INTEGRATION OF A PRODUCT CHOICE MODEL AND A LATENT VARIABLE MODEL OF NUTRITION INFORMATION

We develop and estimate an integrated discrete choice model system of product choice and nutrition information for prepared frozen meals in the United States in the period from 1993 to 1998, when government regulation of nutrition labeling changed from voluntary to mandatory. The model links consumer characteristics (e.g., income, knowledge about nutrition, nutrition label use) to product characteristics (e.g., prices, nutritional attributes) and allows us to obtain consumer preference parameters and demand elasticities with regard to product characteristics. We find that prices, advertising, price reductions, and consumer preferences for taste have a significant effect on the demand for prepared frozen meals, whereas knowledge about nutrition and nutrition label use do not. Using the estimated demand parameters we then evaluate the impact of the new mandatory labeling policy. The results show that consumer preferences and purchasing patterns within the prepared frozen meals category did not change significantly after the implementation of mandatory nutrition labeling.