Consumer willingness to pay for redundant food labels

Previous studies, as well as market sales data, show some consumers are willing to pay a premium for redundant or superfluous food labels that carry no additional information for the informed consumer. Some advocacy groups have argued that the use of such redundant labels is misleading or unethical. To determine whether premiums for redundant labels stem from misunderstanding or other factors, this study seeks to determine whether greater knowledge of the claims - in the form of expertise in food production and scientific literacy - decreases willingness to pay for redundant labels. We also explore whether de-biasing information influences consumers’ valuations of redundant labels. An online survey of 1122 U.S. consumers elicited preferences for three redundantly labeled products: non-GMO sea salt, gluten-free orange juice, and no-hormone-added chicken breast. Respondents with farm experience report lower premiums for non-GMO salt and no-hormone-added chicken. Those with higher scientific literacy state lower premiums for gluten-free orange juice. However, after providing information about the redundancy of the claims, less than half of respondents who were initially willing to pay extra for the label are convinced otherwise. Over 30% of respondents counter-intuitively increase their premiums, behavior that is associated with less a priori scientific knowledge. The likelihood of “overpricing” redundant labels is associated with willingness-to-pay premiums for organic food, suggesting at least some of the premium for organic is a result of misinformation.     

Consumers’ willingness-to-pay for food safety labels in an emerging market: The case of fresh produce in Thailand

Food safety systems in emerging markets are currently facing a transformation period, becoming more stringent because of an increasing demand for safer food. Consequently, policy makers need to find strategies to increase food safety while giving the industry time to improve their performance. In Thailand, policy makers have adopted the strategy of upgrading food safety standards gradually. Government and private food safety brands and labels were introduced onto the market but little is known whether Thai consumers have preferences for them or not. This study is aimed at evaluating Thai consumers’ preferences for food safety labels and brands on fresh produce, using a surveyed based on discrete-choice experiments. A sample of 350 Thai consumers was surveyed in Bangkok and Nonthaburi in 2013. Quota sampling according to the shopping outlets and convenience sampling methods were adopted. Two hundred respondents were recruited at fresh-food markets and 150 respondents were recruited at supermarkets. We found that consumers are willing-to-pay more for both government led food safety label and private brands, but that there is high heterogeneity in their preferences. The high degree of social desirability for food safety labels confirms that food safety labelling policy should be supported. However, the provision of information and credibility are vital in order to mitigate the risk of consumer deception by self-claimed labels.     

Chinese consumer demand for food safety attributes in milk products

Little is known about emerging demands for food safety among consumers in developing countries. This study presents results of an investigation of consumer awareness, willingness to pay, and price premiums for milk products manufactured using Hazard Analysis Critical Control Point (HACCP) management, a quality management system used to reduce food safety risks. Chinese food processors initially sought HACCP certification to access export markets, but now HACCP is rapidly being adopted for domestic products and HACCP logos have begun to appear on labels in China. A survey of Beijing consumers found that less than one in five respondents was aware of HACCP, and most who had heard of HACCP had learned about it within the previous year. After receiving information on HACCP nearly all respondents were willing to pay a modest price premium for HACCP-certified products. Products with HACCP labels in Beijing supermarkets sold at a price premium of about 5% over products without such labels, holding other product attributes constant. The results indicate that demand for food safety is emerging as an attribute demanded by Chinese consumers.     

Consumers’ valuation for food traceability in China: Does trust matter?

Food safety is a very important topic in China. We investigate Chinese consumers’ preferences and willingness to pay (WTP) for food traceability using a choice experiment. Given that consumers’ trust in the food system may affect their preferences and WTP, we also assess the interaction between consumers’ trust in government’s supervision of food safety and food labels and consumers’ preferences for traceable food products. Using data collected from a choice experiment on Fuji apples in a face-to-face survey in six Chinese cities, the results show that (i) consumers are willing to pay for traceable food but their valuations can differ upon the degree of their trust in government’s supervision of food safety and food labels; (ii) consumers are willing to pay for traceability with strong evidence of preference heterogeneity; (iii) government is not the most trusted safety inspection and certificate authority as found in prior studies using animal food products in China.     

