Should governments force businesses to disclose calorie information?
Countries that have a serious obesity problem face adverse consequences that extend well beyond public health into the economic domain.
Medical conditions such as diabetes are expensive to treat and they impede people’s ability to be productive members of the workforce. While the health systems of the Arabian Gulf countries are quite efficient, rising obesity here has been placing them under greater strain.
This, combined with the tough fiscal climate caused by falling oil prices, has made tackling obesity and other health problems increasingly important. That is why the Gulf countries have deployed a wide array of policies aiming to improve public health. In fact, Saudi Arabia’s Vision 2030 places a strong emphasis on personal health, affirming the perceived importance of a healthy population to a prosperous economy.
When governments seek to tackle obesity, the policies that get the most attention are those that mandate exercise for children in full-time education, or that improve the healthiness of food available in school cafeterias.
However, there has recently been a "nudging" revolution in the social sciences, which is based on the premise that policymakers can influence the behaviour of citizens for the better with a range of non-intrusive interventions that have little or no impact on material incentives.
One of the most frequently deployed examples is making organ donation opt-out rather than opt-in. Richard Thaler earned the 2017 Nobel Prize in economics for his breakthrough research on "nudging", and in the context of health policy, this has led to growing interest in interventions that involve no more than modifying the nutritional information given to consumers. This is why most foods that you purchase in the supermarket have calorie information displayed clearly on the front, whereas in the 1990s, the same information would have been absent or difficult to locate on the packaging.
These informational policies are based on the premise that humans are cognitively limited, meaning that their decision-making is flawed, due to two main principles. First, at a point in time, most of your knowledge is inactive, meaning that it is somewhere in your brain but it has not been brought to the fore (activated). Second, when you make a decision, activated knowledge at that point in time has a disproportionately large influence on the decision that you make.
Thus, for example, if you are shown an image of the French flag and are then asked to name a country at random, you are very likely to say “France” because seeing the French flag activated your knowledge about France. Note that in the spirit of nudging, seeing the French flag has no impact on the material incentive to respond “France”; it is due to the limitations of the human brain that you are drawn to saying it.
This is why businesses pay huge amounts to advertise their wares, as they are seeking to activate knowledge of their product so that you subconsciously feel drawn to purchase it. Nike wants you to think of it any time you think of LeBron James and other basketball stars, so that when you wish to purchase a basketball product, "Nike" is automatically activated.
In the case of calorie information, when we are making a food purchase, unless explicitly prompted, we are unlikely to activate knowledge relating to the energy content of the food. In fact, when considering sweets and desserts, we may explicitly try to avoid activating calorie information in case it diminishes our enjoyment of what is often unhealthy food. By requiring companies to display the information, governments are seeking to forcibly activate the knowledge, increasing the likelihood that you make a healthy food purchase. But are such policies effective?
A new study by John Cawley, Alex Susskind (both Cornell University, USA) and Barton Willage (Louisiana State University, USA) examines this issue by collaborating with a restaurant to modify the information that patrons see in the menu. Some customers receive a regular menu that contains no calorie information, while others receive one that contains full information about the energy content of the menu items. The researchers gather detailed data on the customers’ orders to assess the impact.
The study found that customers who saw the calorie information consumed on average 45 fewer calories, typically equalling 3 per cent of the calories consumed in a meal. Moreover, the reduction was concentrated in appetisers and main courses, whereas the types of drinks and desserts ordered were not affected by the provision of such information.
At first sight, this is a very small effect, which suggests that Gulf governments should consider alternative interventions. However, policy evaluation requires an assessment of both benefit and cost. In the case of mandating calorie information, the cost is trivially small, especially compared to policies such as exercise programmes in schools, or changes to school menus, as healthy foods are typically more expensive. Consequently, requiring calories to be displayed is in fact a highly attractive policy.
Moreover, in the Gulf countries, food culture is based on the habits of our nomadic ancestors, for whom any meal was a blessing, and only a few generations have been fortunate enough to live a life of plenty. That is why some citizens still lean towards over-eating rather than adherence to a strict dietary regime.
As such, displaying calorie information may be part of a wider transformation in attitudes towards food and diet.
Omar Al-Ubaydli (@omareconomics) is a researcher at Derasat, Bahrain.