Progress 10/01/10 to 09/30/13
Outputs
Target Audience: In the light of recent renewed interest in expanding broad-based promotional efforts in the United States and discussions about introducing a mandatory check off program, the outcomes of the research are especially relevant for stakeholders in the fresh produce industry, as well as public policy units that aim to increase consumption of healthy food choices. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided? OUTPUTS: In addition to 2 experiments that were implemented in 2010-2011 (Experiment #1 "Consumer Response Experiment" and Experiment #2 "Producer Decision Experiment") we ran Experiment #3 "Impact of Food Labels Experiment" and Experiment #3a "Long-term Impact of Food Labels Experiment". The Experiment #3 had 351 adult (non-student) participants. Subjects were paid $25 for participating, and they could use part of the cash payment to purchase one of the following seven food items that were presented in a series of auctions: oven baked potato chips, mozzarella string cheese, gummy bears (pomegranate, strawberry and sour apple flavors mix), chewy granola bar (with dark chocolate chips), beef jerky (with natural smoke flavoring), soft-baked oatmeal chocolate chip cookies, granola trail mix (with blueberries, mangoes, almonds, pecans & 4 seeds). Subjects were randomly assigned to information treatments and were presented with all seven food items. In all treatments subjects were shown food items that were unpackaged for demonstration purposes only. All subjects were provided with the name of the product and some basic nutrition information. We designed four treatments where the primary label "Contains X" or "Free of X" was supplemented with each of the two types of secondary information: negatively-framed or positively-framed information. Negatively-framed information summarized the views of the critics of the ingredients or production processes, while the positively-framed secondary information was comprised of the proponents' statements about the same ingredients or production processes. We also implemented two treatments where we auctioned items only with the primary labels "Contains X" and "Free of X" without any accompanying secondary information. Finally, the control treatment did not include any label or additional information. The Experiment #3a had the subset of participants from Experiment #3 return into the laboratory 3 months later and bid on the same food items, but with the information on the label truncated relative to the information that the participants were supplied initially in the first phase of the experiment. We intend to measure the memory wear-out regarding positive and negative information. How have the results been disseminated to communities of interest? The results have been disseminated in the form of journal articles, press releases and interviews with the media. What do you plan to do during the next reporting period to accomplish the goals?
Nothing Reported
Impacts
What was accomplished under these goals?
"Impact of Food Labels Experiment" Outcome Summary: The overall goal of this study was to obtain a deeper understanding of how information framing about ingredients and production processes impact WTP across various food products. We found that primary labels and, especially, the content of the secondary information had a significant impact on WTP and the probability of refusal to buy at any price, and that there is evidence of distinct asymmetry of WTP sensitivity between "Contains X" and "Free of X" labels with negative information. We also found that the "Free of X" label needs additional information to have an impact on WTP and that the negative effect of the label "Contains X" is significantly larger when the label is not supplemented with any negative or positive secondary information about X. Finally, we found that for treatments where the information about the ban in the European Union was provided, the negative WTP response is two times higher for items that are banned in the European Union than for the rest of the items. A major implication of our findings for food marketers is that if labeling is mandatory, then providing additional information about what the product contains will lessen the negative impact on demand. Interestingly, this is true for negative as well as positive information. Our study helps inform the ongoing debate about mandatory labeling in the United States, given that most of the proposed labeling schemes do not include provision of any additional information to consumers. Our results suggest that labeling initiatives might lead to a strong decrease in consumers' WTP for labeled items, despite the scientific evidence demonstrating them to be safe. This effect, however, might be mitigated through wide dissemination of information about the labeled ingredients, or presentation of objective information alongside the label. The results of our study present strong evidence that the current policy debate surrounding proposition 37 in California should consider not only the mandatory label, but also the implications from any additional secondary information included on any proposed food labels, and the way the secondary information is presented and regulated. While our research emphasizes the importance of secondary information, further research should explore what is the most suitable form for presentation of such additional information.
