EconPapers    
Economics at your fingertips  
 

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

Abstract: 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)
Date: 2017
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)
http://www.sciencedirect.com/science/article/pii/S0306919217301495
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

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 ().

 
Page updated 2018-09-08
Handle: RePEc:eee:jfpoli:v:68:y:2017:i:c:p:214-232