Recipient Organization
TENNESSEE STATE UNIVERSITY
3500 JOHN A. MERRITT BLVD
NASHVILLE,TN 37209
Performing Department
College of Ag, Human & Nat Sc
Non Technical Summary
Eco-labels have reshaped consumer preferences, food production, and food marketing. The Organic industry is now a $50 billion per year industry, over 10% of all wild-caught seafood is certified sustainable, and major conglomerates are racing up to source sustainably and market sustainability. However, consumers often misunderstand eco-labels, as studies have shown that eco-labels impose imaginary "halo effects" on the perceived taste, healthfulness, and quality of products. Crucially, it is not known if eco-labels are viewed as a mark of food safety, as it is with Organic. A halo effect of food safety could cause the overconsumption of eco-labels. And if widely exploited, the halo effect could erode the public trust in sustainable agriculture. In this seed grant, we develop a framework that would allow us to quantify the extent and the causes of the halo effect, illustrate its impact on consumer choice/ demand, and test if information provision can correct it. Our research seeks to advance the state of knowledge, such that relevant policy discussion can be set in motion to protect consumers and producers.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Goals / Objectives
It is now known that a large segment of consumers is inclined to Organic food mainly because they believe it is safer, and such belief is largely not supported by evidence from food science. Fueled by these insights, more voices have discussed how Organic should be marketed and regulated. Yet, the discussion about the food safety implications is nascent for other eco-labels, which include Fair Trade, Biodynamics, Rainforest Alliance, Marine Stewardship Council, self-certifications, and others. While some eco-labels are misidentified as Organic, whether eco-labels, in general, cast a similar positive halo of food safety has not been well studied. As a result, whether there is a pervasive error in consumers' expectations of eco-labels' food safety quality is left unanswered.The headline "Eating for your health is also better for the environment" proclaims an intuitive association. However, in the context of eco-labels, what is better for the environment may not be necessarily safer. Although most eco-labels have protocols against aspects of environmental degradation, they maintain no explicit claim of food safety enhancement. Such a claim can be overreaching, as the debate on Organic shows. If eco-labels are perceived to be safer, the misalignment to reality could result in loss of consumer welfare, which over time may erode the public trust of sustainable agriculture.Eco-labels signal production method to consumers; therefore, eco-labels generates a price premium that incentivizes producers. However, a food safety halo effect induces consumption that would otherwise not take place. Because the halo effect is mere perception, the overconsumption is welfare reducing, which is perhaps illustrated by the increased food-borne illnesses following the expansion of farmers' markets. In the worst-case scenario of pervasive greenwashing, the eco-label market would incentivize low-cost, low-quality producers the most. Consumers could grow uneasy with each subsequent fraud and food safety incidence related togreenfood products; this could lead to the downward spiral of a Lemon Market.There are now 463 variants of eco-labels. Organic has grown into a $50 billion per year industry; McDonald's has announced its intention to use sustainable beef; the Marine Stewardship Council now certifies over 10% of the total ocean seafood harvest; and worldwide, major supermarkets have set the ambitious goal to source only sustainable seafood. Eco-labels are shaping the market. However, little is known if and why consumers perceive eco-labels to be safer. Therefore, our goal isto understand the role of perceived food safety in the demand for eco-labels.This project investigates if, in general, consumers perceive that eco-labels connote a safer-than-average standard. Further, we seek to determine the factors causing the halo of food safety, provide an instance where it spills over, and investigate if it can be corrected informatively. These efforts lay the groundwork for policy conversations and future research, which shape an environment where consumers' expectation matches the actual provision of eco-labels. These are achieved in three objectives of this project.(Objective 1) Determine if consumers perceive eco-labeled products as safer; Determine the perception's underlying causes.(Objective 2) Demonstrate the halo effect on consumer behavior.(Objective 3) Explore the role of information on the halo effect
Project Methods
Objective 1 aims to clarify two interrelated questions. One, whether consumers perceive that eco-labels imply safer food. Two, unearthing the factors which cause this misperception. No previous known studies have provided answers to these questions, which have important policy and marketing implications.We create a new framework to quantify the extent of the halo effect by adopting the approach of Ginon et al. Respondents will be shown five logos: USDA Organic, Grass-fed, Marine Stewardship Council, Rainforest Alliance, and a generic "sustainably produced" claim. The respondents will be asked if each eco-label creates an impression of a higher food safety standard. Because these eco-labels cover a large swath of food products, this analysis will provide a generalizable inference.The mean rating of each eco-label will be calculated. T-tests will be performed to determine if the responses of 'yes' are statistically significant, which will tell the extent of the food safety halo effect. The values will be tested with ANOVA and Mann-Whitney rank-sum test, which teases out the potential differences between the eco-labels. These