Absolutely unhealthy, relatively healthy - The effect of consumer reference points and loss aversion in evaluating front-of-package nutrition labels
(A2023-114090)

AUTHORS

David Olk, University of Groningen; Koert van Ittersum, University of Groningen; Tammo Bijmolt, University of Groningen

ABSTRACT

Previous research has found that front-of-package labels often fail to increase healthy purchases. More importantly, unhealthy purchases are often not reduced and, in some cases, even increased. In this paper, we introduce the concept of reference points to the labelling domain as an underlying mechanism. Specifically, we argue that products can be perceived as relatively healthy compared to expectations (Internal Reference Point) or other products (Contextual Reference Point), even when they are not healthy in absolute terms. In three experiments, we analyze the nature of those reference points, show that loss aversion applies, and find evidence that consumers tend to choose products that healthier than the reference points.