Consumer Use of Information: Implications for Food Policy. By Lorna

Aldrich. Food and Rural Economics Division, Economic Research Service, U.S.

Department of Agriculture. Agricultural Handbook No. 715 

Abstract

Government programs that are designed to improve health by changing diets

focus on information: education, public information campaigns, and regulation

of advertising and labeling. Research from several social science disciplines

offers insights for public dissemination and regulation of nutrition information.

A review of selected literature in economics, nutrition education, and marketing

highlights several research themes. These are the need to motivate consumers to

use nutrition information, the value consumers place on time, the possibility that

information can change the effects of income on food choices, and the value of

enhanced life and health from improved nutrition.

Keywords: nutrition education, economics of information, unfolding,

benefit/cost, labeling, NLEA, FTC, USDA, FSIS, FDA, advertising, food, consumer

Acknowledgments

The author thanks James Blaylock, Betsey Frazao and Jay Variyam of ERS and

Carol Kramer-LeBlanc of the Center for Nutrition Policy and Promotion,

USDA, for helpful suggestions and comments. Pauline Ippolito of the Federal

Trade Commission was exceptionally generous in providing background and

suggestions at the very beginning of the project. Cathy DeShano's editing significantly improved the manuscript. 

1800 M Street

Washington, DC 20036-5831 June 1999
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

The Economic Approach: 

Why Does the Consumer Want the Information? . . . . . . . . . . . . . . . . . . . .1

Theoretical Considerations From Economics . . . . . . . . . . . . . . . . . . . . .1

Applied Economic Studies of Nutrition Information . . . . . . . . . . . . . . . .3

Nutrition Education Approaches: Public Information Supply . . . . . . . . . . . .8

Theoretical Considerations From Nutrition Education . . . . . . . . . . . . . .8

Examples of Interventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Conclusions From a 

Review of Nutrition Education Interventions . . . . . . . . . . . . . . . . . . . .9

Regulation of Advertising and Labeling: 

Conditions of Private Information Supply . . . . . . . . . . . . . . . . . . . . . . . .11

Federal Regulation of Nutrition Advertising and Labeling . . . . . . . . . .11

Theoretical Considerations With Respect to 

Advertising and Labeling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

Applied Studies of Advertising and Labeling . . . . . . . . . . . . . . . . . . . .13

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Public Benefit Cost Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Placing a Value on Improved Health . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Has Knowledge Increased? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Have Eating Patterns Improved? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Conclusion: Common Themes Across Disciplines . . . . . . . . . . . . . . . . . . .18

Motivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

The Value of Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

Flexible Economic Effects on Food Choices . . . . . . . . . . . . . . . . . . . . .18

High Value of Enhanced Health and Life Expectancy . . . . . . . . . . . . . .19

Integrating the Themes With Policy . . . . . . . . . . . . . . . . . . . . . . . . . . .19

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

ii / ERS-USDA Consumer Use of Information / AH-715

Contents
Summary

Government programs designed to improve health by changing diets focus on

information: education, public information campaigns, and regulation of advertising and labeling. Research from many social science disciplines offers

insights for public dissemination and regulation of nutrition information. This

report synthesizes research from economics, nutrition education, and marketing

on the use of information. Several themes emerged from this selected review of

literature: the importance of motivational knowledge, the value of time to consumers, the changing effects of economic variables on food choices over time,

and the high value of enhanced health and life expectancy. 

During the decades in which nutrition educators have been stressing the relationship between diet and disease, average per capita income in the United

States has increased, making food more affordable for the average consumer.

Furthermore, as peoples incomes rise, they place greater value on time and

demand more convenient foods, needs met by prepared foods and restaurants.

Overall, it appears that the forces of rising incomes and convenience are outweighing nutrition and health information. These trends may not be inevitable.

Economic studies reveal that even as consumers incomes increase, they may

choose to eat more healthful foods as they become more aware of nutrition. 

The economic approach to consumer information on nutrition depends on two

assumptions: that the consumer believes acquiring information will lead to benefits and that the consumer can use the information to reap the benefits.

Nutrition education strives to inform people about nutrition and, ultimately,

aims to change eating behaviors so that people reap the benefits of healthful eating and reduced risks of disease. The conclusions of the nutrition education literature review emphasize specific features that must be present if nutrition education is to prompt change: motivation, clear and relevant messages, advocated

actions consumers can understand and do, and continued reminders.

Producers provide significant amounts of nutrition information in advertising

and labeling. Since the mid-1990's, regulation has increased and channeled this

information, but consumers still need motivation to obtain it, process it, and

change their behavior. The convenience of nutrition information on packages

could make nutrition education and information programs more effective if they

can provide motivational knowledge as well. The potential benefits to consumers from the regulatory developments in the 1990's will ultimately depend

on the ability of education, advertising, and package claims to motivate people

to use labels and to improve their diets and health.

Nutrition information programs aim to enhance life and health through

improved nutrition. Government support of nutrition education and regulation

of advertising and labeling support this goal. Because these are government

programs, policymakers seek benefit-cost calculations for these programs. The

high value that consumers place on health and life means that information programs with demonstrated efficacy in improving health will offer benefits that

consumers will likely feel exceed reasonable costs.

Consumer Use of Information / AH-715 ERS-USDA / iii
Consumer Use of Information / AH-715 Economic Research Service-USDA / 1

Government programs designed to improve health by

changing diets focus on information: education, public

information campaigns, and regulation of advertising

and labeling.1 What does research on consumer use of

information offer to support these policies? This report

synthesizes research from economics, nutrition education, and marketing on the use of information to change

food purchases by healthy adult consumers in the

United States. The report focuses on the marketing of

food products because dietary change for most people

requires changes in food purchases. 

The government plays two roles in determining what

nutrition information consumers receive. By regulating

advertising and labeling, the government changes business costs of providing market information. Second, the

government provides information directly through a

wide variety of nutrition programs. Estimates of the

benefits of these programs, while difficult, are necessary

to achieve the most improvement in consumer health.

Even imprecise measurements can help policymakers

decide which alternative program options yield the most

benefits per dollar of public expenditures.

The economic approach to consumer decisions begins

with predetermined consumer perceptions and tastes

and describes the logical process of making purchases

with limited time, information, and money. The purpose

of nutrition policy is to change consumers perceptions

so they consider the health benefits along with enjoyment of food. Therefore, economic approaches will not

cover the full range of policy considerations. Because a

goal of nutrition education policy is to change food purchases, however, economic analysis of consumer behavior can contribute useful insights to nutrition policy.

Theoretical Considerations 

From Economics

In 1961, George Stigler asserted in The Economics of

Information that consumers seek information on prices

of goods because sellers prices vary as a consequence

of their imperfect information on competitors prices.

Subsequent analysis of the economics of information

incorporates his insights. When buyers search for products, they may pay less; but that search costs consumers

time, a commodity valued more by high-income consumers than by those with low incomes. Consumers will

stop searching for lower prices once they decide the

time they could continue to spend searching is as valuable as the money they would save with a lower price. 

After Stigler, developments in the economics of consumer demand introduced by Lancaster and Rosen laid

the groundwork for further developments in the economics of consumer information. Consumer welfare,

the goal of economic activity, is usually defined as utility based on consumption of specific goods. Lancaster

extended this idea to incorporate the characteristics of

goods, rather than the goods themselves, as the basis of

utilitya food is valued for taste, convenience, nutrition, status, etc., rather than for being a food. The consumer transforms the food into the characteristics. This

simple extension stretches the traditional consumer

demand theory used by Stigler to the constantly changing array of consumer goods, with different combinations of characteristics. Rosen later emphasized the

characteristics even more by defining utility as a funcConsumer Use of Information

Implications for Food Policy

Lorna Aldrich

Introduction

The Economic Approach:

Why Does the Consumer Want the Information?

