Consumer preferences and Willingness to Pay for Food Labeling: A Discussion of Empirical Studies

We discuss empirical research on consumer preferences and willingness to pay for several types of food quality or attribute labeling. The selected categories we include are eco-labels, GM food labels, U.S. state agricultural-product labels and European Protected Geographical Indication labels, BSE-tested-beef labels, and “Fair Trade ” labels. We discuss generalizations that can be drawn from the studies as a group. Most importantly, we find that consumers must perceive high quality in order for the food product to command a premium. Furthermore, the perception of quality may sometimes differ across consumers. ity or attribute labeling. The selected categories we include are eco-labels, GM food labels, U.S. state agricultural product labels and European Protected Geographical Indication labels, BSE-tested-beef la-bels, and “Fair Trade ” labels. Admittedly, this is far from an exhaustive list of food labeling categories. For example, there is a substantial literature on the consumer response to nutrition labeling, which is not covered in this paper. To conclude, we discuss generalizations that can be drawn from these stud-ies as a group. Eco-labels An eco-label identifies environmentally preferable products based on an environmental-impact assess-ment of the product compared to other products in the same category.1 The environmental-impact as-sessment includes the production process, use, and disposal of the product (Blend and van Ravenswaay 1999). While eco-labels require compliance with standards, they are still considered market-oriented, because they do not involve direct government regu