analyses will provide basic facts about the halo effect.We then aggregate the ratings into five categories. A person is either convinced that eco-labels equate to safer food ('yes' for all 5), believes that eco-labels likely or might imply safer food (3-4 or 1-2 'yes' respectively), unsure ('maybe' for all 5), or convinced that eco-labels do not infer safer food (all 'no'). The aggregated ratings will be used as the dependent variable in an Ordered Logit model, where we explore the halo effect's factors, which we will elicit in a survey, but not described verbatim here due to space limitations.Objective 2 seeks to demonstrate the halo effect. The halo effect reflects consumers' use of an eco-label as a food safety risk mitigator; therefore, an eco-label could compete or complement other cues and attributes, which can have wide-ranging implications. This demonstration can stimulate other research in this domain.Here, we focus on eco-labels' impact on consumer preference of Country of Origin, a salient food safety cue that causes avoidance of imported products. We ask if an eco-label mitigates the aversion. This analysis requires one, consumers' preference for an imported, eco-labeled product; two, consumers' aversion towards imported product due to food safety concern. In combination, we can gauge if and how much an eco-label lessens the aversion towards an imported product. We propose an innovative application of a choice experiment, which synthesizes perception to preference.The choice experiment features wild-caught shrimp, the most consumed category of seafood, which is produced domestically and imported. We choose wild-caught because eco-labels of wild-caught seafood tend to have no direct and indirect implications to food safety, unlike eco-labels of farmed seafood that have protocols (e.g., antibiotic usage) that can be interpreted as a food safety enhancement. For these reasons, wild-caught shrimp is a fitting product for a positive analysis, describing the potentially subconscious halo effect as it is in the marketplace.A choice experiment is a tool to elicit consumer utility, which is widely applied in consumer studies. It allows us to uncover how consumers value attributes of a product by asking them to state their choice over different alternatives. The stated choices are then econometrically estimated and transformed into utility. In context, we are interested in how consumer utility changes according to the interaction between the product's origin and eco-label status.Consumer preferences for American and Argentinian shrimp will be compared. We choose Argentina since it is a major exporter of wild-caught shrimp to the U.S. market. The industry has also enrolled in the Fisheries Improvement Projects (FIP).While FIP is an intermediate step towards the full status of "sustainable," it has been frequently advertised as "sustainably sourced" in U.S. supermarkets. The choice experiment, therefore, represents eco-labeled shrimp as "sustainably sourced," which reflects the market. While other ecolabels for seafood exist, these may be subjected to low consumer recognition that can confound the experiment, and are thus unsuited for our purpose 61,62.Lastly, we select four levels of price that range from $8.49 to $12.99 per pound, reflecting the current prices of medium wild-caught shrimp. These prices enable the calculation of marginal utility towards price, which can be used to measure the halo effect's implication in monetary terms.We will quantify the extent to which consumers are concerned about food safety of imported products with a question: "I have ____ concern about whether imported food products are safe to eat." The response is a 4-point scale (1- no, some, considerable, 4 - major). We denote this item as c.Objective 3 investigates the effect of providing definitions of "sustainably sourced" to the respondents. With this, we can determine whether the preference for the eco-label is due to a lack of understanding, which follows the rationale of Hayes et al.. This provides more evidence to support the existence of the food safety halo effect. Further, it also determines if the halo effect can be mitigated by informing consumers.The choice experiment in objective 2 is adapted. Respondents will be provided two definitions. In version one, "sustainably sourced" is defined according to the FIP guidelines of the World Wildlife Fund. In version two, the definition of version one is expanded to include the disclosure that "sustainably sourced" does not provide enhanced food safety assurance, and the product is as safe as other products in the market.Survey ProtocolsThe survey will follow the recommended protocols of Dillman's Tailored Design Method. Validity, reliability, and response rates of the survey will be optimized according to the recommended practices. In addition, the survey instrument will be reviewed by the IRB of Tennessee State University.A nationally representative sample of 2000 U.S. consumers will be targeted. Objectives 1 and 2 will share a sample of 1000. The remaining sample of 1000 will be split between each version of the choice experiment in objective 3. Stratification sampling will be used. The final sample will reflect the U.S. population's characteristics in age, income, gender, and education. Further, screening questions will be used such that only primary shoppersover the age of 18 will be included. The sample collection will be administered online using a consumer panel by a professional company.The choice sets will be constructed using the Bayesian D-Optimality criteria, ensuring that the effect of interest can be estimated. The choice sets will be randomly distributed into multiple blocks. The respondents will be given 8-10 choice sets to minimize the risk of fatigue error. The cheap talk script will be used to mitigate or minimize potential hypothetical bias 70. These minimize the potential of confounding effects.