Can household consumers save the wild fish? Lessons from a sustainable seafood advisory

Abstract

Conservation organizations seeking to reduce over-fishing and promote better fishing practices have increasingly turned to market-based mechanisms such as environmental sustainability labels (eco-labels) in order to shift patterns of household consumption. This paper presents an analysis of consumer response to an advisory for sustainable seafood adopted by a regional supermarket in the United States. The advisory consisted of a label in which one of three traffic light colors was placed on each fresh seafood product to inform consumers about its relative environmental sustainability. Green meant "best" choice, yellow meant "proceed with caution," and red meant "worst choice". Using a unique product-level panel scanner data set of weekly sales and taking advantage of the random phase-in of the advisory by the retailer, we apply a differencein-differences identification strategy to estimate the effect of the advisory on overall seafood sales as well as the heterogeneous impact of the advisory by label color and whether the seafood met additional health-related criteria. We find evidence that the advisory led to a statistically significant 15.3% decline in overall seafood sales, a statistically significant 34.9% decline in the sale of yellow labeled seafood, and a statistically significant 41.3% decline in the sale of yellow labeled seafood on a mercury safe list. We find no statistically significant difference in sales of green or red labeled seafood.

Can Consumers Understand Sustainability through Seafood Eco-Labels? A U.S. and UK Case Study

“…As noted in the introduction section, when more labels enter the market, consumers need to have enough information to understand these labels [17], but not too much information to confuse them [11]. This has caused some to advocate for a standardized label [41], possibly set by government [47].…”

“…However, some studies indicate if too much information is presented it can confuse and in some cases cause consumers to avoid purchases. For instance, Hallstein et al evaluated customer's response to a traffic light labelling scheme (green means buy, yellow means buy with caution and red means avoid buying) in a regional supermarket chain in the San Francisco Bay Area of California [11]. Examining sales before, during and after the transition to the traffic light scheme (coupled with a posted low mercury list), they found a statistically significant 15.3% decline in overall seafood sales, largely driven by a statistically significant 41.3% decline in the sale of yellow labelled seafood on the mercury safe list [11].…”

“…For instance, Hallstein et al evaluated customer's response to a traffic light labelling scheme (green means buy, yellow means buy with caution and red means avoid buying) in a regional supermarket chain in the San Francisco Bay Area of California [11]. Examining sales before, during and after the transition to the traffic light scheme (coupled with a posted low mercury list), they found a statistically significant 15.3% decline in overall seafood sales, largely driven by a statistically significant 41.3% decline in the sale of yellow labelled seafood on the mercury safe list [11]. While the yellow labelled product on the low mercury list was intended to indicate that the consumer should be cautious about purchasing this seafood product but not necessarily avoid it altogether, many consumers appear to have treated the product like a red labelled product and avoided purchase [11].…”

“…Examining sales before, during and after the transition to the traffic light scheme (coupled with a posted low mercury list), they found a statistically significant 15.3% decline in overall seafood sales, largely driven by a statistically significant 41.3% decline in the sale of yellow labelled seafood on the mercury safe list [11]. While the yellow labelled product on the low mercury list was intended to indicate that the consumer should be cautious about purchasing this seafood product but not necessarily avoid it altogether, many consumers appear to have treated the product like a red labelled product and avoided purchase [11]. There was no statistically significant difference in the sales of red or green labelled seafood after the transition.…”

“…Sogn-Grundvag et al also looked at MSC versus other environmental labels like "line caught" and found that both products had a price premium [24]. The Hallstein study also used scanner data [from barcoded products] to demonstrate that in some cases demand for labelled product declines if the messaging is confusing [11]. Overall, the results are mixed as to whether there is a universally strong signal from consumers for eco-labelled products across genders, age, income groups and geographic location [25][26][27].…”