Bauner and Lavoie Publish New Paper on Nutrition Fads and Market Outcomes

Content

Nutritional fads are everywhere – it seems as though we are constantly bombarded with new diets that proclaim to improve our health. While governments strive to reduce increasing nutritionally-based diseases such as hypertension, obesity, and diabetes, they are also faced with a population that can't always discern what products are actually "healthy." Manufacturers increasingly label foods as being in alignment with nutritional fads, which can increase their profits while not necessarily benefitting the consumer. 

Christopher Bauner and Nathalie Lavoie, both resources economics, have published a new paper in the European Review of Agricultural Economics. "Competing with fad products: erroneous health beliefs and market outcomes" explores how misunderstanding of nutrition on the part of consumers affects manufacturers' profits and whether government intervention could improve consumer welfare. "Overall, our results suggest that false beliefs about products often, but not always, reduce the welfare generated in the market and that information provision can be an effective remedy," say Bauner and Lavoie.