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Abstract

This paper examines the impact of consumer learning behavior on the rising bottled water consumption. Consumers are assumed with initial prior beliefs about the distribution of health effect of beverages and update their beliefs using health information in a Baysian manner. We find that the health effect perception for bottled water is much higher than for sugar sweetened soft drinks, which can explain the increase in bottled water consumption over time. According to our findings, health information can promote healthy diet and reduce sugar intake through consumers’ learning behavior. This finding helps policy makers develop more effective obesity control programs.

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