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Jayson L. Lusk & Jutta Roosen & John A. Fox, 2003. "Demand for Beef from Cattle Administered Growth Hormones or Fed Genetically Modified Corn: A Comparison of Consumers in France, Germany, the United Kingdom, and the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 16-29.
- Matsumoto Shigeru, 2004. "Consumers' Responses to Front vs. Back Package GM Labels in Japan," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-25, April.
- Keeling Bond, Jennifer J. & Thilmany, Dawn D. & Bond, Craig A., 2006. "Direct Marketing of Fresh Produce: Understanding Consumer Purchasing Decisions," Choices, Agricultural and Applied Economics Association, vol. 21(4).
- Steven Stern, 1997. "Simulation-Based Estimation," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 2006-2039, December.
- Eliza M. Mojduszka & Julie A. Caswell, 2000. "A Test of Nutritional Quality Signaling in Food Markets Prior to Implementation of Mandatory Labeling," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 298-309.
- Antje Wirthgen, 2005. "Consumer, retailer, and producer assessments of product differentiation according to regional origin and process quality," Agribusiness, John Wiley & Sons, Ltd., vol. 21(2), pages 191-211.
- Gary D. Thompson & Julia Kidwell, 1998. "Explaining the Choice of Organic Produce: Cosmetic Defects, Prices, and Consumer Preferences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 277-287.
- Maria L. Loureiro & Azucena Gracia & Rodolfo M. Nayga, 2006. "Do consumers value nutritional labels?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(2), pages 249-268, June.
- Mario F. Teisl & Nancy E. Bockstael & Alan Levy, 2001. "Measuring the Welfare Effects of Nutrition Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 133-149.
- William Kaye-Blake & Kathryn Bicknell & Caroline Saunders, 2005. "Process versus product: which determines consumer demand for genetically modified apples? ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), pages 413-427, December.
- Craig A. Bond & Dawn Thilmany & Jennifer Keeling Bond, 2008. "Understanding consumer interest in product and process-based attributes for fresh produce," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 231-252.
- Tonsor, Glynn T. & Schroeder, Ted C. & Fox, John A. & Biere, Arlo W., 2005. "European Preferences for Beef Steak Attributes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(02), August.
- Loureiro, Maria L. & McCluskey, Jill J. & Mittelhammer, Ronald C., 2001. "Assessing Consumer Preferences For Organic, Eco-Labeled, And Regular Apples," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December.
- Kuo S. Huang, 1996. "Nutrient Elasticities in a Complete Food Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 21-29.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.