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Measuring the Welfare Effects of Nutrition Information

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  • Mario F. Teisl
  • Nancy E. Bockstael
  • Alan Levy

Abstract

Cost/benefit analysis justifies regulations altering the amount of health-related information presented to consumers. The current method of benefit analysis, the cost of avoided illness, is limited; it assumes the benefits of health-related information are adequately represented by changes in illnesses. The manuscript develops a benefit estimation method to measure the welfare impacts of providing nutrient information. Nutrient labeling significantly affects purchase behaviour but may not lead to increased consumption of health foods. Nutrient labeling may increase welfare without any change in health risk. Thus, the cost of avoided illness approach can underestimate the social benefits of providing nutrient information. Copyright 2001, Oxford University Press.

Suggested Citation

  • 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.
  • Handle: RePEc:oup:ajagec:v:83:y:2001:i:1:p:133-149
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    File URL: http://hdl.handle.net/10.1111/0002-9092.00142
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    References listed on IDEAS

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    1. Jeffrey H. Dorfman & Catherine L. Kling & Richard J. Sexton, 1990. "Confidence Intervals for Elasticities and Flexibilities: Reevaluating the Ratios of Normals Case," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(4), pages 1006-1017.
    2. Jeffrey T. LaFrance, 1993. "Weak Separability in Applied Welfare Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 770-775.
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    4. Dermot J. Hayes & Thomas I. Wahl & Gary W. Williams, 1990. "Testing Restrictions on a Model of Japanese Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 556-566.
    5. Jeffrey T. LaFrance & W. Michael Hanemann, 1989. "The Dual Structure of Incomplete Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 262-274.
    6. Nicholas E. Piggott & James A. Chalfant & Julian M. Alston & Garry R. Griffith, 1996. "Demand Response to Advertising in the Australian Meat Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 268-279.
    7. David G. Swartz & Ivar E. Strand, Jr., 1981. "Avoidance Costs Associated with Imperfect Information: The Case of Kepone," Land Economics, University of Wisconsin Press, vol. 57(2), pages 139-150.
    8. LaFrance, Jeffrey T., 1991. "When Is Expenditure "Exogenous" In Separable Demand Models?," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(01), July.
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