Perception of Carbon Footprint and Local Origin Labelling on Drinking Milk

Abstract

This study investigates preferences of Austrian consumers for carbon footprint labels. To simulate realistic market conditions, carbon footprint labels are tested in addition to the product attributes of local and organic production as well as labels referring to quality guidelines on a hypothetical market of drinking milk. The study evaluates preferences and willingness-to-pay including carbon reduction claims and local production claims. Via a discrete choice experiment, utility functions are approximated and willingness-to-pay estimations are used to quantify premiums associated with the investigated attributes. Results suggest consumers are willing to pay premiums for carbon labeling. However, these premiums are lower compared to local origin and quality claims. Local production claims are viewed as the most important out of the six investigated product attributes. Nevertheless, participants are willing to pay premiums for information on carbon emissions, in particular, if the carbon footprint label indicates a significant reduction of associated greenhouse gas emissions.