Modeling heterogeneity in consumer preferences for select food safety attributes in China

Food safety issues often arise from asymmetric information between consumers and suppliers with regards to product-specific attributes. Severe food safety scandals were observed recently in China. These events not only caused direct economic and life losses, but also created distrust in the Chinese food system domestically, as well as internationally. While much attention has focused on the problems plaguing the Chinese government’s food inspection system, little research has been dedicated to analyzing Chinese consumers’ concerns surrounding food safety. In this paper, we measure consumer preferences for select food safety attributes in pork and take food safety risk perceptions into account. Several choice experiment models, including latent class and random parameters logit, are constructed to capture heterogeneity in consumer preferences. Our results suggest that Chinese consumers have the highest willingness-to-pay for a government certification program, followed by third-party certification, a traceability system, and a product-specific information label. The results of this study call for the direct involvement of the Chinese government in the food safety system. A stricter monitoring system will not only improve consumer well-being in the short-run, but also restore consumers’ trust leading to a social welfare increase in the long run.     

Willingness-to-pay for natural,organic, and conventional foods: The effects of information and meaningful labels

Vague food labels and distorted product claims have persisted in the “natural” food industry, while organic claims can be certified by the U.S. Department of Agriculture (USDA). Using experimental methods and a sample of randomly selected subjects, we test food label and information treatment effects on subjects' willingness-to-pay (WTP) for organic, “natural,” and conventional foods. Random nth-price auctions are used to elicit WTP after subjects received one of five randomly assigned information treatments. We find large information effects, including asymmetric cross-market effects for natural and organic foods. Perhaps surprising is that organic premiums increase in response to subjects seeing the “natural” foods industry's perspective on its products. Demographics effects are also important. The results have practical implications for natural and organic food marketing and valuing products where there are vague claims about their attributes.     

Does nutrition information on food products lead to healthier food choices?

This paper examines the link between nutrition label use and consumers’ healthier food choices. Label use is considered for the two main types of labels currently found on food products; nutrition facts panels and nutrition/health claims. This link is tested using a three-equation multivariate probit model. Data were obtained from an ad hoc survey conducted in two medium-sized Spanish cities. The results indicate that the use of nutrition information by consumers, whether this involves the fact panel or the claim labels, does influence consumer choice of healthier food products to the same extent, although different types of consumers use the various types of labels considered.     

Sustainability labels on food products: Consumer motivation,understanding and use

This study investigates the relationship between consumer motivation, understanding and use of sustainability labels on food products (both environmental and ethical labels), which are increasingly appearing on food products. Data was collected by means of an online survey implemented in the UK, France, Germany, Spain, Sweden, and Poland, with a total sample size of 4408 respondents. Respondents expressed medium high to high levels of concern with sustainability issues at the general level, but lower levels of concern in the context of concrete food product choices. Understanding of the concept of sustainability was limited, but understanding of four selected labels (Fair Trade, Rainforest Alliance, Carbon Footprint, and Animal Welfare) was better, as some of them seem to be self-explanatory. The results indicated a low level of use, no matter whether use was measured as self-reported use of different types of information available on food labels or as use inferred from the results of a choice-based conjoint analysis. Hierarchical regression indicated that use is related to both motivation and understanding, and that both motivation, understanding and use are affected by demographic characteristics, human values as measured by the Schwartz value domains, and country differences. The results imply that sustainability labels currently do not play a major role in consumers’ food choices, and future use of these labels will depend on the extent to which consumers’ general concern about sustainability can be turned into actual behaviour.     

Demand for ecolabeled seafood in the Japanese market: A conjoint analysis of the impact of information and interaction with other labels

The use of seafood ecolabels is expanding in the world marketplace, but so are labels indicating other product attributes, such as country of origin and wild vs. farmed. The interactive effects of these labels and attributes in evaluating consumers’ preferences for ecolabeled seafood are relatively unexplored. In this paper we investigate (1) the direct and interactive effects of seafood ecolabels with other common fish labels, and (2) how consumers’ perceptions about the state of marine stocks and the valuation of ecolabels may be affected by different information. We find moderate interactive effects between ecolabels and country of origin labels, whereas the valuation for seafood ecolabels is fairly high. In terms of information, we find that consumers’ perceptions about fish stock levels changed (negatively) after receiving information on declining stock levels, and more sensationalized information led to increased change. However, valuation for a seafood ecolabel increases only when the information was perceived positively (credible/interesting); whereas exaggerated information (which was also perceived less credible) had insignificant effects on WTP.     

