Information shapes most economic choices, and information on food is no exception. The Federal Government provides consumers access to nutrition information and education through a variety of channels, and ERS studies how this information affects food choices and diet quality:
Since the early 1990s, the Federal Government has been providing food and nutrition guidance to Americans. The report, America's Eating Habits: Changes and Consequences, discusses the history of Federal dietary recommendations, the public's awareness of these recommendations, and the influence of information channels, such as advertising, health claims, and nutritional knowledge on dietary outcomes. See:America's Eating Habits: Changes and Consequences
The Federal Government currently provides nutritional information and dietary guidance in:
- Dietary Guidelines for Americans and the MyPlate program, which provide broadly targeted nutritional information to educate consumers about healthful eating and food choices.
- Other nutritional education programs, such as SNAP-ED (formerly the Food Stamp Nutrition Education Program), are designed to provide nutritional information to specific groups. See: Can Food Stamps Do More to Improve Food Choices? An Economic Perspective—Nutrition Information: Can It Improve the Diets of Low-Income Households? Nutrition Information: Can It Improve the Diets of Low-Income Households?
An ERS literature review concluded that motivational messages along with clear and relevant information were essential to change consumer decision making. See:Consumer Use of Information: Implications for Food Policy
ERS research indicates that changes in consumption patterns are linked to increasing awareness of the relationship between specific nutrients (such as fat, cholesterol or fiber) and health, but differences between perceived and actual diet quality may limit how much consumers respond to such information (see "New Health Information Is Reshaping Food Choices").
Another ERS report finds that short-term factors, such as hunger and time constraints, also limit how much dietary knowledge influences food choices. When it comes to eating vegetables, dietary knowledge influences choice rather subtly, affecting the mix of vegetables consumed more than the total quantity (see "Understanding Economic and Behavioral Influences on Fruit and Vegetable Choices").
For children, parent's nutritional knowledge is an important determinant of diet quality, more so for preschoolers than school-age children. See:Maternal Nutrition Knowledge and Children's Diet Quality and Nutrient Intakes
Recommendations in the Dietary Guidelines for Americans may help improve diet quality indirectly by encouraging food manufacturers to reformulate products or offer new products. Manufacturers were also quick to offer whole grain products, even before the release of the 2005 Dietary Guidelines' recommendation specifying that half of all grains should be whole (See Mancino, Lisa, Fred Kuchler and Ephraim Leibtag. "Getting Consumers to Eat More Whole-Grains: The Role of Policy, Information, and Food Manufacturers," Food Policy 33(6):489-96, December 2008).
Food labeling is one area where the Federal Government uses regulatory mechanisms to streamline the provision of information to consumers. Food markets provide a lot of information to consumers about attributes such as price, taste, convenience, and nutrition, but may overlook negative attributes of food products, that is, nutritional and health attributes that may increase the risk of adverse health outcomes. For a discussion of food labeling related to food safety, see Food Safety: Labeling & Information Policy.
The 1990 Nutrition Labeling and Education Act (NLEA) standardized the provision of health and nutritional information to consumers by food manufacturers on food packages. In effect, new mandatory disclosure regulations lower consumers' information search costs. Benefits are realized if new information enables consumers to make food choices that better reflect their preferences, encourages consumers to substitute more nutritious foods, or leads suppliers to reformulate food products to include more healthful attributes.
ERS research investigates the government's role in regulation; the degree to which current labeling influences the nutritional quality of food in the market and consumers' food choices; and the potential impact of expanding labeling regulation to the food-away-from home sector.
An ERS study, Economics of Food Labeling (see link below), examines the economic theory behind food labeling and presents five labeling case studies—nutritional labeling, dolphin-safe tuna labeling, organic products labeling, country-of-origin labeling, and biotech labeling. This report concludes that the appropriate role for government—to establish mandatory labeling laws, provide services to enhance voluntary labeling, or not intervene at all—depends on the type of information involved and the level and distribution of costs and benefits of providing that information (see also "Do Food Labels Make a Difference?...Sometimes").Economics of Food Labeling
Nutrition label regulations may also encourage food manufacturers to compete through product reformulation. Product reformulations can offer benefits to all consumers by improving the overall quality of the food supply. Evidence suggests that labeling requirements associated with specific public health concerns are more likely to result in broad reformulation and improvements in the food supply.
