Date of Completion

4-30-2013

Embargo Period

4-30-2013

Keywords

Nutrition labels, consumer behavior, voluntary adoption, context effects, natural experiment, multiple purchases

Major Advisor

Rui Huang

Associate Advisor

Rigoberto A. Lopez

Associate Advisor

Joshua Berning

Associate Advisor

Joseph Pancras

Field of Study

Agricultural and Resource Economics

Degree

Doctor of Philosophy

Open Access

Open Access

Abstract

Previous studies indicate that the current Nutrition Facts Panel (NFP) on packaged foods and beverages may not efficiently provide nutritional information to consumers due to its high information search costs. In October 2007, the food and beverage industry announced the voluntary “Nutrition Key” front-of-package (FOP) system (later renamed as “Facts Up Front”). My first chapter uses a market-level natural experiment to empirically evaluate how the voluntary Facts Up Front style FOP labeling system would affect consumer purchasing behavior and dietary choices, and whether the impacts are different across the population in the US Ready-to-Eat cereal (RTEC) market.

In the second chapter, I further study the effects of the Facts Up Front style FOP labels by using a rich data set that combines households weekly purchases, product-level advertising exposure data and detailed products' packaging and nutrition information. Starting with a discrete choice demand model that allows for consumer heterogeneity and incorporates context effects, I develop an empirical framework for understanding the effects of different labeling schemes on consumers' food choices, market outcomes, manufacturers' product development, and firms' strategic adoption of FOP labels.

In practice, consumers regularly make multiple purchases of different RTEC products in a shopping trip. In the third chapter, I examine the commonly neglected modeling assumption in the existing economic and marketing literature that only one product being purchased in a choice occasion. I employ a Multivariate Bayesian approach to study such contemporaneous within-category purchasing behavior and investigate factors that determine the fundamental dependencies among differentiated storable products.

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