Presented by Fabrice Etile from the Parisa School of Economics and INRA
Fat Labels vs. Fat Tax : Evidence from the French ‘Fromage Blanc’ Market
5th October 2010
14:00 – 15:00
Level 1, boardroom, Imperial college business school, South Kensington, London SW7 2AZ
Abstract
A number of public health advocates, some economists and consumer associations urge policy makers to put fat tax on unhealthy food products and to strengthen the labelling rules, in order to help people to make healthier and better informed food choices. Yet, little is known about the effectiveness of such regulations. In this perspective, we compare the impact of a mandatory fat label policy and a fat tax policy on consumer choices in the market for ‘Fromages Blancs’ and related dessert yogurts. While fat labels are mandatory since 1988 for ‘Fromages Blancs’, this is not the case for their by-products. This peculiarity provides a source of variation to identify separately consumer preferences for labels and for fat. We use a mixed logit discrete choice model and household scanner data collected in 2007 to estimate the distributions of the Willingness-To-Pay (WTP) for fat and fat labels and the main market parameters (elasticities) in a sample of casual ‘Fromages Blancs’ consumers.
The first results show that the WTP for labelling is very heterogeneous. In particular, men, the less well-off and the overweight have a negative WTP for labels. This casts some doubt on the ability of fat content label to encourage consumers at risk to choose a reduced-fat product. Results for the simulation of the mandatory labelling and the fat tax policies will be provided in the seminar.
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