Identifying Food Labeling Effects on Consumer Behavior

Abstract

We examine a large-scale mandatory food labeling regulation to identify its effects on consumer behavior. We take advantage of exogenous variation in product-labeling status arising from the gradual and asynchronous introduction of labeled products on store shelves many weeks before the regulation deadline. We combine individual-level scan data from a large retailer with on-the-shelf information on the actual warning-label status. We find that warning labels decrease purchase probabilities on breakfast cereals, but have no impact on chocolates or cookies. The effect is larger on medium-low socioeconomic groups and households with children. Results are consistent with information disclosure influencing consumers’ choices when the advertised information is unexpected.

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