Do Food Package Labels Mislead Consumers, Or Are They Misleading Themselves?
Despite the growing public interest in food production methods, only a small segment of people work in agricultural industries, including less than 2% in the United States. Since the average consumer is unlikely to come from a farming background, how do evaluate the purchasing choices they make in a supermarket? Many consumers rely on food labels to inform themselves and, as best as they can, make informed decisions.
Of course, not all labels are created equal, and this study finds something that further complicates matters: consumers are actually willing to pay more for food products with redundant labels (i.e. labels that don’t add any additional information). For instance, the agency responsible for overseeing the safety of animal-based products in the U.S. prohibits farmers from adding hormones to their pigs and chickens. Despite this, companies are allowed to advertise their meat products with a “no hormones added” label, as long as there’s also small print saying that federal regulations prohibit the use of hormones. Intuitively, one would think that the federal law would resolve any misinformation, but consumers still incorrectly believe that chicken and pig products contain added hormones.
Likewise, genetically modified organism (GMO) labels are contentious, with the number of GMO-free products tripling in the last decade. GMO-free means that the product has not been genetically alerted, which is only a valid claim if the product actually contains genetic material. For example, salt is a mineral without genetic material, so it cannot ever be genetically engineered. However, salt has been and continues to be sold with GMO-free labels. Indeed, prior research cited by this study’s authors shows that consumers are willing to pay extra money for redundant labels like these, which can stem from miseducation and confusion.
In this study, researchers used three methods to understand why consumers pay more money for food products with misleading labels. The first method involved comparing the demand for a product between experts and non-experts (assuming experts are more knowledgeable). Secondly, the researchers compared the demand for a product between informed and uninformed consumers by measuring their knowledge in certain areas. The last method involves comparing the demand for a product before and after receiving information about the label or between a ‘control’ group (that receives no information) and a ‘treatment’ group (receives information).
Using all three methods above, the researchers surveyed approximately 1000 adults about whether they would pay more for products with redundant labels, including non-GMO salt, gluten-free orange juice, and no-hormone-added chicken. Surprisingly (or not, depending on your perspective), 40-58% said they would. Furthermore, the researchers investigated whether such premiums were influenced by expertise (farm experience), knowledge (science literacy), and / or the provision of information. Farm experience was measured by asking participants if they worked on a farm or if their family owned a farm, with 10% saying they did. Science knowledge was assessed by calculating the number of correct answers on a science test, with the average score being 50%. Furthermore, they found that farm experience was significantly associated with lower premiums, particularly for non-GMO salt and no-hormone added chicken. Science literacy was also related to lower premiums, but only for the salt and orange juice items.
Subjective and objective knowledge on food labels were also assessed. Here, participants were asked whether they agreed with statements such as “I am knowledgeable about the way poultry is produced in the United States” (subjective knowledge) and then asked the percentage of broiler chickens sold with growth hormones (objective knowledge). Specifically, 40-45% claimed to be knowledgeable about GMOs, gluten, and chicken production, but only 36-37% answered questions about GMOs and gluten correctly, while only 17% answered the question about broiler chickens correctly. The stark difference between subjective and objective knowledge for chicken production demonstrates that the average U.S. consumer is miseducated about this topic.
Lastly, participants were presented with information about the redundancy of the food labels, after which their willingness to pay for the products was re-examined. If participants were to reduce their premiums after the provision of new information, then this would indicate that they originally misunderstood the labels. Indeed, around 40% of participants reduced their premiums, more than 30% increased their premiums, and the remaining participants maintained their original price. Going back to the study’s main objective of understanding the relationships between product premiums and sources of misunderstanding,, it was found that farm experience increased the premium for only salt, while science literacy reduced the premium for only chicken. Objective knowledge about the food products was associated with no changes in premiums for all products, as well as a reduced likelihood of increasing premiums for GMO-free salt and a lower probability of reducing premiums for gluten-free orange juice. In contrast, subjective knowledge about the labels did not influence a change in premiums after receiving information about them.
It is important to note that this study has not yet been published in an academic journal, so its methodology and results have not yet been peer-reviewed. Keeping that in mind, this study reports that about half of its participants were willing to overspend for a food item with a redundant label. Even when approached with new information explaining the redundancy of the label, most participants either maintained their original price or were willing to pay more for it. This suggests that disclaimers on products are insufficient to educate the public about misleading labels. The authors suggest that cognitive bias may instead be a driving factor of these decisions.
For animal advocates, the results are somewhat speculative, but worth considering deeply. Animal agriculture industries often tap into consumer miseducation when they promote their products as “free-range,” “grass-fed,” and “humane,” among other labels, and those industries know the commercial definitions of those labels are not likely to be fully understood by consumers. Although this study didn’t assess welfare-friendly labels for animal-based products, it would be no surprise that consumers would also pay premiums for such items, given that the average consumer is far from fully informed about animal farming. As such, it’s important that advocates continue to do work that helps to inform the public so they can approach all food labels critically.