Compelled Disclosure of Food Characteristics--Posner

Last week New York City began enforcing an ordinance that requires fast-food chains to post on menus and menu boards the number of calories in each menu item, in the same type size as the item itself. (The ordinance is rather complicated, see www.nyc.gov/html/doh/downloads/pdf/cdp/calorie_compliance_guide.pdf, visited July 24, 2008; my summary is a simplification.) The stated purpose of the ordinance is to reduce obesity. The ordinance will be criticized as being at once unnecessary, because information about calorie content can be conveyed without requiring that it be printed in large type on the menu (an alternative would be publication on the chain’s website, or the posting of a separate notice in the restaurant), and paternalistic, because people concerned about their weight have the incentive and ability to inform themselves about the number of calories that they consume. The ordinance may also be ineffectual, because most people eat most of their food at home rather than in fast-food outlets; anticompetitive, because small chains will incur the same costs as large ones to certify the caloric content of their offerings; blind to the effect of competition in forcing retail firms, including restaurants, to disclose whatever information will give them an advantage in competing for calorie-conscious consumers; unhelpful, because it will contribute to information overload on consumers bombarded with all sorts of warnings; and not based on a responsible cost-benefit analysis. These are legitimate criticisms, but they may not be conclusive. A law aimed at reducing obesity would be paternalistic if obesity did not produce external costs, but it does, because obese people consume a disproportionate amount of medical resources, and there is extensive public and private subsidization of medical expenses (private through insurance pools that are unable or forbidden to identify and reject high-risk insureds). However, the size of the externality is in question, because obese people die on average at a younger age than thin people, and so consume medical resources for fewer years on average than thin people do. While some obesity has strictly physical causes, most is due to poor eating habits and lack of exercise and is therefore treatable by changes in behavior. If the necessary changes can be induced by low-cost informational warnings, the result is likely to be a reduction in the external costs of obesity. However, government programs designed to educate consumers in the causes and consequences of obesity have not been effective. Fast food is one of the factors that is responsible for the obesity "epidemic" in the United States and other wealthy countries. Economic studies find that weight rises with lower relative prices of fast-food and full-service restaurants and the wider availability of such restaurants and hence the lower full price of eating at them. Partly because some of the costs of obesity are external, competition among restaurants or other food providers cannot be counted upon to optimize caloric intake. An obese person will not eat less in order to reduce the social costs of medical subsidies. It is not even clear that competition will produce the caloric intake desired by consumers for purely selfish reasons of health, medical expense, and appearance. Firms are reluctant to advertise relative safety, because it alerts the consumer to the existence of danger. Cigarette and auto companies were traditionally reluctant to advertise safer cigarettes and safer cars, as that might get consumers thinking and as a result induce substitution away from the product. Prominent display of calorie numbers might persuade consumers to avoid fast-food chains rather than to look for the chain with the lowest calorie numbers. This is especially likely because the high-calorie items on the menu tend to be the tastiest. Inexpensive food rich in butter, cream, sugar, and egg yolk generally tastes better than inexpensive food low in those ingredients; low-calorie foods that taste good tend to use expensive ingredients. For people who want to be thin, there is an abundance of information that enables them to adopt a healthful diet. Neither ignorance nor externalities seem to be the important forces in the growth of obesity. More important may be exploitation by food sellers of people's addictive tendencies, which have biological roots. In the "ancestral environment," to which human beings are biologically adapted, a taste for high-calorie foods had great survival value. As Becker has emphasized in academic work, the choice of an addictive life style may be freely chosen and the life style itself may be socially productive and personally satisfying; Becker and I, for example, are addicted to work. But many obese persons became addicted to high-calorie foods as children, and a child's choice of an addictive life style is not an authentic choice, to which society need defer. Nor can parents be assumed to be the perfect agents of their children, protecting them from unwise choices; it takes a lot of parental work to keep children physically active in the era of the video game, and away from rich foods. So there is a case to be made for public efforts to reduce obesity. The significance of the New York City ordinance lies in its requiring that calorie numbers be printed next to the food items on menus and menu boards and in large type. The purpose is less to inform than to frighten. Psychologists have shown (what is anyway pretty obvious) that people respond more to information that is presented to them in a dramatic, memorable form than to information that is presented as an abstraction or is merely remembered rather than being pushed in one's face; that is the theory beyond requiring reckless drivers to watch videotapes of accidents and requiring cigarette ads to contain fearsome threats. It is one thing to know that a Big Mac has a lot of calories, and another thing to have the number emblazoned on the menu board, next to a mouth-watering picture. The warnings--for that is what the display of high calorie numbers amounts to--may create fear of high-calorie foods, not only in fast-food chains but generally. If so, and if as a result there is less obesity, there will be a reduction in medical expense and possibly a gain in happiness if, as one suspects, thin people are on average happier than fat people. No one can know in advance the net effects of the ordinance. Its effect on obesity may be small, and it will impose costs of compliance on the fast-food chains subject to them and as a result cause the price of fast food to rise, though perhaps by a trivial amount--and the increase in price will contribute, albeit modestly, to efforts to reduce obesity. An increase in general education, by tending to reduce people’s discount rates, may have a greater effect than the ordinance in checking obesity, because the ill effects of obesity are greater in the long term than in the short term and education tends to reduce discount rates. The argument for the New York City ordinance thus comes down to the argument for social experimentation generally: that it will yield valuable information about the effects of public interventions designed to alter life styles. I therefore favor the ordinance, though without great optimism that it will contribute significantly to a reduction in obesity.

