2 The Role of Economic Incentives to Reduce Obesity

Maria L. Loureiro 1

Sammendrag

Å finne preventive tiltak for å minske den verdensomspennende trenden av overvekt av fedme er et prioritert område. Ulike økonomiske virkemidler for å påvirke folks næringsinntak inkluderer målrettede, direkte reguleringer (restriksjoner på salg og reklame), indirekte reguleringer som skatter på usunn mat, subsidier for å øke salget av sunn mat, og ulike typer informasjonsvirkemidler (merking av næringsinnhold og informasjonskampanjer). Dette notatet presenterer noen erfaringer ved ulike typer virkemidler. Fordeler og ulemper ved de ulike tiltakene er diskutert. Resultater og konklusjoner fra dette notatet vil sette planleggere i bedre stand til å gjøre hensiktsmessige valg av strategier for å bekjempe problemer relatert til fedme.

Summary

The design of preventive efforts to reduce the increasing worldwide overweight and obesity trends is a priority. Several economic tools employed to correct individual dietary behavior include the exercise of targeted regulations (selling and advertising restrictions), taxes on unhealthy foods, subsidies to promote healthier foods, as well as informational instruments (including nutritional labeling and information campaigns, mainly). In the current paper, evidence based on previous experiences regarding the potential effects caused by the different interventions is presented. Pros and cons derived from the use of each of discussed instruments are also included. The findings and conclusions from this Annex should help policymakers to make more informed choices with respect to the available strategies when combating overweight related problems.

Introduction: The growing obesity epidemic

Obesity has become now a global concern (See Figure 2.1). New World Health Organization (WHO) figures indicate that obesity is spreading around the world as a «global epidemic.» Globally, there are more than 1 billion adults who are overweight and at least 300 million of them are clinically obese, while 800 million suffer from malnutrition. In Europe, obesity is spreading quite significantly in cohorts over 50 years (See Figure 2.2)

The economic costs due to obesity can be burdensome. According to a recent WHO news release (Nov. 2006), the cost of obesity to society is enormous: approaching 1% of the gross domestic product (GDP) in some countries in the WHO European Region. Further, obesity in adults accounts for up to 6% of direct health costs in the Region. Additionally, indirect costs - due to premature loss of life, productivity and related income- are at least twice the direct costs. In Spain, for example, the total cost attributable to obesity is estimated to be €2.5 billion per year. In a recent study, Fry and Finley (2005) quantify the total costs of obesity in 2002 for EU-15 to amount to a total of €32,800*10⁶, which is equivalent to represent near the 0.028% of the GDP in the EU-15 region.

Estimates of the cost of obesity per capita of the population differ from country to country, but a pattern is emerging. In the U.S. where 22% of the population are obese (OECD, 2004), and health care for overweight and obese individuals costs an average of 37 percent more than for people of normal weight, adding an average of $732 to the annual medical bills of each American (Connolly, 2003). On average, medical costs connected to obesity and smoking each account for about 9 percent of all health expenditures in the U.S.

According to the WHO (Nov. 2006), in Sweden, for example, the direct cost of obesity is estimated to be US$ 45 per capita per year, with much higher indirect costs: US$ 157. Calculations of direct costs in other countries show similar annual per capita figures: up to US$ 35 in Germany and US$ 32 in the Netherlands. A Belgian study has reported direct costs of US$ 69 per capita: close to 6% of health care costs. In addition, these costs are rising dramatically. The direct annual cost of obesity per capita in the United Kingdom rose from an estimated US$ 13 in 1998 to US$ 25-31 in 2002. 2

Obesity in Norway is also important due to the related effects. As an example, in addition to the direct costs, it is necessary to acknowledge that obesity is highly related to other risk factors such as diabetes and cholesterol. In this regard, Midthjell et al.(1999) show that there is a strong correlation between high BMI rates and diabetes in Norway. In addition, Nystad et al. (2004) found that obese and overweight individuals reported asthma more often than thinner people did. Consequently, the costs imposed by obesity may be much higher than the ones reported.

Obesity, however, is important not only from an economic perspective, but also from a social perspective, with additional intangible costs- such as underachievement in school and discrimination at work, psychosocial problems or poorer quality of life. The social consequences of obesity are serious, and multiple studies have shown that obesity affects, in a negative and statistically significant way, personal and working relations, earnings, and wages, particularly for females in the USA (Cawley, 2004) and in the Europe (Villar and Quintana, 2005).

