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Are Consumers Eating Out Less Frequently?

According to this Grub Street article, the answer is yes.

The average American’s restaurant visits reached a 28-year low this year, falling from an average of 215 a year in 2000 to 186 a year in 2018. Data gathered by the NPD Group shows a particular and precipitous decline since 2008. Today, 82 percent of meals in America are made at home.

And, they speculate on causes in the slow-down on restaurant spending:

Going out to restaurants doesn’t seem like such a good idea when you’re saddled with student debt and contending with wage stagnation. (In fact, many Americans saw their wages decline over the last year.)

Meanwhile, restaurants are becoming increasingly more expensive compared to eating in.

I’m a little skeptical of these data? Why? Well, here’s data from the Bureau of Economic Analysis (BEA) data on personal consumption expenditures (these are the data that feed into calculation of GDP) for food at home and away from home.

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In inflation-adjusted terms, all consumer spending is up about 36% since 2001. Spending on food at home only rose about 24% over this time periods, but spending away from home increased 54%. (I’ve also shown spending on clothing for reference). Spending on food away from home fell during the Great Recession, but it has significantly rebounded since.

Now, it’s not impossible for both of these statistics to be simultaneously true - one can eat out less frequently but spend more money on each trip, and total expenditures could still rise.

But, the BEA also reports quantity indices, which provide an estimate of the volume of food sold away from home. Here are those data. These data suggest little evidence for a slowdown in the amount of food consumed away from home.

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The headline on the Grub Street article asks “Should Restaurants be Worried?” The BEA data suggest the answer is “no.”

Dealing with Lazy Survey Takers

A tweet by @thefarmbabe earlier this week has renewed interest in my survey result from back in January 2015, where we found more than 80% of survey respondents said they wanted mandatory labels on foods containing DNA. For interested readers, see this discussion on the result, a follow-up survey where the question was asked in a different way with essentially the same result, or this peer-reviewed journal article with Brandon McFadden where we found basically the same result in yet another survey sample. No matter how we asked this question, it seems 80% of survey respondents say they want to label foods because they have DNA.

All this is probably good motivation for this recent study that Trey Malone and I just published in the journal Economic Inquiry. While there are many possible reasons for the DNA-label results (as I discussed here), one possibility is that survey takers aren’t paying very close attention to the questions being asked.

One method that’s been around a while to control for this problem is to use a “trap question” in a survey. The idea is to “trap” inattentive respondents by making it appear one question is being asked, when in fact - if you read closely - a different question is asked. Here are two of the trap questions we studied.

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About 22% missed the first trap question (they did not click “high” to the last question in figure 2A) and about 25% missed the second question (the respondent clicked an emotion rather than “none of the above” in question 2B). So far, this isn’t all that new.

Trey’s idea was to prompt people who missed the trap question. Participants who incorrectly responded were given the following prompt, “You appear to have misunderstood the previous question. Please be sure to read all directions clearly before you respond.” The respondent then had the chance to revise their answers to the trap question they missed before proceeding to the rest of the survey. Among the “trapped” respondents, about 44% went back and correctly answered the first question, whereas about 67% went back and correctly answered the second question. Thus, this “nudge” led to an increase in attentiveness among a non-trivial number of respondents.

After the trap questions and potential prompts, respondents subsequently answered several discrete choice questions about which beer brands they’d prefer at different prices. Here are the key findings:

We find that individuals who miss trap questions and do not correctly revise their responses have significantly different choice patterns as compared to individuals who correctly answer the trap question. Adjusting for these inattentive responses has a substantive impact on policy impacts. Results, based on attentive participant responses, indicate that a minimum beer price would have to be substantial to substantially reduce beer demand.

In our policy simulations, we find a counter-intuitive result - a minimum beer price (as implemented in some parts of the UK) might actually increase alcohol consumption as it leads to a substitution from lower to higher alcohol content beers.

In another paper in the European Review of Agricultural Economics that was published back in July, Trey and I proposed a different, yet easy-to-interpret measure of (and way to fix) inattention bias in discrete choice statistical models.

Taken together, these papers show that inattention is a significant problem in surveys, and that adjusting results for inattention can substantively alter one’s results.

We haven’t yet done a study of whether people who say they want DNA labels are more or less likely to miss trap question or exhibit other forms of inattention bias, but that seems a natural question to ask. Still, inattention can’t be the full explanation for absurd label preferences. We’ve never found inattention bias as high as the level of support for mandatory labels on foods indicating the presence/absence of DNA.

Slow Growth Chicken - What do Consumers Think?

What do you think about slow-growth chickens?  If you're like most people I've asked, your answer is probably "what the heck is a slow growth chicken?"  

