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Can Labeling and Information Policies Harm Consumers?

Author

Listed:
  • Lusk Jayson L.

    (Oklahoma State University)

  • Marette Stéphan

    (UMR Economie Publique INRA AgroParisTech)

Abstract

Information and labeling are popular food policy instruments because of their presumed positive influence on consumer welfare. In a one-good case with unlimited attention, we show consumer welfare is always improved with the provision of accurate information. However, in a two-good case with limited attention, we show that consumer welfare is not always improved with the provision of accurate information. When attention is constrained, welfare may fall with information provision policies irrespective of their costs. The results suggest information and labeling polices may sometimes be counterproductive when attention is limited.

Suggested Citation

  • Lusk Jayson L. & Marette Stéphan, 2012. "Can Labeling and Information Policies Harm Consumers?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-15, October.
    • Handle: RePEc:bpj:bjafio:v:10:y:2012:i:1:n:7
    DOI: 10.1515/1542-0485.1373
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    References listed on IDEAS

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    Cited by:

    1. Marette Stéphan, 2014. "Economic Benefits Coming from the Absence of Labels Proliferation," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 65-73, January.
    2. Nadia A Streletskaya & Jura Liaukonyte & Harry M Kaiser, 2019. "Absence labels: How does information about production practices impact consumer demand?," PLOS ONE, Public Library of Science, vol. 14(6), pages 1-18, June.
    3. Olivier Bonroy & Christos Constantatos, 2015. "On the Economics of Labels: How Their Introduction Affects the Functioning of Markets and the Welfare of All Participants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 239-259.
    4. Christian Garavaglia & Paolo Mariani, 2017. "How Much Do Consumers Value Protected Designation of Origin Certifications? Estimates of willingness to Pay for PDO Dry‐Cured Ham in Italy," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 403-423, June.
    5. Sunstein, Cass R., 2021. "Viewpoint: Are food labels good?," Food Policy, Elsevier, vol. 99(C).
    6. Garavaglia, Christian & Mariani, Paolo, 2015. "How Much Do Consumers Value PDO Certifications? Estimates of WTP for PDO Dry-Cured Ham in Italy," 145th Seminar, April 14-15, 2015, Parma, Italy 200376, European Association of Agricultural Economists.
    7. Joseph, Siny & Lavoie, Nathalie & Caswell, Julie A., 2014. "Implementing COOL: Comparative welfare effects of different labeling schemes," Food Policy, Elsevier, vol. 44(C), pages 14-25.
    8. Ray, Susweta & Giannakas, Konstantinos, 2021. "Market and Welfare Analysis of Excess Information in Food Claims," 2021 Annual Meeting, August 1-3, Austin, Texas 313999, Agricultural and Applied Economics Association.
    9. Birg, Laura & Voßwinkel, Jan S., 2018. "Minimum quality standards and compulsory labeling when environmental quality is not observable," Resource and Energy Economics, Elsevier, vol. 53(C), pages 62-78.
    10. Kent D. Messer & Marco Costanigro & Harry M. Kaiser, 2017. "Labeling Food Processes: The Good, the Bad and the Ugly," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(3), pages 407-427.

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