Identifying Food Labeling Effects on Consumer Behavior

47 Pages Posted: 1 Jul 2018 Last revised: 3 Feb 2022

See all articles by Sebastian Araya

Sebastian Araya

University of Chile - Center of Applied Economics (CEA)

Andres Elberg

PUC-Chile - School of Management

Carlos Noton

Dept of Industrial Engineering - University of Chile

Daniel Schwartz

University of Chile

Date Written: November 16, 2019

Abstract

We examine a large-scale mandatory food labeling regulation to identify its effects on consumer behavior. We take advantage of exogenous variation in product-labeling status from the gradual and asynchronous introduction of labeled products on store shelves many weeks before the legal deadline. We combine individual-level scan data from a large retailer with on-the-shelf information on the actual warning-label status for breakfast cereals, chocolates, and cookies. Warning labels decrease demand and purchase probabilities in the cereal category, and this effect is larger on medium-low socioeconomic groups. We find inconclusive results of the warning label on chocolates and cookies. Overall, results suggest that the warning label effect is consistent with information disclosure influencing consumers' choices when the advertised information is unexpected.

Keywords: Food Labeling, Consumer Behavior, Nutritional Information, Point-of-Sale Advertising

JEL Classification: D12, I12, I18

Suggested Citation

Araya, Sebastian and Elberg, Andres and Noton, Carlos and Schwartz, Daniel, Identifying Food Labeling Effects on Consumer Behavior (November 16, 2019). Available at SSRN: https://ssrn.com/abstract=3195500 or http://dx.doi.org/10.2139/ssrn.3195500

Sebastian Araya

University of Chile - Center of Applied Economics (CEA) ( email )

Republica 701
Casilla 2777
Santiago
Chile

Andres Elberg

PUC-Chile - School of Management ( email )

Av. Vicuña Mackenna 4860
Santiago, RM 7820436
Chile

Carlos Noton (Contact Author)

Dept of Industrial Engineering - University of Chile ( email )

Beauchef 851
Santiago, RM
Chile

HOME PAGE: http://www.dii.uchile.cl/~cnoton/

Daniel Schwartz

University of Chile ( email )

Beauchef 851
Santiago, R. Metropolitana
Chile

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