1For a listing of nutrition education programs, see Center for

Nutrition Policy and Promotion, A Catalog of National Nutrition

Education Promotion Projects.
2 / Economic Research Service-USDA Consumer Use of Information / AH-715

tion of the characteristics themselves (Ratchford ). The

new formulation evaluates consumers search for price

and characteristic information among different brands of

the same product and also considers new and changed

products which offer novel combinations of valued

characteristics. 

This more realistic formulation of consumers behavior

also highlights the role of consumer information. While

Stigler discussed consumers search for the best price,

he also suggested that consumers seek quality. While

price can be determined before purchase, other characteristics that consumers value cannot be. The contemporary consumer is confronted with an array of characteristics for which information about quality could be

obtained. 

An economics of information literature describes products' search characteristics (price, size of package,

color) that can be determined before purchase. These

characteristics lend themselves to Stigler's original

analysis. But products also have characteristics that can

be determined only by experience (taste, durability,

maintenance needs). Finally, products have characteristics that the consumer cannot determine even after consumption (nutritional value of a food, expertise of a

doctor, honesty of a car repair shop). The three types of

characteristics are referred to as search, experience, and

credence characteristics. The nature of supply and

demand for information about each of the three categories differs. Consumers' acceptance of producers'

claims will vary by the nature of the characteristic

advertised. Search characteristics, which can be readily

checked by the consumer before purchase, are hypothesized to be the most accurately advertised. Experience

characteristics (i.e., testimonials such as the cologne

appealed to the opposite sex, the food tasted good,

the appliance had low maintenance needs) can sometimes be determined in advance from third parties,

either informally or through formal information services. Consumers will evaluate those goods they repeatedly

purchase in somewhat the same manner as search

goods; bad-tasting food will quickly lose its share of the

consumer's budget.

Credence characteristics will always require the consumer to acquire information from the seller or third

parties. The subject of this reportnutrition information is a credence characteristic of food. The consumer cannot determine the nutritional value of a food

from consuming it but must obtain nutrition information

from other sources, whose credibility will vary. How

much nutritional knowledge will the consumer seek?

Stiglers discussion of the supply and demand for information will still apply: consumers will seek information

until they decide continued searching will yield less

than the value of time spent. If consumers are to spend

time seeking nutrition information, then they must

believe nutrition information will yield utility.

In Stigler's formulation, the main cost of information is

time. In 1965, Becker specifically analyzed time in "A

Theory of the Allocation of Time," in which he emphasized that consumption, as well as production, requires

time, a valued commodity. Utility depends not only on

the characteristics of products, as in Lancasters and

Rosen's formulations, but also on the time required to

consume products. A book requires both consumers'

time and money. The movie made from the book is a

different experience, but one requiring less time. 

The same principle applies to food. Acquisition and

consumption of both information and food require time.

Different consumers will need different amounts of time

to obtain and process information; education should

help improve how efficiently consumers process information. Regardless of ones efficiency, however, time

required to obtain nutrition information and to prepare

nutritious food is time that otherwise could be contributing to utility, either by earning money for other

goods or by consuming other goods. 

In this context, a consumer seeking information about

nutrition faces alternative sources of information, each

with a time cost and a perceived contribution to utility.

Sellers advertising information will have the lowest

cost, but not necessarily the highest perceived contribution. Generally, consumers obtain information from

sources that require little of their time, but value information from other sources more. In one poll, respondents cited print media and TV as the most common

sources of nutrition information, but cited doctors,

books, and dietitians as the most useful. Family and

friends fell in between (table 1). This apparent discrepancy between use and usefulness of information is consistent with the costs of information sources.
Information from medical professionals is both expensive (in time and money) and rarely used. Information

from books costs time and is rarely used. Information

that is nearly free through the media is widely used,

even if assigned a low value.2

Applied Economic Studies 

of Nutrition Information

Economic studies of information using data on individuals have explored the effect of nutrition information on

food consumption. These studies yield estimates of the

relative weight of economic forces, primarily income,

and individual knowledge. Other, more aggregate studies have compared aggregate consumption in the population before and after the general availability of information about diet-disease connections. The aggregate

studies provide further corroboration of the role of

nutrition information in food choice.

Studies Based on Individual Data

The Economic Research Service (ERS) has published

detailed studies based on consumption of fat, cholesterol levels, and fiber intake of individuals who plan

household meals (Variyam et al. 1997, and 1995). The

research uses Lancasters and Beckers theories in

which the meal planner for the household combines

food, information, and other resources to provide food

that is enjoyable and possibly healthful. The studies use

two surveys of the same population: the 1989-91

Continuing Survey of Food Intakes by Individuals

(CSFII) and the Diet and Health Knowledge Survey

(DHKS) of USDA. The CSFII is an interview and diary

record of food ingestion for a 3-day period. The DHKS

is a follow-up telephone survey that asked food 

managers of the responding households questions on

knowledge and attitudes about nutrition. 

The ERS work on fat and cholesterol included several

measures of knowledge. The work assessed consumers

views of the importance of a healthful diet with queries

on the importance of avoiding too much of each of

three nutrients: fat, saturated fat, and cholesterol.

Consumers responded on a scale from 1 to 6, with 6

reflecting very important. The second type of knowledge was called diet-disease awareness and respondents

indicated with yes or no answers whether they had

heard about health problems related to each of the three

nutrients. The final type of knowledge was nutrient content knowledge, measured by consumers correct choices between pairs of foods on the basis of fat or cholesterol contents. Diet-disease awareness and nutrient content knowledge were closely correlated with each other,

but not with the importance of a healthy diet. Thus,

knowledge seems to be of two kinds: a general idea that

healthful eating is important and specific knowledge of

why and how to achieve a healthful diet.

Results indicated that specific knowledge had much

larger effects on reducing intake of fat and cholesterol

than did general knowledge that having a healthful diet

was important. However, general knowledge did reduce

intake of the three nutrients (table 2). As indicated

below in the section on nutrition education, the importance of diet-disease and nutrient-content information is

consistent with the theories underlying the design of

effective nutrition education programs. 

Some significant results of the study reflect the roles of

income and schooling on fat and cholesterol intake,

Table 1 Sources/usefulness of 

nutritional information

Use of Advice

information "very useful"

Percent

Magazine/

Newspaper 46 23

TV 22 23

Doctor 13 55

Books 10 51

Family 4 44

Dietitian 3 61

Food/labels

Packages 2 N/A

Friends 2 46

Government 1 26

N/A = Not applicable

Source: Gallup Poll conducted for 

International Food Information Council 

and the American Dietetic Association, 1989.

Consumer Use of Information / AH-715 Economic Research Service-USDA / 3

2The use of packages and labels in the Gallup poll is lower than use

found in surveys that have focused on labels per se; this may be

because respondents to the poll interpreted nutrition information

as dietary advice, as opposed to nutrient content.
4 / Economic Research Service-USDA Consumer Use of Information / AH-715

mediated through information. The study design permitted estimation both of the direct effects of income and

schooling on intake measured in grams and of their

indirect effects through increased knowledge. This was

done by having two sets of equations.3

As expected, income and schooling limit intake in fat

grams indirectly by contributing to general and specific

knowledge about nutrition. However, the direct effects

of income and schooling on fat and cholesterol intake

are larger: with additional income and schooling, people

consume more fat, saturated fats, and cholesterol (table

3). Thus, as incomes grow and educational levels rise,

more nutrition education efforts are needed to offset the

direct effects of income and schooling.

