Measuring the Impact of Calorie Labeling Laws: The Mechanisms behind changes in Obesity

The New York City Calorie Labeling Mandate of 2008 required fast food restaurants to post calorie information for all standardized items. We estimate the impact of the mandate on the rate of obesity using data from the Selected Metropolitan/Metropolitan Area Risk Trends of the Behavioral Risk Factor Surveillance System (SMART-BRFSS) from 2004 to 2012. Using a difference in differences approach, we show that the mandate plausibly reduced the obesity rate by 2.3 percentage points - a 11 percent decline and it reduced Body Mass Index (BMI) by 1.4 percent. Our results are robust to a variety of sensitivity checks and strengthened by various placebo tests.

These results are in line with what other researchers have found for the same policy using different identification strategies. Our main focus is to understand the underlying mechanisms that could explain the observed decline in the obesity rate. We show that the nearly all of the reduction in obesity is driven by reductions in BMI for those with BMI between 30 and 35.

To further understand how these changes in weight occurred, we focus on energy expenditure, intake and the role they play to keep energy balance in individuals. First, we use data from the American Time Use Survey (ATUS) from 2004 to 2012. We show that the mandate increased the overall activity level of individuals (measured using metabolic equivalents of task) by 1.1 percent which is equivalent to a 13.1 calorie expenditure increase. This result is mostly explained by 2.4 percent decrease in minutes of sedentary activities and a statistically significant increase in vigorous activities. Second, we use data from the Consumer Expenditure Survey and we find that, conditional upon visiting a fast food restaurant, there is a statistically significant increase in expenditures per visit of 7.1 percent. This increase may be consistent with substitution towards healthier, more expensive items.

To conclude, our results suggest that the observed 11 percent decline in obesity is consistent with the observed increase in energy expenditure, substitution towards healthier items and the decrease in calorie intake observed in most of the calorie labeling literature.