Posner gives an excellent analysis of the possible risks from consuming too much trans fats, but I believe he reaches the wrong conclusion about whether the NY ban of trans fats in restaurants is warranted. In my view this ban is a further example of the tendency for local and federal government in the United States and other countries to act as nanny states. They presume with insufficient evidence that consumers are typically too ignorant to make decisions in their own interests, particularly regarding health, but in other areas as well.
Posner provides a well-presented case for what he calls the "Chicago" argument for why such an ordinance as New York's is unnecessary and undesirable. Perhaps it is no surprise to many readers that I find his argument unconvincing. He rejects these arguments because of his belief about consumer ignorance of trans fats. Posner does not mainly argue that restaurant-goers do not know which restaurants use trans fats, or even that they may be bad for you, or that restaurants possess private information not known to consumers about the adverse effects of trans fats.
His main concern is what he considers to be the great difficulty consumers have in "absorbing" information about trans fats. Posner gives a few reasons why he believes absorbing trans fat information is particularly difficult: that there is still considerable ignorance about the health risks of trans-fats, that consumers do not know their total intake of these fats, and that consumers are unaware that alternatives are often claimed to be more or less equally tasty. In short, according to Posner, consumers do not absorb the alleged fact that the benefits of avoiding or cutting down trans fats far exceed their costs.
As far as I can judge, the evidence is rather strong that trans fats contribute to heart disease, but the degree of harm from different levels of these fats is still to be determined. The best summary of the scientific evidence that I know of is "Trans Fatty Acids and Cardiovascular Disease" in the April 2006 issue of the New England Journal of Medicine. The authors carefully review many studies, including several with quite small random samples. The estimated mean effects of common levels of trans fats on cardiovascular disease are typically large, but one of the best data sets that they analyze cannot reject (at the 95 percent confidence interval) the conclusion that there is either no effect of trans fats on this diseunase, or only a small one. So I have only modest confidence from the studies analyzed that typical trans fats consumption levels have large effects on cardiovascular disease.
To be sure, evidence cannot disprove Posner's claim about consumer ignorance of, and inability to process, information about trans fats. However, the fact that about half of all NYC restaurants did not use trans fats even prior to passing this ordinance--although these may be the restaurants where it was easier to eliminate trans fats-- that many foods sold in ordinary supermarkets and other groceries have become trans fat free in a short time period, that we do not know much about whether consumers who eat high trans fat foods in restaurants eat little of these fats at home, that young persons are the primary consumers of heavy trans fat diets, and other unknown and relevant variables should make us skeptical of the ignorance argument. Indeed, it is remarkable how fast the food industry and restaurants have responded to the greater evidence during the past few years that trans fats in sufficient quantities contribute to heart disease. The article I cited earlier appeared only about 8 months ago.
There is evidence in other areas that consumers respond quickly to health news. For example, studies have documented the rapid reduction in salt intake and growth of low salt foods in response to evidence in the 1980's--now considered exaggerated--that high salt levels have been an important source of high blood pressure.
The prominence of young persons among the big consumers of trans fats, cholesterol, and calories in foods like French fries and big Macs may not be due to ignorance. Rather, they may have an unarticulated awareness that when they reach older ages where heart disease and other diseases are more common, drugs are likely to have been developed that offset the negative consequences of what appears now to be unhealthy diets. Lipitor and similar drugs have greatly reduced the consequences of high levels of "bad" cholesterol, and drug companies believe they will pretty soon have drugs that will raise levels of "good" cholesterol. So even if prolonged consumption of trans-fats has sizable negative health consequences in today's knowledge environment, that is likely to change many years down the road when today's youth are at risk for heart disease. Taxpayers may pay for a good share of their future expenditure on such drugs, but that is a wholly different and more complicated issue
On Posner's assumptions, one might expect either that restaurants would be pressured to eliminate trans fats, or that eliminating trans fats would cause consumers to be worse off. Posner's first order estimate of the benefits from eliminating trans fats in New York City restaurants is $3.5 billion, and he takes $60 million as a generous estimate of the cost to restaurants from becoming trans fat free. Then the cost of trans fat consumption would exceed the expected benefits from lower prices in restaurants with trans fats, even for quite but not completely ignorant consumers who attach no more than a 2% chance to the likelihood that these fats have serious consequences for their health (0.02 x $6.5 billion exceeds $100 million). These largely ignorant consumers too would only go to restaurants that are trans fat free; hence other restaurants would have to adjust or go out of business.
Posner also gives a kind of lower bound estimate of the benefits as $100 million, and also suggests a much lower cost to restaurants of becoming trans fat free--I take this as $30 million. With a small taste benefit from the use of trans fats-- the New England Medicine Journal article I cited earlier does admit positive effect of trans fats on "palatability"-- the total cost of the ban would equal or exceed total benefits. For example, suppose 1 million persons on average eat 200 meals per year in NYC restaurants with trans fats. If they value the taste of trans fats in their foods only by 35 cents per meal, the taste cost to consumers of the ban would be $70 million per year. Then the total cost of the ban would equal the benefits from the ban.
Does one really want to go down the road of a ban on trans fats when the net gains to consumers are dubious, and probably negative, and when reversing directions is politically difficult? As an example of the difficulty in adapting politically, new evidence indicates that requiring child car seats may increase their risk of injury in accidents, yet there is no movement to reverse these laws.
These and related calculations suggest that while city and other governments should continue to help provide the best information available about the effects of trans fats and other foods on health, market forces of supply and demand should determine the fats consumed. Otherwise, we encourage further attempts to legislate fat and calorie content of permissible foods not only in restaurants but also in foods consumed at home, and absurdities such as the new Italian ordinance that models cannot be too slim because it sets a bad weight example for young women. There are just too many opportunities for ill-considered attempts to override on limited evidence individual judgments about what they want to consume.