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 language | English |
|---|---|
| Pages (from-to) | 243-270 |
| Number of pages | 28 |
| Journal | Marketing Science |
| Volume | 41 |
| Issue number | 2 |
| DOIs | |
| State | Published - 1 Mar 2022 |
Bibliographical note
Publisher Copyright:© 2022 INFORMS.
Funding
History: Avi Goldfarb served as the senior editor and Carl Mela served as associate editor for this article. Funding: This work was supported by the Robert King Steel Faculty Fellowship at the University of Chicago Booth School of Business. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mksc. 2021.1315.
| Funders |
|---|
| University of Chicago |
Keywords
- nutrition labels
- obesity
- product
- public policy
- reformulation
