The impact of mandatory disclosure laws on product choices: An analysis ofthe salad dressing market

The Nutrition Labeling and Education Act (NLEA) requires most food products to include a nutrition label. Prior to the NLEA, labeling was voluntary. T his study uses nutrition label information and supermarket scanner data pre - and post-NLEA to examine the impact of moving from a voluntary to a manda tory labeling regime on consumer product choice. The voluntary unraveling o f information is shown to be an important market mechanism. Prior to the NL EA, all low-fat salad dressings had a nutrition label, while the majority o f the higher fat dressings did not. However, there remained large variation in fat content among dressings that did not voluntarily label. Those with the highest fat levels experienced a significant decline in sales after the y were required to disclose. The results indicate that even in markets with credible, low-cost mechanisms to disclose, mandatory labeling can have an impact on consumer behavior and health.