Shrinkflation, Unit Price Disclosure, and Consumer Welfare: Evidence from Canned Tuna

44 Pages Posted: 19 Dec 2024

See all articles by Katherine Harris-Lagoudakis

Katherine Harris-Lagoudakis

Iowa State University

Xibo WAN

University of Connecticut

John M. Crespi

Iowa State University

Date Written: September 18, 2024

Abstract

Shrinkflation has become a favored strategy among food manufacturers to subtly raise the unit price. However, the effectiveness of policies aimed at alerting consumers to these covert unit price hikes remains underexplored. Leveraging variation in unit price disclosure regulations across different states, this paper estimates the welfare impact of price per unit disclosure in the context of a coordinated shrinkflation event in the canned tuna industry. Our findings reveal that consumers in states with unit price disclosure regulations are more responsive to unit price changes compared to those in states without such regulations. Our analysis suggests that implementing unit price disclosure regulations would enhance consumer welfare by approximately $10.93 million dollars annually.

Keywords: attribute disclosure, collusion, greedflation, scanner data, shrinkflation

JEL Classification: H30, L81, L38

Suggested Citation

Harris-Lagoudakis, Katherine and WAN, Xibo and Crespi, John M., Shrinkflation, Unit Price Disclosure, and Consumer Welfare: Evidence from Canned Tuna (September 18, 2024). Available at SSRN: https://ssrn.com/abstract=4994447 or http://dx.doi.org/10.2139/ssrn.4994447

Xibo WAN

University of Connecticut ( email )

John M. Crespi

Iowa State University ( email )

Department of Economics
260 Heady Hall
Ames, IA 5011-1070
United States
515-294-6740 (Phone)
515-294-0221 (Fax)

HOME PAGE: http://www.econ.iastate.edu/

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