Toward a More Comprehensive Theory of Food Labels

Food labels play important third-party roles in the food marketing system through their impact on product design, advertising, consumer confidence in food quality, and consumer education on diet and health. However, current analysis focuses overwhelmingly on the label's direct use as a point-of-purchase shopping aid, even though such use is limited by consumers' information processing abilities and time. In rewriting label regulations, policy makers should consider the benefits and costs of the broad array of roles labels serve, with evaluation of alternative regimes based on their impacts on consumer behavior and seller strategy.