Transcript Comparing Experiences of Using Economic Instruments to

Comparing Experiences of Nutritional
Labeling to reduce the Incidence of
Obesity and Overweight Problems in
Europe and U.S.
Maria L. Loureiro,
IDEGA-USC, Spain & NILF,
Norway
Understanding the causing factors
of obesity
Obesity Growth Currently: BMI
growth
%pop BMI>25 in OECD countries
60
50
40
30
%pop BMI>25
20
10
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
Year
0
Percentage of Individuals Obese
and Overweight in Selected
Countries
United States
64.5
United Kingdom
62
Sweden
42.7
Spain
48.3
Slovak Rep ublic
57.6
Poland
43.1
New Zealand
52.2
country Netherland s
44.8
48.8
Iceland
Fra nce
36.2
Denmark
41.7
Czech Republic
51.1
Austria
46.1
Australia
60
0
10
20
30
40
50
60
Figure 1: Incidence of Overweight Problems Internationally
70
Obesity by Age and Country: ECHP
Source: Sanz-de-Galdeano, A., 2005
The Fat Tale Problem….
Obesity by Age Group
Source: Sanz-de-Galdeano, A, 2005
Obesity as an economic externality
• Estimates of the cost of obesity per capita of the population differ
from country to country, but a rising pattern is emerging.
• Direct costs of obesity are estimated to be as high as:
–
–
–
–
Sweeden US $45 per capita per year,
US$ 35 in Germany
US$ 32 in the Netherlands
US$ 69 in Belgium, close to 6% of health care costs. In addition, these
costs are rising dramatically.
– US$ 25-31 in UK( 2002)
– US$ 157 in USA
– 1% of EU GDP!!!...and rising!
(World Health Organization Media Center, 2006)
Obesity as an economic externality
• The social and economic consequences of obesity are
serious.
• Social problems (stigma effect): obesity affects in a
negative and statistically significant way earnings and
wages in the EU, U.S. and in the U.K, particularly for
females (Harper, 2000; Cawley, 2004, Brunello and
O´Homes, 2007), as well as personal relations.
• Economic problem with externalities: direct medical
costs in OECD are rising
– U.S. studies indicate the health care for overweight and obese
individuals costs an average of 37 percent more than for people
of normal weight.
• Other related illnesses to obesity are also
growing.
Source: Andreyeva, T., P.C. Michaud, A. Van Soest.
Why Economic Instruments?
• Economic intervention is justified when there are
market failures:
– In the obesity epidemic there are clear costs
(externalities) being paid by the whole society
– Information may not be sufficient to make rational
choices: misleading information, or asymmetric
information.
– Not all agents may be able to make rational choices:
the case of children
• If one or more of the previous premises is
violated, then government intervention is
justified.
Types of Instruments
• Information instruments
– Nutritional Labeling
– Nutritional Guidelines
– Educational Programs
• Pricing Instruments
– Taxes
– Subsidies
• Other economic regulations to limit certain
input usages or sales of outputs,
advertising to children, etc.
Information Instruments: Nutritional
Labeling
Types of Nutritional Information on
Food Labels
– Nutritional Panel
– Nutrient content claims-”light” 30% fewer
calories, low in sodium, etc.
– Voluntary food profiling labels
Nutritional labeling: The US
Nutritional Panel
specify
the number of servings per container and the key
nutrients of a serving
in a 2,000-calorie-per-day diet (expressed as percentage of the
Daily Value).
Serving sizes on the label are standardized so that consumers
can compare
nutritional information between products.
International Concerns about
Nutrition Labeling Practices
•
•
In the EU provision of nutritional •
information is done on voluntary
basis.
EU Nutritional Labeling Directive
is under review. A proposal is
expected during 2007.
•
–
•
In a EU recent survey, it was found that
56% of all food products included
tabular nutrition labeling and 44% had
no tabular nutrition labeling. Inconsistent
labeling information
Only those products healthier use
labels (signaling and disclosure) ant
these become marketing tools.
•
In the United States the
Nutrition Labeling and
Education Act (NLEA) was
passed in 1990.
