Are consumers concerned about palm oil? Evidence from a lab experiment

•A lab experiment studies consumer valuations of palm oil and palm oil-free products.•Revealed information emphasizes the controversial nature of both products.•The welfare effects of an information campaign and a per-unit tax are also analyzed.•The information campaign has a larger welfare effect than the tax. A lab experiment evaluates the consumers’ willingness to pay (WTP) for food products made with and without palm oil. Palm oil production induces environmental damages, and its consumption presents a health risk. However, the production of alternative oils raises land use issues. In the experiment, successive messages emphasizing the characteristics of palm oil and palm oil-free products are delivered to participants. Information has a significant influence on WTP when it underlines the negative impact of the related product. This effect is stronger for the palm oil product than for the palm oil-free product. The experiment also compares the welfare effects of two regulatory instruments, namely a consumer information campaign versus a per-unit tax. Because of the respective attributes of both palm oil and palm oil-free products, the information campaign improves welfare with a much larger impact than the tax.