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Erick Mas
Assistant Professor of Marketing at the Kelley School of Business-Indiana University
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Synopsis: People primarily consume news for information or entertainment. However, given the abundance of content available at any given moment, consumers may have difficulty deciding what articles will best satisfy these goals. To aid this decision, news outlets commonly highlight the most popular content using different labels (e.g., “most read” and “most shared”). This research demonstrates that these popularity labels can differ in their social basis and signal different levels of information versus entertainment value, which shapes consumers’ news preferences and decisions. Specifically, labels reflecting less (vs. more) social behavior (e.g., “most read” vs. “most shared”) convey higher information value but lower entertainment value. Thus, when consumers have information motives, they prefer less social popularity labels, a stronger signal of information value. Conversely, activating entertainment motives generates a preference for more social labels, a stronger signal of entertainment value. Additionally, we examine the moderating role of factors under the control of news outlets—endorsement source (i.e., readers vs. editors) and featured list position (i.e., top or bottom of page). We examine the effects of popularity labels on news consumption in two field experiments and seven lab studies (including two in the web appendix) and discuss the managerial and theoretical implications.
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Anocha Aribarg
Professor of Marketing at Michigan Ross School of Business
Quantifying the Heterogeneous Impact of FDA Changes to the Nutrition Facts Label
Synopsis: The US Food and Drug Administration (FDA) updated the Nutrition Facts label on the back of packaged food in 2016 to reflect new scientific information, including information about the link between diet and chronic diseases, such as obesity and heart disease. The objective of the update is to help consumers make more informed food choice decisions. In particular, the FDA requires all manufacturers with annual sales of $10 million or more to update the nutrition information on their labels by January 1, 2020, and those manufacturers with annual sales less than $10 million to do so by January 1, 2021. The mandate involves changes to several different components on the label, the most significant of which include enlarging the font size presenting calories per serving, including an item for “added sugar”, removing the item “calories from fat”, and adjusting serving sizes to better reflect actual consumption. Considering the substantial costs incurred by product manufacturers to implement the new label, it is important to understand the consequences of this new FDA regulation. Therefore, in this paper we first quantify the impact of the Nutrition Facts label change on consumer food consumption using a large-scale panel of retail sales at the week and UPC level and a comprehensive database that records label changes for different UPCs from 2016 - 2022. We investigate the prevalence of unintended consequences occurring as a result of some components of the change. We also quantify how the effects of the label change vary across product categories. Second, exploiting data that combines individual-level household purchases with longitudinal survey data on self-reported health conditions, we analyze the heterogeneous effects of the label change across households. Specifically, we address the question of whether the label change nudges unhealthy consumers to improve their food consumption. Finally, extant previous research has investigated the effectiveness of various components and styles of food labels. We compare our results to those reported from field and lab experiments performed in more restrictive situations.