For example, an early ERS study that analyzed changes in nutritional quality of product offerings due to new NLEA regulations found no significant change in the average nutritional quality of products offered in five categories (entrees, soup, salted snacks, cookies, and processed meats and bacon) in a New England supermarket between 1992-95 and 1997. See:Changes in Nutritional Quality of Food Product Offerings and Purchases: A Case Study in the Mid-1990's
A trans fat labeling requirement, effective in 2006, however, led to a dramatic increase in the number of new products claiming "no trans fat." This increase started before 2006, paralleling the way whole-grain reformulations preceded the official Dietary Guidelines for Americans recommendations (see "Food Policy: Check the List of Ingredients").
Another ERS study that examined the low-fat salty snack market between 1995 and 1999 observed that "food manufacturers … introduced 1,914 new reduced/low-fat products in 1995 and 2,076 in 1996. The market for these products, however, never grew as anticipated, as food processors dramatically cut their new product introductions of lower fat products after 1996, introducing only 481 new products in 1999." Thus, while a certain degree of reformulation may occur in the aftermath of a labeling policy, this phenomenon may decline as firms observe consumer response to the reformulated offerings.
Consumer use of nutrition labels is another important factor influencing the extent of benefits from food labeling. ERS research indicates that when consumers use labels, intake of certain nutrients does improve (see Jay Variyam. "Do Nutrition Labels Improve Dietary Outcomes?" Health Economics, 17:695-708, June 2008).
While a majority of Americans read nutrition labels when shopping for food, ERS found, however, that use declined over the 10-year period following implementation of NLEA. The decline in label use has been greatest among adults under 30 (see The Decline in Consumer Use of Food Nutrition Labels, 1995-2006, link below). A notable exception to decreased label use was an increase in the use of information about fiber content. The relationship between health and fiber intake has been featured prominently on food packages and in advertising campaigns, particularly with the emphasis on consumption of whole grains in the most recent Dietary Guidelines for Americans.The Decline in Consumer Use of Food Nutrition Labels, 1995-2006
Motivated by an increase in U.S. consumption of foods prepared away from home and their negative effect on diet quality (see The Impact of Food Away From Home on Adult Diet Quality and How Food Away From Home Affects Children's Diet Quality, links below), the Patient Protection and Affordable Care Act of 2010 authorizes the FDA to set uniform requirements for restaurants with 20 or more locations under the same name and offering similar menu items. FDA published its final regulations in the Federal Register on December 1, 2014, and businesses covered by the regulations are required to be in compliance by December 1, 2016. Although some restaurants posted this information voluntarily and others in response to State or local requirements, the new law supersedes any State or local legislation. The effect of this requirement on diet quality is as yet unknown, as many factors influence food choices, especially when dining out (see "Will Calorie Labeling in Restaurants Make a Difference?," Amber Waves, March 2011).
- The Impact of Food Away From Home on Adult Diet Quality
- How Food Away From Home Affects Children's Diet Quality
The 2005 ERS report, Nutrition Labeling in the Food-Away-From-Home Sector: An Economic Assessment (see link below), examined the dietary implications of increased food consumption away from home, discussed the economics of information dissemination in this sector, reviewed empirical evidence on the impact of information provision in food-away-from-home settings, and presented the potential costs and benefits of a mandatory labeling policy.Nutrition Labeling in the Food-Away-From-Home Sector: An Economic Assessment
A 2014 report by ERS researchers examined consumer use of nutrition information in fast food and other restaurants between 2007 and 2010 (see Consumers' Use of Nutrition Information When Eating Out, link below). The study found that only about 10 percent of consumers used nutrition information when making their selections at eating places. This low usage rate is due to the fact that only 20 percent or less of consumers actually saw nutrition information and that only about half of those who saw the information actually used it to make a choice. The study also found that those who used the nutrition information in eating places tended to have better diet quality overall and in their at-home food selections.Consumers' Use of Nutrition Information When Eating Out
Without nutrition information on menus, restaurant consumers must use their own knowledge to select foods that meet their dietary needs. Another 2014 ERS report, Menu Labeling Imparts New Information About the Calorie Content of Restaurant Foods (see link below), discusses how consumers use rules of thumb to differentiate high- and low-calorie foods. While rules of thumb are helpful to sort foods with large differences in caloric content, they are not helpful to distinguish foods that differ by 200 calories or less. Thus, the new calorie labeling on restaurant menus and menu boards should assist consumers in making choices that meet their caloric needs.Menu Labeling Imparts New Information About the Calorie Content of Restaurant Foods