Academic journal article The Journal of Consumer Affairs

Unintended Consequences of Health Supplement Information Regulations: The Importance of Recognizing Consumer Motivations

Academic journal article The Journal of Consumer Affairs

Unintended Consequences of Health Supplement Information Regulations: The Importance of Recognizing Consumer Motivations

Article excerpt

Information regulation is intended to enhance consumer decision making. However, past studies raise concerns about the effects of such remedies. Using qualitative methods, this research provides a contextualized, in-depth view of consumer responses to information regulation. The dietary supplement industry provides an informative case for studying the unintended consequences of reducing market restraints. Our findings provide insight into the potential maladaptive behaviors that may accompany information remedies and highlight the importance of considering consumer motivations in regulation design. Real consumer protection can only be forged with an understanding of consumer biases and the unintended impacts likely from such policy intervention.

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The information which marketers communicate to consumers through product labels, advertisements, Web sites and other materials must comply with governmental regulations designed to govern the flow and quality of market information. These regulations are intended to enhance consumer decision making, stimulate competitive activity and protect public health and welfare without placing undue burdens upon business. Among regulatory options, information disclosure has become the preferred consumer protection remedy advocated by economists, the courts, regulators and business. Ideally, disclosures provide relevant product information allowing for consumers' self-protection through search without infringement upon individual preferences (Beales, Craswell, and Salop 1981). However, both field and experimental research offer mixed findings about the ways in which information remedies guide individual choice given consumer differences in motivation and processing (France and Bone 2005; Hill, Ramp, and Silver 1998; Johar and Simmons 2000; Mason, Scammon, and Fang 2007; Moorman 1996; Roe, Levy, and Derby 1999). Despite such evidence that suggests consumer differences play a significant role in the effectiveness of information disclosures, the theoretical frameworks to facilitate regulatory policy decisions (Bloom 1989; Mazis et al. 1981; Moorman and Price 1989) give scant attention to the extent and manner in which individual motivations and biases may lead to unintended consequences. Greater consideration of consumer motivations within the consumption context and the ensuing consumer biases which may impact information use is needed.

This research provides an in-depth view of consumer responses to information regulation and regulators. We empirically examine through qualitative methods the effects of information regulation in the dietary supplement industry. Specifically, we report the results of thirty in-depth interviews conducted among a diverse sample of product users in order to attain a contextualized view of consumer responses to information remedies. The dietary supplement industry provides a useful case to study potential unintended consequences of information due to legislative and legal actions reducing market restraints and increasing product information availability. Our findings suggest that an understanding of consumer biases and an awareness that unintended consequences may result could help improve regulation.

With the passage of the Dietary Supplement Health and Education Act (DSHEA 1994), the supplement industry was exempted from stricter regulation required of foods and drugs (Mason, Scammon, and Fang 2007). The exemption was intended to benefit consumers by enhancing product availability. The regulation created an incentive for marketers to make relatively nonspecific structure-function (1) claims rather than more explicit health claims because structure-function claims did not require documentation of safety or proof of efficacy. To foster consumer understanding, the regulation did require a disclaimer to be included which explains that the Food and Drug Administration (FDA) has not evaluated the claim and the product is not intended to treat or cure any disease. …

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