Comments

[Sister Y]

This piece seems to signal that Posner thinks certain forms of paternalism may be justified if there is a biological basis for the absence of rationality. That would seem to justify addictive drug prohibitions, even in the absence of externalities.

But this particular form of paternalism - shoving information in people's faces - seems relatively benign. Large-print calorie counts are a far cry from making decisions for people. Shoving information in people's faces might even promote rationality. Minimal paternalism doesn't seem to need as much justification as hardcore paternalism, like prohibitions.

[Michael Sherrin]

It's nice to try to help people be healthy and informed, but this ordinance targets a symptom at best. Health warnings on cigarettes and alcohol have done little to sway smokers and drinkers just like nutrition facts on cookies haven't encouraged healthier eating. Yes eating out can sometimes be a mystery of ingredients, but knowing those ingredients at home haven't helped. People know what's healthy and isn't healthy, even non-health conscious people. Eating badly and not exercising are chosen behaviors that overbearing statistics aren't going to combat.

Changing America's health requires education, peer-pressure, and most of all healthy options. The unhealthiest states and areas are also the poorest, living on cheap fast food and processed food. Eating out is likely not the main culprit.

[Wes]

All I can say is, thank goodness for the dollar menu. A full meal for $3. I used to worry about inflation but these days I don't think America can afford inflation.

[Timothy]

One line in this article is quite troubling: "...a child's choice of an addictive life style is not an authentic choice, to which society need defer." Perhaps there are extreme cases, as with drug or alcohol addiction, where a child exposed too early to such temptations is not making a genuine choice, and society many need to intervene. But most behaviours, habits and mild addictions which adults display are learned in childhood. Would Becker and Posner be so hard working had they not been encouraged, or even forced, to study as children? Disentangling what is a genuine choice from what is an addiction learned in childhood would be near impossible, as evidenced by the ongoing nature v nurture debate demonstrates.

[Nathan]

"...possibly a gain in happiness if, as one suspects, thin people are on average happier than fat people."

Is there any reliable statistical evidence for this? Leaving aside the obvious happiness-inducing elements of gluttony (and its equally obvious downside), one would think that "happiness" is entirely too complex to be reduced to simple cause and effect from eating too much (or too little). If the argument here is for a libertarian approach to maximizing happiness, that would seem to run counter to a paternalistic approach to maximizing health.

[Robert]

Two words: nanny state.

[Jim]

Two comments:

1. I think that most fast food customers don't know what a calorie is and certainly don't understand how obesity effects themselves much less the externalities. Someone should have tested this before enacting an ordinance.

2. Gluttony and sloth are warned against in the old testament. I assume that the warning meant that an individual and/or a society could be injured by either or both. Extrapolating a little, how will we legislate against lust, greed, envy, etc.?