Publications
- Type:
Journal Articles
Status:
Accepted
Year Published:
2013
Citation:
J. Liaukonyte, N. Streletskaya, H. Kaiser and B. Rickard "Consumer Response to Contains and Free of Labeling: Evidence from Lab Experiments." Applied Economic Perspectives and Policy.
- Type:
Journal Articles
Status:
Accepted
Year Published:
2011
Citation:
B. Rickard, J. Liaukonyte, H. Kaiser and T. Richards Consumer response to commodity-specific and broad-based promotion programs for fruits and
vegetables . 2011. American Journal of Agricultural Economics
93(5): 13121327.
- Type:
Journal Articles
Status:
Accepted
Year Published:
2012
Citation:
Liaukonyte, J. Rickard, B., Kaiser, H., Okrent, A., Richards, T. (2012). Economic and Health Effects of Fruit and Vegetable
Advertising: Evidence from Lab Experiments, Food Policy, 37(5); 543-553.
- Type:
Journal Articles
Status:
Under Review
Year Published:
2014
Citation:
"Under-Contribution to Generic Advertising due to Self-Interested Inequity Aversion"
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Progress 10/01/11 to 09/30/12
Outputs
OUTPUTS: In addition to 2 experiments that were implemented in 2010-2011 (Experiment #1 "Consumer Response Experiment" and Experiment #2 "Producer Decision Experiment") we ran Experiment #3 "Impact of Food Labels Experiment" and Experiment #3a "Long-term Impact of Food Labels Experiment". The Experiment #3 had 351 adult (non-student) participants. Subjects were paid $25 for participating, and they could use part of the cash payment to purchase one of the following seven food items that were presented in a series of auctions: oven baked potato chips, mozzarella string cheese, gummy bears (pomegranate, strawberry and sour apple flavors mix), chewy granola bar (with dark chocolate chips), beef jerky (with natural smoke flavoring), soft-baked oatmeal chocolate chip cookies, granola trail mix (with blueberries, mangoes, almonds, pecans & 4 seeds). Subjects were randomly assigned to information treatments and were presented with all seven food items. In all treatments subjects were shown food items that were unpackaged for demonstration purposes only. All subjects were provided with the name of the product and some basic nutrition information. We designed four treatments where the primary label "Contains X" or "Free of X" was supplemented with each of the two types of secondary information: negatively-framed or positively-framed information. Negatively-framed information summarized the views of the critics of the ingredients or production processes, while the positively-framed secondary information was comprised of the proponents' statements about the same ingredients or production processes. We also implemented two treatments where we auctioned items only with the primary labels "Contains X" and "Free of X" without any accompanying secondary information. Finally, the control treatment did not include any label or additional information. The Experiment #3a had the subset of participants from Experiment #3 return into the laboratory 3 months later and bid on the same food items, but with the information on the label truncated relative to the information that the participants were supplied initially in the first phase of the experiment. We intend to measure the memory wear-out regarding positive and negative information. Events: During year 2011-2012 Principal Investigator participated in multiple conferences and workshops where she presented the results of the ongoing research with HATCH funds. The conferences included Marketing Science Conference in Boston, EARIE Conference in Rome, Italy and Economics Conference in Vilnius, Lithuania. Dissemination: The results of these experiments were presented in multiple conferences and workshops (see above) and were prepared into manuscripts for publication. Experiments #3 yielded 3 working papers, one of which is currently under review in an economics journal. PARTICIPANTS: Timothy J. Richards Morrison Chair, Morrison School of Agribusiness and Resource Management, W. P. Carey School of Business Arizona State University, Mesa, AZ 85212 phone: 480-727-1488 email: trichards@asu.edu Bradley J. Rickard Assistant Professor, Charles H. Dyson School of Applied Economics and Management Cornell University, Ithaca, NY 14853 255 Warren Hall; phone: 607-255-7417 email: bjr83@cornell.edu Harry M. Kaiser Gellert Family Professor, Charles H. Dyson School of Applied Economics and Management Cornell University, Ithaca, NY 14853 350 Warren Hall; phone: 607-255-1598 email: hmk2@cornell.edu, Nadia Streletskaya, Graduate Student, Charles H. Dyson School of Applied Economics and Management. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
