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Documenting Food Safety Claims and Their Influence on Product Prices

Published online by Cambridge University Press:  15 September 2016

Ji Li  and
Neal H. Hooker
Ji Li
Affiliation:
Department of Agricultural, Environmental, and Development Economics at The Ohio State University in Columbus, Ohio
Neal H. Hooker
Affiliation:
Department of Food Marketing at Saint Joseph's University in Philadelphia, Pennsylvania
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Abstract

In response to increasing customer attention to food attributes, agribusinesses are employing novel product differentiation strategies. As an example, we investigate the use of food safety claims on new packaged food products from the food manufacturers’ perspective. First, using two product innovation databases, we investigate claim use on labels in seven English-speaking countries over the period from 1980 to 2008. Then, based on manufacturer recommended selling prices and using U.S. data (from 2002 to 2008), we apply parametric and nonparametric hedonic methods to identify supply-side (agribusiness) valuations of chemical and microbiological claims in two food categories. We identify a significant 5 cent premium per ounce for a “preservative free” claim in spoonable yogurts. We do not find a statistically significant impact for “E. coli free” messages on meat and poultry products but find a significant price premium (19.3 cents and 25.7 cents per ounce in the two models) for “antibiotic free” claims in this category.

Keywords

food safety claimsparametric and nonparametric hedonic modelsprice premium
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 38 , Issue 3 , December 2009 , pp. 311 - 323
Copyright
Copyright © 2009 Northeastern Agricultural and Resource Economics Association 

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