Willingness-to-pay for natural, organic, and conventional foods: The effects of information and meaningful labels
Jonathan R. McFadden and
Wallace E. Huffman
Food Policy, 2017, vol. 68, issue C, 214-232
Vague food labels and distorted product claims have persisted in the “natural” food industry, while organic claims can be certified by the U.S. Department of Agriculture (USDA). Using experimental methods and a sample of randomly selected subjects, we test food label and information treatment effects on subjects' willingness-to-pay (WTP) for organic, “natural,” and conventional foods. Random nth-price auctions are used to elicit WTP after subjects received one of five randomly assigned information treatments. We find large information effects, including asymmetric cross-market effects for natural and organic foods. Perhaps surprising is that organic premiums increase in response to subjects seeing the “natural” foods industry's perspective on its products. Demographics effects are also important. The results have practical implications for natural and organic food marketing and valuing products where there are vague claims about their attributes.
Keywords: Experimental auctions; Organic foods; “Natural” foods; Information effects; Food labels; Random nth-price auction (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:68:y:2017:i:c:p:214-232
Access Statistics for this article
Food Policy is currently edited by J. Kydd
More articles in Food Policy from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().