"Impact of Food Labels Experiment" Outcome Summary: The overall goal of this study was to obtain a deeper understanding of how information framing about ingredients and production processes impact WTP across various food products. We found that primary labels and, especially, the content of the secondary information had a significant impact on WTP and the probability of refusal to buy at any price, and that there is evidence of distinct asymmetry of WTP sensitivity between "Contains X" and "Free of X" labels with negative information. We also found that the "Free of X" label needs additional information to have an impact on WTP and that the negative effect of the label "Contains X" is significantly larger when the label is not supplemented with any negative or positive secondary information about X. Finally, we found that for treatments where the information about the ban in the European Union was provided, the negative WTP response is two times higher for items that are banned in the European Union than for the rest of the items. A major implication of our findings for food marketers is that if labeling is mandatory, then providing additional information about what the product contains will lessen the negative impact on demand. Interestingly, this is true for negative as well as positive information. Our study helps inform the ongoing debate about mandatory labeling in the United States, given that most of the proposed labeling schemes do not include provision of any additional information to consumers. Our results suggest that labeling initiatives might lead to a strong decrease in consumers' WTP for labeled items, despite the scientific evidence demonstrating them to be safe. This effect, however, might be mitigated through wide dissemination of information about the labeled ingredients, or presentation of objective information alongside the label. The results of our study present strong evidence that the current policy debate surrounding proposition 37 in California should consider not only the mandatory label, but also the implications from any additional secondary information included on any proposed food labels, and the way the secondary information is presented and regulated. While our research emphasizes the importance of secondary information, further research should explore what is the most suitable form for presentation of such additional information.
Publications
- Liaukonyte, J. Rickard, B., Kaiser, H., Okrent, A., Richards, T. (2012). Economic and Health Effects of Fruit and Vegetable Advertising: Evidence from Lab Experiments, Food Policy, 37(5); 543-553.
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Progress 10/01/10 to 09/30/11
Outputs
OUTPUTS: Activities: There were 2 sets of major experiments designed and implemented during this time period, which were used to analyze proposed questions. Experiment #1 "Consumer Response Experiment": A total of 271 adult, non-student subjects participated in the experiment, which measured Willingness to Pay response to alternative broad-based and commodity specific advertisements. All subjects except those in the control group also viewed four 30-second fruit and vegetable advertisements with two shown between the first and second Simpsons episode and the other two shown between the second and third Simpsons episode. Second, subjects were asked to bid in auctions for four fruits and four vegetables. The control group (Treatment 1) included 58 subjects who were not exposed to any ads, but did view three 90-second episodes of The Simpsons. Experiment #2 "Producer Decision Experiment":. A total 336 student subjects participated in the experiment and were primarily business and economics students. The experiment consisted of three parts designed to emulate the same order of the history of funding for fruit and vegetable generic advertising in the United States. Part A of the experiment did not involve an advertising program. Part B included a mandatory commodity-specific generic advertising program for the three individual commodities. Part C was the same as Part B, except that subjects were asked to vote on an additional mandatory broad-based generic advertising joint for all three commodities based on treatment specific variation in information that was presented to subjects. Treatment 1 was the control group and was based on factors that we hypothesize to have contributed to the low support for a mandatory broad-based program by the fruit and vegetable industry. The purpose of Treatment 1 was to reflect the current state of the industry. Treatment 2 was designed to test whether inequity aversion holds and whether there is empirical support for either the self-centered or self-interested inequity aversion hypothesis. Treatment 2 relaxed the unequal returns condition of control treatment. The rest of the treatments were designed as extensions to the main treatments by including factors that might affect perceived inequity. Events: During year 2010-2011 Principal Investigator participated in