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Mandatory Labelling: Evidence from the French Fromage Blanc and Yogurt Market

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  • Allais, Olivier
  • Etile, Fabrice
  • Lecocq, Sebastien

Abstract

A number of public health advocates and consumer associations urge policy makers to strengthen nutrient labelling rules, in order to help people to make healthier and better informed food choices. Yet, little is known about the e¤ectiveness of mandatory labelling. This research evaluates the impact of a mandatory fat label policy on consumer choices in the fromages blanc and dessert yogurt market. While fat labels are mandatory since 1988 for fromages blancs, this is not the case for yogurts. This is a natural source of variation to identify separately consumer preferences for labels and for fat. We use a mixed logit discrete choice model and household scanner data collected in 2007 to estimate the distribution of the Willingness-To-Pay (WTP) for fat labels and simulate various counterfactual policy scenarios in a sample of casual fromages blancs and dessert yogurts consumers. The WTP is negative for about one third of this population, especially for consumers of full-fat dessert yogurts. The rst simulation results suggest that a mandatory labelling policy would make these individuals switch to full-fat fromages blancs or to the outside option, and mandatory labelling would have more impact than a fat tax on the consumption of full-fat products. Hence, variations in labelling rules have been exploited by producers to develop dessert yogurts and increase market segmentation. We plan to re ne these results, by taking into consideration manufacturers’and retailers’strategic reactions to these policies.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 120382.

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Date of creation: 2011
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Handle: RePEc:ags:eaae11:120382

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Keywords: Food Consumption/Nutrition/Food Safety; Marketing;

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  1. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
  2. Chouinard Hayley H & Davis David E & LaFrance Jeffrey T & Perloff Jeffrey M, 2007. "Fat Taxes: Big Money for Small Change," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-30, June.
  3. David Cutler & Edward Glaeser & Jesse Shapiro, 2003. "Why Have Americans Become More Obese?," NBER Working Papers 9446, National Bureau of Economic Research, Inc.
  4. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  5. Olivier Allais & Patrice Bertail & Véronique Nichèle, 2010. "The Effects of a Fat Tax on French Households' Purchases: A Nutritional Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 228-245.
  6. 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.
  7. Mathios, Alan D, 2000. "The Impact of Mandatory Disclosure Laws on Product Choices: An Analysis of the Salad Dressing Market," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 651-77, October.
  8. 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.
  9. Jayachandran N. Variyam, 2008. "Do nutrition labels improve dietary outcomes?," Health Economics, John Wiley & Sons, Ltd., vol. 17(6), pages 695-708.
  10. Shapiro, Jesse & Glaeser, Edward & Cutler, David, 2003. "Why Have Americans Become More Obese," Scholarly Articles 2640583, Harvard University Department of Economics.
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