[Will]

I am surprised that Judge Posner does not mention the behavioral experiment described in the first chapter of Cass Sunstein/Richard Thaler's book Nudge, where simple adjustments in the placement of healthy vs. non-healthy foods on a cafeteria line dramatically changed food purchase habits. Granted, even the most invasive city restaurant law probably cannot micromanage the display of menu items on a fast food restaurant's board, but if chain restaurants are truly concerned about steering customers toward healthier choices, there are things they could do like displaying large pictures of crispy fruits and salads on the waiting line, offering more salad items on their value menu, or offering the choice of carrot sticks (like Cosi does) instead of fries/chips. I can see terrific PR from doing this, just as Subway attracted customers with its Jared diet and "eat fresh" campaigns.

[Jeff]

I worry this may have the detrimental effect of putting blinders on consumers and making everyone think only of calories.

Calories, it should be pointed out, are necessary for human life: they are measures of energy and we eat food for the express purpose of getting energy. I don't for a second mean to suggest that fast food provides good energy, but you can't think only of calories. Look at this absurd example...

A boneless, skinless chicken breast with a side order of broccoli has about 250 calories. A glazed donut from Dunkin Donuts has 230. Nobody would confuse this situation, but it illustrates that "cutting calories" is an overly simplistic way of looking at your health.

For a historical example, when I was growing up in the 1980s, the government informed us that eating fat in one's diet makes you fat. (This is actually not even close to the truth.) They therefore encouraged us school children to load up on breads, pasta, starches, and limit our intake of milk, poultry and meat, and anything with "fats and oils." Yeah, good luck with that. This advice turned out to be terrible. I would venture to say that the food pyramid we were forced to memorize has done more to contribute to obesity than all the fast food restaurants combined.

The point being, focusing in on the number of calories in a particular food is a very simplistic way of looking at things and can have unintended consequences. In health class, they drilled into us that "fat is bad" but didnt say anything about processed starches or sugar. So food companies boasted of their "low fat" and "no fat" offerings that were high in cheap, processed starches and sugars. This is what makes you fat, but since it was low in dietary fat, it had the implicit approval of the food pyramid and the ministry of truth that devised it.

Food companies may now have an incentive to invent ever more harmful chemicals that keep the calorie count low even as these chemicals destroy people's health in 100 other ways.

The only reason we have trans fats today is because government threatened to take action against saturated fats before.

There are always, always, always unintended consequences when government throws itself into the mix like this. They will pass this law and move on to some other concern, even as the secondary effects of the law continue to multiply in the future.

[Vitaly]

Giving consumers access to more information about a product, whether food nutritional facts, mortgage and car loan terms or medication side effects, enables them to make educated choices for themselves. This is quite the opposite of paternalism, where the government prescribes certain behavior. Thus the ordinance is about empowering people, not restricting them.

A health-conscious consumer does not, as Mr. Posner claims, have abundant information about nutrition, at least not when trying to order meal at a reastaurant. Quite often, even supposedly healthy dishes are high in saturated fat and calorie count. Disclosing food characteristics would provide consumers with an option to choose the healthiest food.

Furthermore, I cannot share Mr. Posner's pessimism regarding this policy. As people become increasingly aware of risks associated with consuming certain foods, they will improve their diets and consumption of damaging fast-food will decrease just like smoking in the past decades.

[James N. Markels]

If the laws only target "fast-food restaurants," then what about fine dining establishments and diners? In many cases, the meals provided at those restaurants are even worse than what you get from fast-food. By emphasizing the calories in fast-food, we are thereby de-emphasizing the calories from non-fast-food and encouraging people to think that eating elsewhere would be healthier when, in fact, that is not the case. You may as well only mandate nutritional information be posted on cookies and not on cereals.

The advantage of fast-food is that it is fast. It is a convenience. It is already understood in our society that fast-food is generally fattening. It is also probably understood that the food in top-notch fine-dining establishments is also generally fattening, too, but we go after the fast-food restaurants...why? Because of a social experiment? If we are really concerned about obesity, and we are willing to use the government to fix the problem, the law should cover all restaurants.

