Measuring the Welfare Effects of Nutrition Information

17 Pages Posted: 24 Mar 2020

See all articles by Mario F. Teisl

Mario F. Teisl

University of Maine - Department of Resource Economics and Policy

Nancy E. Bockstael

University of Maryland - Department of Agricultural & Resource Economics

Alan Levy

Government of the United States of America - Food and Drug Administration (FDA)

Date Written: February 2001

Abstract

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 behaviour but may not lead to increased consumption of health foods. Nutrient labeling may increase welfare without any change in health risk. Thus, the cost of avoided illness approach can underestimate the social benefits of providing nutrient information.

Keywords: cost of ignorance, labeling, nutrition, value of information, D180, D610, I120

Suggested Citation

Teisl, Mario F. and Bockstael, Nancy E. and Levy, Alan, Measuring the Welfare Effects of Nutrition Information (February 2001). American Journal of Agricultural Economics, Vol. 83, Issue 1, pp. 133-149, 2001, Available at SSRN: https://ssrn.com/abstract=3558149 or http://dx.doi.org/10.1111/0002-9092.00142

Mario F. Teisl (Contact Author)

University of Maine - Department of Resource Economics and Policy ( email )

200 Winslow Hall
Orno, ME 04469-5782
United States
207-581-3162 (Phone)
207-581-4278 (Fax)

Nancy E. Bockstael

University of Maryland - Department of Agricultural & Resource Economics ( email )

Symmons Hall, Rm 2200
University of Maryland
College Park, MD 20742-5535
United States

Alan Levy

Government of the United States of America - Food and Drug Administration (FDA)

5600 Fishers Lane
Rockville, MD 20857-0001
United States

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