Consumer Information and Labeling

This chapter describes the current landscape surrounding food information policies directed at improving consumer choice and welfare. It critically evaluates the economic justifications traditionally given for food information policies, including asymmetric information, quality uncertainty, and moral hazard. The basic model economists have used to conceptualize the value of information policies is also presented. The chapter describes how policy makers have responded to these motivations for food information policies and asks how well the policies have performed. It also considers several policy options, including facilitating more voluntary labeling programs such as process certification programs and standards, facilitating more mandatory labeling programs, banning “low quality” products, and pursuing more education or information provision programs. It compares each option to pursuing a more laissez faire approach relative to the status quo. Throughout the chapter, specific examples of information policies related to country of origin, biotechnology, hormones, nutritional content, and organics are discussed. The conclusion contains some discussion on future research needs and some thoughts on how food information policies might be made more effective.