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Can Information Costs Affect Consumer Choice?—Nutritional Labels in a Supermarket Experiment—

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  • Kiesel, Kristin
  • Villas-Boas, Sofia Berto

Abstract

This paper investigates whether information costs under currently regulated nutritional labeling prevent consumers from making healthier food choices. We implement five nutritional shelf label treatments in a market-level experiment. These labels reduce information costs by highlighting and summarizing information available on the Nutritional Facts Panel. Following a difference-in-differences and synthetic control method approach, we analyze weekly store-level scanner data for microwave popcorn purchases from treatment and control stores. Our results suggest that consumer purchases are affected by information costs. Implemented low calorie and no trans fat labels increase sales. In contrast, implemented low fat labels decrease sales, suggesting that consumer response is also influenced by consumers’ taste perceptions. A combination of these claims into one label treatment increases information costs and does not affect sales significantly.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists & Agricultural and Applied Economics Association in its series 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany with number 116433.

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Date of creation: 2010
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Handle: RePEc:ags:eaa115:116433

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Keywords: Nutritional labeling; information cost; scanner data; market-level experiment; difference-in-differences; synthetic control method; Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Health Economics and Policy; C93; D01; D18; D83; L51;

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  12. Kiesel, Kristin & Villas-Boas, Sofia B., 2009. "Can Information Costs Confuse Consumer Choice?---Nutritional Labels in a Supermarket Experiment," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6st6d0rr, Department of Agricultural & Resource Economics, UC Berkeley.
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Cited by:
  1. Lint Barrage & Eric Chyn & Justine Hastings, 2014. "Advertising, Reputation, and Environmental Stewardship: Evidence from the BP Oil Spill," NBER Working Papers 19838, National Bureau of Economic Research, Inc.
  2. Li, Shuo & McCluskey, Jill J. & Mittelhammer, Ron C., 2012. "Effects of Healthier Choices on Kid's Menu: A Difference-in-Differences Analysis," Journal of Food Distribution Research, Food Distribution Research Society, vol. 43(3), November.
  3. Zhu, Chen & Huang, Rui, 2014. "Heterogeneity in Consumer Responses to Front-of-Package Nutrition Labels: Evidence from a Natural Experiment?," Working Papers 27, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  4. Kirsten, Johann F. & Vermeulen, Hester & Van Zyl, Karlien & Du Randt, Gerrie & Du Plessis, H. & Weissnar, Tessa, 2012. "The economic potential for an origin based marketing and certification system for a meat product in South Africa: Perceptions, preferences, and experiments," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125764, International Association of Agricultural Economists.
  5. Menapace, Luisa & Raffaelli, Roberta, 2013. "Do ‘locally grown’ claims influence artisanal food purchase? Evidence from a natural field experiment," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150282, Agricultural and Applied Economics Association.

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