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Mandatory nutrition attributes labeling and consumer demand: a structural approach analysis of the US soft drink market.
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- Author(s): Codjia, Clement O.; Woods, Timothy A.; Zheng, Yuqing
- Source:
Agricultural & Food Economics; 5/23/2024, Vol. 12 Issue 1, p1-25, 25p- Subject Terms:
- Source:
- Additional Information
- Abstract: While soft drinks stand out as a major cause of obesity and overweight worldwide, the USA is the country most concerned with this problem. To reverse the situation, experts have agreed that labels and taxes represent promising policy tools. Focusing on the soda market, this paper investigates how consumer demand for nutrient contents responds to the US revised nutrition facts label policy implemented in 2020. Relying on retail scanner data, the study finds after estimation of a discrete choice logit demand model that the change in nutrition labels caused consumers to modify their purchasing behavior. However, they did not systematically switch from unhealthy beverages to healthy ones. The analysis finds evidence that the label revision policy was mostly impactful in decreasing consumers' preference for soda with superhigh calories and high sugar content. Surprisingly, the joint effect of label and tax did not decrease the sampled consumers' preference for unhealthy nutrient contents. They still preferred buying soft drinks superhigh in calorie content inside US cities with a tax on sugar-sweetened beverages (SSB), despite the revision of the facts label. Finally, the new nutrition label has improved the average surplus of consumers and total welfare. However, the gain is lower within the cities implementing the sugar tax. [ABSTRACT FROM AUTHOR]
- Abstract: Copyright of Agricultural & Food Economics is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
- Abstract:
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