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Volume 43, December 2013, Pages 180–189
Are consumers concerned about palm oil? Evidence from a lab experiment
Highlights
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- A lab experiment studies consumer valuations of palm oil and palm oil-free products.
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- Revealed information emphasizes the controversial nature of both products.
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- The welfare effects of an information campaign and a per-unit tax are also analyzed.
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- The information campaign has a larger welfare effect than the tax.
Abstract
A
lab experiment evaluates the consumers’ willingness to pay (WTP) for
food products made with and without palm oil. Palm oil production
induces environmental damages, and its consumption presents a health
risk. However, the production of alternative oils raises land use
issues. In the experiment, successive messages emphasizing the
characteristics of palm oil and palm oil-free products are delivered to
participants. Information has a significant influence on WTP when it
underlines the negative impact of the related product. This effect is
stronger for the palm oil product than for the palm oil-free product.
The experiment also compares the welfare effects of two regulatory
instruments, namely a consumer information campaign versus a per-unit
tax. Because of the respective attributes of both palm oil and palm
oil-free products, the information campaign improves welfare with a much
larger impact than the tax.
Keywords
- Consumer information campaign;
- Experimental economics;
- Palm oil;
- Per-unit tax;
- Willingness to pay
Copyright © 2013 Elsevier Ltd. All rights reserved.
