Tuesday, May 11, 2010

Would I Have Opposed Nutrition Facts Labels?

CC image from ericskiff on Flickr.

Nutrition Facts labels have been required on most foods in U.S. grocery stores since 1990. I was 4 years old at the time, but I can just picture the little economist inside me opposing the policy.

I would have raised all sorts of arguments about how we shouldn't make it harder or more expensive for firms to do business and how the labeling law was creating a barrier to entry that many food producers could not overcome, resulting in a less diverse grocery store selection. I'd use a bootleggers and Baptists analogy, which involves two morally opposed groups agreeing on a policy for different reasons. Health advocates would support the ban for obvious reasons, but so would corporate food manufacturers, which would now face less competition and thus be able to charge higher prices.

I've been mildly opposed to New York City's law that calorie counts be displayed on restaurant menus for much the same reasons, but perhaps I shouldn't be. The sacrifices required to implement Nutrition Facts labels seem well worth it in retrospect, because they have enabled consumers to make better decisions. This information gain has put pressure on food producers to improve the health content of their products or at least offer healthy alternatives.

One more devil's advocate point: as I said in my prior post, we have to measure the value of something by how much better it is over the next-best alternative. Without Nutrition Facts labels, most people would still know that an apple is healthier than a candy bar, even if they can't quantify the calories, cholesterol, or other parameters involved. How much does knowing the hard numbers really improve health outcomes?