Too Much Information

Information is a scarce resource: There’s a cost to gathering it, analyzing it, and promulgating it. Human attention is also scarce. Not even Stephen Wolfram can process all of the information that’s out there.

That’s why requiring businesses to provide data to consumers isn’t always sound policy. It’s like a tax. Well-established businesses will be able to pay upfront and pass on the cost, in the form of higher prices, to its customers. Businesses with fewer resources will be forced to close. And those that would like to enter the market will have to meet this additional expense besides all the usual costs of entry.

This analysis applies to calorie posting requirements, including the one proposed in New York state. A posting requirement would limit entry into the chain restaurant business, restricting consumers’ choices. People might even have fewer healthy options as a result of the law, if new chains that would have offered healthier menus can’t break into the market.

Then there’s the question of what consumers do with the data. Calorie counts by themselves aren’t that informative if people don’t understand what they mean or how many calories they need a day. And healthy eating involves more than just calories; consumers would also have to consider variables like protein and vitamins to make good choices.

For some people, being bombarded with calorie information could actually hurt their health. For example, Harvard discontinued its practice of posting calorie counts in dining halls over fears that it could exacerbate students’ eating disorders.

The following argument would be amusing if it weren’t marshaled in support of a potentially destructive policy:

Studies show that most people find it difficult to guess the calorie counts of typical restaurant meals; one study showed that less than 15 percent of New Yorkers could guess the lowest or highest calorie menu items at any chain restaurant in the survey.

I’m reminded of those surveys they do every now and then, that find most people can’t name the vice president or a member of the Supreme Court. People are generally bad at identifying things for surveys, and we shouldn’t conclude from a survey that they have no idea fast food is unhealthy.

There will probably be more debate about this policy here in Missouri, too. This is the bill that our state legislators proposed for calorie counts.