An earlier study that examined the determinants of fiber

consumption found similar results (Variyam et al.,

1995). Although higher income was associated with

greater knowledge about the fiber content of food, as

peoples income levels increased, they reduced fiber

Table 3The effects of income and schooling on food intake

Direct Indirect knowledge Total

effect effects effect

Healthful diet DietVariable importance disease

Total fat (grams:

Income 5.316* 0.126 -3.667** 1.775*

Schooling 1.554* -0.032 -1.091** 0.431*

Saturated fat (grams):

Income 1.630* -0.042 -0.968* 0.621*

Schooling 0.566* -0.038*** -0.430* 0.097

Cholesterol (milligrams):

Income 18.327* -0.105 -7.955** 10.267*

Schooling 2.499 -0.020 -3.144*** -0.665

Note: *, **, and *** indicate coefficient estimates significant at 1-, 5-, and 10-percent levels, respectively, under two-sided t-tests. 1Figures are for a doubling of income. 2Figures are for an additional year of schooling.

Table 2Relationship between consumer knowledge of healthful eating and nutrients*

Variable Total fat Saturated fat Cholesterol

Healthy diet -0.087 -0.131 -0.066

importance (2.56) (4.77) (2.44)

Diet-disease -0.321 -0.296 -0.243

awareness (2.75) (3.02) (1.86)

*Minimum distance coefficients on variables indicating healthy diet importance and diet-disease knowledge in equations estimating intake in log grams of total fat, saturated fat, and cholesterol (absolute t-values in parentheses)

Source: Adapted from tables 3, 4, and 5 in Variyam et al., 1997.

3The information variables appeared as dependent variables in their

own equations and as independent variables in the intake equations.

The whole system of equations was estimated simultaneously. 
Consumer Use of Information / AH-715 Economic Research Service-USDA / 5

consumption, despite its health benefits. One reason for

this may be that foods higher in fiber, such as whole

grains, may be considered inferior goods, that is, goods

whose consumption declines as income rises. 

A later study (Variyam et al., 1998) again employed a

similar approach to analyze determinants of the Healthy

Eating Index, developed by USDA to assess multiple

components of good nutrition simultaneously. The estimated direct effects of income and education on healthy

eating were negative although their total effect on the

index, which includes many more dimensions of diet

than fat, fiber, and cholesterol, was positive. The total

positive effects of income and education in this study

result from their indirect effect of fostering information

acquisition. 

One explanation of the fat, fiber, and cholesterol results

may be that meals eaten away from home may increase

as incomes and education rise. Away-from-home foods

typically contain more of nutrients overconsumed (fat

and saturated fat) and less of nutrients underconsumed

Table 4 How income affected food purchases*

Product group 1980-81 1988-89

Total food 0.3468 0.3183

Food away from home .5583 .5308

Food at home .2006 .1566

Meat, poultry, fish, and eggs .2170 .1181

Beef .2341 .0979

Pork .1597 .0404

Other meat .1900 .0929

Poultry .1053 .1264

Fish .3750 .2069

Eggs .0012 -.1080 

Cereals and bakery products .1603 .1111

Dairy products .1381 .1124

Milk and cream .0205 -.0378

Cheese .3171 .2217

Other dairy products .2109 .2789

Fruits .1934 .2401

Fresh .1881 .2528

Processed .2217 .2248

Vegetables .2402 .1455

Fresh .2437 .1659

Processed .2267 .1182

Sugars and sweeteners .1669 .1577

Nonalcoholic beverages .1258 .1087

Fats and oils .1809 .1152

Butter .3497 .1869

Margarine .0827 .1300

Other .1439 .0899

Miscellaneous .2507 .2100

*Comparison of estimated income elasticities between 1980-81 and 1988-89.

Source: Blisard and Blaylock, Table 35.
6 / Economic Research Service-USDA Consumer Use of Information / AH-715

(calcium, fiber, and iron) by Americans (Lin et al.,

1999). As peoples income and education rise, they

may place greater value on time and choose not to prepare meals that could be lower in fat and cholesterol

and higher in fiber even though they have a greater dietdisease knowledge. Income allows consumers to choose

from many products, while education may create the

ability to engage in more activities.

Studies Using National Aggregate Data

Some studies using national aggregate data offer insight

into the economic forces countering nutrition information, even though the studies do not specifically include

information. Blisard and Blaylock estimated individual

equations containing economic, regional, and demographic variables for 28 categories of food expenditures,

and used their results for projections. Their equations

provide a basis for determining the effects of income on

each category of food (table 4). The expenditure data

approximate food quantities in these data because all

households faced the same prices during the time of the

study. 

Based on the 1988-1989 Consumer Expenditure Survey,

Blisard and Blaylock found an income elasticity for

food away from home of 0.53, compared with 0.16 for

food at home. This means that a 1-percent increase in

income will increase expenditures on food away from

home by .53 percent, and for food at home by .16 percent. Because food away from home contains more fat

and cholesterol and less fiber per meal, its higher

income elasticity could counter improved knowledge

and attitude effects of higher income, provided that

higher expenditures translated into more, not just more

expensive, meals away from home. 

It is also possible that rising incomes increase fat and

cholesterol because foods containing them are consumed more as incomes rise. Blisard and Blaylocks

results provide mixed evidence on this point. The highest income elasticity for an individual food, .28, was for

other dairy, a mixture of low- and high-fat items. The

second highest elasticity, .25, was for fresh fruit, very

low in fat and cholesterol. However, cheese, a high-fat

item, had a relatively high-income elasticity in that

study, .22. Per capita intake of cheese has increased

markedly in recent years as people have consumed

more pizza and other manufactured and prepared foods,

which are common in away-from-home and at-home

convenience meals (Putnam and Gerrior). This trend

illustrates the earlier argument that times value to consumers is increasing. 

Two aggregate studies explored the effects of information by examining national consumption and price data

for cholesterol and the fats and oils complex (Brown

and Schrader, Chern et al.). Brown and Schrader developed an index of cholesterol information based on the

cumulative number of articles in medical journals that

supported a link of diet, serum cholesterol, and heart

disease. They found that the increase in information

about cholesterol decreased per capita egg consumption

16-25 percent over the 1955-87 period. Chern et al. also

used the index of medical journals and several alternative indicators of information a time trend, the mean

of health beliefs from survey data on health beliefs, and

the variance of beliefs. They found that cholesterol

information reduced consumption of butter and lard, but

not necessarily of all fats and oil.

Many studies assume that consumers responses to

prices and income remain constant over the period studied. Others assume responses will vary over time.

Brown and Schrader allowed responses to vary and

found that price and income responsiveness changed

over time, as more cholesterol information became

available. By the end of the study period (1955-87),

they discovered that if egg prices dropped and incomes

rose in a given year, shell egg consumption increased

less than it would have at the beginning of the period.

Blisard and Blaylocks study updated an earlier one

(Blaylock and Smallwood) that had used the same

methods but earlier data. A comparison of income elasticities between the two studies gives an indication of

change in the strength of economic responses over time,

which may change because incomes rise, relative prices

change, or consumers perceptions of food qualities

change. For example, nutrition information may transform a positive characteristic, such as percent butterfat

in milk, into a negative characteristic and thereby

change the expenditure, and possibly the consumption,

in response to higher income. 

In general, Blisard and Blaylock found lower income

elasticities in 1988-89 data than in 1980-81 data (table

4). People continued to spend a large part of additional
Consumer Use of Information / AH-715 Economic Research Service-USDA / 7

income eating out, but added less from that additional

income to spending for food at home. The proportion of

additional income going to meat, poultry, fish, and eggs

was about halved, while additional income was associated with less spending on eggs, consistent with the

findings in the two studies just discussed. Additional

expenditure on cheese remained high, but was less than

previously. People also consumed more fresh fruit as

income increased, but additions to butter consumption

were much smaller. These changes in response to

incomes are consistent with a shift toward more healthful diets over the decade, but they could also reflect differences in relative prices, demographics, and other factors. The data demonstrate that consumer responses to

economic forces adjust over time.

