Noisy Information Signals and Endogenous Preferences for Labeled Attributes

Jura Liaukonyte, Nadia Streletskaya and Harry Kaiser

No 211823, 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists

Abstract: Consumer preferences for labeled products are often assumed to be exogenous to the presence of labels. However, the label itself (and not the information on the label) can be interpreted as a noisy warning signal. We measure the impact of “Contains” labels and additional information about the labeled ingredients, treating preferences for labeled characteristics as endogenous. We find that for organic food shoppers, the “Contains” label absent additional information serves as a noisy warning signal leading them to overestimate the riskiness of consuming the product. Provision of additional information mitigates the large negative signaling effect of the label.

Keywords: Agricultural and Food Policy; Labor and Human Capital (search for similar items in EconPapers)
Pages: 46
Date: 2015
New Economics Papers: this item is included in nep-com, nep-exp and nep-mkt
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Citations: View citations in EconPapers (10)

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Journal Article: Noisy Information Signals and Endogenous Preferences for Labeled Attributes (2015)
Working Paper: Noisy Information Signals and Endogenous Preferences for Labeled Attributes (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae15:211823

DOI: 10.22004/ag.econ.211823

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