The sneaky economics of healthwashing

d3sign/Getty Images This article first appeared in the Planet Money newsletter. You can sign up here. If you go to a store like Whole Foods, you'll find a lot more than … whole foods. You'll also find bougie packaged snacks, cereals, and all sorts of other processed foods and drinks. Often they'll have buzzwords on their packaging. "Organic." "Non-GMO." "High protein." "No Cholesterol." "100% Avocado Oil." These products tend to cost more, and they come with a sort of promise: they're better for you than the cheaper stuff. But these food products may not actually be healthier than the cheaper stuff. Sometimes it's because they're still packed with sugar, salt, saturated fat, preservatives, and other additives. Other times their healthy-sounding ingredients aren't actually healthier (labels like "organic" and "non-GMO" don't necessarily make a product more nutritious). In other, more extreme cases, these products may not even include the healthier ingredients they're charging you a premium for. Our NPR colleague Maria Godoy recently reported on a new study by researchers at UC Davis that suggests a bunch of avocado-oil products have false claims on their packaging. The researchers did a chemical analysis of 54 products that listed avocado oil as their only oil ingredient. We're talking swanky products like avocado-oil potato chips, salad dressing, and mayonnaise. The researchers found that, despite being labeled as containing only that pure, uncut avocado oil — a whopping 89% of the products they tested appeared to be adulterated with other oils. One avocado-oil product appeared to have no avocado oil at all, according to one of the researchers. For Millennials like me who sustain ourselves almost exclusively on avocado products, it's enough to make you fall into an avocado pit of despair. The good news is that this appears to be one of the more egregious recent examples of food mislabeling. If a product lists avocado oil as its only oil ingredient but actually contains other oils, that could violate federal food-labeling rules. The study did not determine who introduced the other oils or whether the brands themselves knew about them. But it could help lead to more accurate labels. The bad news, however, is that companies don't have to literally lie on their ingredient lists to mislead consumers. There are subtler ways. They can nudge consumers into believing their products are healthier — and worth paying a premium price — by using buzzwords, clever packaging, and other marketing gimmicks. Some consumer advocates call this "healthwashing." So in this edition of the Planet Money newsletter, we're digging into the economics of healthwashing. Why is it so profitable? Why are our brains so susceptible to it? And what, if anything, should regulators do about it? Along the way, we called up one of the legends of food policy to help us figure out how to shop without getting hoodwinked. People shop at a supermarket in Santa Monica, California, on September 13, 2022. US annual inflation slowed slightly in August, largely thanks to falling gasoline prices -- but likely not enough to satisfy the Federal Reserve and President Joe Biden, as high prices continue inflicting pain on Americans. (Photo by Apu GOMES / AFP via Getty Images) APU GOMES/AFP via Getty Images hide caption toggle caption APU GOMES/AFP via Getty Images The economics of healthwashing The economics of healthwashing starts with a simple reality: we often don't really know what's in the food products we're buying. Economists have one of those off-putting, jargony terms for this: asymmetric information. But it's a simple idea. It's when one side of a transaction has less information than the other. And it can have serious consequences for the health of a marketplace. One consequence is that it gives businesses more opportunities to mislead and overcharge consumers. Think getting ripped off by a mechanic, being convinced to get an unnecessary test by a docto