Can Information Costs Affect Consumer Choice?—Nutritional Labels in a Supermarket Experiment—
AbstractThis 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 InfoPaper provided by European Association of Agricultural Economists in its series 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany with number 116433.
Date of creation: 2010
Date of revision:
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;
Other versions of this item:
- Kiesel, Kristin & Villas-Boas, Sofia B., 2013. "Can information costs affect consumer choice? Nutritional labels in a supermarket experiment," International Journal of Industrial Organization, Elsevier, vol. 31(2), pages 153-163.
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
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