Estimating the Welfare Loss to Consumers When Food Labels Do Not Adequately Inform: An Application to Fair Trade Certification
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Matthew C. Rousu
Government officials and other policymakers often face difficult decisions determining what information must be provided to consumers in the limited space available on food labels. An ideal label will cause consumers to make the same purchase that they would make if they had all relevant information, while an inferior label will induce a consumer to purchase a product he would not purchase if more information were available or to forgo purchasing a product that would have yielded positive consumer surplus. We present the design and results of an experimental auction that allows researchers to compare several alternative labels in order to determine the welfare loss from labels that do not adequately inform consumers. Further, we compare a set of candidate labels to assess whether one of the labels is better or worse at informing consumers.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Article
- Demand and Pricing in the U.S. Margarine Industry
- Understanding Consumer Interest in Organics: Production Values vs. Purchasing Behavior
- Estimating the Welfare Loss to Consumers When Food Labels Do Not Adequately Inform: An Application to Fair Trade Certification
- The Role of Farmers' Risk aversion for Contract Choice in the US Hog Industry
- Private Labeling and Competition between Retailers
- Consumer Preferences for Detailed versus Summary Formats of Nutrition Information on Grocery Store Shelf Labels
- Further Results on Asymmetry in Farm-Retail Price Transmission under Spatial Monopoly
- Search Costs in Identity-Preserved Agricultural Markets
- Paying for Shelf Space: An Investigation of Merchandising Allowances in the Grocery Industry
- Agricultural Production Clubs: Viability and Welfare Implications
Articles in the same Issue
- Article
- Demand and Pricing in the U.S. Margarine Industry
- Understanding Consumer Interest in Organics: Production Values vs. Purchasing Behavior
- Estimating the Welfare Loss to Consumers When Food Labels Do Not Adequately Inform: An Application to Fair Trade Certification
- The Role of Farmers' Risk aversion for Contract Choice in the US Hog Industry
- Private Labeling and Competition between Retailers
- Consumer Preferences for Detailed versus Summary Formats of Nutrition Information on Grocery Store Shelf Labels
- Further Results on Asymmetry in Farm-Retail Price Transmission under Spatial Monopoly
- Search Costs in Identity-Preserved Agricultural Markets
- Paying for Shelf Space: An Investigation of Merchandising Allowances in the Grocery Industry
- Agricultural Production Clubs: Viability and Welfare Implications
