Equilibrium Effects of Food Labeling Policies
We study a regulation in Chile that mandates warning labels on products whose sugar or caloric concentration exceeds certain thresholds. We show that consumers substitute from labeled to unlabeled products—a pattern mostly driven by products that consumers mistakenly believe to be healthy. On the su...
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| Veröffentlicht in: | Econometrica 2023-05, Vol.91 (3), p.839-868 |
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| container_title | Econometrica |
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| creator | Barahona, Nano Otero, Cristóbal Otero, Sebastián |
| description | We study a regulation in Chile that mandates warning labels on products whose sugar or caloric concentration exceeds certain thresholds. We show that consumers substitute from labeled to unlabeled products—a pattern mostly driven by products that consumers mistakenly believe to be healthy. On the supply side, we find substantial reformulation of products and bunching at the thresholds. We develop and estimate an equilibrium model of demand for food and firms' pricing and nutritional choices. We find that food labels increase consumer welfare by 1.8% of total expenditure, and that these effects are enhanced by firms' responses. We then use the model to study alternative policy designs. Under optimal policy thresholds, food labels and sugar taxes generate similar gains in consumer welfare, but food labels benefit the poor relatively more. |
| doi_str_mv | 10.3982/ECTA19603 |
| format | Article |
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We show that consumers substitute from labeled to unlabeled products—a pattern mostly driven by products that consumers mistakenly believe to be healthy. On the supply side, we find substantial reformulation of products and bunching at the thresholds. We develop and estimate an equilibrium model of demand for food and firms' pricing and nutritional choices. We find that food labels increase consumer welfare by 1.8% of total expenditure, and that these effects are enhanced by firms' responses. We then use the model to study alternative policy designs. Under optimal policy thresholds, food labels and sugar taxes generate similar gains in consumer welfare, but food labels benefit the poor relatively more.</description><identifier>ISSN: 0012-9682</identifier><identifier>EISSN: 1468-0262</identifier><identifier>DOI: 10.3982/ECTA19603</identifier><language>eng</language><publisher>Evanston: Blackwell Publishing Ltd</publisher><subject>Consumers ; Equilibrium ; equilibrium effects ; food labels ; food policy ; Healthy food ; Labels ; Obesity ; Sugar ; sugar taxes ; Thresholds ; Welfare</subject><ispartof>Econometrica, 2023-05, Vol.91 (3), p.839-868</ispartof><rights>2023 The Econometric Society</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c4903-93cdea405a4999c8a388601398bb8de9302213bf1a1a730e36b0ffd1cd86578e3</citedby><cites>FETCH-LOGICAL-c4903-93cdea405a4999c8a388601398bb8de9302213bf1a1a730e36b0ffd1cd86578e3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://onlinelibrary.wiley.com/doi/pdf/10.3982%2FECTA19603$$EPDF$$P50$$Gwiley$$H</linktopdf><linktohtml>$$Uhttps://onlinelibrary.wiley.com/doi/full/10.3982%2FECTA19603$$EHTML$$P50$$Gwiley$$H</linktohtml><link.rule.ids>314,776,780,1411,27903,27904,45553,45554</link.rule.ids></links><search><creatorcontrib>Barahona, Nano</creatorcontrib><creatorcontrib>Otero, Cristóbal</creatorcontrib><creatorcontrib>Otero, Sebastián</creatorcontrib><title>Equilibrium Effects of Food Labeling Policies</title><title>Econometrica</title><description>We study a regulation in Chile that mandates warning labels on products whose sugar or caloric concentration exceeds certain thresholds. We show that consumers substitute from labeled to unlabeled products—a pattern mostly driven by products that consumers mistakenly believe to be healthy. On the supply side, we find substantial reformulation of products and bunching at the thresholds. We develop and estimate an equilibrium model of demand for food and firms' pricing and nutritional choices. We find that food labels increase consumer welfare by 1.8% of total expenditure, and that these effects are enhanced by firms' responses. We then use the model to study alternative policy designs. Under optimal policy thresholds, food labels and sugar taxes generate similar gains in consumer welfare, but food labels benefit the poor relatively more.</description><subject>Consumers</subject><subject>Equilibrium</subject><subject>equilibrium effects</subject><subject>food labels</subject><subject>food policy</subject><subject>Healthy food</subject><subject>Labels</subject><subject>Obesity</subject><subject>Sugar</subject><subject>sugar taxes</subject><subject>Thresholds</subject><subject>Welfare</subject><issn>0012-9682</issn><issn>1468-0262</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2023</creationdate><recordtype>article</recordtype><recordid>eNp10EFLwzAUB_AgCs7pwW9Q8OSh-pK0b8lxlE6FgR7muaRpIhndsiUrsm9vZkVPQuDl8OP_Hn9Cbik8cCnYY12t5lQi8DMyoQWKHBiyczIBoCyXKNgluYpxDQBlehOS1_vB9a4NbthktbVGH2LmbbbwvsuWqjW9235kb7532pl4TS6s6qO5-ZlT8r6oV9Vzvnx9eqnmy1wXEnguue6MKqBUhZRSC8WFQKDpwLYVnZEcGKO8tVRRNeNgOLZgbUd1J7CcCcOn5G7M3QW_H0w8NGs_hG1a2TCRcpBJxKTuR6WDjzEY2-yC26hwbCg0pzaa3zaSzUZrtN-6-CdFyVAgFydCR_LpenP8P-v7x1J7yPkXz8BoNw</recordid><startdate>202305</startdate><enddate>202305</enddate><creator>Barahona, Nano</creator><creator>Otero, Cristóbal</creator><creator>Otero, Sebastián</creator><general>Blackwell Publishing Ltd</general><scope>OQ6</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>202305</creationdate><title>Equilibrium Effects of Food Labeling Policies</title><author>Barahona, Nano ; Otero, Cristóbal ; Otero, Sebastián</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c4903-93cdea405a4999c8a388601398bb8de9302213bf1a1a730e36b0ffd1cd86578e3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2023</creationdate><topic>Consumers</topic><topic>Equilibrium</topic><topic>equilibrium effects</topic><topic>food labels</topic><topic>food policy</topic><topic>Healthy food</topic><topic>Labels</topic><topic>Obesity</topic><topic>Sugar</topic><topic>sugar taxes</topic><topic>Thresholds</topic><topic>Welfare</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Barahona, Nano</creatorcontrib><creatorcontrib>Otero, Cristóbal</creatorcontrib><creatorcontrib>Otero, Sebastián</creatorcontrib><collection>ECONIS</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Econometrica</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Barahona, Nano</au><au>Otero, Cristóbal</au><au>Otero, Sebastián</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Equilibrium Effects of Food Labeling Policies</atitle><jtitle>Econometrica</jtitle><date>2023-05</date><risdate>2023</risdate><volume>91</volume><issue>3</issue><spage>839</spage><epage>868</epage><pages>839-868</pages><issn>0012-9682</issn><eissn>1468-0262</eissn><abstract>We study a regulation in Chile that mandates warning labels on products whose sugar or caloric concentration exceeds certain thresholds. 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| ispartof | Econometrica, 2023-05, Vol.91 (3), p.839-868 |
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| language | eng |
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| source | Wiley Online Library Journals Frontfile Complete |
| subjects | Consumers Equilibrium equilibrium effects food labels food policy Healthy food Labels Obesity Sugar sugar taxes Thresholds Welfare |
| title | Equilibrium Effects of Food Labeling Policies |
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