Remember, we can “overlabel”

Following the unfortunate death of a woman from drinking far too much Coke, there have been calls to label Coke.  I’m all for information, and that often makes me pro-labeling, but in this case I’m not … it is important to recognise that we are targeting providing information, and so we can “overlabel”.

A label gives information as an abstract concept, but it is costly to interpret and so the existence of a label is often taken as a signal, and used as a rule of thumb.  As a result, too much labeling of things could reduce the true information content – leading to people making more poorly informed decisions.

The solution?  There is a trade-off for the amount we label a given piece of food etc – and we need to accept that.  However, we can also make more detailed information and standards a necessary requirement to be on some sort of central website – so people who do want to take into account greater information can do so at a low cost.  I would also note that people that design easier to interpret labels which don’t sacrifice information are “shifting out the information curve” – this is a real productivity improvement, and these people are cool as a result.

The overall goal of the regulation is to “maximise information” so that people can take costs and benefits into account when they do something.  That should be the guiding principal – not saying people should have one thing or another.

Note:  Look, no need for me to go on about personal responsibility, or insult the woman about her life choice to get this result – which I’ve seen a bunch of.  We don’t know her life, preferences, or situation – so we shouldn’t suddenly decide that since it is a choice we wouldn’t make we should either ban the product or attack the choice.  I’ve noticed a lot of both, and its generally a bit disrespectful, which is also why I delayed this post until people stopped being rude.