Does organic sunscreen benefit from a spillover effect from USDA organic food?
Date
2018
Authors
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Publisher
University of Delaware
Abstract
Consumers look for the USDA organic label to define organic food but many may not understand what defines a sunscreen labeled organic even after purchasing it. To better understand consumer behavior for non-agricultural organic products, a study was conducted to determine if consumers believe an organic label on oranges and sunscreen have the same meaning, creating consumer confusion. In addition, certification information was provided to learn if government and/or third party certification closes the asymmetric gap on the meaning of organic food and nonfood products. Participants’ willingness to pay (WTP) for four products, three conventional and organic oranges, and one ounce of conventional and organic sunscreen were examined and a survey was conducted before and after information on knowledge, perception and trust for organic food and nonfood products. Information was provided in between the auctions to determine the effect of certification information on participants’ WTP. ☐ The study was conducting using field experiments in New Castle County, Delaware. An auction was utilized to get consumers initial demand for organic products. The second auction was conducted to better understand if participants’ WTP for organic sunscreen would decrease, suggesting an organic label was misleading participants. One of three facts sheets was provided to participants in between the auctions. One with information from USDA, FDA and FTC regarding government regulations, one of NATRUE, the third party certification, which certifies the sunscreen used in the study, and another of a combination of both information sheets. A total of 204 participants took part in the study. ☐ Initially, participants’ were willing to pay on average from $2.81 to $3.15 for organic sunscreen and $2.09 to $2.43 for three organic oranges. After information, mean bids deceased for organic sunscreen, ranging from $2.16 to $3.02 and increased slightly for organic oranges of $3.01 to $3.54. To analyze the results before and after information more closely, paired t-tests were utilized. The t-test showed that consumers are willing to pay significantly less for organic sunscreen after reading government information. The tests also showed participants do not believe a product should be labeled organic without USDA certification. Lastly, there were significantly different responses to the survey question “the meaning of an organic claim on a organic orange is the same as the meaning on an organic sunscreen” after information was provided. ☐ Lastly, tobit regression analysis for organic sunscreen showed participants changed their WTP as a result of the information. If participants had a positive opinion of organic, they were willing to pay more after government information. Participants that received third party certification information, were willing to pay more in the second auction if they had a higher trust for the certification, trust in organic enforcement and if they were the household shopper, which implies information about the third party certification is important when making purchasing decisions. Participants that received both pieces of information significantly increased WTP if their trust increased in organic labeled personal care products, while WTP decreased the more education degrees participants had compared to participants with a high school degree. The differences in WTP by treatment group implies that the lack of a organic personal care products labeling standards are effecting purchasing decisions and could have damaging effects on consumer welfare. This could lead to a market failure if information to the public does not become more readily available.