Although historically overweight and obesity related illnesses have not been a problem in Scandinavia, the new statistics released by the WHO in September 2003 reveal that Norwegian men are the most overweight males in Europe (WHO, 2003). This fact was much debated on the popular press in the past years (Afterposten, 2003). However, general population statistics (See Figure 2.1) indicate that on average, Norway has one of the lowest obesity rates in Europe.

The body mass index (BMI) is a common and accepted measure to report obesity rates (see WHO, 1997). BMI is measured as weight in kilograms divided by height in meters squared. Recommended BMI levels are generally between a numerical value of 20 and 25. An individual with a BMI between 25 and 30 is considered overweight, and with a BMI above 30 obese. On the other hand, individuals with BMIs below 20 are considered thin. According to the OECD, in 1995, only 5% of the total population in Norway had a BMI greater than 30, while in 2005 this percentage rose to 8.3% (8.2% females and 8.4% males). A similar trend is also observed in the other Scandinavian countries (OECD, 2005). However, we should notice that in reality these OECD reported values may be a bit higher, although in Norway the data are based on clinical data and consequently more accurate than self-reported data. However, in some parts of the country it is documented that the mean BMI rates are much higher than those reported by the OECD. Midthjell et al. (1999) report that during 1986 and 1997 the mean BMI rate in Nord-Trøndelag increased from 25.1 to 26.4, an increment which is much higher than the one registered in the neighboring country of Sweden during the same period. Very recently, Meyer and Tverdal (2005) study the evolution of obesity rates in the last 40 years in Norway. They conclude that the obesity for male has increased from 5% to 15% between the late 1960s until the late 1990s, showing a similar concern as the latest OECD statistics. In the case of women, the prevalence of obesity decreased from around 13 % in the late 1960s to 7 % in the late 1980s, and going back to 13 % again in the late 1990s. In general, they also find that obesity is associated with low education and a sedentary lifestyle, although recently the increase in BMI has also occurred in the more educated and physical active population segments. Kumar et al. (2006) investigate the differences in obesity among immigrants by gender from developing countries in Oslo. Using the Oslo Immigrant health Study, they find that there are clear differences between immigrants with respect to generalized obesity (measured by the BMI index earlier discussed) and central obesity (measured by the waist hip ratio). In particular, they find high proportions of obese subjects from Pakistan and Turkey, but low proportion among those from Vietnam.

Although obesity is progressive over time, implying that the older the segment of population, the more likely to become obese (See Figure 1.2), in recent years it has also spread to the youngest segments of population. Particularly, obesity among children is becoming a serious concern. Phipps, Burton, Osberg and Lethbridge (2006) assess the role of poverty in child obesity in Canada, Norway and United States. In this context, their results show some worrisome perspectives for Norwegian children. Specifically, they find that for children who are obese in Norway, the «severity» 3 of obesity is similar to that evident in the United States and Canada.

The obesity epidemic has caught many governments and policy agencies by surprise. For example, in Europe, the E.U. Parliament has not yet passed and approved a Directory on mandatory nutritional labeling for food. Therefore, for policy-making purposes, it is useful and necessary to understand the factors contributing to obesity growth and the differences, which exist across countries. In Norway, there is an ongoing debate about the role that different policy instruments might play in order to provide Norwegian consumers with the right incentives to purchase and consume healthier foods, such as fruits and vegetables, while reducing the consumption of high saturated fatty foods and sugars. Among the different economic incentives, a higher rate of taxation for unhealthy foods seems to be a clear candidate. However, these possible taxes may not be effective on changing consumer behavior, if habit formation is persistent. This point and others will be later discussed in this report. Therefore, it is interesting to assess and compare the role of price instruments (such as taxes and subsidies) aiming to increase the consumption of healthier foods (fruits and vegetables, or low-sugar sodas), or physical activity, and other informational tools. Before looking into the different policy instruments to control obesity, we should know what contributing factors may be identified in the obesity debate, so that such factors may be properly targeted.

