Labeling Context and Reference Point Effects in Models of Food Attribute Demand
Posted: 13 Oct 2006
There is considerable interest in the effect of labels on food product demand. Labeling statements may convey new information about attributes and place consumers in different choice contexts; consumers' assessment of information in labels may be affected by reference points. We examine labeling context relating to genetically modified (GM) food as a factor in the stochastic component of a random utility model and assess reference points over a set of observable characteristics of consumers. We find that labeling context effects are present, although relatively small, while reference dependence is a very important factor that varies over observable characteristics of the sampled consumers.
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