Digestible information: The impact of Multiple Traffic Light nutritional labeling in a developing country

Bad dietary habits are among the main causes of increasing obesity and other health problems. According to the literature, information asymmetry and cognitive biases may lead to suboptimal decisions by individuals regarding food consumption. Many countries have implemented different forms of nutritional labelling in order to provide individuals with better information when making choices. We assess the Multiple Traffic Light (MTL) system, an alternative and simplified labelling format implemented in the UK. Although this system has been found to significantly improve consumer’s understanding of nutritional quality, evidence regarding its effect on actual choices is scarce and uncertain. In order to evaluate this format’s effectiveness on consumer decisions, we conduct a selection experiment with a particular sample: university students in a developing country. Our results show that the proposed nutritional labeling system has a significant positive effect on the nutritional quality of consumers’ decisions regarding snacks and beverages. These findings contribute to the existing literature in two ways. First, we prove that MTL labels can in fact modify real consumer behavior towards healthier nutritional habits, despite the difficulties faced by previous work in identifying such an effect. Second, we provide new insights on how to assess the increasing problem of bad nutrition in emerging economies.