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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.