Do nutrition labels improve dietary outcomes?

TLDR

The Nutrition Labeling and Education Act of 1994 mandated standardized Nutrition Facts panels on packaged foods, providing calorie, fat, cholesterol, and sodium information, and was expected to help consumers choose healthier diets, though evaluating its dietary impact is complicated by confounding factors. This paper examines whether the mandatory nutrition labels impacted consumer diets. The study addresses self‑selection bias by exploiting the NLEA exemption of away‑from‑home foods, using a difference‑in‑differences approach that accounts for zero away‑from‑home intakes. When self‑selection is accounted for, labels raise fiber and iron intake among users, whereas models ignoring self‑selection falsely suggest significant effects for most of the 13 listed nutrients.

Abstract

The disclosure of nutritional characteristics of most packaged foods became mandatory in the United States with the implementation of the Nutrition Labeling and Education Act (NLEA) in 1994. Under the NLEA regulations, a 'Nutrition Facts' panel displays information on nutrients such as calories, total and saturated fats, cholesterol, and sodium in a standardized format. By providing nutrition information in a credible, distinctive, and easy-to-read format, the new label was expected to help consumers choose healthier, more nutritious diets. This paper examines whether the disclosure of nutrition information through the mandatory labels impacted consumer diets. Assessing the dietary effects of labeling is problematic due to the confounding of the label effect with unobserved label user characteristics. This self-selection problem is addressed by exploiting the fact that the NLEA exempts away-from-home foods from mandatory labeling. Difference-in-differences models that account for zero away-from-home intakes suggest that the labels increase fiber and iron intakes of label users compared with label nonusers. In comparison, a model that does not account for self-selection implies significant label effects for all but two of the 13 nutrients that are listed on the label.