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Andreas C. Drichoutis is a PhD candidate at the Department of Agricultural Economics and Rural Development in Agricultural University of Athens, Iera Odos 75, 11855, Athens, Greece, telephone +30 210 5294726, [email protected] . Panagiotis Lazaridis is an Associate Professor at the Department of Agricultural Economics and Rural Development in Agricultural University of Athens, Iera Odos 75, 11855, Athens, Greece, telephone +30 210 5294720, [email protected] . Rodolfo M. Nayga, Jr. is a Professor at the Department of Agricultural Economics in Texas A&M University, College Station, TX 77843-2124, USA, [email protected] . The authors are grateful to the Editor and three anonymous reviewers for their valuable and constructive comments and suggestions.
CONSUMERS' USE OF NUTRITIONAL LABELS: A REVIEW OF RESEARCH STUDIES AND ISSUES
More than 40 years have passed since Lancaster (1966) published his now famous product characteristics theory. In this model, consumers derive utility from attributes of the goods when some transformation is performed, instead of deriving utility directly from the goods. However, Silberberg and Suen (2001, p. 343) acknowledged that, "...it still remains that empirical implementation of the Lancaster model in a truly observable manner is not straightforward. Identification and measurement of 'attributes' may be more difficult than measurements and predictions of market goods." The big change that occurred with Lancaster's model was that marketing economists started looking at products such as foods (and other commodities) not just as consumption commodities, but as a bundle of attributes (see for example, Lazardis and Drichoutis, 2005). Empirical applications of this model have been more successful when applied to goods whose attributes are additive and non-conflicting (Drichoutis and Lazaridis, 2006; Leung and Miklius, 1997; Silberberg, 1985).
Nelson (1970; 1974) distinguished the concepts of search and experience attributes for products but it is Darby and Karni (1973) that added the concept of the credence attribute. Credence attributes cannot be evaluated even when the product is in use or after consumption (e.g. the nutrient value of foods). However, Caswell and Mojduszka (1996) argued that the credence attribute of nutritional content can be transformed into a search attribute when a nutritional label is present. The regulatory environment in some countries (e.g., USA), by mandating the presence of nutrition information on food products, has long recognized the possibility that the transformation of...