Causes of Obesity

Several recent economic studies explain the role played by cultural and socio-demographic factors on obesity rates. As it is well known, obesity is caused by the difference in calories consumed and used per individual. Consequently, most published research justifies the growth of obesity rates analyzing any of the factors that may contribute to the imbalance between consumed and used calories. A popular argument used to justify the spread of obesity is the increment of fast food consumption and soda drinks in the daily diets of western countries. This new habit has increased the dietary intake of saturated fats, sugar, and calories (Schlosser, 2002). Others argue that female labor participation has been a leading factor in increasing obesity rates, since home made cooked dinners have been widely substituted by TV. Dinners or restaurant dinners—which frequently take place in fast-food restaurants. Young and Nestle (2002) suggest that large portions in restaurants are also main contributing factors to higher obesity rates, particularly in the U.S. However, the previous arguments, as well as the fast food argument, are invalidated by Cutler, Glaeser, and Shapiro (2003), who argue that the main contribution to the dietary calorie intake in the U.S. was due to calories consumed outside the main meals, thus, in snacks. Thus, they show that Americans nowadays eat more frequently than they used to, and that on the other hand, mean calorie consumption at dinnertime has been somewhat reduced. A recent explanation that justifies the growth of obesity is linked with the value of time in industrialized societies.

Chou, Grossman and Saffer (2004) look at the role played by different factors hinting to the value of time reflected by dinning out instead of cooking at home. Their results highlight that years of formal schooling and real household income have negative effects on BMI, and on the probability of being obese. Other recent contributions done by economists in the field of obesity are those by Philipson and Posner (1999), Philipson (2001), Popkin (1999), Lakdawalla and Philipson (2002). They all conclude that increases in BMI over time are due to cultural change (mainly urbanization processes) and reductions in the strenuousness of work. Philipson and Posner (1999) present a theoretical model to argue that technological change provides the natural interpretation of these long-run obesity effects, but that it also implies that obesity growth is self-limiting. Loureiro and Nayga (2005) show that both, supply and demand related factors matter when analyzing obesity rates in the context of OECD countries.

Many obesity studies are also emerging in the Norwegian context. Kvaavik et al. (2004) examine the association between smoking habits, dietary habits, physical activity and body mass index in Norway from 1997-1999. They conclude that generally non-smokers have a healthier lifestyle. Wenche, Holmen and Midthjell (2004) study the relationship between self-reported leisure time physical activities during a period of eleven years in a sample of Norwegian women. Their results show that although physical activity has a moderating effect on BMI, this is limited, given that even not high levels of physical activity were sufficient to prevent weight gains in all subgroups of study. Andersen et al. (2005) study overweight and obesity among children, showing that the proportion of overweight and obese children has increased greatly during the last decade. Kumar et al. (2005) compare ethnic and gender differences in generalized (BMI>30) and central obesity (defined as waist hip ratio >=0.85) among immigrants in Oslo, finding large differences in both obesity measures between immigrant groups from developing countries. In a recent study, Kvaavik et al. (2005) study the role of psychosocial predictors of eating habits among adults in their mid-30s. They found that for women, subjective norms, perceived behavioral control and perceived social norms measured in 1991 were associated with two or three eating patterns in 1999. These references, among others, will be employed to contextualize the obesity trend in Norway. Thus, these interdisciplinary studies offer opportunities to understand the role that information and price incentives may play controlling obesity.

Prevention Policies

The design of preventive efforts to reduce the increasing worldwide overweight and obesity trends is becoming a priority. Norway was one of the first industrialized countries (in 1975-76) to respond to the statement that all countries should formulate a proper nutritional policy (Roos, Lean and Anderson, 2002). The first White Paper was closely linked with policies of agricultural self-sufficiency and regional development, while the 1982 White Paper (Norwegian Ministry of Health and Social Affairs Report 11, 1982) shifted its focus more towards nutrition and health. In 1993, the nutrition and food policy were integrated into the health policy (Norwegian Ministry of Health and Social Affairs Report 37, 1993), while the role of nutrition and health promotion was emphasized. In general terms, nutrition tended to be regarded more of a problem related to food choices than to food supply. In order to improve the quality of such food choices, several national nutritional campaigns have been organized since the 1980s. These campaigns try to inform consumers but also bring together producers, marketers and consumers in order to generate a constructive debate surrounding food supply and nutritional policies. In 1995, the National Nutrition Council initiated a Nutrition Forum for collaboration between the Council, the food industry, the retail sector and other NGOs and consumer associations. This forum keeps meeting 1-2 times a year to discuss current issues about nutritional concerns and related policies.

