SINCE THEIR INTRODUCTION IN THE 1920s, consumer warning labels have provided a wide range of information about the products they adorn. Because of the variety of products that now carry warning labels—foods, medicines, appliances and other objects such as cigarettes—and the lack of consistent regulation of those labels, consumers must now navigate a huge number of warning labels, with different formats and intensities. A new research paper co-authored by Richard Zeckhauser, Frank Plumpton Ramsey Professor of Political Economy at Harvard Kennedy School (HKS), examines the problems inherent in the current warning label system, which makes it difficult for consumers to distinguish between different levels of risk.

The current system “fails miserably at distinguishing between large and small risks; that is to say between wolves and rabbits,” the authors posit. “Such a system is of little value, since people quickly learn to ignore a warning, given that rabbits, which pose little danger, are many times more plentiful than wolves.” Some warning labels, by using graphic devices such as large fonts or shocking illustrations, create a heightened sense of risk where none is necessary, they argue, while other labels confuse their audiences because they use unclear language or convey competing messages. In either case, the warning labels fail to present consumers with a clear, accurate sense of the risks involved.

The authors cite cigarette labeling as a common, well-known case of graphic labeling that has provoked substantial debate. While consumers of cigarettes presumably buy them with full awareness of the risks of smoking, several tobacco companies have sued the Food and Drug Administration (FDA) on the basis that a 2011 set of graphic labels played no constructive role in informing consumers.

“We argue that the decision to require a warning and the wording of the warning [on any product] should be designed in a manner that will lead consumers to roughly assess their accurate risk level, or to at least distinguish between serious and mild risks,” the authors write. “Empowering individuals to make appropriate risk decisions is a worthwhile goal. The present system fails to provide them with the requisite information.”

Zeckhauser and his fellow researchers cite the example of warning labels about the presence of mercury in certain fish, which poses much higher risks to certain groups (such as pregnant women) than others. They contend that a simpler, clearer system of warning standards would allow consumers to more quickly and accurately assess the specific risks associated with certain products.

“Warnings policies should recognize that wolves are not rabbits and that seafoods are not cigarettes,” the authors conclude. 


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