Consumer Response to "Contains" and "Free of" Labeling: Evidence from Lab Experiments

Jura Liaukonyte, Nadia Streletskaya, Harry Kaiser and Bradley J. Rickard

Applied Economic Perspectives and Policy, 2013, vol. 35, issue 3, 476-507

Abstract: Using a lab experiment with 351 adult non-student subjects, we investigate the impact of labels and secondary information on willingness to pay (WTP) for foods that use various ingredients and processes that have been the subject of food policy discussions. We find a distinct asymmetry of WTP sensitivity between "Contains X" and "Free of X" labels with negatively-framed secondary information. The "Free of X" label has an impact only when secondary information is provided, and the negative impact of "Contains X" is mitigated by secondary information. We also consider how the results of our study can inform the ongoing debate about mandatory food labeling regulations in the United States: if mandatory labeling is adopted, providing additional information about what the product contains would significantly lessen the negative impact on demand.

Date: 2013
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