Last summer, New York City made a great stride toward promoting public health, by requiring chain restaurants to prominently publish calorie counts alongside their menus. This type of regulation holds the promise of improving people’s eating habits, without restricting their freedom to order whatever they want.
Theoretically, this new regulation should help consumers make better choices: they should eat fewer big Macs and more Asian chicken salads. Indeed, proponents of free markets, who normally oppose government regulation, should celebrate New York City’s new policy, because, by requiring restaurants to inform consumers about their purchases, the city has moved the restaurant business closer to Adam Smith’s ideal of a free market-one where savvy and educated consumers choose among available goods based on their cost and benefits.
As a physician who conducts research in behavioral economics, however, I am concerned that this policy won’t accomplish its goals, because it should be simple for restaurants to make their offerings attractive to even the most calorie conscious consumer.
How will they do this? By creating new items on the menu that make everything else look healthy by comparison.
When people evaluate consumer goods, they usually need some context in which to judge relevant attributes of competing products. What counts as an expensive DVD player? Best way for me to tell is by looking at other DVD players. And what counts as a low-calorie meal? Easiest way to tell is to see how many calories are in other meals.
If I was a restaurant owner and wanted to keep selling a popular high calorie sandwich to New Yorkers, I would place two new items on my menu, each with 50% more calories than the old sandwich. Maybe add on a couple slices of bacon, or a fried egg . . . anything Homer Simpson would like on his sandwich.
I expect that very few customers would thrill at the idea of these new “heart attacks on a bun.” Most will recoil. But that’s ok, because my goal would not be to attract customers to these new sandwiches. Instead I would use these new sandwiches to make my old ones look better. You see, my customer’s eyes will soon wander toward other items on the menu, and what used to be the highest calorie sandwiches will now look like veritable health-food snacks!
I have no idea whether any restaurants will employ this psychological technique. I do know that companies often make high-priced products, deluxe car models for example, in large part to sell their midrange products.
More importantly, my example highlights the kind of unconscious behaviors that could reduce the impact of New York City’s new regulations.
I hope that I am wrong, and that restaurant goers begin eating more healthfully in response to the calorie information now available to them. But if they don’t, I expect New York City will need to go further, to persuade people to eat better food.
Helping consumers make good choices often means we need to do more than simply inform them.
To read my other blogs, and to learn about my book Free Market Madness: Why Human Nature is at Odds with Economics-and Why it Matters , check out my website at: https://www.peterubel.com/.
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