The laboratory study of 351 shoppers found consumers willing to pay a premium when a product label says "free of" something, but only if the package includes "negative" information on whatever the product is "free of."
For example, a food labeled "free" of a food dye will compel some consumers to buy that product. But even more people will buy that product if that same label also includes information about the risks of ingesting such dyes.
"What did surprise us was the effect of supplementary information," said Harry M. Kaiser, a Cornell professor whose field of study includes product labeling. "Even seemingly negative information was valued over just the label itself."
When provided more information about ingredients, consumers are more confident about their decisions and value the product more, Kaiser said.
Published earlier this month as "Consumer Response to 'Contains' and 'Free of' Labeling" in the journal, Applied Economic Perspectives and Policy, the Cornell study might interest CEOs of food-processing companies, government policy makers and American consumers alike.