Our study addresses the question of whether retailers’ move from unlabeled conventional milk to milk that is labeled as free of synthetic hormones is driven by consumer bias against rBST or for other reasons. We examine this issue within the context of psychological stigma, a phenomenon in which people develop negative associations with something even though there is no evidence of that item causing a problem or presenting a human health risk. In our experimental setting, we measured adult test subjects’ willingness to pay for milk based on the production method (conventional versus rBST-free). Willingness to pay provides a direct observable measure, as opposed to hypothetical questions in a survey. By altering the order in which people bid for different types of milk, we found that consumers are indeed willing to pay a premium for rBST-free milk despite a lack of scientific evidence regarding harmful effects of rBST on human health. Given consumers’ willingness to pay such a premium, it is likely that the retail move toward rBST-free milk is being driven by consumer preferences.