Why the Nutrition Label Fails to Inform Consumers

Sherzod Abdukadirov
2015 Social Science Research Network  
As it becomes clear that the Nutrition Facts panel (NFP) and other information disclosure policies have failed to improve consumers' dietary choices, many health advocates have declared information-based policies ineffective and instead advocate measures that would manipulate consumers' choices. In contrast, this paper argues that health advocates are too quick to blame consumers for the ineffectiveness of information disclosure policies. Using the NFP as an example, the paper shows that
more » ... tion disclosures are often poorly designed and fail to actually inform consumers. They often fail to account for how consumers perceive and interpret information or for the differences in their socioeconomic backgrounds. Thus, it may not be consumers' behavioral biases but rather poor policy design and implementation that is be responsible for the NFP's ineffectiveness. Consequently, the paper argues that nutrition labels should follow smart disclosure principles, which emphasize information salience and usability. JEL codes: I18, K23 Americans make unhealthy dietary choices. Recent Institute of Medicine (IOM) reports show that, while American adults have improved their intake of vitamins A and C, they are still not getting enough of potassium, calcium, or vitamin D. 1 They still consume too much fat and sodium and not enough dietary fiber. 2 But the problem with Americans' diet that has attracted the most attention in recent years has less to do with specific nutrients and more with the overall amount of calories that people consume. According to the Dietary Guidelines for Americans, most Americans eat too much and exercise too little. 3 As a consequence, the number of obese and extremely obese has almost tripled in the past 50 years, 4 leading to a host of major health problems. 5 Nutrition Facts panel (NFP). 7 In 2014, the FDA went further to require calorie disclosure on vending machines and restaurant menus. 8 Yet, as the growth in obesity rates continued unabated, health advocates began to question the effectiveness of policy measures that focused on information disclosure and turned to behavioral economics for answers. 9 The growing literature on behavioral economics suggested that it was behavioral biases, not uninformed choices, that lead to increases in obesity rates. 10 According to behavioral economists, consumers find it hard to resist the immediate gratification of calorie-packed snacks over fruits and vegetables, even though they fully realize that the longterm benefits of a healthier diet outweigh its immediate costs. Thus, these economists conclude, it is lack of willpower, not lack of information, that undermines consumers' efforts to make better health choices. As the nutrition label and other information-disclosure efforts failed to improve consumers' dietary choices, health advocates shifted to paternalistic measures. 11 They concluded that the failure of the nutrition label demonstrated that information disclosure did not work: even fully informed consumers were still making unhealthy choices. 12 Instead, they began advocating 7 Food and Drug Administration, "Food Labeling:
doi:10.2139/ssrn.2652289 fatcat:cn4tbwkv5bg6loyhjtsvuirofq