Welfare effects of nudges: The emotional tax of calorie menu labeling

Traditionally, information has been assumed to never harm consumers, a notion recently challenged. Salience nudges have been argued to evoke negative emotions, therefore acting as “emotional taxes”. I design a hypothetical restaurant meal experiment to analyze the emotional and short-term consumer w...

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Bibliographic Details
Published in:Judgment and decision making Vol. 14; no. 1; pp. 11 - 25
Main Author: Thunstrom, Linda
Format: Journal Article
Language:English
Published: Tallahassee Society for Judgment and Decision Making 01.01.2019
Cambridge University Press
Subjects:
Analysis
calorie information
Calories
Consumer behavior
Consumers
economic experimentNAKeywords
emotional tax
Federal intervention
Influence
Labeling
Laws, regulations and rules
menu labeling
Menus
Negative thinking (Psychology)
nudge
Self control
Taxes
Welfare economics
welfare effects
United States
ISSN:1930-2975, 1930-2975
Online Access:Get full text
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Summary:Traditionally, information has been assumed to never harm consumers, a notion recently challenged. Salience nudges have been argued to evoke negative emotions, therefore acting as “emotional taxes”. I design a hypothetical restaurant meal experiment to analyze the emotional and short-term consumer welfare impact of a calorie salience nudge (calorie menu labeling) – a policy implemented nationwide in the U.S. in 2018. I find that a calorie salience nudge may act as an emotional tax, but only for some – there is considerable heterogeneity in the emotional response to the nudge. In particular, the nudge emotionally taxes people with low eating self-control, while it emotionally subsidizes those with higher levels of eating self-control. It therefore emotionally taxes the “right” people. However, people with lower levels of self-control may experience fewer benefits from the nudge – the nudge causes them to adjust their high calorie meal consumption by less than do those with higher self-control. It is therefore unsurprising that consumers with lower self-control attach a lower (a negative) value to the calorie salience nudge. Overall, the calorie salience nudge positively affects consumer welfare, although heterogeneity over consumers is substantial – the consumer value ranges from positive to negative. I find no distributional effects over income from the calorie salience nudge.
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content type line 14
ISSN:1930-2975
1930-2975
DOI:10.1017/S1930297500002874