Food retailers, however, aren't wondering because they're being asked by animal advocacy organizations to make new commitments to only buy chicken from slower-growing birds (here is the request in the EU and here is the Humane Society of the United States on the issue).

First, what is slow growth chicken?  Here's from my new paper on the topic just released by the journal Poultry Science (references omitted):

Genetic improvements have allowed poultry producers to rear broilers faster and to heavier weights than was possible in previous decades , with the result being more affordable chicken for consumers. However, some research has suggested that rapid growth may result in broilers that suffer from leg damage and pain. These ideas have recently gained traction in popular media and have led to calls for older heritage breeds of chickens, or newer slower growing chickens that are argued to be associated with improved taste and higher broiler welfare. Some research suggests little to no independent relationship between days of growth and consumer sensory evaluations of chicken , and other research suggests that slow-growing breeds are deemed less tender and less juicy than conventional chicken breeds. Nonetheless, consumer preferences for chicken may be as much affected by perceptions and labels than by actual sensory characteristics.

The new paper reports on the results of some surveys I conducted late last year with about 2,000 U.S. chicken consumers for a project funded by the Food Marketing Institute, the Animal Agriculture Alliance, and the Foundation for Food and Agricultural Research (a fuller, un-gated report of the results is here).  One of the main results is that most consumers don't know much about slow growth chickens, and as a result, positive or negative information can really sway people one way or the other.  

One group of people were given no extra information.  Another group of people received "pro" slow growth information from articles in NPR (as reported by Dan Charles) and the New York Times (as reported by Stephanie Strom), and yet another group of people received "anti" slow growth information from the National Chicken Council.

After receiving this information, consumers made a number of choices in a simulated retail environment showing packages of chicken breasts with different labels and prices.  These choices were used to back out consumers' willingness-to-pay for the slow-growth label (at present there is no widely adopted slow-growth label, so I created one myself for use in this study).  Here is the distribution of willingness-to-pay ($/lb) for slow growth and organic labels in the different information treatments.

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Some of the most interesting results related to the extreme lack of knowledge people have about broiler production in general and slow-grown in particular.  For example, here are some results when they were asked what they thought a variety of different labels implied.  

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The table shows the average beliefs about animal welfare, expense, healthfulness, safety, and taste of different labels. Without extra information, slow growth labels tended to be associated with disadvantageous beliefs. Without additional information, slow growth labels are associated with signaling the lowest safety, taste, and health of the labels considered.

Here's how I concluded the article:

Given the disadvantageous beliefs consumers hold about slow growth claims, a substantial marketing effort would likely be needed for the attribute to become a major determinant of consumer choice. Given consumers’ lack of knowledge about broiler production, simply informing consumers of already existing practices (e.g., cage free and no added hormones) could be a more cost-effective way of boosting chicken demand. That said, it is possible that the presence of hormone absence labels may exacerbate the misinformation problem by indirectly suggesting that there are some brands of chicken that use growth hormones. While organic labels are associated with positive beliefs and are valued relatively highly by consumers, organic production entails significantly higher costs in comparison to non-GMO or no antibiotic claims.

Perhaps the most significant factor explaining the increase in chicken consumption over the past several decades is price. Increases in production efficiencies have reduced chicken prices relative to the price of beef and pork. Perhaps not surprisingly then, this study also shows price to be a major determinant of choice for consumers. Nonetheless, there is a non-trivial minority of consumers who are relatively unconcerned about chicken prices, and these consumers are the target market for the label claims considered in this study.

Hierarchy, Disagreement, and Food Politics

Discussions about food are frequently divisive.  Low-carb or low-fat?  Organic or conventional?  Local or exotic?  Is our food system fantastic or broken?

Now, look out into the future to the year 2050.  Do you think our future food conversations will be more or less divisive than they are today?  As much as I hope the opposite, I suspect that we're likely to have more disagreement, not less, as we we go forward.  

Here's my theory.  You've no doubt heard of Maslow's Hierarchy of Needs, which characterizes stages of human growth.  The basic idea is that one has to satisfy more basic needs (e.g., food and shelter for survival) before moving on to worry about other "higher" needs, like social belonging.  Other's have posited a similar phenomenon in the domain of food.  For example, see Ellyn Satter in this 2007 academic article where she lays out a hierarchy of food needs.

Below, I've constructed my own version of Satter's food need hierarchy.  At the bottom, when people are highly income and resource constrained, people are asking questions like, "how do I get enough calories to eat?"  Once that question is answered, they can then worry about other things like: "Is this food safe?"  As a person (or country) develops and gains more income, they move from food being primarily consumed to survive to food consumption eventually serving as a form of self expression and actualization.

