Milk by Any Other Name … Consumer Benefits from Labeled Milk

Tirtha Dhar and Jeremy D. Foltz

American Journal of Agricultural Economics, 2005, vol. 87, issue 1, pages 214-228

Abstract: This article uses revealed preferences of consumers to study the consumer benefits from rBST-free and organic labeled milk. The article specifies and estimates a quadratic AIDS demand system model for different milk types using U.S. supermarket scanner data. The introduction of rBST-free and organic milk is used to estimate consumer benefits that are decomposed into two components, competitive and variety effects. Results show significant consumer benefits from organic milk and to a lesser extent from rBST-free milk. Based on the findings, we explore implications for present U.S. labeling standards. Copyright 2005 American Agricultural Economics Association.

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