Blog

Our Research on Menu Labeling

For the past couple years, I've been working with one of my former graduate students, Brenna Ellison at the University of Illinois, on some papers related to effects of calorie labels on menus (for those who may not be aware, "Obamacare" mandated that chain restaurants include such menu labels but the FDA has yet to release the final rules and implementation date).  

The first part of that research was finally published last week in the International Journal of Behavioral Nutrition and Physical Activity, where we report on a smaller sample from the larger study which includes the group of people Brenna interviewed after they ordered.  The results have been picked up by a couple news outlets, including this one from Reuters: 

Showing diners how many calories are in restaurant food items may influence how much they eat - especially among the least health-conscious people, a new study suggests.

That's true - but only partially true.  We find that the numeric labels mandated by "Obamacare" do not have a statistically significant effect on the number of calories people order.  The labels that we find to be (somewhat) effective are stop-light labels, in which we put a red dot next to the high calorie foods, a yellow dot next to the medium calorie foods, and a green dot next to the low-calorie foods.  As the story suggests, the labels are less influential among people who we rate (based on their survey answers) as health conscious.  The result isn't terribly surprising - people who are health conscious are probably already familiar with the caloric content of the foods they eat, and as such, adding labels are unlikely to provide new information.  Still, we'd want to know something about the cost of the label to know whether the policy was a net-plus (this is an issue we take up in our other papers still in the works).    

The result I found most interesting from the whole study was only discussed in the conclusions (and was missed all together in the news story) is the following:

Interestingly, despite the calorie+traffic light label’s effectiveness at reducing calories ordered, it was not the labeling format of choice. When asked which of the three labeling formats was preferred, only 27.5% of respondents said they wanted to see the calorie+traffic light label on their menus. Surprisingly, 42% preferred the calorie-only label which had virtually no influence on ordering behavior. These responses imply diners may want more information on their menus (the number of calories), yet diners do not want to be told what they should or should not consume (i.e., green = good, red = bad).

Monsanto at the Supreme Court

According to NPR:

This week, the Supreme Court will take up a classic David-and-Goliath case. On one side, there's a 75-year-old farmer in Indiana named Vernon Hugh Bowman; on the other, the agribusiness giant Monsanto.
The farmer is fighting the long reach of Monsanto's patents on seeds — but he's up against more than just Monsanto. The biotech and computer software industries are taking Monsanto's side.

Here is what's at the issue according to the report:

Starting in 1999, he [Bowman] bought some ordinary soybeans from a small grain elevator where local farmers drop off their harvest. "They made sure they didn't sell it as seed. Their ticket said, 'Outbound grain," says Bowman.
He knew that these beans probably had Monsanto's Roundup Ready gene in them, because that's mainly what farmers plant these days. But Bowman didn't think Monsanto controlled these soybeans anymore, and in any case, he was getting a motley collection of different varieties, hardly a threat to Monsanto's seed business. "I couldn't imagine that they'd give a rat's behind," he snorts.
Bowman told his neighbors what he was doing. It turned out that Monsanto did, in fact, care.
"He wanted to use our technology without paying for it," says David Snively, Monsanto's general counsel.

I don't know if what Bowman did was legal or not.  However, I have previously commented that many people do not seem to grasp the economics of the situation.  Here's what I said back in October at the case:

What do you think will happen to the price of the first generation seed if farmers are able to freely replant the progeny?  . . . if the Supreme Court rules that Monsanto does NOT own the progeny, then the value of the seed to farmers rises since they can re-use the seed.  . . .  For the indifference principle to hold (i.e., for equilibrium to be restored), the price must rise.  Monsanto will charge more for it's initial offerings if farmers can freely replant.      

I also subsequently posted on several myths that seem to be circulating in relation to this case.

The implications of the case could be far reaching.  For example, when I sell a book, I get royalties when a new copy is sold.  But, when it is re-sold as used I no longer make any money (but it seems that perhaps I could under the logic used by Monsanto).  What about music?  Back when I was in college, Napster was a big deal, but was subsequently shut down because it was apparently illegal to share songs in this fashion.  It seems that some forms of music (electronic) are treated like Monsanto seed but other forms (old vinyl records) are not.  Picasso made money the first time he sold a painting but not when the buyer re-sold it.  But, what if he had copyrighted the image? Or patented his painting process?

The underlying issue here is when and how long do innovators hold the rights to their creations?  And, are these rights maintained even after the original invention is re-sold?  

Assorted Links

The Market for Animal Welfare

That's the title of a magazine article about a talk I gave a couple months ago in Canada.  The talk (and the academic paper I published about it in the journal Agriculture and Human Values) delves into an idea I've been developing for a while that attempts to release some of the steam from the animal welfare debate using a bit of free-market economics.  

The idea, in short, is to create a separate market for animal welfare that is decoupled from the market for eggs, meat, and milk.  Farmers have a product they're supplying (animal welfare) that is only indirectly (and poorly) reflected in the price of food.  Animal advocacy groups have a product they want to buy (higher animal welfare) but there is currently no mechanism for them to achieve this outcome in a market setting.  It is no wonder then, they they often turn to bans, litigation, and protests.  The idea is create an index of animal welfare being produced on the farm and assign "credits" or "units" based on production that can be sold in a newly constructed market.  The idea somewhat analogous to pollution trading markets, and I argue that it could be more effective than bans on production processes (like gestation crates), meat taxes, and other policies that are currently on the table.  

If you want more details, see my paper.  I'll leave you with the conclusion from the  article in Canadian Poultry Magazine:

Coming back to the concept of Animal Well-Being Units, would people be willing to buy animal welfare? Lusk asked. For those who feel strongly about animal welfare but have already changed their diet to reflect their preferences, buying welfare credits is an option that could appease their need to support animal welfare: they can’t not buy eggs anymore if they’re already not buying eggs. Agribusiness, animal welfare groups, you and me, we could all buy AWBUs and producers could participate and make money for doing so.
“The current market price for animal welfare is zero,” says Lusk. “Therefore not many farmers are going to sell it.”
From this economist’s perspective, we’ve just got the price wrong.

Animal Welfare and Food Safety

Food Safety Magazine just published an article Bailey Norwood and I wrote on animal welfare and food safety.  

Here are a few excerpts:

The premise of [the movie] Contagion is that raising hogs on “factory farms” encourages the emergence of deadly pathogens. How accurate is this caricature? In reality, a bat is more likely to drop food near hogs or chickens raised outdoors. Would the movie have been more realistic if the bat infected a pig raised on an organic farm, a farm where animals roamed “free range,” or a farm owned by a small producer slaughtering his own animals and selling locally? