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The authors analyze the impact of the Nutrition Labeling and Education Act on the use of voluntary claims in 19 product categories between 1992 and 1999. The percentage of products that make nutrient-content claims decreased somewhat, and the major effect was a redistribution of claim activity among product categories. Products that make health and healthy claims increased, but these claims remained relatively rare.

In May 1994, new nutrition labeling regulations went into effect in the United States requiring mandatory disclosure of information on the nutritional content of foods. This article uses Grossman's model of totally effective quality signaling to evaluate whether markets were effective in information provision prior to the new regulation. If markets were effective in providing information to consumers on the nutritional quality of foods the new regulation would be unnecessary. The results of the logistic model, where the probability of voluntary information disclosure is linked to the nutritional quality of food products and their prices, indicate that private quality signaling was not reliably at work in food markets prior to implementation of the mandatory nutrition labeling regulation.Key words: food markets, nutrition labeling, quality signaling.The promulgation of the Nutrition Labeling and Education Act (NLEA) in 1990 marked a major step toward stricter nutrition labeling regulation in the United States. The NLEA went into effect in May 1994, requiring mandatory nutrition labeling in the form of a standardized nutrition information panel that shows the amounts of the macro-and micronutrients found in a food. In addition, voluntary nutrient content and health claims that are made outside the standardized information panel are circumscribed by the law. Prior to implementation of the NLEA, nutrition labeling was provided by manufacturers on a voluntary basis and government requirements concerning nutrient content and health claims made on food packages were much less stringent.The NLEA relies heavily on requirements for information disclosure in an attempt to encourage consumers to demand foods with better nutritional profiles and to inspire manufacturers to produce higher quality foods. Information regulation might be very valuable in the case of nutrition because consumers often cannot accurately evaluate the nutritional quality of specific brands of food products. Following Nelson (1970Nelson ( , 1974 and Darby and Karni, we can distinguish three groups of product attributes that explain how consumers learn about the quality of the products they purchase: search attribute (consumers can determine product quality at the point of purchase by looking at the product, examining, or researching it), experience attributes (consumers cannot determine product quality until they buy the good and use it), and credence attributes (the quality cannot be learned even after consumption). As Caswell and Mojduszka (1996) argue, the nutritional attributes of specific brands of food should in general be viewed as credence attributes. Therefore, if manufacturer are required to provide reliable information to consumers, nutritional quality can become a search attribute consumers can evaluate at the point of purchase.High-quality products may not be supplied in markets with imperfect and asymmetric information. If consumers have limited information about product quality, the markets may not exist or if they exist, the quality pr...