Estimating consumer preferences and willingness to pay for the underutilised indigenous chicken products

Indigenous chicken serves many functions, which include the provision of meat and eggs for home consumption and income from sales. The purpose of this study was to estimate the consumers’ responsiveness to an increase in prices of the indigenous chicken products and how much they are willing to pay for them in the market. The survey was conducted in the selected three regions of Kenya. A total of 930 respondents were interviewed both in the urban and rural areas. Contingent valuation experiment was used in empirical data collection. The two-step Heckman selection model was utilised to analyse consumers decisions and the amount they were willing to pay. The study results revealed that consumers are willing to pay 23.26% per kg more for indigenous chicken meat and 41.53% for eggs. Socioeconomic factors like age, income, education and family size significantly determines consumers’ willingness to pay. Other important factors include the indigenous chicken meat substitutes’ prices, attributes like taste/flavour and the product’s form on purchase. The yolk colour and size of eggs determined the consumers’ willingness to pay. Preferences for indigenous chicken products were found to be high. This information will assist in understanding both the urban and rural consumer’s behaviour. Therefore, useful for the indigenous chicken producers, breeders, marketers and policy makers in developing efficient production and marketing strategies. This would also provide a means of improving food security and livelihoods of the rural poor indigenous chicken farmers.     

Green market expansion by reducing information asymmetries: Evidence for labeled organic food products

We investigate how the provision of objective information about the environmental and health impact of organic labels by policy makers can influence the willingness-to-pay of consumers for labeled organic apples in Flanders (Belgium). Using a stated choice experiment, we initially find that Flemish consumers are willing to pay a positive price premium of some 33 eurocent per kilogram for labeled organic apples. After the provision of information on the actual environmental and health effects of organic apple production, this price premium becomes even more pronounced and increases to 57 eurocent per kilogram. Using a conditional logit model with covariates and a mixed logit model, we find evidence of preference heterogeneity. Also, the effect of information provision is more pronounced for certain groups of consumers such as non-vegetarians, infrequent buyers of organic products and members of a nature protection organization. As such, this paper illustrates that there is a role for policy makers and CSR producers in providing more accurate and reliable information about socially responsible production processes. Moreover, it is important to take the observed preference heterogeneity into account and tailor policies to specific consumer groups.     

Quality certification vs. product traceability: Consumer preferences for informational attributes of pork in Georgia

Consumer willingness-to-pay for informational attributes of food products is important information for food producers and supply chain participants and policy makers. We examine consumer demand in the pork sector of the Republic of Georgia. Results of conditional and mixed logit estimation, conducted on choice experiment data, reveal that Georgian consumers treat quality certification and product traceability attributes as substitutes. We also find that producers and other supply chain participants should be concerned primarily with maintaining the appearance of pork products. Retailer specific factors such as location and type of outlet can also substitute for product traceability. Store location and product appearance, however, are complementary attributes. In light of the recent turbulence in Georgia these consideration may be of paramount importance as participants in the supply chain seek to rebuild damaged infrastructure.     

Consumer knowledge and use of information about fish and aquaculture

This paper explores consumers’ knowledge about fish and aquaculture and assesses the use and importance of different information cues about fish. Cross-sectional data were collected in 2008 through a consumer survey (n = 3213) in the Czech Republic, Germany, Greece, Italy, Portugal, Romania, Sweden and the UK. Consumers’ knowledge about fish generally, and about aquaculture in particular, was relatively low and differed significantly between countries. Consumers from all countries reported an indication of quality and/or food safety as an information cue when buying fish. The information sources most frequently used by Europeans were labelling and sellers in retail or supermarkets. The Internet was identified by consumers in all of the countries as one of the most important sources of information about sea and freshwater fish products. Policy makers and food marketers are encouraged to develop a simple and easily recognisable mark (relating to quality, food safety and nutrition) to assist consumer decision-making. Information campaigns focusing on issues such as the nutritional benefits of eating fish are also recommended.     

Experts and activists: how information affects the demand for food irradiation

The public must decide between assertions made about food safety through irradiation by advocacy groups and by scientific experts. Herein we discuss the policy implications of experimental results that show how favorable and unfavorable information on food irradiation to reduce risks affects willingness-to-pay to control the food-borne pathogen Trichinella in irradiated pork. The surprising result is that when we presented both positive and negative information simultaneously, the negative information clearly dominated. This was true even though the source of the negative information was identified as being a consumer advocacy group and the information itself was written in a manner that was non-scientific.     

Standing out in the crowd: The effect of information clutter on consumer attention for front-of-pack nutrition labels

Whether and how information density on front-of-pack design affects consumers’ attention for nutrition labels is explored. The main manipulation concerned the number and type of nutrition labels (directive-, semi-, and non-directive), chromaticity (monochrome vs. traffic light color-coded scheme); number and type of additional design elements; and the distance between the label and additional design elements. Attention was measured by performance in visual search task. Performance was slower with increasing number of additional design elements, and when the label appeared in a dense rather than non-dense area. These effects were modulated by label type and chromaticity. The results show that information density is a key factor for consumer attention to (nutrition) information. Implications for policy makers and food producers who want to optimize package design layout and thus help consumers easily to find nutrition information displayed front of the pack are discussed.     

