How much is a calorie worth? A study of willingness to pay for calorie labels in restaurant menus

Abstract

AbstractWe asked individuals about their willingness to pay (WTP) either: (1) for a mandate requiring restaurants to post calorie information on their menus; or (2) to avoid such a mandate. On average, more people were in in favor of the mandate and were willing to pay four times more than those who were against it, thereby leading to a Kaldor–Hicks improvement from this policy. To ensure robustness, we tested the impact of providing three types of information during individuals’ WTP determinations: (1) visual examples of the proposed calorie labels; (2) data on their effectiveness at the individual level; and (3) data on their wider social and economic benefits. For those in favor, providing a simple visual of the label had no impact on WTP. Data on the individual effectiveness of the labels increased the WTP, while evidence on broader obesity reduction and economic benefits reduced it. For opponents, WTP did not change with provision of additional information except when provided with information on social and economic benefits. Under this condition, the opponents increased their WTP 12-fold to avoid a mandate of this policy. Finally, we measured individual well-being under this policy and found directionally similar results, confirming a net improvement in aggregate welfare. Our results suggest that messaging that focuses on private benefits (providing calorie information so that individuals can effectively choose to reduce excessive caloric consumption) rather than wider public benefits (reduction in overall health-related costs and obesity) is more likely to be effective.