The resulting nutrition labelling
regulations, which became fully
effective in 1994, provide
consumers with an
unprecedented amount of
nutrition information by
mandating nutrition labelling on
virtually all processed foods.
The Nutrition Facts Panel´s
contents, regulated by the FDA,
are specific to the food product
or food product category
The European Food Labels: Food
Profiling
•Non standarized
•Non-comparable
information
The Keyholder symbol applied in
Sweeden and Norway by the ICA retail
group
•Still Voluntary, unless
a nutritional claim is
made
Nutritional Labeling coverage
EU
• Large Geographical Differences:
– UK: 75 % of products are labeled
– Spain: 54% of foods carry a label
– Germany: 50% of foods are labeled
– Poland: 41% of foods carry labels
Are labels effective: Who reads
them?
• Not all consumers are used to read labels
• Spanish study (Loureiro, Gracia and Nayga,
2006): who read the labels?
• Only obese and overweight female with higher
levels of education usually read food labels
while shopping for food.
– Previous U.S. studies arrive to the same conclusions.
Measurements of Direct Effects:
Labeling on Health
• Problems with assessment:
– We need to have a good measure of the
dietary intakes. Is that really possible?
• Measurement error can be really large due to
problems with 24 hour recall, diaries, complication
of food frequency questionnaires.
Assessing the Benefits of
Nutritional Labeling
• Most previous studies were conducted in
the US. They have shown that:
– After the NLEA 1991, unhealthy foods were
transformed to healthier foods given that they
were obligated to disclose their nutritional
properties (Mathios,1995).
– Labels help consumers selecting healthier
food choices (Kim, Nayga and Capps, 1995).
– Labels increase knowledge of nutritional
properties of foods among consumers.
Benefits of Labeling
• However, in spite of these encouraging results,
recent studies show limitations of the NLEA to
reduce obesity.
• Variyam (2006) finds that the implementation of the
NLEA was associated with a decrease in body
weight and the probability of obesity among nonHispanic white women.
• One thing is to pass a cost-benefit analysis and
another is to change radically consumers´
behavior (Golan et al.,2000).
European Preferences Towards
Food Labeling
• Spanish study (Loureiro, Gracia and Nayga,
ERAE, 2006) shows that consumers are
supportive of future food nutritional labeling.
– On average, in a sample of 400 representative
shoppers the mean WTP for nutritional labels carried by
energy dense food was about 11% of the initial price.
– Individuals watching their diets due to medical reasons
and obese were willing to pay on average more.
European Preferences Towards
Food Labeling
• However, choice experiments show that the
presence of a known brand is more important
than the level of nutritional information
provided when facing shopping decisions.
• Can marketers savvies offset more stringent
regulations with better promotion campaigns
and more interesting product design?
Health Claims: Are those good for
you??
• Recently regulated at EU level. Need
scientific consensus
• Are there perverse effects linked to
marketers strategy of highlighting
information related to only one food
attribute and ignoring all others (vitamin
levels?)
• Low fat, fat-free, etc.
Nutritional Labeling in
Restaurants
• Being currently debated in
the U.S. The U.S. Surgeon
General (2001) “increase
availability of nutrition
information for foods eaten
and prepared away from
home”.
• Great importance of food
away from home in Western
societies. Americans spend
about 46% of their food
dollars in FAFH (Variyam,
2006).
• Fast food: generally higher
calories and saturated fat.
Product
Calories
Price$
Double
Quarter
Pounder
760
2.99
Cheese
Burger
330
0.99
Big Mac
590
2.39
Crispy
Chicken
550
2.79
Burger King Hamburgers XXL
• Spain chastises Burger King for advertising
giant burger
• 971 kilocalories on average, which is "almost
50 percent of the energy requirement of an
active teenager".
• Advertising promotion: It's awful being a
vegetarian, right?"
• The XXL as a Whopper "with two enormous
portions of flame-broiled meat that will give
you all the energy you need to take the world
by storm."
Information Instruments:
Summary
• New guidelines may help consumers to select
healthier food choices
• US one of the countries is the world with more
stringent legislation regarding food labeling.
Number of labels when up considerably while
obesity became a serious problem.
• Labeling is not a panacea. Additional efforts
should be made to educate individuals about
proper ways of eating.