Beyond Consumer Switching: Supply Responses to Food Packaging and Advertising Regulations

Jorge Alé-Chilet, Sarah Moshary

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

This paper studies the effect of nutrition warning labels and advertising restrictions on the breakfast cereal market in Chile. In June 2016, the Ministry of Health required food products that exceed thresholds for sugar (22.5 g) and calories (350 kcal) to carry con-spicuous front-of-package warning labels. Furthermore, these products were barred from advertising on television programs with high child viewership. Early evidence suggests that the regulation induces consumers to switch to products without warning labels; we show that this change in demand elicits a supply response. In particular, we present evidence of bunching just below the cutoffs. Using a structural model of cereal demand, we find that reformulation tends to reinforce the intent of the reform, in particular, by lower-ing the calorie content of cereal purchases.

Original languageEnglish
Pages (from-to)243-270
Number of pages28
JournalMarketing Science
Volume41
Issue number2
DOIs
StatePublished - 1 Mar 2022

Bibliographical note

Publisher Copyright:
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Keywords

  • nutrition labels
  • obesity
  • product
  • public policy
  • reformulation

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