As Variyam (2006) recognizes, several economic tools employed to correct individual dietary behavior include the exercise of targeted regulations (selling and advertising restrictions), taxes on unhealthy foods, subsidies to promote healthier foods and exercising habits, as well as informational instruments (including nutritional labeling). In this Appendix, evidence based on previous experiences regarding the potential effects caused by each of the cited interventions is presented. We explicitly consider two types of instruments commonly used: the price-based instruments, and information-based instruments. Their effects on the demand of a particular good are presented on a graphical way on Figure 2.3 (Quantity demanded changes due to price changes) and Figure 2.4(Demand schedule changes due to information flows). Pros and cons derived from the use of each of different instruments are also included. The findings of this paper should help policymakers to make more informed decisions with respect to the available strategies when combating overweight related problems in Norway.

A) Price Instruments: Taxes

Traditional economic theory indicates that higher prices will lead to lower quantity demanded (See Figure 2.3). From an economic point of view, the law of demand is behind current suggestions to augment price of fats and sweets, so that consumers may reallocate their resources towards consumption of healthier foods. However, taxes have not always been successful in terms of altering the quantity demanded of certain goods, given that their relative success will depend on the demand elasticity for each particular good.

Previous experiences have shown different degrees of success of taxes in terms of changing consumption patterns. For example, in the U.S., 19 states employ food taxes to soft drinks, candy, chewing gum, or snack foods (potato chips, pretzels and others). Taxes may be levied at the wholesale or retail level and may be levied in terms of a fixed tax per volume of product or as a percentage of sales price (Jacobson and Brownell, 2000). Likewise, in Canada, 7 provinces apply a sales tax to soft drinks, candy, and snack foods but not to other foods. Even when these taxes are fairly small they are able to raise substantial revenues. For example, in the U.S. the special taxes on soft drinks, candy and snacks generate about $1 billion per year. However, no jurisdiction uses such revenues to subsidize healthful foods.

Overall, it is not clear whether sales taxes and other small taxes have had a significant effect changing sales and food consumption of unhealthy products. In general terms, their success to change food demand depends on the magnitude of demand responsiveness to price changes, or the magnitude of the price elasticity of demand. A price elasticity greater than 1 in absolute terms implies that a 1% increment on price decreases the demanded quantity more than proportionally. In a literature review using international studies, it was found that in some countries such as in the U.S. taxes were not effective means of changing consumption patterns of dairy products (Chouninard et at ,2006), or of potato chips and snacks (Kucher, Tanage and Harris, 2004). Similar results were also shown by Marshall (2000) in the UK. In Norway, Gustavsen and Rickertsen (2006,b) investigate the effect of a tax increment form the current 13% VAT level up to 25% on consumption of sugar-sweetened carbonated soft drinks. According to their results, this will reduce the purchases of sweetened carbonated soft drinks about 30% in the lowest frequency consumption group, and about 10% in the highest quantile. However, the effects of this extra tax in the highest quantiles (with are at risk of health effects) are not significantly different from zero. An interesting contribution to the literature of tax on unhealthy foods is the work by Kennedy and Toner (2006). They conclude that in order to control obesity, a policy in which a private insurance system coupled with tax deductible, and a tax on the fat content of food may define a regime with the highest net benefit for society.

Evidence from developing countries shows that income policies may be more effective in reducing consumption of unhealthy food than price policies, given that income elasticities towards such foods are even higher than their corresponding price elasticities (Abdulia and Aubert, 2004). Guo et al. (1998) study the effects of food price changes in food demand in China during the «nutrition transition» at the beginning of the 90s, showing large and significant effects derived from price increments. Their results show that price increments reduce the consumption of fats among the rich, but adversely affects protein intake among the poor.

In the case of price policies related to subsidies or reduction of prices of certain goods to increase health conditions, Gustavsen and Rickertsen (2006,a) study the effects of price reductions in vegetable consumption in Norway. They conclude that a removal of the value added tax (VAT) is likely to increase the consumption of vegetables in the high-consuming households, but not in the very low consuming households, where the health benefits may be greatest.