Relative Roles of Information, Income, 

and Convenience

During the decades in which nutrition educators have

been stressing the relationship between diet and disease,

average per capita income in the United States has

increased, making food more affordable for the average

consumer. From 1961 to 1996, disposable income spent

on food decreased from 17 percent to 11 percent, of

which the share spent on more expensive food away

from home grew to 40 percent (Elitzak). Variyam et al.

show that incomes influence offsets the effects of information. Furthermore, as peoples incomes rise, they

place greater value on time and demand more convenient foods, needs met by prepared foods and restaurants.

Overall, it appears that the forces of rising incomes and

convenience are outweighing nutrition and health information. Between 1970 and 1994, the calorie level per

person of the food supply rose 15 percent (Putnam and

Gerrior). In 1998, the American Heart Association

(AHA) declared obesity a risk factor for heart disease,

while also citing increasing levels of obesity in the

United States, from 25 percent in 1976-80 to 33 percent

in 1988-91. The increase in obese Americans accompanied a decline in the share of calories from fat: from 40

percent of the diet in 1965 to 34 percent in 1991. That

decline is probably somewhat illusory, however, due

more to an increase of calories in the diet rather than to

a decrease in fat intake. The AHA also noted a lack of

exercise likely contributed to obesity (American Heart

Association, 1997, 1998). 

These trends may not be inevitable. Economic studies

reveal that even as consumers incomes increase, they

may choose to eat more healthful foods as they become

more aware of nutrition (Blisard and Blaylock, Blaylock

and Smallwood). Still, existing studies indicate that,

despite being more informed, people usually spend

more money on food when they have more to spend.

New information strategies are necessary to counteract

such tendencies.
8 / Economic Research Service-USDA Consumer Use of Information / AH-715

The economic approach to consumer information on

nutrition depends on two assumptions: that the consumer believes acquiring information will lead to benefits and that the consumer can use the information to

reap the benefits. Helping consumers achieve this belief

and ability is an intermediate goal of nutrition education.

Those educating consumers about nutrition ultimately

aim to change eating behavior so that people reap the

benefits of better nutrition and reduced risks of disease.

At the motivated, action stage of consumer behavior,

the economic calculation of costs and benefits of information, as described by Stigler and others, applies. 

How effective is nutrition education? To answer this

question, USDA sponsored a systematic review of nutrition education. The results were published in the

December 1995 issue of the Journal of Nutrition

Education (Contento et al.). This chapter relies on the

results of that review.4

Theoretical Considerations 

From Nutrition Education

The review classifies theoretical models into two basic

types: knowledge-attitude-behavior models and "other,"

which includes motivational, behavioral change, and

community development models. Knowledge-attitudebehavior models assume that when consumers are

informed about components of a healthy diet, they will

modify their attitudes and their diet. In general this

approach has not been successful in changing behavior.

Knowledge of healthful diets alone will not affect

behavior; people also must be motivated to change. The

knowledge-attitude-behavior approach has often been

applied by providing how-to knowledge how to

have a healthy diet without also motivating people.

People may become motivated to change their habits if

they believe healthy eating will produce improved

health and reduce risk of chronic disease. Unless consumers are convinced that consumption of fat can

increase risks of cancer and heart disease, their knowledge that pretzels contain less fat than potato chips is

not likely to precipitate a switch from potato chips to

pretzels.

Models in the second category, basically other, are

not sharply distinct from each other or from the knowledge-attitude-behavior models. Models that focus on

individual behavior first emphasize the need for motivation, such as a threat to be averted or a gain to be

acquired. Threats are apparently more effective motivators than gains. The models also require that individuals

believe they are capable of carrying out actions necessary to improve their health. Additional aspects of individual change models emphasize that individuals interact with others and evaluate and alter their behavior

based on the interaction. Finally, these models identify

stages of behavioral change: precontemplation, contemplation of change, decision to change, overt behavioral

change, and maintenance of change. Nutrition education

programs need to target the appropriate stage of change

to alter behavior.

Additional theories should be considered with respect to

education programs targeting individuals. The information processing approach asserts that individuals have a

finite capacity to process information and, therefore,

process information by using rules of thumb, by

searching the environment, and by using their own

memories for clues. This approach resembles the economic approach because it emphasizes the costs of

acquiring and using information. The applications to

nutrition education are direct. Nutrition education can

provide rules of thumb 5 A Day (meaning five servings of fruits and vegetables a day), so consumers need

not remember the specific nutrients provided by different fruits and vegetables. Consumers tendency to

search the environment for information is important for

developing programs at the point of purchase or choice.

In addition, the message itself needs to be considered

carefully. Communication theory and marketing practices can contribute in the search for effective messages. 

Examples of Interventions

Cases in which nutrition educators have changed consumers eating habits illustrate these considerations. In

addition, many of the successfully targeted behaviors

require little or no additional time or money than the

less healthful behavior: the consumer simply picks up

one cafeteria item rather than the other or selects from

different menu items or products on a grocery store

shelf.

Nutrition Education Approaches:

Public Information Supply

4Much of the same literature was also reviewed in an earlier

National Academy of Sciences study (Thomas, ed., 1991).
Consumer Use of Information / AH-715 Economic Research Service-USDA / 9

Three national health campaigns used media heavily:

the National High Blood Pressure Education Program,

initiated in 1972; the National Cholesterol Education

Program, initiated in 1985; and the 5 A Day for Better

Health program, initiated in 1992. Nutrition educators

used focus groups, concept tests, and message tests to

determine if their message about blood pressure was

effectively informing the target audience. By 1985, the

share of people aware of the link between high blood

pressure and heart disease had increased from 29 percent in 1972 to 92. Physician visits for hypertension and

the percentage of diagnosed hypertensives under treatment increased as well.

When the cholesterol program began, 65 percent of people understood the link between cholesterol levels and

heart disease, but only 35 percent of people had had

their cholesterol checked. The campaign aimed to

change this. By 1990, 65 percent of adults reported having had their cholesterol checked. 

The 5 A Day for Better Health program advocates,

through media and other channels, that individuals consume five servings of fruits and vegetables each day.

The amount of information disseminated about the program was impressive. Within 1 month, there were 1,800

media messages. Within 1 year, all governors had

signed proclamations of support, 225 newspapers had

carried stories, and 1 million brochures had been distributed about the program. Results were less encompassing than for the other two campaigns:

The campaign and the principal message had

substantial penetration during 2 years: the percentage of Americans who knew that five or

more were the number of servings of fruits and

vegetables to eat each day for good health rose

from a baseline of 8% to 29% and the percentage who believed that eating fruits and vegetables would quite likely help prevent cancer

rose from 45% to 64%. On the other hand, 13%

(up from 8%) reported that it would be very

hard to eat five or more servings of fruits and

vegetables per day (Contento et al., page 314).

Excluding potatoes, per capita fresh fruit and vegetable

consumption increased 34 percent between 1970 and

1996, while processed fruit and vegetable consumption

increased 18 percent. This campaign, higher incomes,

and other sources of information apparently produced

some shift in diets; however, most of the change

occurred before the campaigns kickoff in 1992 (Putnam

and Gerrior).

Contento et al. note that these national campaigns and

other information sources appear to have had a strong

secular effect in reducing risk factors for heart disease

over the 15 years preceding the review. In fact, many

smaller, community-scale studies using media and other

communication channels found that both their control

communities and their targeted communities improved.

It was difficult to achieve statistically significant effects

in targeted community populations in addition to the

national effects.

Many nutrition education efforts are conducted in small

groups, as part of larger Federal programs, in community settings, and at work sites. Groups can be effective at

each stage of change when they first motivate consumers to alter their eating habits and then inform and

educate people about how to change. Because group

settings differ so widely, it is difficult to characterize the

results of all attempts to change behavior. Generally,

more effective programs are interactive, tailored to the

clients, and run for a long time. 

