Do Food Consumers Vote Differently Than They Shop?

According to some research I just published in the Journal of Agricultural and Resource Economics with a former graduate student, Kate Brooks, who is now an assistant professor at the University of Nebraska, the answer is "yes."  

Our research suggests caution in using people's shopping behavior (as, for example, indicated by grocery story scanner data) to infer which public policies they may or may not support.  In the particular application we studied, people were willing to pay large premiums to avoid milk and meat from cloned cows when asked what they wished to buy when shopping in a grocery store.  One might conjecture from this behavior, then, that the consumers would approve of a government ban on use of clones in meat and milk production.  

According to our research, that conjecture would be wrong.  The majority of consumers did NOT favor a ban on cloning in food animals.  In fact, most people would demand compensation if a ban were enacted (rather than be willing to pay to have the ban).  This finding defies many of the explanations often given for differences in voting and shopping behavior, such as the consumer-vs-citizen hypothesis or the hypothesis that consumers perceive the existence of externalities.  The behavior is more consistent with the notion that people have an option value (they don't want to get rid of a technology that may produce some promising result in the future even if they don't want it now) or that people respect the freedom of others to arrive at their own choices even if they happen to be at odds with one's own preferences.     

The other interesting thing about our finding is that is exactly the opposite of what has been observed in other food issues.  For example, in California, 63.5% of voters voted in favor of Prop 2 in 2008 to effectively ban battery cages in egg production.  Yet, the retail market share of cage free eggs is less than 5%.  In this case, shoppers aren't willing to shell out the extra bucks for cage free eggs in the grocery store, but they enthusiastically voted to ban the product they normally buy in the voting booth.  Why?  Hard to say.  My feeling is that the costs are much more salient in the store than in the voting booth.  Another possibility is that the universe of voters is different than the universe of shoppers (all voters shop but not all shoppers vote).  There are, of course, other possible explanations.  

Gaining a better understanding why people behave differently when shopping and voting is a key area of future research for food economists.  And, the fact that people often behave so differently in the two environments represents a key challenge for food economists who conduct regulatory cost-benefit analysis and advise policy makers.  

So What if the Poor Eat More Salt?

A new study was released showing that poorer people in Britain consume more salt than the rich.  I don't doubt this is true.  But, I seriously question the inferences drawn by the researchers and other commentators.

The authors of the study indicate that:

These results are important as they explain in part why people of low socio-economic background are more likely to develop high blood pressure (hypertension) and to suffer disproportionately from strokes, heart attacks and renal failure.

Really?  Isn't poverty correlated with a bunch of other bad things that can result in adverse health outcomes?  There is strong evidence that the poor smoke more, drink more, eat fewer veggies, weight more, and on an on.  Yet, we are to believe that the culprit for all their problems is salt?  Aren't there underlying factors, such as the evidence that the poor have lower discount rates (i.e., they value the future less), that are driving all these behaviors?  In short: correlation with salt intake and poverty doesn't  prove anything is causative.  Yet, we'd need to know causation before public policies are recommended.  Nevertheless, the researchers say that:   

widespread and continued food reformulation is necessary through both voluntary as well as regulatory means to make sure that salt reduction is achieved across all socio-economic groups.

But, where is the evidence that such regulations or voluntarily actions would have the intended effect?  There is actually quite a lot of debate (see here or here) about the health impacts of reducing salt in our diet.  

And what would be the costs of such voluntary or forced actions?  It might do good to ask why the poor eat more salt in the first place?  One answer is alluded to in the press release: the poor are much more likely to work in jobs that require manual labor.  You know - jobs that make you sweat.  More sweating requires more salt intake.  Another answer, also alluded to in the press release, is that the poor might eat more processed food which often contains more sodium.  What the release fails to discuss is that, given job and family demands, the value of convenient, processed food might be relatively higher among the poor.  Restricting access to such foods might very well reduce salt intake but it is unlikely to make their life measurably better.  It is easy for a relatively rich researcher with a relatively flexible job to say that the poor would be better off if they cooked more fresh foods and stayed away from convenient, packaged foods.  I suspect a single mother working two jobs would have a different opinion.

Are Fruits and Veggitable Subsidized?

To hear food pundits talk you'd think that growers of fruits and veggies don't receive subsidies from the government.  Indeed, the pundits often argue vegetables should receive subsidies because they don't receive them now.  Just to give one example, here is Mark Bittman writing in the New York Times:

Simply put: taxes would reduce consumption of unhealthful foods and generate billions of dollars annually. That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit.