In general, the use of taxes may create a strong opposition from the food and soft drinks industry. For example, in the U.S., the soft drink and snack industry oppose the introduction of these taxes and have campaigned against special taxes on their products. For example, in response to a Coca-Cola offer to build a bottling facility in Louisiana, legislators passed a law in 1993 that halved the soft drink tax beginning in 1995, and repealed the tax entirely contingent upon a bottler contracting to build a bottling facility worth $50 million or more. Frito-Lay also used «blunt threats» not to build a manufacturing and distribution center in Harford Count to persuade the state to repeal its snack tax, which had generated $15 million in revenues annually. In order to reduce the current budget deficits, many US cities are considering the introduction of «fast food taxes» as in Detroit (BBC News, 2006). The 2% tax which would be levied on top of the state’s existing 6% restaurant tax will add to 10 cents to the price of $2.50 burger. Meanwhile, as the debate on local fast food taxes continues, a member of the New York state Congress has argued that a 1% tax on junk-food and TV commercials to finance an anti-obesity drive. An additional problem with the use of taxes is to properly regulate its implementation. For example, soft drinks containing about 40% juice, should they be taxed? To avoid such definition problem, Kennedy and Toner (2006) suggest that taxes on dietary fat would be best applied upstream in the food production process, so that fats and oils would be taxed as ingredients.

Food taxes are now being debated in Norway as a means of reducing the consumption of unhealthy foods. Under new recommendations put before the country’s Parliament, a trade tax known as «moms» could be as much as doubled on confectionary products to further subsidize cheaper fruits and vegetables. Previous international experiences may help with the design of such taxes.

B) Information Instruments: Nutritional Labeling

Multiple studies consider labeling as an important information tool that may be used to guide consumers in their food choices. Information may change the consumer demand schedule, increasing it or decreasing it over its original level (See Figure 2.4). Many institutions agree on indicating the importance of food labels in nutrition (see Report on Obesity requested by the Lord of the Commons, U.K, 2004). However, there is a lack of literature about the role that food labels may play in order to reduce obesity rates. Weaver and Finke (2003) showed that in the case of sugar consumption in the U.S., there is a significant relationship between frequent use of sugar information on the label and reduced sugar added density, suggesting that labeling is effective as a means of assistant consumers to moderate sugar consumption. From a policy-making perspective it is necessary to assess the benefits to the society and costs associated with public policies.

Within the EU, and under the current European Regulation on nutritional labelling (90/496/ECC), nutritional labelling is optional unless a claim is made, in which case it becomes compulsory. Nowadays, the European Commission is considering whether to make nutrition labelling mandatory. In early 2003, the Commission launched a consultation among Member States and stakeholders related to the revision of the current regulation and the preparation of a proposal amending the current Directive. Broadly speaking, results from this consultation indicate that some country Member States are in favour of the mandatory implementation (i.e., Denmark, UK) while others support the continuation of the voluntary system (i.e., Ireland). Consumer organizations and different professional associations (e.g., Associations of dieticians, International Obesity Taskforce, European Heart network) are in favour of mandatory nutritional labelling with exemptions. Finally, the agri-food and retail sectors recognize the importance of providing nutritional information to consumers. However, they pointed out that whether or not nutritional labelling should be made compulsory needs to be assessed in the context of the broader discussion of nutrition policy. They also wanted to know if there is a link between nutritional labelling, better information, and better health. In July 2003, the European Commission proposed a draft regulation on the use of nutrition and health claims for food products marketed in the European Union (COM(2003) 424 final). While adoption did not occur yet, the momentum to legislate remains. When adopted, the proposal will establish a new harmonized regulatory framework for the use of food labels in the EU. In comparison with the current legislation, the debated proposal reflects a tendency to control in more detail the food products in EU markets, understand the potential effects of any future mandatory nutritional labelling implementation.

In a recent study by Gracia, Loureiro and Nyaga, (2007), Spanish consumers were interviewed to assess their preferences towards the new suggested EU labelling policy. Results indicated some positive reactions, so that those consumers who were more knowledgeable about nutritional labelling were more likely to use nutritional labels, and prefer an EU mandatory nutritional labelling program.

In contrast to the EU, nutritional labelling is mandatory in the United States. In 1994, the Nutritional Labelling and Education Act (NLEA) required the inclusion of nutrition information on almost all packaged foods (See Figure 2.5). In the United States, it was estimated that the benefits associated with this policy outweighed the costs (See Golan et al., 2001). In this sense, the Nutritional Labeling Education Act (NLEA) imposed significant changes in the information about calories and nutrients that manufactures of packaged foods must provide to consumers (Variyam, 2006). Prior to enacting the NLEA, labeling was voluntary and labels were required for food products containing added nutrients or that made nutritional claims. The new labeling regulations were expected to help consumers choose more healthful diets thought improved access to credible nutrition information.