Nutrition education interventions at the point of choice

occur in stores, restaurants, work-site cafeterias, and

vending machines. Point-of-choice programs generally

involve labeling the food, shelf, or menu with nutritionally relevant information such as low fat. The review

found that these programs change choices while they

are present, but change generally does not persist once

the labels are withdrawn. The initial success and lack of

persistence of these approaches is consistent with an

information-processing view of consumers. This view

asserts that consumers will rely on signals from the

environment rather than their memories. When the

information is absent, consumers revert to old habits. 

Conclusions From a Review of 

Nutrition Education Interventions

The conclusions of the literature review reinforce the

theoretical considerations for conditions for success in

nutrition education that advocates action:

1. Motivation must be present. Consumers must perceive personal consequences from undertaking or not

undertaking change.
10 / Economic Research Service-USDA Consumer Use of Information / AH-715

2. Messages advocating action must be clear and relevant to consumers situations. For some, messages must

emphasize motivation and consequences; for others,

messages should emphasize how tos. An important part

of a nutrition education program is determining in

advance the state of knowledge and attitudes of the target population.

3. Advocated actions must be understood by consumers,

who must feel capable of implementing them. From an

additional economic perspective, if advocated actions

are low-cost in money, time, and effort, consumers will

be more likely to adopt them. 

4. Reminders via media or at points of choice are effective while they continue. Thus, nutrition education must

be a continuing effort, not a one-time program.
Consumer Use of Information / AH-715 Economic Research Service-USDA / 11

Advertising and labeling of food make large amounts of

nutrition information available to consumers. In 1996,

producers spent $21 billion for advertising and $47 billion for packaging (Elitzak). While only a fraction of

these expenditures supports nutrition information, that

fraction is probably larger than the total of public nutrition education programs. In the 1980's, widespread, but

inconsistent, claims and advertising accompanied

increased public recognition of the connection between

nutrition and health. Consequently, in the early 1990's,

significant new regulation of food labeling was established through the Nutrition Labeling and Education Act

(NLEA) of 1990, which was implemented with regulations that took effect in 1994. Advertising policy

changed as well. Current discussion among nutrition

educators focuses on the effects of these changes in policy and regulation.

Federal Regulation of 

Nutrition Advertising and Labeling

Three agencies share primary responsibility for Federal

regulation of nutrition information: the Food and Drug

Administration (FDA), the Federal Trade Commission

(FTC) and the Food Safety and Inspection Service

(FSIS) of the U.S. Department of Agriculture (USDA).

The Federal Trade Commission regulates food advertising, while the other two agencies share responsibility

for regulating labels; FSIS regulates meat and poultry

product labeling and FDA regulates other foods labeling. The NLEA addressed FDA-regulated packages, and

FSIS issued parallel regulations. 

The NLEA and related policy developments channeled

nutrition labeling and package claim practices that had

expanded greatly during the 1980's. Beginning in 1973,

the FDA required nutrition labeling for packaged products that contained nutrients added during processing or

that made health or comparative content claims.

Nutrition labels were on about 40 percent of food packages in 1977 (Wang et al.). In the early 1990's about 70

percent of packages displayed nutrition labeling

(Caswell). Many consumers reported using the labels at

least some of the time. In USDAs 1987-88 Nationwide

Food Consumption Survey, 45 percent of households

reported that they had obtained nutrition information

from food labels in the previous year (Wang et al.).

Bender and Derby reported that the percentage of consumers who claimed to pay attention to nutrition labels

rose from 68 percent in 1982 to 74 percent in 1988. In

1990, 79 percent of respondents to a National Food

Processors Association survey said they always or

sometimes read labels before buying a food for the

first time (Mueller).

The NLEA, its implementing regulations, and parallel

regulations issued by FSIS prescribe three aspects of

package labeling: nutrient contents, nutrient content

claims (such as "low fat"), and diet-disease claims (such

as high fiber will reduce risk of cancer). The now-familiar nutrition panel that must appear on most packaged

foods contains nutrient content information and the percent of the daily value these nutrients represent in a

2000-calorie diet. Regulations also prescribe nutrient

contents for each claim.

The FDA also restricted health claims to those that it

determined were supported by significant scientific

agreement. Permitted health claims are:

 Calcium with reduced risk of osteoporosis 

 Sodium with increased risk of hypertension

 Dietary fat with increased risk of cancer

 Dietary saturated fat and cholesterol with 

increased risk of coronary heart disease

 Fiber-containing grain products, fruits, and veg

etables with reduced risk of cancer

 Fruits and vegetables with reduced risk of cancer

 Sugar alcohols and increased risk of dental caries

 Whole oat foods and reduced risk of heart 

disease

 Foods containing psyllium and reduced risk of 

heart disease

 Folate with reduced risk of neural tube defects

More claims are likely as scientific evidence accumulates. The Food and Drug Administration Modernization

Act of 1997 permits claims based on statements of U.S.

Government scientific bodies with responsibility for

public health or the National Academy of Sciences or

its subdivisions. Distributors and manufacturers must 

Regulation of Advertising and Labeling:

Conditions of Private Information Supply 
12 / Economic Research Service-USDA Consumer Use of Information / AH-715

submit notification of claims to the FDA, which will

determine whether the claim fits the Acts provisions.

While the regulations require most food packages to be

labeled, they exempt ready-to-eat foods prepared primarily on site, such as deli and bakery items and restaurant

food. Nutrition information is voluntary for raw fruits,

vegetables, fish, meat, and poultry. Since food-awayfrom-home now comprises 40 percent of consumer food

expenditures (Elitzak), an ever-growing part of the food

supply is exempt from nutrition labeling, unless the seller makes a nutrient content claim, such as "low calorie." 

After the NLEA was implemented, the FTC issued a

policy statement on food advertising that automatically

makes claims acceptable for advertising if they conform

to the FDA regulations. Claims inadmissible for labeling are not admissible in advertising. Advertisers can

make other claims, however, under carefully prescribed

conditions for accuracy and presentation of substantiating evidence (Starek). 

Theoretical Considerations With 

Respect to Advertising and Labeling

Economic analysis of advertising focuses on producer

behavior in competitive markets. Generally, producers

disclose only information advantageous to them. For

example, the producer of a product low in fat will voluntarily advertise that fact, while failing to disclose a

high sodium content. However, competitors might

advertise that their products are low in both fat and

sodium. Consumers would then be suspicious of products that failed to make both claims. This competitive

disclosure, or unfolding process, results in explicit

claims for all positive aspects of food and causes consumers to be suspicious of foods without claims. The

unfolding hypothesis also operates to alert consumers to

negative aspects of products. For example, the cigarette

brand that advertises less tar is alerting consumers to a

negative aspect of all cigarettes. Under the theory, disclosure of tar levels will be widespread among low-tar

cigarettes and nonexistent among high-tar cigarettes.

The unfolding theory implies that the presence of advertising is a signal of quality and that lack of advertising

about a specific quality alerts consumers to a probable

absence of quality (Grossman; Ippolito and Mathios,

1990).

Advertising is voluntary for sellers. Although some

labeling is voluntary, much is now mandatory and is

likely to have effects beyond those of the unfolding

hypothesis. Mandatory labeling could improve food

products if producers reformulate products to avoid

making unfavorable disclosures, such as high fat or

sodium content. This process would extend the benefits

from nutrition labeling to consumers who do not actually use labels to make purchase decisions (Caswell and

Padberg). Mandatory labeling also changes the function

of nutrition information, a credence characteristic of

food, when the consumer cannot evaluate it before purchase and consumption. If nutrition information that the

consumer trusts is available, nutrition labels could function as a search characteristic (Caswell and Mojduszka).

