Scandinavian Working Papers in Economics

HUI Working Papers,
HUI Research

No 68: The Importance of Taste for Food Demand and the Experienced Taste Effect of Healthy Labels - An experiment on potato chips and bread

Linda Thunström () and Jonas Nordström ()
Additional contact information
Linda Thunström: HUI Research, Postal: HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden, and University of Wyoming , 1000 E. University Ave. Laramie , WY 82071,
Jonas Nordström: Lund University, Postal: Box 117, 221 00 Lund, and the Institute of Food and Resource Economics University of Copenhagen , Rolighedsvej 25 , 1958 Frederiksberg C , Denmark

Abstract: This paper quantitatively analyzes the importance of taste versus health in food demand, as well as the effect on consumers’ experienced taste of the non-intrinsic value of healthy labels. Our analysis is based on taste experiments and Vickrey second price auctions on potato chips and bread. Our findings imply a large positive effect on demand for potato chips from higher taste scores: when consumers’ experienced taste from potato chips improves by one unit, the average WTP for a 150 gram bag of chips increases by 20 euro cents. The effect from taste on bread demand seems smaller, but may be sizeable for subgroups of consumers. Our evidence suggests that a better nutritional content, as indicated by a healthy label, may also positively affect food demand, but the effect is small and not statistically significant. Finally, we find that consumers’ experienced taste of a food is unaffected by the food carrying a healthy label.

Keywords: healthy labeled food; non-intrinsic value; taste; Vickrey second price auction

JEL-codes: C91; D01; D84; I10

17 pages, October 18, 2012

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