However, the rising obesity in the U.S. has focused attention on the effectiveness of the NLEA labeling rules in improving health outcomes, al­though this rising trend should not be understood directly as a lack of effectiveness. Several studies assess the effectiveness of the NLEA. Kim, Nayga and Capps (2000) studied the impact of labeling on intake of fats, cholesterol, sodium, and fiber finding that labeling induces lower intakes. Moorman (1996) studied the effect of the NLEA on consumer comprehension and processing of label information using a longitudinal quasi-experimental design. He concludes that more information was acquired about nutritionally unhealthy products compared with healthy products, suggesting that labels may have a public health benefit. Mathios (2000) analyzes the salad dressing market prior and after NLEA implementation. He finds that after the NLEA, salad dressings with the highest fat content experience a significant decline in sales, given that they were required to disclose their nutritional qualities.

In spite of these encouraging results in terms of guiding consumer behavior, recent studies have shown the limitations of the NLEA to reduce obesity levels. In a recent paper, Variyam (2006) indicates that the implementation of the NLEA was associated with a decrease in body weight and the probability of obesity among non-Hispanic white women.

Given that the EU mandatory nutritional labelling policy is currently under consideration and that no consensus among Member States and stakeholders have been found yet, it is important to assess the voluntary nutritional labelling experiences in other EU countries. These voluntary labelling experiences are based on «food profiling» characteristics, sending the message to the consumer that a particular labelled product may be healthier than the unlabeled substitute. The most popular labelling programs in Europe are summarized in the following section.

The Swedish Keyhole

The keyhole symbol was introduced in the catering sector in 1983 in Sweden (See Figure 2.6), as part of a regional health promotion project in Northern Sweden to reduce coronary heart diseases. Originally, it was labelling dishes with less than 30% of the energy from fat. In 1989 the Swedish National Food Administration implemented the symbol into the Swedish Code of Statutes. The symbol is used on a voluntary basis, and the criteria for labelling are set by the Food Administration. The criteria for keyhole labelling were revised in 2004, and now it includes the total amount of fat, type of fat (saturated fat plus trans-fatty acids), added refined sugars or total sugars, salt as sodium chloride, and fibre. For ready-made dishes a required amount of energy (minimum and maximum) and a minimum for vegetables (80g) has been established. Products excluded from the label are ice cream, skim milk powder, whey-cheese and biscuits. Functional foods are not covered by the scheme either. The keyhole labelling is a relative scheme, not an absolute, comparing levels of nutrients within a given product group.

Attempts have been made to evaluate the impact of the keyhole symbol on health in population in the health promotion project for which the symbol was designed. In 1996 a study was carried out among women in South-west Sweden to determine whether knowledge of the keyhole symbol was associated with intake of dietary fat and fibre. Sixty-two percent of the women adequately understood the meaning of the symbol. However, mean BMI was significantly higher among the women with more knowledge of the symbol, but there were no major differences in total fat intake or total fibre intake between groups. The conclusions were that the participants understood the campaign, but this did not change necessarily their food habits. A similar study a few years later showed that 53 percent of men and 76 percent of women understood the meaning of the symbol, and that men and women with knowledge of the symbol seemed to have adopted its low-fat message (97). However, in certain sub-groups, particularly the less educated, the message of the symbol appeared to have no association with dietary practices.

According to a study performed by Statistics Sweden in 2003 (before the criteria had been revised) there was high awareness (69 %) among the Swedish population that the keyhole stands for low-fat products. There was less awareness (24 %) of the high-fibre message, while unfortunately, 36% misunderstood the symbol and thought it should for a «calorie-free» product.

Norwegian food shoppers are also becoming familiar with the keyhole label used in Norway by the ICA retailing group. In a recent national survey, Roos (2007) found that 40% of the interviewed Norwegian population had heard about the green keyhole label. However, when told that in some countries some labels were introduce to denote healthy food, and asked whether they knew of a similar symbol in Norwegian shops, only 25% said they knew about some label or symbol denoting healthier foods. One plausible explanation for this difference, may be that 27% of the interviewed sample although they had heard bout the keyhole they did not know what its meaning was.

The Finnish Heart symbol

The «Better Choice» label was launched by Finnish Heart Association and Diabetes Association in January 2000 (Kinnunen, 2000) (See Figure 2.7). Companies may buy the right to use the label on food items, which have lower salt content and an improved fat composition compared with the average products on the market. The exact criteria have been set for each food type.

