Can information costs affect consumer choice? Nutritional labels in a supermarket experiment

Policy Summary

This paper investigates whether information costs under currently regulated nutrition labeling prevent consumers from making healthier food choices. The authors’ results suggest that consumer practices are affected by information costs as well as consumer taste perceptions. Implemented low-calorie and no trans-fat labeling increased sales, whereas implemented low-fat labels decreased sales. A combination of these claims into one label treatment increased information costs but did not significantly affect sales. This study adds to existing literature a market-based approach on how nutritional shelf labeling affects purchasing decisions, with implications for the Nutritional Labeling and Education Act and the U.S. Food and Drug Administration.

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