Noisy Information Signals and Endogenous Preferences for Labeled Attributes

Jura Liaukonyte, Nadia Streletskaya and Harry Kaiser

No 205386, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: Consumer preferences for labeled products are often assumed to be exogenous to the presence of labels. However, the label itself (and not the information on the label) can be interpreted as a noisy warning signal. We measure the impact of “Contains” labels and additional information about the labeled ingredients, treating preferences for labeled characteristics as endogenous. We find that for organic food shoppers, the “Contains” label absent additional information serves as a noisy warning signal leading them to overestimate the riskiness of consuming the product. Provision of additional information mitigates the large negative signaling effect of the label

Keywords: Agribusiness; Agricultural and Food Policy; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 2
Date: 2015
New Economics Papers: this item is included in nep-com, nep-exp and nep-mkt
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Citations: View citations in EconPapers (12)

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Journal Article: Noisy Information Signals and Endogenous Preferences for Labeled Attributes (2015)
Working Paper: Noisy Information Signals and Endogenous Preferences for Labeled Attributes (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205386

DOI: 10.22004/ag.econ.205386

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