The label signals a better choice in a certain product group regarding fat (total fat and quality of fat), sodium, cholesterol (in some product groups), and fibre (in one product group). Product groups include milk and dairy products, fats and oils, processed meats, bread and cereals, convenience food, semi-processed food, meal components, spices and seasoning sauces. In October 2005 altogether 247 products from 29 companies were entitled to use the symbol. The symbol has been heavily promoted through TV, radio, Internet, shopping carts, periodicals, fairs and journals.

Regular market research studies are performed on the use of the symbol. Data from November 2004 (Puska, 2004) show that 71% of men and 83% of women recognize the Heart Symbol. Over 34% of men (42% women) utilize the Heart Symbol as a guide of healthier choices in purchase situations. The Heart Symbol has not yet been evaluated with regard to its effects on diet composition or energy intake. Although according to some preliminary analysis, different measures have resulted in a progressive decrease in the average intake of salt in the Finnish population. Parallel to this reduction in salt intake, there has been a reduction in average population blood pressure. For example there has been more than a 10 mm Hg reduction in diastolic blood pressure. This reduction in blood pressure largely explains the decrease of strokes and heart attacks. There has been an 80% reduction in the death rates both from stroke and heart disease in the middle-aged population, which can help account for the reduction in overall mortality in Finland which has decreased so much that the life expectancy has increased by several years among both women and men.

The Traffic Light Labelling System in the UK

Some of the UK’s major food manufacturers are launching a £4m food labelling campaign using a guideline daily amounts (GDA) system, where the labels show percentages of sugar, salt, fat and calories in each serving. Other companies use the Food Standard Agency-approved traffic-light labels, where green is good and red warns shoppers not to consume too much (See Figure 2.8).

Sainsbury, Asda and Waitrose, the Co-Op and Marks and Spencer have all opted for a traffic-light label. This is the system the Food Standards Agency would like the whole industry to adopt. Its supporters say the GDA system is flawed because many adults do not understand percentages. According to the British newspaper Telegraph (2007), the FSA says its research shows traffic-light labels are easier to understand. «Some consumers do like the extra information that GDAs provide,» it said in a statement. «However, without a traffic light colour code our research showed that shoppers can’t always interpret the information quickly and often find percentages difficult to understand and use.»Diabetes UK has described it as the «quickest and easiest» way for consumers to know what their food contained.

In summary, although there have been some success stories with respect to nutritional labelling, there is no clear known measurable effects of nutritional labelling on dietary behaviours, and the impact on obesity and public health. Symbols such as the Green Keyhole and the Heart Symbol are recognised respectively in Sweden and Finland by a majority of consumers, who seem to understand what the symbols stand for and the campaigns associated with them. However, the message of the symbol appears to have no association with dietary practices in certain sub-groups, particularly the less educated and less in men than in women.

In addition to nutritional labelling, other information devises could be articulated to promote healthier food habits. For example, the UK Government has suggested the use of information campaigns in its new White Paper to promote healthier food habits (BBC News, 2004). Information campaigns have been widely used to fight the tabacco battle. Similar campaigns could be also articulated to provide more information about the need for healthier food choices, particularly among children.

Concluding Remarks

This review has presented the most important economic interventions used to control weight related problems around the world. Two types of instruments were mainly illustrated: prices and information. Results suggest that consumers in developed countries are not as responsive towards price changes in food as in the developing world. Among the reasons, the low relative budget dedicated to purchase foods is one important justification. However, in addition to these classical economic factors, physiologists are also providing some further justifications to understand the limited role of price policies when the habits of consumption and addition come into play. These addictive consumption patterns tend to be more severe for older population groups.

Information policies can also be used to complement or substitute price policies. As indicted, their short term results may not be entirely desirable, because messages conveyed by food labels need to be fully understood by consumers, so that they have an effect on demand. As this review has shown, knowledge of local nutritional food labels studied is currently quite high, although their use is more limited. Future actions, such as advertising campaigns may also be used to increase awareness of nutritional labeling.

To conclude this report, it is necessary to emphasize that obesity has multiple causes. In addition to inherent factors linked to the supply and demand of foods, other technological factors such as the lack of physical activity, and many other cultural factors linked to the dietary globalization, are all contributing to the spread of obesity around the world. It seems that in order to target the wide variety of causing factors, multidisciplinary policies should be articulated, in which economic instruments might be combined with informational ones, and other physiological, sociological and cultural interventions.

Kilde: Source: Sanz de Galdeano, 2005.

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