Does Shelf-Labeling of Organic Foods Increase Sales? Results from a Natural Experiment
AbstractCan a simple point-of-purchase (POP) shelf-label increase sales of organic foods? We use a random-effects, random-coefficients model, including a time adjustment variable, to test data from a natural experiment in a hypermarket in Gävle, Sweden. Our model incorporates both product specific heterogeneity in the effects of labeling and consumer adjustment to the labels over time. The introduction of POP displays was found to lead to an increase in sales of organic coffee and olive oil, but a reduction in sales of organic flour. All targeted products became less price-sensitive. The results reveal that product specific heterogeneity has to be accounted for, and in some cases consumers adjusted to labeling over time.
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Bibliographic InfoPaper provided by HUI Research in its series HUI Working Papers with number 36.
Length: 24 pages
Date of creation: 01 Feb 2010
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Product labeling; random coefficient models; ecological products; experimental economics;
Other versions of this item:
- Daunfeldt, Sven-Olov & Rudholm, Niklas, 2010. "Does Shelf-Labeling of Organic Foods Increase Sales? Results from a Natural Experiment," Ratio Working Papers 152, The Ratio Institute.
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
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