Theoretical approaches from the nutrition education literature provide additional useful insights about how

current labeling regulations may affect consumers. By

itself, the nutrition label panel would not be expected to

have significant effects. The knowledge-attitude-behavior approach in which provision of nutritional facts is

expected to lead to behavioral changes would apply. But

this approach is generally not successful because motivational knowledge must precede how-to knowledge to

produce behavioral changes. When information provided by nutrition and health claims on packages and

advertising motivates consumers, however, the how-to

aspect of nutrition-content labeling might have an

effect. Claims could provide the motivational knowledge necessary to move the consumer along the first

few steps of the stages of change model, which include

precontemplation, contemplation of change, decision to

change, overt behavioral change, and maintenance of

change (Contento et al.).

A similar marketing theory, the information-processing

model, hypothesizes a series of steps that consumers

would take before actually purchasing a product: exposure, reception, persuasion, retention, and behavior.

Consumers may ignore the messages at any step by not

hearing (seeing) the message, by not processing the

message, by rejecting the message rather than being

persuaded by it, by forgetting it, and by not changing

their behavior. Each decision may be affected by other

aspects of the message: the source, the substance and

style, the channel, and the nature of the target audience

(Scholten). 

The same consumers may process information that they

hear from several sources. For example, a nutrition education class may alert consumers to a diet-disease relationship, a connection that may be reinforced by a
Consumer Use of Information / AH-715 Economic Research Service-USDA / 13

media ad promoting a low-fat product, and that is again

reinforced on a label as consumers purchase products.

Even if the label were the most proximate cause of

dietary change, the other programs would have been

necessary to alter consumers decisions. 

Applied Studies of 

Advertising and Labeling

The economics of information literature treats advertising as a source of information about product characteristics, be they search, experience, or credence characteristics. This view of advertising is that it contains factual

information. Other literature emphasizes the image or

persuasive nature of advertising. For the economists of

information literature to be relevant, advertising must be

informational. Abernathy and Franke conducted a metaanalysis of 59 studies on the information content of

advertising to determine how much and what kind of

alleged facts or cues were contained in the average ad.

The study relied on widely used categories of ad content, one of which is nutrition characteristics (table 5).

The studies represented 91,000 ads from a number of

countries. More than 84 percent had at least one cue, or

fact, 58 percent two or more, and 33 percent three or

more. The most common type of information was about

product performance, contained in 43 percent of ads.

Other facts included in the ads were availability, 37 percent; components, 33 percent; price, 25 percent; quality,

19 percent; and special offers, 13 percent. Thus, advertising does provide information some of which consumers can verify. The finding is consistent with the

economic analysis of information introduced by Stigler,

the economics of information theory, and the unfolding

hypothesis. 

If advertising is informational, nutrition advertising

could be a form of nutrition education. Ippolito and

Mathios (1990) conducted a widely cited study of the

effects of nutrition-advertising claims regarding fiber in

cereal. The study examined conditions in the ready-toeat cereal market before and after manufacturers began

a mid-1980's campaign that stated the relationship

between fiber consumption and a reduced risk of colon

cancer. The claim, first made by the Kellogg Company,

asserted the message was endorsed by the National

Cancer Institute. 

Comparing the pre- and post-claim periods regarding

fiber in cereal, Ippolito and Mathios found that knowledge of the fiber-cancer link increased among all educational levels, market share shifted to higher fiber cereals, the fiber content of cereals in general increased, and

disclosure of other nutrients, such as sodium, increased.

The example demonstrates that advertising can transmit

nutrition information and change food choices when it

contains a simple message that requires low-cost actions

(more purchase of high-fiber cereals).

In 1985, the FDA, in effect, relaxed a prohibition

against health claims and permitted them if they met the

standards of non-deception and substantiation required

of all advertising. Consequently, the marketplace experienced a flood of health claims. Ippolito and Mathios

(1995) also examined this second period. They found

that fat consumption per capita fell continually from

1977 to 1989/90, but that it fell faster after the ban was

lifted. The results are consistent with an information

role for advertising.

Their results also illustrate one advantage of advertising

informationspecificity. In 1977-85, before nutrition

claims were permitted in advertising, consumption of

fat declined among categories of food whose fat and/or

cholesterol content was widely communicated meat,

eggs, and fats and oils. However, increases in fat content from other foods largely offset these consumption

declines. After 1985, people consumed less fat across

more categories, with less increase in other categories.

This result suggests advertising claims provide a finer

level of detail than broad nutrition information and that

such details assist consumers making choices within

such categories of food as frozen dinners. Other nutrition information programs also affected consumers

Table 5 Advertising Information 

Content Categories

Price

Quality - characteristics of product

Performance - what the product does

Components - materials and ingredients

Availability - when and where to purchase

Special offers

Taste - citation of other consumers

Nutrition - content, comparisons

Packaging - size, shape

Warranties

Safety - special features

Independent research - citation of studies

Company research

New ideas - new concepts embodied in product

Source: Resnick and Stern as quoted in 

Abernathy and Franke.
14 / Economic Research Service-USDA Consumer Use of Information / AH-715

diets. Together with advertising, these programs could

explain the findings in Contento et al. that nutrition

knowledge and improvement in diets spread widely during the 1980's and that community-level efforts at nutrition education often had no statistically significant additional effects.

Evidence that ads provide some facts does not mean

they provide all the facts; the unfolding theory predicts

many ads would not. Ippolito and Mathios (1990)

reviewed four applications of the unfolding hypothesis

to markets. Evidence supported the idea that producers

disclose favorable nutrient composition for cereals and

spreads butter and margarine  but not for frozen

pizza and cigarettes. They conclude, ...this evidence

supports the view that competitive forces can sometimes

be relied on to fill in missing information in the market

(page 432, italics added). Caswell (1992) reported similar inconsistent evidence for the unfolding theory. 

The possibility that unfolding through competitive

advertising claims will sometimes add to nutrition information in markets remains relevant because producers

advertising claims, unlike labeling, are voluntary.

Package claims are often more visible and eye-catching

than the required nutrition-label panel. The possibility

that the absence of eye-catching claims should arouse

consumer suspicion is likewise still relevant, but the

nutrition-label panel makes it easier for consumers to

confirm or allay their suspicions.

When mandatory nutrition-labeling regulations were

enacted, some speculated that new and reformulated

food products would be introduced so that producers

could advertise products improved nutritional characteristics. Large numbers of nutritionally improved foods

(mostly fat reduced) have been introduced, but there is

debate over whether they can be attributed to mandatory

labeling (Petruccelli).

Consumers knowledge of store prices provides some

clues about their likely behavior toward nutrition information after the NLEA. Despite price labels, market

researchers report that consumers generally do not

know the prices of most items in their grocery baskets.

Consumers appear to be more concerned with the cost

of shopping time and rely on general impressions of the

cost competitiveness of stores they develop through

advertisements (Avery). It is also possible that past

investment in price information is reflected in current

choices. A similar approach could be expected for consumers use of nutrition information.

The quantity of standardized nutrition information

available to consumers has increased markedly since the

1977-90 period studied by Ippolito and Mathios. FDA's

implementation of the NLEA, FSIS's parallel labeling

regulations, and FTC's conforming policy statement all

increased the consistency, uniformity, and pervasiveness

of nutrition information in the marketplace. The cost of

information acquisition has been reduced to reading and

processing package or display labels. However, the time

costs are still significant enough that they will be a barrier to some consumers. 

Moorman assessed the effects of the NLEA by comparing samples of grocery shoppers in the same cities and

stores in October 1993 and October 1994, several

months before and after the NLEA effective date of

May 1994. Her questions were as follows: Has the

introduction of the NLEA increased nutrition information processing at the point of sale? Has the NLEA promoted nutrition information processing regardless of

individual consumer differences? Has the NLEA

increased nutrition information processing at the point

of sale for both healthful and non-healthful products?

