Why the Nutrition Label Fails to Inform Consumers
31 Pages Posted: 28 Aug 2015
Date Written: April 28, 2015
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 information 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.
Keywords: nutrition label, Nutrition Facts panel, NLEA, FDA, obesity, health, regulation, behavioral economics, nudge, smart disclosure, information disclosure
JEL Classification: I18, K23
Suggested Citation: Suggested Citation