[robert]

There is little focus on why this is a proper role for government intervention at all. As Becker shows, the externality argument is weak and inconclusive. If people really want access to information at caloric intake, they can chose to eat only at establishments that disclose it. And if such a "demand" exists, some places will alter their normal practices to provide the demanded information. Maybe, however, when people go out to eat (at fast food places or elsewhere) they do not what to be nagged (even if only indirectly by "disclosures").

[Richard Mason]

Becker and I, for example, are addicted to work.

Looks like work might be the gateway drug to a habit of self-congratulation.

[Max]

Menus that must carry calorie counts. Next: "Warning: Driving this car burns x less calories per mile than walking."

In fact chairs should post warnings as well. It would be hard to calculate so how about this: sitting here can make you fat.

Computers should bear an especially stern warning. Staring at this screen is bad for your waistline.

[sidd]

I am new to US.Back in India fast food is like drinking coffee at Starbucks.Its not a primary eating habit.

The mushroom crowd of fast food joints in US did surprise me.I had questioned myself all the above mentioned concerns and the reasons, this article did answer each one of them.

[Melissa]

The fact that I see people loading up on unhealthy foods at the grocery store, where most food is labeled with calorie count, makes me pretty pessimistic about this new policy.

It also relies on a theory of weight loss that may be outdated and unhelpful. Gary Taube's book Good Calories, Bad Calories shreds the calories in/calories out hypothesis.

[Steven]

First, I wonder if the lawmakers behind the ordinance had evidence of a powerful causal link between fast-food consumers' knowledge of the number of calories in a product and their willingness to eat the food item.

Even with that relationship firmly established, as one reader's chicken-broccoli-doughnut example demonstrates, a calorie display may not have been the most effective way to curb obesity through city regulation. Since there doesn't seem to be a smoking-gun scientific consensus about the role that various factors play in causing obesity, it stretches credulity to think that the public would have a clearer understanding. That said, several readers' call for increased nutrition education -- firmly grounded in what we do know -- might be the best answer.

And finally, the food industry's ability to stay at least one step (if not several steps) ahead of city regulators might very well have the nasty side effect -- as one commenter noticed -- of exposing the fast-food eating public to various artificial flavors introduced simply to evade the calorie-directed measures. The worldwide fast food industry can easily muster its research and development capabilities when the alternative is becoming less profitable.

[Jack]

The issue seems much larger than just banning or limiting the number of "fast food" units in an area or insisting that they divulge what they are putting in their "food", but the whole model that has made them ubiquitous.

They've fine-tuned their model of profiting from cheap food and soft drinks combined with such low wages that among the "externalities" we might discuss is that of taxpayers subsidizing the difference between what the employees get in their paycheck and what the cost of a minimum existence costs.

Using this formula for 50 years they've frozen out other types of cafes. These would include the "Mom's" cafes and those catering to "merchant lunches" and diners where fairly wholesome "home cooked" food could be obtained even before the, moms going to work too, movement created such a huge market for eating out, or on the run.

Again, in a functioning democracy? there is more to the story than simply that of "the market" and as a community of human beings first and "economic units" or consumers for giant corporate interests, it is a part of our ongoing educational function to inform folks about the nature of the food they are putting in the only body they'll ever have.

BTW a tip of the hat to the many new immigrant or ethnic cafes that by dint of tremendous labor have been able to survive and provide a locally owned, tastier, and most likely far healthier alternative to the corporate juggernaut.

[CJColucci]

I'm reasonably well-informed about nutrition and health and only slightly overweight. I sometimes eat in restaurants covered by the new NYC law. I always knew that some of the offerings were very fattening, but I did not know just how caloric they were, or, of more practical importance, how large the caloric differences were in items that did not seem very different. I have noticed a tendency on my part to shift consumption to less caloric items even without decreasing my patronage of such places. I've lost a few pounds, too.

[David]

I have not had time to digest (pun intended) all the arguments on this issue, but my cursory recollection from law school, some years ago, is that the Chicago school of law and econ favors schemes that allow rational actors to make choices based on full information with low transaction costs. The NYC food ordinance is a step toward providing consumers with full information. How can this be harmful?

