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Are Healthy Foods More Expensive?

Are healthy grocery items more expensive than their regular within category counterparts? How do purchases of foods with positive health attributes change given negative unemployment shocks? To answer these questions, I supplement five years of multi-market, multi-chain scanner data with additional information on positive health attributes to create a unique dataset. First, this enables a robust descriptive analysis of the price of products with positive health attributes versus their regular within category counterparts; I find no evidence that products with positive health attributes are systematically more expensive or promoted systematically less.

That's from the job market paper of Jessica Rider in the Agricultural and Resource Economics Department at UC Berkeley.  

This is an interesting contribution to the debate between some folks at the USDA, who argue that healthy foods are not more expensive, and the work of people like Adam Drewnowski who say the opposite (here is just one example of many news stories on the debate).  

Give (Frozen) Peas a Chance — and Carrots Too

That's the title of a nice article by Dr. Oz in Time Magazine earlier this month and he echos several themes in my forthcoming book, The Food Police.  I was pleased to finally see some good sense on food by someone so prominent in the media.  Here are some excerpts:   

Nutritionally speaking, there is little difference between the farmer’s-market bounty and the humble brick from the freezer case. It’s true for many other supermarket foods too. And in my view, dispelling these myths–that boutique foods are good, supermarket foods are suspect and you have to spend a lot to eat well–is critical to improving our nation’s health. Organic food is great, it’s just not very democratic. As a food lover, I enjoy truffle oil, European cheeses and heirloom tomatoes as much as the next person. But as a doctor, I know that patients don’t always have the time, energy or budget to shop for artisanal ingredients and whip them into a meal.”

and:

The rise of foodie culture over the past decade has venerated all things small-batch, local-farm and organic–all with premium price tags. But let’s be clear: you don’t need to eat like the 1% to eat healthily. After several years of research and experience, I have come to an encouraging conclusion: the American food supply is abundant, nutritionally sound, affordable and, with a few simple considerations, comparable to the most elite organic diets

and

But for the most part, it's O.K. to skip the meat boutiques and the high-end butchers. Nutritionally, there is not much difference between, say, grass-fed beef and the feedlot variety. The calories, sodium and protein content are all very close.


 

Is Wal-Mart Devouring the Food System?

Stacy Mitchell posted a really creative info-graphic over at Huffington post, which I've reproduced below.  

The graphic gets a lot of the statistics right, but draws many wrong inferences.  A few comments:

  • The typical concern expressed about Wal-Mart is that they price "too low" and thereby drive all their competition out of business.  I do not doubt that Wal-Mart bankrupts some competitors and creates some adverse consequences for communities (yet the studies cited in this graphic are not a representative selection of the academic research - they convey only the side of the story the author wants to tell).  Moreover, low prices are good for you and I the food consumer.  After all, I've never seen Wal-Mart employees forcing anyone into their stores.  This paper in a 2006 issue of the American Journal of Agricultural Economics, for example, reported: 
    Consumers, in contrast, appear to benefit from Wal-Mart's entry in the form of lower prices. Studies focusing on consumer impacts have found that a Supercenter's entry reduces grocery prices. Not only do Supercenters offer lower prices, but their entry may have the indirect effect of lowering prices at competing stores. Estimates of this indirect effect range from 3% overall to as high as 13% for specific items (Basker 2005b; Hausmann and Leibtag 2005).
  • The facts reported below could be framed very differently.  Rather than saying Wal-Mart "captures $1 out of every $4" why not say they "earn $1 out of every $4"?
  • Yes, production and retailing of food are highly concentrated industries.  The question is why.  Market power is only one possible explanation, and there is theory and evidence that this concentration could relate to economies of scale and cost savings, capacity constraints, and risk reduction, among many factors. And, you can't just look at size, you have to look at how firms behave.  Coke and Pespi are both very big but anyone watching TV ads knows they are in fierce competition.  
  • It is a red-herring to cite the farmer's share of the retail dollar as evidence of nefarious processor or retailer behavior.   Processing and retailing costs have risen over time.  Here is a nice paper by Gary Brester and colleagues showing that the farmer's share of the retail dollar is uninformative in this regard and "should not be used for policy purposes."
  • It is  untrue that many "farmers are struggling to get a fair price."  Prices for many agricultural commodities are near record highs.  Farm-land values are exploding, in part, due to the extra income on the farm.  For commodities like milk (which is pictured just below the above quote), there are complex government rules that determine the prices farmers get paid.  
  • Worker wages may have fallen in real terms, but this is not unique to the food processing industry but is true of real median wages across the entire economy.  People like Tyler Cowen  have argued that this is a result of declines in productivity growth.  So, again, the statistical "fact" is probably right, but the interpretation is misplaced.   

You may still want to visit local farmers markets or local grocers as this graphic exhorts.  But make it an informed decision.   

stacymitchell.JPG

A New Food Documentery

From the celebrity Chef Tom Colicchio and the producers of Food, Inc comes a new documentary on food entitled A Place at the Table slate for release in March.  I look forward to watching it.  

I see that the subtitle of the new documentary is One Nation Underfed.  I haven't, of course, seen the documentary, but their web site suggests that the film will focus on the problem of hunger.  Ironically, however, here are the folks involved in the movie: 

 sociologist Janet Poppendieck, author Raj Patel and nutrition policy leader Marion Nestle; ordinary citizens like Pastor Bob Wilson and teachers Leslie Nichols and Odessa Cherry; and activists such as Witness to Hunger’s Mariana Chilton, Top Chef’s Tom Colicchio and Oscar®-winning actor Jeff Bridges

Some of these people have been on record in the past talking about how we Americans are Over-fed . And, they've been on record as harshly criticizing precisely those firms and technologies that have made food more convenient and affordable than it once was.  I wish for once the producers of these documentaries would pick (even at random) some of the excellent agricultural scientists working in Land Grant Universities across the U.S. to weigh in on some of these issues.  

I'll withhold final judgement till I watch the movie.  For the time being, however, I will say that I am more sympathetic to the angle that seems to be taken in this food documentary than I was with many of the other's I've seen.  Let's hope this time around the facts are presented in a balanced manner and the suggested alternatives are more well reasoned.