Time preferences and food choices: Evidence from a choice experiment

Time preferences have been recognized by numerous studies as an important driver of a number of healthy and environmentally-friendly behaviors. In this study, we first examined if healthy and environmentally-friendly food labels (e.g., USDA organic, carbon trust, health claim, and calories) are relevant in driving food choices. Second, using the Consideration of Future Consequences (CFC) scale we analyzed if individuals with different time preferences have different choice behavior and valuations in relation to these labels. Results indicate that consumers value both healthy and environmentally-friendly attributes displayed on labels. Results also suggest that time preferences can significantly influence consumers’ valuation for the USDA organic label, the presence of health claims and the calorie amount attribute.     

Combining attitudinal statements with choice experiments to analyze preference heterogeneity for functional dairy products

In this article, we employ a discrete choice experiment to examine preferences for functional dairy product attributes and willingness-to-pay estimates for consumers in Germany. We estimate preference heterogeneity by linking stated preference choice data not only to socioeconomic characteristics but also to attitudinal statements in a latent class framework. The empirical results indicate the existence of class-specific preference heterogeneity based on the consumers’ attitude towards functional foods, emphasizing the importance of attitudinal data in explaining consumers’ choice behavior. Our estimates demonstrate that within a class, consumers’ preferences are in accordance with their responses to attitudinal statements, that is functional food skeptics prefer non-functional dairy products, while functional food advocates have a negative preference for non-functional dairy products. The findings also show that all consumers place high value on dairy products enriched with known functional ingredients such as omega-3 fatty acids.     

Consumer perceptions of best practice in food risk communication and management: Implications for risk analysis policy

As a consequence of recent food safety incidents, consumer trust in European food safety management has diminished. A risk governance framework that formally institutes stakeholder (including consumer) consultation and dialogue through a transparent and accountable process has been proposed, with due emphasis on risk communication. This paper delivers actionable policy recommendations based on consumer preferences for different approaches to food risk management. These results suggest that risk communication should be informed by knowledge of consumer risk perceptions and information needs, including individual differences in consumer preferences and requirements, and differences in these relating to socio-historical context associated with regulation. In addition, information about what is being done to identify, prevent and manage food risks needs to be communicated to consumers, together with consistent messages regarding preventative programs, enforcement systems, and scientific uncertainty and variability associated with risk assessments. Cross-cultural differences in consumer perception and information preferences suggest a national or regional strategy for food risk communication may be more effective than one applied at a pan-European level.     

Consumer responses to front-of-package labeling in the presence of information spillovers

Voluntary nutrition labeling, a means of nutrition quality disclosure, was introduced in the U.S. over the last decade by leading food manufacturers, primarily in the form of front-of-package (FOP) labeling. This article examines how consumer responses to FOP labeling via product participation and information spillovers shift consumer demand across competing products. Applying a random coefficient logit demand model to sales data from the U.S. ready-to-eat cereal market (RTEC) empirically confirms a positive participation effect of FOP and a strong negative spillover effect on non-participating products. Further results indicate that the participation and spillover effects are stronger for healthy RTECs than they are for unhealthy ones. Moreover, ignoring such effects leads to underestimation of consumer valuation of FOP labeling for participating products, higher own-price elasticities of demand and lower price-cost margins. The findings also suggest that an incentive in a firm’s voluntary participation in self-regulated labeling programs is to avoid negative treatment externalities and that less health-conscious consumers are not influenced by spillover effects. Overall, this article highlights the importance of including spillover effects in the evaluation of FOP programs and that FOP can play a positive role in improving the healthfulness of consumer choices.     

How do consumers in developed countries value the environment and workers’ social rights in developing countries?

This paper uses a lab experiment to investigate developed countries’ consumer valuations of characteristics linked to the environment and workers’ social rights in developing countries. It focuses on seafood products and distinguishes between regular, environmentally friendly and fair trade varieties. Consumer valuations are elicited with a multiple price list. Results show that environmental and social labels have similar effects on participant willingness-to-pay when they are first presented. Using welfare variation coming from the labels, we also show that the absence of negative information linked to the regular variety may lead to an underestimation of the value of information associated with the label.