It might come as a surprise, then, to hear that many fruits and vegetable growers already receive (implicit and explicit) subsidies of one form or another.  Here is an issue, for example, that came to light during the fiscal cliff debate:  

Many folks have picked out the extension of "market loss assistance" for asparagus farmers, for example, but this dates back to the farm bill from the last year of the Bush administration. Senator Patty Murray (D-WA) brags about it on her website and Senator Maria Cantwell (D-WA) was talking about fighting for it back in 2007, so I think we can gather than a lot of asparagus is grown in Washington State.

This is said to be needed because American asparagus farmers have been "devastated" by cheap imported Peruvian asparagus.

The reality of farm and food policy and its impacts is much more complicated than is often made to appear in foodie books and blogs.

Who Will be the Paternalist for the Paternalists?

With lawmakers seemingly still struggling to come up with solutions to the fiscal cliff dilemma (now only a day away from the cliff), I am reminded of this paper I ran across a while back by Niclas Berggren in the Review of Austrian Economics.  Here is the abstract:

This study analyzes leading research in behavioral economics to see whether it contains advocacy of paternalism and whether it addresses the potential cognitive limitations and biases of the policymakers who are going to implement paternalist policies. The findings reveal that 20.7% of the studied articles in behavioral economics propose paternalist policy action and that 95.5% of these do not contain any analysis of the cognitive ability of policymakers. This suggests that behavioral political economy, in which the analytical tools of behavioral economics are applied to political decision-makers as well, would offer a useful extension of the research program. Such an extension could be related to the concept of robust political economy, according to which the case for paternalism should be subjected to “worst-case” assumptions, such as policymakers being less than fully rational.

That is precisely the problem with much of the behavioral economics research which advocates for policy action.  This research typically finds people are not perfectly rational and then the researchers make a logical deduction that a paternalistic policy can make "irrational" people better off.  But the vast majority of these studies never actually test how the people (for whom paternalism is supposedly needed) will respond to the choices or nudges made on their behalf or how political influences might affect the best-laid nudging plans.

I will note that for over a year now, I've been working on a couple papers with Bailey Norwood and Stephan Marette, which summarize the results of some experiments we ran in the US and France looking at how people respond to paternalistic food choices made for them.  I'll write more about these studies when the papers are accepted for publication.  For now, I'll reveal one finding, which isn't terribly surprising: people value the freedom to make their own choices.

Does the Food Stamp Program Subsidize Obesity?

At his NYT blog, Mark Bittman says that beneficiaries of SNAP (otherwise known as food stamps) shouldn't be allowed to pay for sodas.  Here is Bittman:

What’s to be done? How to improve the quality of calories purchased by SNAP recipients? The answer is easy: Make sure that SNAP dollars are spent on nutritious food.

This could happen in two ways: first, remove the subsidy for sugar-sweetened beverages, since no one without a share in the profits can argue that the substance plays a constructive role in any diet. . . . 

Simultaneously, make it easier to buy real food; several cities, including New York, have programs that double the value of food stamps when used for purchases at farmers markets. The next step is to similarly increase the spending power of food stamps when they’re used to buy fruits, vegetables, legumes and whole grains, not just in farmers markets but in supermarkets – indeed, everywhere people buy food.

On one level, I'm sympathetic to Bittman's argument.  Why should my tax dollars be used to subsidize bad behavior?  But, if we are going to accept that argument, where do we stop?  As a professor, I indirectly get a paycheck from the State of Oklahoma.  What is to stop someone like Bittman one day proposing that the federal or state government dictating where and how I can spend the portion of my paycheck that comes from taxpayers?     

Aside from this "slippery slope" argument, it is useful to consider the broader debate in economics on whether foods stamps, in general, cause obesity.  Unless a person (before receiving food stamps) is constrained in the food they buy, a standard economic model suggests that food stamps simply act as an income transfer.  Stated differently, under the aforementioned situation, a person shouldn't treat food stamps any differently than a monthly cash gift.  There are lots of empirical papers studying whether this true and the evidence is a bit mixed but I think its safe to say that a big part of the effect of food stamps (if not the total effect) is simply an income effect.  

This is useful to consider this perspective because - if we are going to give food stamps out of some feeling of charity or benevolence - we have to realize that restricting their use may not have the intended effect.  Money is fungible.  If you can't use food stamps to buy sodas, you'll use them to buy more of something else - freeing up money to buy soda.  

I also think it isn't particularly helpful to claim that food stamps are "subsidizing" obesity simply because sodas can be bought directly with food-stamp dollars.  Food stamp recipients are choosing to use their dollars (and food stamp coupons/debit cards) to buy sodas.  Food stamps are only "subsidizing" obesity to the extent that extra income is subsidizing obesity.  It isn't food stamps per se that are causing soda consumption - it is people's preferences for sodas that are leading to soda consumption.