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Related Reports

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:

Nutrition Information and Education Programs

Since the early 1990s, the Federal Government has been providing food and nutrition guidance to Americans. See America's Eating Habits: Changes and Consequences, which 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.

The Federal Government currently provides nutritional information and dietary guidance in:

An ERS literature review concluded that motivational messages along with clear and relevant information were essential to change consumer decisionmaking (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 16x16 - PDF).

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

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, 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").

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 reformuation 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.

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). 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 recentDietary Guidelines for Americans.

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), the Patient Protection and Affordable Care Act of 2010 requires chain restaurants to post the number of calories in each standard menu item by March 23, 2011. Although some restaurants posted this information voluntarily and others in response to State or local requirements, the new law authorizes the FDA to set uniform requirements for restaurants with 20 or more locations under the same name and offering similar menu items. 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?).

The 2005 ERS report, Nutrition Labeling in the Food-Away-From-Home Sector: An Economic Assessment, 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.

Last updated: Saturday, May 26, 2012

For more information contact: Jessica Todd