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Heterogeneity in Consumer Responses to Front-of-Package Nutrition Labels: Evidence from a Natural Experiment?

Author

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  • Zhu, Chen

    (University of Connecticut)

  • Huang, Rui

    (University of Connecticut)

Abstract

We use a market-level natural experiment to evaluate how the voluntary Facts Up Front style Front-of-Package (FOP) nutritional labeling system would affect consumer choices, and whether it can promote the consumption of healthier food products. The new FOP system provides a quick summary of the calories, sugar, saturated fat, and selected positive nutrients, and is listed on the front of food packages. Using data of household-level Ready-to-Eat cereal (RTEC) purchases and difference-in-differences (DD) approaches, we find that the new FOP labels induce consumers to buy less RTEC, consume fewer calories, and less sodium, but only in households purchasing two RTEC packages per month or fewer. For RTEC products containing new FOP labels, consumers are observed to substitute more vigorously from products with poor nutritional quality to healthier RTEC products. We also find that household heads with education levels of a high school degree or less show the greatest improvement in their food choices, suggesting that the FOP labels change consumer behavior primarily through reduced information costs.

Suggested Citation

  • 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.
    • Handle: RePEc:zwi:wpaper:27
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    File URL: http://www.cag.uconn.edu/are/zwickcenter/documents/workingpapers/wp27.pdf
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    Cited by:

    1. Chen Zhu & Rigoberto A. Lopez & Xiaoou Liu, 2016. "Information Cost and Consumer Choices of Healthy Foods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(1), pages 41-53.
    2. Petrova, Maria, 2012. "Mass media and special interest groups," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 17-38.

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    Keywords

    Front-of -Package (FOP) Nutrition labels; label restriction; self-regulation; distributional effects;
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