Would You Like a Side of Calories with Your Latte?

Posted by Jeffrey Brown on Jun 15, 2010

Filed Under (Health Care)

One of the key dividing lines between liberals and conservatives in the U.S. is the extent to which people believe that individuals should have the freedom to make their own choices, even when those choices appear to be “bad” for the individual.  Just think about the debates we have had over motorcycle helmet laws, seat belts, and smoking.

The standard libertarian perspective is that individuals should be free to make their own choices.  After all, we might think that it is really stupid for someone to ride a motorcycle down the highway at 70 miles per hour without wearing any protective gear, but perhaps the person doing it feels differently.  Thus, debates over such policies often hinge on the extent to which the policy helps prevent negative “externalities” – in other words, we restrict your behavior because we are trying to protect other individuals from the side-effects of your actions.  So the anti-smoking crusaders focus on “second hand smoke” while the mandatory-helmet proponents often focus on the costs to society of providing medical care to the uninsured motorcycle rider. 

In recent years, there has been much debate related to the food we consume.  There is no question that the U.S. is suffering from a rise in obesity, and that this trend has costs not only for individuals but also for society as a whole (e.g., rising costs of publicly provided health care).  Still, many of us recoil at the notion that the “food police” will tell us what we can and cannot eat.  After all, if I want to eat a half-pound hamburger with a side of fries while I am on vacation, it is hard to see why that should be the business of anybody but me and the restaurant.

Even in the absence of externalities, public health advocates will often argue that people do not make good eating choices because they do not have good information.  If true, then the best policy approach would seem to be to provide such information (rather than, say, outlawing half pound hamburgers!)  But does providing such information really make any difference?

In a new NBER working paper, three economists provide compelling evidence that posting calorie information affects behavior. Specifically, the studied food and beverage purchases at Starbucks stores in New York City (where calories are posted), as well as the purchases of Starbucks stores in other locations (where calories are not posted). 

The long and the short of it is that they found that mandatory calorie posting reduced calories per transaction by 6% (from 247 to 232 calories).  Intriguingly, they also found that commuters who lowered their calories per transaction while working in New York City during the week also lowered their calories while buying from Starbucks outside the city on weekends (where calories are not posted).  This suggests that the information sticks with people and causes them to change their habits.  Interestingly, all the reduction came from food, not from the beverages.  I guess true Starbucks aficionados are really there for the coffee, not the cakes.  (Of course, as my colleague Nolan just pointed out to me, a 15 calorie reduction is probably within the margin of error of how much milk the typical person puts in their coffee!)

This research is of much broader relevance than just Starbucks.  As part of the March 2010 health care reform bill, chain restaurants nationwide will have to start posting calorie counts sometime in 2011.  While such a regulation is certainly not cost-less for the restaurants, at least it is nice to know there is some evidence suggesting that this policy may actually have the desired effect.  That is not sufficient to suggest that this policy passes a cost-benefit test, but at least it is a start!