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In this paper we investigate preferences for fat in milk through a structural characteristics model. The data includes information about daily purchases and social and demographic characteristics of more than 1,100 households. We find that consumers who prefer milk with a high fat content do not react to information about health effects, but can be influenced by prices, while consumers who prefer milk with a low share of fat are influenced by information, but are less price sensitive. Therefore, when attempting to decrease consumption of fat from milk, prices are more efficient than information.

In this paper we investigate preferences for fat in milk through a structural characteristics model. The data includes information about daily purchases and social and demographic characteristics of approximately 2500 households. We find that consumers who prefer milk with a very high fat content can be reached both by information and prices, while consumers who prefer milk with a moderate to high fat share are not influenced by information, but are price sensitive. This is of great importance since these households drink a lot of milk and thereby get a considerable amount of fat through milk

Characteristics models in demand analysis capture the idea that people value goods not For the commodity itself but for the characteristics (or attributes) or embodied in the good. For example, agents may care about the fat content and the taste of different sorts of milk but not the actual type of milk. When we have fewer characteristics than types of good the theory imposes restrictions on observables. We present a revealed preference characteristics model analysis of the demand for milk in Denmark.

The Danish market is especially well suited for consumer analyses, because the Danish market for organic foods is relatively mature, meaning that it does not suffer seriously from the supply shortages and barriers, which dominate most of the markets outside Denmark. The well-functioning Danish market makes it possible to collect and analyse reliable data on purchases. Our study istinguishes itself by being based on observations of stated as well as actual purchasing behaviour of a large number of organic as well as conventional foods. The project applies information at the individual household level (panel data), which makes possible a detailed and informative approach. The panel data was provided by a marketing research company. In addition, the modelling is supported by a questionnaire, surveying households in the very same panel as applied in the model estimations. An essential feature and ultimate strength of the project is that it can reveal differences between actual and postulated behaviour and enlarge the analyses by information on attitudes, values, food habits/eating patterns and food interests. In the paper, preliminary results from the project are presented.