Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal

Policy Summary

This paper investigates consumer reactions to changes in information provision regarding organic production, focusing on the implementation of mandatory labeling guidelines under the National Organic Program. Their results indicate that the USDA organic seal increases the probability of purchasing organic milks, and that consumers substitute away from milk carrying the rBGH-free label. It also provides an example of empirically measuring consumer benefit in contrast to the costs of accreditation and labeling. This has policy implications for the efficacy of labeling as an intervention to shift purchasing and consumption of foods, especially organic. They find empirical support for the involvement of USDA in developing uniform and standardizing labeling guidelines based on consumer valuation of these informational changes. This supports their broader research goal to identify successful and efficient strategies and guidelines for policies addressing public health problems such as obesity through information provision aimed at influencing or altering consumers’ food choices.

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