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Redundant Food Labels Affect Consumers' Willingness to Pay
Posted by: Prof. Dr. M. Raupp (IP Logged)
Date: February 14, 2020 07:09AM

Researchers from Purdue University conducted a survey that showed that some
consumers are willing to pay more for labeled foods even if the label's
claims are bogus. In their results, they state that the likelihood of
overpricing redundant labels is associated with willingness-to-pay premiums
for organic food, which may suggest that at least some of the premium for
organic is a result of misinformation.

Researchers from Purdue University conducted a survey to determine whether
premiums of redundant labels originate from misunderstanding, or if there
are other factors to consider. Furthermore, their study aimed to investigate
whether better knowledge of the food labels' claims decreases willingness to
pay for redundant labels. For this, they focused on three labels: non-GMO
sea salt, gluten-free orange juice, and no-hormone-added chicken breast.

The survey revealed that consumers who participated in the survey with farm
experience paid lower premiums for non-GMO salt and no-hormone added
chicken. Participants with better scientific literacy paid lower premiums
for gluten-free orange juice. It was also indicated that when the
information about the redundancy of the claims was provided, less than half
of the respondents who were willing to pay extra in the beginning were
convinced otherwise. Results of the survey showed that 39-43% of the
respondents lower their premiums after seeing the information - a behavior
attributed to being misled. And 14-27% of the respondents did not change
their premiums, which may be due to the respondents discrediting the
information. But what is more interesting is that 30% of the respondents
counter-intuitively increase their premiums. This behavior is associated
with less deduced scientific knowledge. The researchers stated that
overpricing redundant labels is connected with the
willingness-to-pay-premiums for organic food. This may suggest that at least
some of the premium for organic is a result of misinformation.

The results of this study showed that providing the correct information is
not often enough to discourage consumers from paying more for products with
redundant claims. The challenge for food regulators is to find ways to
provide consumers with the right information they need while avoiding


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