Determinants of food demand and the experienced taste effect of healthy labels – An experiment on potato chips and bread

This paper examines the importance of taste and health in food demand, as well as the effect on consumers’ experienced taste of the non-intrinsic value of healthy labels. Our analysis is based on taste experiments and Vickrey second price auctions on potato chips and bread. Our findings imply a large positive effect on demand, as measured by willingness to pay, for potato chips from higher taste scores. The estimated effect from taste on bread demand is smaller, but may be sizeable for subgroups of consumers. Our evidence suggests that demand for chips and bread may be positively affected by the healthy label, but the effect is not statistically significant when one control for taste. Finally, we find that consumers’ experienced taste of a food is unaffected by the food carrying a healthy label.