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Friend or PHO? On the Marginal Valuation of Reducing the Content of Trans Fat in Processed Foods

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  • Steven S. Vickner

Abstract

Ahead of the January 1, 2006 deadline for mandatory labeling of trans fat, Nabisco, a leading brand in the market for crackers – a $1 billion processed food category and ranked amongst the top sources of trans fat – reformulated a subset of their existing products and voluntarily labeled them as trans fat-free. New products were also introduced in the market and labeled as trans fat-free as well. The purpose of this study was to determine the implicit price of products voluntarily labeled as trans fat-free. Using a national level weekly scanner data set and controlling for the other observable product attributes, such as non-PHO fat labels, whole grain labels, sodium labels, variety, and package size, in addition to market conditions, the implicit price of the voluntary trans fat-free label was estimated to be $0.53 per pound, or a premium over the base case of 17.64 percent.JEL classification numbers: D12, M38, Q18Keywords: Food Labeling Policy, Hedonic Pricing, Retail Scanner Data, Trans Fat.

Suggested Citation

  • Steven S. Vickner, 2017. "Friend or PHO? On the Marginal Valuation of Reducing the Content of Trans Fat in Processed Foods," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 7(2), pages 1-2.
    • Handle: RePEc:spt:admaec:v:7:y:2017:i:2:f:7_2_2
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    More about this item

    Keywords

    food labeling policy; hedonic pricing; retail scanner data; transâ fat.;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation

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