Does Shelf-Labeling of Organic Foods Increase Sales? Results from a Natural Experiment

Sven-Olov Daunfeldt and Niklas Rudholm ()
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Niklas Rudholm: The Swedish Retail Institute (HUI), Postal: Regeringsgatan 60, 103 29 Stockholm, Sweden, and Department of, Economics, Dalarna University, SE-781 88 Borlänge, Sweden.

No 36, HUI Working Papers from HUI Research

Abstract: Can a simple point-of-purchase (POP) shelf-label increase sales of organic foods? We use a random-effects, random-coefficients model, including a time adjustment variable, to test data from a natural experiment in a hypermarket in Gävle, Sweden. Our model incorporates both product specific heterogeneity in the effects of labeling and consumer adjustment to the labels over time. The introduction of POP displays was found to lead to an increase in sales of organic coffee and olive oil, but a reduction in sales of organic flour. All targeted products became less price-sensitive. The results reveal that product specific heterogeneity has to be accounted for, and in some cases consumers adjusted to labeling over time.

Keywords: Product labeling; random coefficient models; ecological products; experimental economics (search for similar items in EconPapers)
JEL-codes: L66 L81 M31 M37 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2010-02-01
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Related works:
Journal Article: Does shelf-labeling of organic foods increase sales? Results from a natural experiment (2014)
Working Paper: Does Shelf-Labeling of Organic Foods Increase Sales? Results from a Natural Experiment (2010)
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