Food Label Use, Self-Selectivity, and Diet Quality

Food labels provide measurable benefits by improving diet quality of Americans by as much as four to six points on a 100-point Healthy Eating Index scale. Among nutritional panels, serving sizes, nutrient content claims, list of ingredients, and health claims, the use of health claims on food labels provides the highest level of improvement in diet quality. The data source for this analysis is the 1994 to 1996 Continuing Survey of Food Intakes for Individuals (CSFII) and the accompanying Diet and Health Knowledge Survey (DHKS). Many Americans are not meeting dietary recommendations. The U.S. Department of Agriculture revealed that only about 12 percent of Americans are eating healthfully. Even though more Americans are now aware of the importance of good nutrition, most diets still fall short of the Dietary Guidelines for Americans (Frazao 1995). Through new scientific discoveries about linkages between diet and health, risks associated with nutritional imbalances in the composition of diet have been reported to be the most significant. For example, four of the top ten causes of death in the U.S.--heart disease, cancer, stroke, and diabetes--are associated with poor diets (U.S. Surgeon General 1988). Diet-related health conditions cost society an estimated $250 billion annually in medical costs and lost productivity (Frazao 1995). McNutt (1992) estimated that the health care savings from improved and better diets could amount to $3.6 billion to $21 billion. USDA also estimates that improved dietary patterns could save $43 billion in medical care costs and lost productivity resulting from disability associated with coronary heart disease, cancer, stroke and diabetes each year and prevent over 119,900 premature deaths among individuals fifty-five to eighty-four years of age, valued at $28 billion per year (Frazao 1995). During the last two decades, product labeling has become a popular policy tool, particularly with respect to the provision of nutrition and health information. It culminated in the passage of the Nutrition Labeling and Education Act (NLEA) in 1990. (1) The NLEA instituted sweeping changes to replace the voluntary system of labeling established by the Food and Drug Administration (FDA) in 1973. It requires mandatory nutrition labeling for almost all packaged food and strict regulation of nutrient content and health claims. In addition, it also requires a new format for the nutrition information panel called Nutrition Facts, standardization of serving sizes, and strict regulation of use of descriptors and explicit health messages (Caswell 1992; Ippolito and Mathios 1993). Nutrition labeling as a policy tool is appropriate and particularly valuable in that consumers have no way to evaluate the nutritional value of their food products. Nutritional information provided through food labeling may reduce the consumer uncertainty (Zarkin and Anderson 1992) or transform credence attributes of food products into search attributes (Caswell and Mojduszka 1996). Most of all, the passage of the NLEA has been expected to provide substantial improvements in the diet quality by helping consumers make healthier food choices. Zarkin et al. (1993) estimated that the number of discounted life years that could be gained nationwide during the first twenty years of the implementation of the NLEA ranges from about 40,000 to a high of 1.2 million. On the other hand, the FDA estimated that the NLEA would cost the food industry $1.4 billion to $2.3 billion and the government $163 million over the next twenty years. These estimates, however, are contingent upon the presumption that consumers' diets are i mproved by their use of food labels. While this paper does not address the effect of the NLEA per se, this analysis supports the presumption that use of food labels can affect consumers' diets. The impact of providing nutrition information on consumer purchasing behavior has been reported in the literature. …