Pauline M. Ippolito

Information, Advertising, and Health Choices: A Study of the Cereal Market

This article examines the effects of information on consumer and producer behavior by focusing on the ready-to-eat cereal market during a period in which information developed about the health benefits of fiber cereal consumption. Although cereal producers were initially prohibited from advertising these health benefits, the regulatory ban against producer advertising was lifted during the period we study. Our results indicate that consumers changed their behavior once informed of the health benefits and that advertising was an important source of information once the ban was lifted. Producer health claims about fiber also led to significant product innovation and did not cause adverse effects in other health dimensions of cereal consumption. Government and general information sources had limited impact on fiber cereal choices in the years prior to the advertising. Analysis of individual food consumption data indicates that theories of information acquisition are important in explaining who responds most quickly to new information; household and individual characteristics that reflect costs of acquiring information, ability to process information, and valuation of health are all important determinants of fiber cereal choices. Moreover, the evidence suggests that advertising reduced the differences across consumers by lowering the costs of acquiring information for broad segments of the population. In contrast, the information processing advantages due to education were not reduced by advertising.

Measuring the value of life saving from consumer reactions to new information

Abstract Past studies have relied on cross-section patterns of risky behavior to generate estimates of the value of life saving. This approach is colored by several problems that affect the reliability of the results in potentially serious ways. It is difficult to separate the risk components from the (dis)utility attributes of work or consumption; to avoid selectivity biases; and to disentangle user costs (e.g. wearing a face mask) from the risk premium paid for accepting risk. To circumvent some of these difficulties, this paper uses a different approach, one which exploits the information about the value of risk reduction that is provided by changing consumption patterns over time brought about by changes in available information about risks. This approach makes it possible to more reliably estimate the pure effects of risks on behavior and to generate unbiased distributions of the value of life saving. The case of cigarette consumption over time provides an ideal setting to illustrate this methodology.

The regulation of science-based claims in advertising

This paper analyzes the effects of scientific information dissemination on consumer and producer behavior. The first section draws heavily from evidence on the ready-to-eat cereal market during a period in which information developed about the health benefits of fiber cereal consumption. Although producers were initially prohibited from advertising these benefits, the regulatory ban against advertising was lifted during the period we study. Our results indicate that advertising was an important source of information leading to increased fiber cereal consumption and product innovation. The second part of our paper discusses the potential for deception if science-based claims are allowed. In the final section we consider a number of regulatory proposals that have been raised in the context of health claims for food products. We evaluate these proposals against the three goals of encouraging the dissemination of truthful information and discouraging the dissemination of deceptive or misleading information and their ability to keep pace with the changing science.ZusammenfassungDer Beitrag untersucht die Auswirkungen der Verbreitung wissenschaftlicher Informationen auf das Verhalten von Konsumenten und Produzenten. Der erste Teil bezieht sich vor allem auf Befunde über den Markt für verzehrfertige Frühstückskost aus einer Zeit, in der Erkenntnisse über die gesundheitlichen Vorteile von ballaststoffhaltiger Frühstückskost gewonnen wurden. Die Hersteller durften anfänglich nicht mit diesen Vorteilen werben, aber dieses Werbeverbot wurde während des Untersuchungszeitraums aufgehoben. Die Untersuchung zieht Daten über aggregierte Marktanteile heran, Daten über den individuellen Verbrauch, Umfrageergebnisse hinsichtlich des Produktwissens, sowie Daten über die Einführung neuer Produkte und gelangt insgesamt zu dem Ergebnis, daß die Werbung zu einer wichtigen Informationsquelle wurde, die zu wachsender Nachfrage nach ballaststoffreicher Frühstückskost und zur Entwicklung neuer Produkte in diesem Bereich führte. Ebenso zeigte sich, daß nicht-werbliche, allgemeine Informationen in der vorhergehenden Zeit solche Auswirkungen in erheblich geringerem Maße hatten. Darüberhinaus ergab sich, daß die Werbung durch ihre größere Reichweite in der Lage war, Unterschiede zwischen verschiedenen Konsumentengruppen im Verbrauch von ballaststoffhaltiger Frühstückskost abzubauen.Der zweite Teil des Beitrage beschäftigt sich mit dem Irreführungspotential der Werbung mit wissenschaftlichen Aussagen und stellt dabei die Unvollständigkeit von Werbeaussagen und Probleme der Unsicherheit und Verständlichkeit in den Vordergrund. Der letzte Teil behandelt eine Reihe von Regulierungsvorschlägen, die im Zusammenhang mit der Verwendung gesundheitsförderlicher Wirkungen von Lebensmitteln gemacht wurden. Er bewertet diese Vorschläge unter dem zweifachen Ziel, daß die Verbreitung richtiger Informationen gefördert und die Verbreitung täuschender und irreführender Information reduziert werden sollte.

How government policies shape the food and nutrition information environment1

Abstract This paper discussed how government policy shapes the information environment in which consumers make food choices. Governments most important information role may be in supporting the production of basic scientific knowledge about the relationships between diet and health. Government also plays a role in education and in shaping the types of information available to consumers. Among the issues highlighted by the author are the importance of incentives in determining the types of products offered for sale, the key role of scientific uncertainty and the dynamic nature of the diet–health knowledge in shaping regulatory choices, and finally, the importance of recognizing consumer heterogeneity in assessing the success of regulatory rules and other government initiatives.

The Value of Life Saving: Lessons from the Cigarette Market

This paper reports the results of a study of the cigarette market designed to measure what consumers are willing to pay for increased life expectancy. The spread of information on the health effects of smoking has dramatically transformed the cigarette market in the last 30 years. Using survey evidence on consumer beliefs together with reductions in cigarette demand gives a direct estimate of consumers’ valuation of safety. The average “value of life” is estimated to be

Information and Advertising: The Case of Fat Consumption in the United States

460,000 (1985

INFORMATION AND THE LIFE CYCLE CONSUMPTION OF HAZARDOUS GOODS

), but consumers are found to differ considerably in their valuations. Moreover, there appears to be a skewness to the value of life distribution; the median value of life is approximately

Product Quality and Information in the Used Car Market

380,000, compared to the mean of

Food Companies Spread Nutrition Information Through Advertising and Labels

460,000.