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So, here's my twist on this.  When a community or country is largely at the bottom of the pyramid, there is likely to be broad agreement about "society's" objective in the food and farm realm: produce enough food to eat.  However, at the top of this pyramid, there is no reason to expect "society" to agree on the primary objective.  Satter called the top of this pyramid "instrumental food" and she said such foods were consumed to "achieve a desired physical, cognitive, or spiritual outcome."  If we're talking about food satisfying a particular view of what I think of myself (I eat what I am) or food satisfying a "spiritual outcome", why would we expect you and I to agree on what is "best"?  In this sense, we might expect food consumption to be more politicized.  

Satter also says of such food consumption, "These instrumental reasons may or may not be rational or supported by scientific inquiry."  No kidding!  That's precisely the world in which we now live.  A couple of years ago, for example, the Pew Foundation found that the widest gap between the general public and scientists was on the topic of the safety of GMOs.  Clearly, something other than peer-reviewed science is driving many people's food beliefs and consumption patterns.  

Another challenge is that psychology research shows that we have a tendency to think others are more like us than they actually are.  For those of us who have had the opportunity to "move up" the pyramid, we might forget the more foundational challenges many food consumers' face.  This might be one of the causes of food paternalism I've written about on a number occasions - the view that others should be eating more like me.  This quote from a psychology paper on "egocentric empathy gaps" is particularly apt:

A traditional Irish proverb, for example, states that ‘the full person does not understand the needs of the hungry.’ Most people in affluent societies may have little appreciation of the desperation of true starvation, and may consequently work less to alleviate it than if they understood how hunger really felt.”

It's not just that we might "work less" but that we might work to solve the problem in ways that suit our own particular desires rather than those we aim to help.  

So, is my little theory correct?  That greater affluence will lead to greater disagreement about which food and food systems are ideal?  As we often say in academic papers when we don't know the answer: "that question is left to future research."  

GMO labels - not as bad as I thought

Science Advances (the open-access version of Science Magazine) just published a paper I co-authored with Jane Kolodinsky from the University of Vermont.  I suspect the paper's findings may raise a few eyebrows, as we find that opposition to GMOs in Vermont fell relative to that in the rest of the U.S. after mandatory labeling was adopted in that state.

Some background context might be useful here.  Several years go, I was decidedly in the camp that thought imposition of mandatory labels would cause people to be more concerned about GMOs because it would signal that something was unsafe about the technology.  Prominent scholars such as Cass Sunstein have argued the same.  A few years ago, Marco Costanigro and I put this hypothesis to the test in a paper published by Food Policy, and we found little evidence (in a series of survey-based experiments) that the label per se neither increased or decreased aversion to GMOs.  So, I was less convinced that this particular argument against mandatory GMO labeling was valid, but I was still unsure.  

Then, last summer at the annual meetings of the Agricultural and Applied Economics Association (AAEA), I saw Jane present a paper based on survey data she collected in Vermont before and after mandatory labels went into place there.  Her data suggested opposition to GMOs fell at faster rate after mandatory labels were in place.  Despite my findings in Food Policy, I remained dubious and Jane and I went back and forth a bit on the robustness of her findings. 

I'd been in enough conversations with Jane to know that we had different philosophical leanings about the desirability of GMOs, but this was an empirical question, so we put our differences aside and decided to join our data and put the hypothesis to the test.  Through the Food Demand Survey (FooDS), I had been collecting nationwide data on consumer's concerns about GMOs, and I suggested we combine our two sets of data and do a true "difference-in-difference" test: Did the difference in concern among consumers in VT and the result of the US increase or decrease after mandatory labeling was adopted in VT?

Our article in Science Advances has the result:

This research aims to help resolve this issue using a data set containing more than 7800 observations that measures levels of opposition in a national control group compared to levels in Vermont, the only U.S. state to have implemented mandatory labeling of GE foods. Difference-in-difference estimates of opposition to GE food before and after mandatory labeling show that the labeling policy led to a 19% reduction in opposition to GE food. The findings help provide insights into the psychology of consumers’ risk perceptions that can be used in communicating the benefits and risks of genetic engineering technology to the public.

One important caveat should be mentioned here.  Our result does NOT suggest people will suddenly support GMOs once mandatory labels are in place.  Rather, our findings suggest that people will be somewhat less opposed than they were prior to labels.  I mention this because in the wake of my paper with Marco in Food Policy some of the media's interpretation of our results (such as that of the New York Times editorial board), could have been construed as suggesting that imposition of mandatory labels would not cause economic harm.  That may or may not be true.  But, this new study suggest that labels per se may in fact reduce opposition.

It was great to work with Jane on this project, and for me it was a good lesson to test your beliefs, particularly when there are theoretical reasons that could support the opposing point of view.

I'll end with a key graph from the paper.

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