multiple conferences and workshops where she presented the results of the ongoing research with HATCH funds. The conferences included Marketing Science Conference in Cologne, Germany, Economics of Advertising Research conferences in Barcelona, Spain as well as in Moscow, Russia. Dissemination: The results of these experiments were presented in multiple conferences and workshops (see above) and were prepared into manuscripts for publication. Experiment #1 yielded 1 publication (listed below) and one other paper that is currently under review in "Food Policy" as well as publication for "Smart Marketing" newsletter with wide readership consisting of NYS farmers, growers and producers (http://hortmgt.dyson.cornell.edu/smart_marketing/). The results from Experiment #2 were prepared for submission to Journal of Public Economics and is currently under review. PARTICIPANTS: Timothy J. Richards Morrison Chair, Morrison School of Agribusiness and Resource Management, W. P. Carey School of Business Arizona State University, Mesa, AZ 85212 phone: 480-727-1488 email: trichards@asu.edu Bradley J. Rickard Assistant Professor, Charles H. Dyson School of Applied Economics and Management Cornell University, Ithaca, NY 14853 255 Warren Hall; phone: 607-255-7417 email: bjr83@cornell.edu Harry M. Kaiser Gellert Family Professor, Charles H. Dyson School of Applied Economics and Management Cornell University, Ithaca, NY 14853 350 Warren Hall; phone: 607-255-1598 email: hmk2@cornell.edu TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.
Impacts
Consumer Response Experiment Outcome Summary #1: Our results show commodity specific advertising programs may be less effective at increasing demand for fruits and vegetables than earlier studies have suggested. However, commodity-specific campaigns do appear to have a significant clockwise rotational effect on the demand for fruits and vegetables. This result indicates that commodity-specific promotional campaigns lead to an increase in the dispersion of valuations. Broad-based advertising does have a direct effect on the WTP for fruits and vegetables and therefore leads to an upward shift in demand. Furthermore, we find evidence that broad-based advertising appears to have a counter-clockwise rotational effect on the demand for fruits and vegetables. The combined effect of the outward shift in demand and the counter-clockwise rotation in demand from broad-based advertising leads to an increase in the average WTP, and this result is pertinent to the design of a broad-based promotional program for fruits and vegetables. Our results provide empirical support for the proponents of a broad-based promotional campaign who argue that such advertising would raise overall demand for fruits and vegetables. Consumer Response Experiment Outcome Summary #2: Our results suggest that both industry stakeholders and government health agencies should carefully consider adopting a broad-based promotional strategy. We find that a successful broad-based advertising campaign for fruits and vegetables, either alone or as a hybrid with commodity-specific campaigns, would reduce average annual caloric intake per person by approximately 1,800 kcal. Although this reduction may appear small, it is a substantial part of annual weight gain (0.77 pounds per year) that average American has experienced. Such a strategy could be used as one component of an overall program to reduce obesity and the serious health risks associated with it. Therefore, based on the results of our study, an increase in broad-based advertising would lead to benefits for producers of fruits and vegetables and consumers more generally. Producer Decision Experiment Outcome Summary: In this research, we examined several possibilities as to why growers are often reluctant to fund generic broad-based commodity promotion programs even under a high likelihood of positive returns. Our analysis focuses on one possibility for this behavior which we refer to as "self-interested inequity aversion", which holds that individuals experience negative utility when others benefit more from a public good than they do, but positive utility when they earn more than others. Our results show strong support for this theory. Among the tested treatments, we find that if returns are non-stochastic, or if they are indeed equal across producers, the likelihood of a favorable vote rises. Similarly, if subjects are allowed to experience several periods of positive returns under a generic advertising program, they will be more likely to vote in favor of keeping the program.
Publications
- Rickard, B.J., J.Liaukonyte, H.M.Kaiser, and T.J. Richards (2011). Consumer Response to Commodity-Specific and Broad-Based Promotion Programs for Fruits and Vegetables, American Journal of Agricultural Economics, 93(5).
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