Moorman wanted to know if the NLEA increased information use while reducing the effects of consumer

backgrounds and the nature of products. Consumers

were questioned immediately after they were observed

selecting a brand in 1 of 20 product categories in grocery stores.

In the pooled data for the 2 time periods, consumers

spent an average of 12 seconds choosing a brand, and

nearly half of consumers made their choice in 1 second

(figure 1). If either price or nutrition information influenced most purchases, that influence was probably

based on memory or general impressions of brands, 

products, and stores. Results indicated consumers ability to recall fat content was inaccurate.5 These data

appear surprising compared with the pre-NLEA findings

that large proportions of consumers claimed to use

labels, but the consistency with which consumers

claimed to use labels varied from in the past year to 

always or sometimes. Moormans results suggest that

label use is neither pervasive nor continuous. 

5When shoppers were asked to recall the grams of fat per serving in

the last brand selected, the average error of recalled fat grams per

brand was 5, with a standard deviation of 14. Since fat content varied from 0 grams for orange juice to 3 grams for cereal, to 17 for

frozen pizza, the average recall appears inaccurate.
Consumer Use of Information / AH-715 Economic Research Service-USDA / 15

Moorman found statistically significant increases in

information acquisition, measured by search time in

seconds, after the NLEA took effect. Motivated consumers acquired more information after the law than

before, and even the less motivated more accurately

recalled fat content afterwards. Likewise, the level of

knowledge consumers had about label regulations and

diets in general became less important to fat recall after

the law. Diet-disease knowledge became more important, however, possibly because diet-disease claims on

packages were carefully regulated. Finally, consumers

retained more information about higher fat products

(those defined as having more than 5.5 grams of fat per

serving) than they did about lower fat products. The

author speculates that standardized and adequate reference information, required by the NLEA, raised awareness of the nutritional quality of food products, thereby

increasing the focus on higher fat products. Thus, the

NLEA may have spurred product competition, even

among higher fat products. 

If mandatory labeling is to make nutrition a focus of

market competition, consumers must use the information. The nutrition education and marketing literature

emphasizes the need for awareness and motivational

knowledge to precede the use of how-to information

and change in behavior. Motivational knowledge does

appear to be a precursor to use of labels, as these theories suggest. Moorman and other researchers have

found that health-conscious consumers use labels more

than other people (Wang et al., Mueller). 

Conclusion

Producers provide significant amounts of nutrition

information in advertising and labeling. Since the mid1990's, regulation has increased and channeled this

information, but consumers still need motivation to

obtain it, process it, and change their behavior. The convenience of nutrition information on packages could

make nutrition education and information programs

more effective if they can provide motivational knowledge as well. The potential benefits to consumers from

the regulatory developments in the 1990's will ultimately depend on the ability of education, advertising, and

package claims to motivate people to use labels and to

improve their diets and health.

Figure 1 Consumers Choose Food Products Quickly

Seconds To Select a Brand

0

5

10

15

20

25

30

35

40

45

50

1 2-5 6-10 11-15 16-20 21-25 26-30 over 30

Number of Seconds

Percent of Choices

Source: Moorman 1996.
16 / Economic Research Service-USDA Consumer Use of Information / AH-715

Nutrition information programs aim to enhance life and

health through improved nutrition. The multiple inputs

contributing to a final outcome good health complicate an attempt to value the benefits. Some of those

inputs include nutrition, medical care, and lifestyle over

many years as well as the genetic disposition of the

individual. In addition, nutrition information programs

probably interact with each other and commercial information to lead consumers along the steps of nutritional

awareness. 

Placing a Value on Improved Health

Because nutrition educators and advocates of other

health and safety programs have found a need to place a

value on health and life as they assess the benefits of

their programs, two approaches have been developed to

estimate these values. One approach measures the cost

of medical treatments of illness and the earnings lost

because of illness and premature death, while the other

approach measures the amount of money people will

spend for safety devices that preserve health and life

and the extra wages required to induce people to take

risks. The second approach is preferred because it recognizes that life and health are valued as ends in themselves, not only as a means to income or as an avoidance of medical costs.

For 1970, 1980, and 1990, Cutler and Richardson used

the second approach to estimate health capital for

individuals at birth and at age 65. They measured health

capital as the expected years of remaining life, and

adjusted for expected disability from chronic diseases.

Expected years of life were based on death rates by age

in the three years. The authors value a year of life at

$100,000, in 1990 dollars, citing economic literature

that derives the value of life from the premiums

required for risky jobs and the prices people are willing

to pay for safety devices. 

The authors used the National Health Interview Survey,

which contains data on individual health from 1969 on,

to estimate the effect of chronic conditions on selfreported health. A year of life as an invalid may not

have the same value as a year of life in complete health.

The authors derived weights for impaired years that

they based on personal health reports of people with

impairments. For example, a year of life for a person

with heart disease was valued at 64 percent of that of a

healthy person in 1970 and 70 percent in 1990, apparently a reflection of improvements in medical treatment. 

The final adjustment Cutler and Richardson made was

to discount the value of future years of life by 3 percent,

even though such practice is controversial. They also

made their calculations with rates of 0 and 6 percent.

Their undiscounted estimates of the change in value of

health capital for a baby born in 1970 versus one born

in 1990 was $387,000 (table 6). For a 65-year-old in

both years, the change was $247,000. Discounted at 3

percent, the values are $95,000 and $169,000. They

conclude with a general statement that health capital in

the United States improved by approximately $100,000

to $200,000 per person between 1970 and 1990, or

$5,000-$10,000 per person per year. 

Clearly, this is an approximation. What it does imply is

that improved health and life are highly valued, a hardly

surprising conclusion. The high value that consumers

place on health and life means that information programs with demonstrated efficacy in improving health

will offer benefits that consumers will likely feel exceed

reasonable costs.

Has Knowledge Increased? 

Efficacy of nutrition information requires not only

increases in knowledge of nutrition information but also

consequent improved eating patterns, which enhance

life and health. The FDA has determined that there is

scientific agreement on specific connections between

diet and some diseases. Although knowledge and eating

patterns have improved somewhat since the 1970's,

potential improvements that remain are still large.

Relaying nutrition information so that consumers understand how diet affects disease remains a challenge.

With respect to increases in knowledge, a wide range of

potential and actual knowledge could be examined.

Nutrition knowledge ranges from the general value of

eating fruits and vegetables to understanding the consequences of eating different kinds of fats. At the most

straightforward end of the continuum, a journalist

reduces the necessary knowledge to a few words: 

lots of fruits and vegetables and grain-based

foods [that are] rich in fiber, vitamins and minPublic Benefit Cost Considerations
Consumer Use of Information / AH-715 Economic Research Service-USDA / 17

erals and [also] low in calories, fleshed out with

modest amounts of animal proteinfour-ounce

portions of well-trimmed meat, skinless poultry

or fishand low-fat and nonfat dairy foods

(Brody, 1998). 

Some research does indicate consumers are retaining

nutrition information. The FDAs Health and Diet

Surveys found that the number of people who said fats

and fatty food are a major cause of heart disease

increased from 8 percent in 1970, to 29 percent in 1983,

and to 55 percent in 1988 (Frazao). Consumers understanding of the sources and characteristics of fat,

polyunsaturated fat, and cholesterol, however, did not

improve from 1983 to 1988 (Levy et al.). 

Other evidence reveals improved knowledge over time.

The applied economic studies of egg consumption and

cholesterol (Brown and Schrader, Chern et al.)

described earlier indirectly provide evidence that more

people became aware of this diet-disease connection

during the period studied. Ippolito and Mathios found

that consumers knew more about diet-disease connections and that they changed their diets in both of the

periods they studied. The changes in responses of

expenditure on different categories of food when

income increased, as reported by Blisard and Blaylock,

suggests indirectly knowledge has improved.

Have Eating Patterns Improved? 

