ERS report on nutrition and restaurant food labeling

Jay Variyam of USDA's Economic Research Service -- a true "nutrition economist" -- courageously takes on the nutritional implications of America's growing reliance on restaurant food.

Here is the trend:



And here are the nutritional covariates:

Apparently, we are on the road to perdition. [Update 4/29/2005 evening -- actually, I read the top row of this table in reverse, and it doesn't say we are on the road to perdition. Apparently, furthermore, blogger ethics require me to leave my error uncorrected and note my error in an update. Ugh. I will have to build the case that we are on the road to perdition another day.]

Variyam considers the resulting policy issues as an economist is trained to do:

The trends toward higher consumption and lower nutritional quality of food away from home are the outcome of the economic forces of supply and demand. Away-from-home-food is of lower dietary quality not just because providers supply such food, but also because there is consumer demand for such food—or its attributes such as taste and convenience. At the same time, market characteristics suggest that the information disclosure mechanism may result in a lack of nutritional information for buyers. Sellers have an incentive not to disclose “negative” attributes about their products because these same ingredients usually enhance taste. To the extent that this lack of disclosure leads to consumption levels that would differ if buyers were better informed, asymmetric information might be creating an inefficient market outcome.

As any good economist would, Jay considers both benefits and important costs of possible government regulation to require food labeling in restaurants. But he may even understate the case. Right now, the issue is not just that restaurants are unwilling to undertake the publication or signage costs of making the information consumers need more accessible at the point of purchase. The issue is that some major chains hide the necessary information altogether. The economic case for better information than THAT is overwhelming.

Ironically, the best place to find the current status of restaurant labeling rules at the state level is from the people who want to keep you in the dark. Latest tally is restaurant labeling bills for 2005 introduced in 12 states, defeated by the restaurant industry in 4 states, and still pending in 8 states.