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Does Calorie Labeling Nudge Eating Habits?

The United States is the most obese nation in the world. Without knowing the real cause of why, lawmakers assume that people are just ignorant to what they are eating and thus consume too many calories. New York, for instance, created a law that required chain-restaurants to post calories in order to lower calorie consumption (and remove the ignorance excuse). The presumption here is that when chain-restaurant consumers find out just how many calories they are eating they will cut back (really?)… The impact of a policy such as this one can be measured by determining how much it changed behavior. So, does it work? A recent study (see below) says, sort-of.

“We find that mandatory calorie posting does influence consumer behavior at Starbucks, causing average calories per transaction to decrease by 6%.” Almost the entire decrease is related to food purchases. Posting calories at Starbucks only influenced the eating habits of the food products and not the beverage ones!

The question is why? Clive Thompson speculates:

“I think it’s because of the psychology of Starbucks itself. People who go to Starbucks are motivated primarily by the desire for a drink, not a piece of food. So even if they’re forced to confront the calorie count on their favorite, hideously repellent bucket of candied snot (sorry, I can’t stop myself here), they’re probably not going to change their mind. They’ll just decide to forgo the chocolate graham crackers.”

Another interesting finding of the study is that calorie posting had little impact on revenue at Starbucks. The study showed evidence that calorie posting may have caused some consumers to realize how many calories were in Dunkin Donuts and, as a result, switch to Starbucks:

The potential impact of calorie posting on restaurants’ profits is an important aspect of the policy’s overall effect. The data in this study provide a unique opportunity to directly assess the impact of calorie posting on Starbucks revenue (which is highly correlated with their profit under plausible assumptions). We find that calorie posting did not cause any statistically significant change in Starbucks revenue overall. Interestingly, we estimate that revenue actually increased by 3% at Starbucks stores located within 100 meters of a Dunkin Donuts (an important competitor to Starbucks in NYC). Hence, there is evidence that calorie posting may have caused some consumers to substitute away from Dunkin Donuts toward Starbucks.

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The NYT also ran an interesting story on some of the other findings in the study that are less surprising.

But the study also revealed a stronger trend, one that speaks to the weight of human nature: around Thanksgiving and Christmas, New Yorkers seemed to lose all control. Statistically speaking, they pigged out.

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Abstract: We study the impact of mandatory calorie posting on consumers’ purchase decisions, using detailed data from Starbucks. We find that average calories per transaction falls by 6%. The effect is almost entirely related to changes in consumers’ food choices—there is almost no change in purchases of beverage calories. There is no impact on Starbucks profit on average, and for the subset of stores located close to their competitor Dunkin Donuts, the effect of calorie posting is actually to increase Starbucks revenue. Survey evidence and analysis of commuters suggest the mechanism for the effect is a combination of learning and salience.

Study: http://www.nber.org/papers/w15648.pdf