Putnam and Gerrior reported that in 1996 Americans

consumed two-fifths more grain products and a fifth

more fruits and vegetables than in 1970, ate leaner

meat, and drank lower fat milk, habits that are consistent with the dietary guidelines. They are also reported

to be eating fewer shell eggs (eggs sold in the shells

rather than in food products). Offsetting these trends

that improve diets, Americans are consuming recordhigh amounts of sugar and other caloric sweeteners,

high-fat dairy products, and near-record amounts of

added fats  including salad and cooking oils and baking and frying fats. Although consumers have reduced

their intake of shell eggs, they are eating more food

with processed egg products, such as baked goods.

People are also consuming large amounts of fat in

cheese as they eat out or buy pre-prepared food to save

time. Overall consumption of milkfat did not decline

between 1970 and 1996, despite the trend toward lower

fat milk. Increased consumption of cheese and fluid

cream compensated for the reduced fat intake from fluid

milk.

Putnam and Gerrior found that Americans appear to be

changing their diets based on nutrition information, but

that they offset changes by consuming more calories

and added fats and oils. These trends may reflect both

economic forces income and a desire to save

time  and less recognized calories and fat in packaged

food, despite labels, or in food eaten out. Although economic forces will persist, the NLEA may make information on calories and fat more recognizable. Limited evidence for 1993-96 does suggest the NLEA may affect

consumer behavior. Putnam and Gerrior reported annual

per capita consumption of added fats and oils declined

at least 8 percent in those years. 

Other evidence shows modest improvement in diets.

Between 1989 and 1996, USDAs healthy eating index

rose from an average of 61.5 to 63.8, on a scale of 0 to

100. Scores over 80 represent a good diet so the average

U.S. diet needs improvement; but the average is above

the 20-50 percent range that indicates a poor diet.

Consumers scored best in areas that indicated limited

total fat and cholesterol consumption, scores that may

reflect package and advertising claims (Bowman et al.).

Conclusion

Circumstantial evidence indicates government nutrition

information and regulation may be affecting consumers

diets. The FDA has determined that significant scientific

agreement on diet-disease connections supports the

health claims that are currently permitted on food pack

ages. There is evidence of increased knowledge of these

connections and of some changes in diets consistent

with recommendations. Therefore, a portion of the large

value of improved health could be due to nutrition

information from commercial and public sources. Still,

the unrealized benefits remain large.

Table 6 Change in value of health capital per person in the United States, 1970-90*

Discount rate At birth At age 65

0 387 247

3 percent 95 169

6 percent 38 122

*Figures are in thousands of 1990 dollars.

Source: Cutler and Richardson
18 / Economic Research Service-USDA Consumer Use of Information / AH-715

Several themes emerged from this selected review of literature: the importance of motivational knowledge, the

value of time to consumers, the changing effects of economic variables on food choices over time, and the high

value of enhanced health and life expectancy. 

Motivation

Stages theoriesstages of change and stages of

information processing provide important insights

into how public information and regulation could affect

food choice. The stages of change theory hypothesizes

that consumers move through the stages of precontemplation, contemplation of change, decision to change,

overt behavioral change, and maintenance of change.

Information processing theory suggests that consumers

may be exposed to a message, may receive the information, may be persuaded by the information, may retain

the message, and may alter their behavior if they

respond to the advertisement. In both theories, behavioral change follows the other stages, thus stressing the

need to motivate consumers to adopt healthy lifestyles.

Commercial, public, and educational sources of information may reinforce each other in guiding consumers

through stages. Different sources could provide consumers with the motivation, reinforcement and how-to

information they need to modify behavior.

Research findings are consistent with these theories.

Contento et al. found that providing specific knowledge

without motivational knowledge was not successful.

Both motivation and how-to information must be provided, and should be targeted to an audiences needs.

Variyam et al. (1997) found that a general attitude that

healthful eating was important was not closely correlated with diet-disease and nutrient-content knowledge,

which were themselves closely correlated. Furthermore,

diet-disease and nutrient-content knowledge had a larger

effect in diets.

From the perspective of these theories, consumers who

think it is important to have a healthful diet, but who

lack the specific knowledge to do so, are probably in an

earlier stage of the information process they are

aware, but not sufficiently motivated to invest in specific information. Providing consumers diet-disease information how to reduce the risk of cancer and heart

disease is likely to be more motivating than offering

general information about healthful eating without identifying the benefits. 

The Value of Time

Both economic theory and observations of consumers'

shopping behavior indicate that saving time becomes

more important to consumers as incomes rise.

Convenience minimizes the time costs (forgone wages

or alternative consumption) of buying, preparing, and

consuming food. Marketing studies of grocery-shopping

patterns reveal that consumers do not spend the time

required to know the prices of the items in their grocery

cart (Avery). Moorman reported from observations of

shoppers that nearly half of consumers choices were

made in 1 second. 

Flexible Economic Effects on Food Choices

Consumers responses to food choice when prices

and/or incomes change summarize complex behavior in

which consumers balance the perceived utility of one

expenditure against the other possibilities. If consumer

perceptions change as a result of information, it would

be expected that consumers responses to price and

income variation would change as well. Brown and

Schrader demonstrated that consumers purchases of

food respond differently to changes in prices and

income at different times, and Blisard and Blaylock

demonstrated the same thing for changes in income.

The flexibility of economic effects is encouraging

because current responses to income and prices are

leading to overconsumption. The AHA identified easily

affordable food as one of the root causes of overconsumption, a practice that has caused obesity to become

an important risk factor for heart disease (American

Heart Association, 1998). Variyam et al. (1997) found

that high incomes encourage consumption of fat and

cholesterol and offset the effects of knowledge in determining the diet. Given the flexibility of economic

responses, affordable food will not inevitably defeat

nutrition information in forming the diet. Economic

responses can change over time if consumers reevaluate

foods' characteristics. 

Conclusion: Common Themes Across Disciplines
Consumer Use of Information / AH-715 Economic Research Service-USDA / 19

High Value of Enhanced Health 

and Life Expectancy

The goal of providing and regulating nutrition information is to enhance health and increase life expectancy

through improved food choices and nutrition. Because

people place high value on health and life, as asserted

by Cutler and Richardson, effective programs will very

likely produce benefits in excess of costs. However,

interacting forces that produce health and interacting

information programs make tracing the effects of programs challenging. 

Integrating the Themes With Policy

Mandatory nutrition labeling has created an environment rich in instructional information, at least for packaged foods. Motivated consumers can access information much more easily than they could before mandatory labeling. These circumstances suggest that moving

more nutrition information efforts into motivational

messages around the existing how-to of labels could be

an efficient use of educational resources. Potential messages might combine motivation and instruction, for

example, Excess calories can be dangerous read the

label.

Even the motivated consumer will still value time.

Regulators and educators could incorporate the value of

time into their programs. One way would be to use

symbols that summarize other information, such as a

symbol for combined lows  fat, sodium, cholesterol,

and calories. Other symbols could communicate high

fiber, calcium, and/or protein. Consumers could use

symbols that summarize information to simplify nutrition information processing when they are making their

choices in very few seconds. Otherwise they may not

process nutrition information.

The value consumers give to food characteristics can be

changed by information, education, and advertising.

One sandwich chain compared the fat content of its beef

sandwich with the higher fat content of a competing

hamburger using the slogan Fat is cheap! Regardless

of the outcome of that campaign, evidence reveals that

information can lead consumers to change their economic responses to foods' characteristics. Public programs could address similar image issues, such as A

real taste for unsweetened, low-sodium foods. 

Research from many social science disciplines offers

insights for public dissemination and regulation of

nutrition information. Given the value of improved

health and life that could result from effective programs, it is worthwhile to weigh these results during

program and policy development. 
20 / Economic Research Service-USDA Consumer Use of Information / AH-715

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