  In the present study, we use an experimental setting to explore the effects
of sugar-free labels on the willingness to pay for food products. In our
experiment, participants placed bids for sugar-containing and analogous
sugar-free products in a Becker-deGroot-Marschak auction to determine the
willingness to pay. Additionally, they rated each product on the level of
perceived healthiness, sweetness, tastiness and familiarity with the product.
We then used structural equation modelling to estimate the direct, indirect and
total effect of the label on the willingness to pay. The results suggest that
sugar-free labels significantly increase the willingness to pay due to the
perception of sugar-free products as healthier than sugar-containing ones.
However, this positive effect is overridden by a significant decrease in
perceived sweetness (and hence, tastiness) of products labelled as sugar-free
compared to sugar-containing products. As in our sample, healthiness and
tastiness are positively related, while healthiness and sweetness are related
negatively, these results suggest that it is health-sweetness rather than
health-tastiness tradeoff that decreases the efficiency of the sugar-free
labelling in nudging consumers towards healthier options.
