UC Berkeley

In 2016, over 6% of all retail spending at health and personal care firms was done through an electronic medium. Purchasing health products online provides an interesting challenge to consumers, as not only do consumers often have limited knowledge about which health goods that will best suit their needs (as these tend to be experience goods bought infrequently), but they also face the additional challenge of having to discern the quality of a good only based on its online listing. Hence in this context, a signal, such as the brand information of a good, may be useful in identifying its quality. Additionally, given that online purchasing decisions occur in private, we can rule out some other explanations for consumers choosing branded products, such as reputational concerns. Using data from a health goods retailer operating through Amazon.com from 2013 and 2014, we test whether brand information in the product’s listing influences the demand for health-related goods. We find that having branded information displayed in the product’s listing photo significantly increases the probability consumers consider a health good in their choice set (measured as page views) but not the demand for the goods, except for the case of bandages and dressings.