Menu Labeling

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"Menu Labeling"

Had some tacos for lunch in LA and what a pleasure it is to dine someplace you’ve never been in a jurisdiction with a menu labeling law (lesson learned—lengua tacos are low calorie compared to other meats). Readers will know that I’m a bigger booster of free markets than most American progressives, but the utter failure of the unregulated market for lunch to meet the “perfect information” standard of an idealized market seems very obvious. And there’s no real political economy problem with the rule.

Something interesting to think about here is the different kind of equilibria you can reach. One knows from eating lunch in Washington DC that the market doesn’t provide on-menu labeling of calories. But suppose we ran an experiment where DC implemented a menu labeling requirement for ten years, and then the requirement sunset. My overwhelming suspicion is that the vast majority of places would keep doing the labeling once the rule expired. When nobody does menu labeling, nobody seems to want to do it voluntarily. But if there was a pro-labeling norm in place, being the first restaurant to drop it would seem weird, like they had something to hide.

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