From today’s inbox, a new paper — “Calorie Posting in Chain Restaurants” by Bryan Bollinger, Phillip Leslie, Alan Sorensen. Here is the link (sadly gated).
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.
Australia has not risen to the food labeling challenge. Perhaps our health ministers should reconsider. After all, if they want supermarkets to disclose unit price, why shouldn’t other retailers disclosure even harder to discern quantitative information.