The Impact of Mandatory Disclosure Laws on Product Choices

Mathios (2000)
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Summary by 
Mark Egan

ThNutrition Labeling and Education Act (NLEA) required most foodproducts to include a nutrition label. Prior to the NLEA labeling was voluntary.This study uses nutrition label information and supermarket scanner data preand post-NLEA to examine the impact of moving from a voluntary tomandatory labeling regime on consumer product choice.Prior to the NLEA all low-fat salad dressings had a nutrition label, while themajority of the higher fat dressings did not. However, there remained large variation in fat content among dressingsthat did not voluntarily label. Those with the highest fat levels experienced a significant decline in sales after theywere required to disclose. The results indicate that even in markets with credible, low-cost mechanisms to disclose,mandatory labeling can have an impact on consumer behavior and health.