Remember, we can “overlabel”

Following the unfortunate death of a woman from drinking far too much Coke, there have been calls to label Coke.  I’m all for information, and that often makes me pro-labeling, but in this case I’m not … it is important to recognise that we are targeting providing information, and so we can “overlabel”.

A label gives information as an abstract concept, but it is costly to interpret and so the existence of a label is often taken as a signal, and used as a rule of thumb.  As a result, too much labeling of things could reduce the true information content – leading to people making more poorly informed decisions.

The solution?  There is a trade-off for the amount we label a given piece of food etc – and we need to accept that.  However, we can also make more detailed information and standards a necessary requirement to be on some sort of central website – so people who do want to take into account greater information can do so at a low cost.  I would also note that people that design easier to interpret labels which don’t sacrifice information are “shifting out the information curve” – this is a real productivity improvement, and these people are cool as a result.

The overall goal of the regulation is to “maximise information” so that people can take costs and benefits into account when they do something.  That should be the guiding principal – not saying people should have one thing or another.

Note:  Look, no need for me to go on about personal responsibility, or insult the woman about her life choice to get this result – which I’ve seen a bunch of.  We don’t know her life, preferences, or situation – so we shouldn’t suddenly decide that since it is a choice we wouldn’t make we should either ban the product or attack the choice.  I’ve noticed a lot of both, and its generally a bit disrespectful, which is also why I delayed this post until people stopped being rude.

4 replies
  1. Eric Crampton
    Eric Crampton says:

    Did you catch today’s NBR? They there point out that labeling would give soda 3 green lights (fat, saturated fat, sodium), 1 red light (sugar); milk would get 3 orange lights and a green. The cognitively constrained add up the lights and buy soda.

  2. Elinor_Dashwood
    Elinor_Dashwood says:

    Seems to me technology provides some part of an answer here. You could have an app which would be instructed to extract only the information you were interested in from the barcode.

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