The only downside I see is the cost imposed on industry, which is minimal in the long run, once a few new menus are printed. Maybe it's a marginally-useful law, but it has near-zero costs. And given how poorly educated many consumers are about the caloric value of their food, it might turn out to be more beneficial than anyone imagined. For instance, I had no idea until recently that an order of fries has twice as many calories as a hot dog. From now on I will eat more hot dogs and fewer fries. :-)

[St. Darwin Assissi's cat]

Judge Posner, this is a totally new slant for you! Congratulations on setting forth your objections and then coming full circle to embracing health education by restaurants. It seems public schools cannot educate youth so maybe the young will become educated with their dining out dollar...children mimic, maybe even unconsciously internalize their parents' choices/behaviors so in a way they are just 'choiceless' captive amoebas....anything a society can do to become more efficient (efficiency translates into maximizing utility) whether in the human body or in the production of energy is positive however we 'vocabularize' the behavior....Here it would seem restaurants are actually protecting themselves from product liability litigation -- nothing noble about this. "Hey, we, the restaurant, will tell you this so we can continue making Billions off of you, the unconscious (or ignorant) consumer ....(recall lawsuit against fast food for making a consumer fat)I wouldn't really call what you and Becker do an addiction ... you two are like Elton John (making money while having FUN) ... except you don't sing it, just write and publish...an opera about economics and the law ... great idea; get on it Mr. Berlin. Be sure you and Becker are circulating your blood at least every 30 minutes (a little laughing yoga would work)...(now if you go into your 'muse' and stop sleeping and eating it could be dangerous if prolonged)...thank you for another fun post. (Great citation on the New York ordinance ... how do you cite a master's paper which has not been published (APA style)?)

[jim]

Aw, co'mon. Fast food restaurants only exist because Americans don't want to spend time shopping for the ingredients to cook at home, preparing the food and cleaning up and/or having an apple for lunch. Cooking skills are not being passed along and a goodly number are ignorant about matters of health anyway. If you want to argue that point just spend a few hours in any emergency department in a non-upscale hospital which are used as walk-in clinics. The cost of alcohol use and abuse in terms of health and social disruption must far exceed a high calorie diet. Why don't we do something about that? So are we going to have speak-easys for burgers and fries? "Hey, buddy, wanna see my trans fats?".

[neilehat]

This ordinance by NYC is just a little applied
Communications Theory. Better known as the "signal to noise ratio" and its impact on communication. Most food suppliers already supply caloric info on their products (a Federal requirement I do believe). Never mind the fact, that most times one needs an extermely powerful magnifying glass to read it.

You see, it's simply:

!!!SIGNAL!!!

to noise. Get the picture?

It might have some impact on lessening the intake of excess calories that leads to over-nourishment that leads to obesity which leads on to other chronic conditions (Ah yes! the causal chain and hope runs eternal).

One thing that the ordinance doesn't get into is the even more important aspect of physical activity and exercise. As my doctor keeps telling me, "You need to eat less and exercise a lot more. If you did that, you might actually hit your proper body mass level."

I know, I know, I'm trying! But, I jockey a desk eight hours a day and sometimes more. It's not like when I was younger and worked in the field.

[Jack]

David sez: Maybe it's a marginally-useful law, but it has near-zero costs.

jjjjjjjjj Yes! and when considering "costs to industry" those exist within our totality, ie. WE pay for health care and a lower standard of living/health.

"And given how poorly educated many consumers are about the caloric value of their food, it might turn out to be more beneficial than anyone imagined."

jjjjjjjjjj To some extent, but as literate posters here have testified many consumers KNOW the diff but for a whole variety of reasons may not be able to exercise their judgment; tight schedules, few cafe options etc. and we live in a VERY complex society where we can not all be experts on food, law, what sort of car to buy, the future price of oil, so it strikes me as well within the purview of FDA and other Fed or State agencies to enact reasonable precautions to protect the consumer.

Perhaps its a better route than that of suing tobacco companies decades after the harm done was known?

[Jim]

It occurs to me that with this week's topic, we are getting down to some pretty atomic social problems. That has gotten me thinking at what point does the division of labor, for example, or the atomization of problem solving become inversely proportional. Is there a curve for that? If there is, I will bet that it is bell shaped. Get my drift?