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 The Ratio Institute in its series Ratio Working Papers with number 152.
Length: 24 pages
Date of creation: 26 May 2010
Date of revision:
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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," HUI Working Papers 36, HUI Research.
- 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
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-06-04 (Agricultural Economics)
- NEP-ALL-2010-06-04 (All new papers)
- NEP-CBE-2010-06-04 (Cognitive & Behavioural Economics)
- NEP-MIC-2010-06-04 (Microeconomics)
- NEP-MKT-2010-06-04 (Marketing)
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.:
- Reicks, Marla & Splett, Patricia & Fishman, Amy, 1999. "Shelf Labeling Of Organic Foods: Customer Response In Minnesota Grocery Stores," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(2), July.
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- Caswell, Julie A. & Mojduszka, Eliza M., 1996.
"Using Informational Labeling To Influence The Market For Quality In Food Products,"
25989, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
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- Conner, David S., 2004. "Beyond Organic: Information Provision For Sustainable Agriculture In A Changing Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(01), March.
- Monier Sylvette & Hassan Daniel & Nichèle Véronique & Simioni Michel, 2009. "Organic Food Consumption Patterns," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 7(2), pages 1-25, December.
- Bellows Anne C. & Onyango Benjamin & Diamond Adam & Hallman William K, 2008. "Understanding Consumer Interest in Organics: Production Values vs. Purchasing Behavior," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-31, May.
- Hassan, Daniel & Monier-Dilhan, Sylvette & Nichele, Veronique & Simioni, Michel, 2009. "Organic Food Consumption Patterns in France," 2009 Pre-Conference Workshop, August 16, 2009, Diet and Obesity: Role of Prices and Policies 53342, International Association of Agricultural Economists.
- Beretti Antoine & Grolleau Gilles & Mzoughi Naoufel, 2009. "How Cognitive Biases Can Affect the Performance of Eco-Labeling Schemes," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 7(2), pages 1-13, December.
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