The impact of nutrition labels on consumer demand: A study conducted in Istanbul, Ankara and İzmir

Nutrition labels are an efficient tool of food policy that minimizes consumers? information costs in the food market where information asymmetry between producers and consumers is relatively high. The studies conducted in order to increase the effectiveness of nutrition labels in directing consumers toward healthier food choices have in recent years developed the idea of including nutrition labels on the fronts of food packs. The research conducted on front-of-pack labels have revealed that such labels are highly preferable by consumers.The study investigates whether front-of-pack labels significantly direct consumers to make healthier food choices. Data gathered from a contingent valuation survey conducted in three largest metropolitan cities of İstanbul, Ankara and İzmir in Turkey have been applied through a Tobit model in order to derive a yoghurt demand function. The demand function aims to investigate in what direction the demand for yoghurt, a product highly rated for its health implications, shifts; provided that consumers have been asked to assume the presence of a hypothetical scenario where legal arrangements force mandatory front-of-pack labels on food products and thus, prices of food products that have front-of-pack labels on them slightly increase because of the additional cost burdens this policy places on firms. The results of the analysis suggest that consumer demand on the mentioned yoghurt product decreases after the policy arrangement. The study explains this evidence in regard to consumers? perceptions of taste of yoghurt, health implications of yoghurt and price of yoghurt. The evidence achieved in the study is commonly in line with most conclusions that have been in drawn food labels literature.