Do rBST-Free and Organic Milk Stigmatize Conventionally Produced Milk?

Christopher Kanter, Kent D. Messer () and Harry M. Kaiser

No 43491, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Producers are continually seeking to differentiate their products in the marketplace. A common approach is via labeling where differences in production methods are marketed. Yet, positive labeling for the new product has the potential to stigmatize the conventionally produced product by highlighting perceived problems with the product. The net economic result can be negative to producers as the conventional product that dominates the market is stigmatized by the new product that has little market share, and this leads to consumers decreasing their willingness to pay for the conventional product. This experimental research identifies this stigma effect in the case of milk, where the presentation of rBST-Free milk reduces consumers' willingness to purchase conventional milk.

Keywords: Demand and Price Analysis (search for similar items in EconPapers)
Date: 2008
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