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Cost and Benefit: Calorie Counts

Jun 19, 2013 • Behavioral Economics, Demand, Supply, and Markets, Economic Debates, Education, Regulation, Thinking Economically • 160 Views    No Comments

Soon everyone will know that a Starbucks venti Double Chocolaty Chip Frappucino Blended Creme has 670 calories (200 calories more than turkey on whole wheat with mustard).

Announcing that all of its company owned stores would post calorie counts on June 25, Starbucks obviously has seen the research. Even when we know the calories, most of us buy the product. After all, that is why we went there in the first place.

Still though, one Oklahoma State University study concluded that we respond to red, green and yellow traffic lights. With red lights indicating more than 800 calories, yellow for 401-800 and green a slimming 400 or less, some people selected lower calorie entres. (Other parts of the meal were impacted less.) The result was not enormous–maybe a 120 calorie difference but still, over a month, if you went to the same restaurant everyday and ordered green light food, you could lose a pound. By contrast, when food was just labeled with calorie counts, there was some response but not as much.

Come on???

I doubt that most food vendors will label their menus with traffic lights.

Behavioral economists believe that cost, defined as sacrifice, shapes our behavior. With calorie labels, we are comparing the long term cost of obesity and heart disease to the short term benefit of a Starbucks venti Double Chocolaty Chip Frappucino Blended Creme. Unaware that we are doing cost and benefit analysis, many of us prefer to increase short term pleasure instead of decreasing long term cost.

Sources and resources: As you can tell, I am somewhat skeptical of the traffic light weight control incentives that are described in this paper and a Reuters article. However, concerned that I was displaying confirmation bias, I did locate this survey of calorie labeling research that confirmed its inefficacy. I also suggest looking at Nobel laureate Daniel Kahneman’s Thinking Fast and Slow for further discussion of self-control and short term gratification. Finally, resisting the calorie labeling mandate in the Affordable Care Act, Domino’s has claimed 34 million permutations they would need to list in every store. Here are 4 examples:

Menu Calorie Labels from Bloomberg

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