American Journal of Agricultural Economics: Measuring the welfare effects of nutrition information - Brief Article

Family Economics and Nutrition Review, Spring, 2001 by M.F. Teisl, N.E. Bockstael, A. Levy

Teisl, M.F., Bockstael, N.E., and Levy, A. 2001. Measuring the welfare effects of nutrition information. American Journal of Agricultural Economics 83(1):133-149.

Cost/benefit analysis justifies regulations altering the amount of health-related information presented to consumers. The current method of benefit analysis, the cost of avoided illness, is limited; it assumes the benefits of health-related information are adequately represented by changes in illnesses. The manuscript develops a benefit estimation method to measure the welfare impacts of providing nutrient information. Nutrient labeling significantly affects purchase behavior but may not lead to increased consumption of healthy foods. Nutrient labeling may increase welfare without any change in health risk. Thus, the cost of avoided illness approach can under-estimate the social benefits of providing nutrient information.