This paper examines the reference-dependent and labelling effects when consumers make choices about functional foods, and explores how changes in reference points could alter individuals’ preferences. Functional food (probiotic yogurt) and regular food (regular yogurt) are used as examples to...

The global market for functional foods is estimated to be worth about US$33 billion (Hilliam, 2000). Given the information asymmetry inherent in functional foods, labelling information plays a key role in allowing consumers to make informed choices. Understanding consumer choices with respect to...