Ezra Klein and Megan McArdle each have odd posts up today about calorie labeling laws. Megan’s post is weird because she says she’s in favor of menu labeling but then goes on to list numerous reasons she thinks it won’t accomplish anything. If it doesn’t work as a nudge why not simply require accessible disclosure rather than prominent display?
Ezra’s post is weird for its suggestion of how calorie labeling will work. He says it may not be because it causes customers to change their orders but because it will induce restaurants to lower the calories of items offered on their menus. Why would they do this unless they anticipate that the information would affect consumer behavior? The only plausible interpretation I can give to his post is that he thinks labeling won’t affect customer behavior at a single visit but might affect how often they return to a restaurant. Calling this an effective mechanism seems like a stretch.
Anyway, the evidence he cites — some menu changes at Macaroni Grill and Denny’s — is a little tenuous. Macaroni Grill was reformatting its menu under new leadership and Denny’s says it was responding to consumer demand for healthier items, not to the law. The changes might be independent of menu labeling legislation.
Even if we grant the assumption that California’s law prompted the changes, that brings up an interesting question: Can the rest of the country free ride on California? The changes Ezra mentions are taking effect nationwide, not just in that state. If California, New York City, and a few other major markets can exert pressure on major chains, the rest of the country may benefit* without having to gaze upon prominent calorie counts or burdening smaller, local chains with the costs of compliance.
Of course it’s also possible that chains could offer different menus depending on whether a jurisdiction requires labeling. If you think that’s a likely strategy then you should also be skeptical that the nationwide changes at Macaroni Grill and Denny’s are a response to the law rather than to other market forces.
*Of course this assumes that the changes really are beneficial. The article cited makes no mention of the taste of the revamped menu items, perhaps with good reason.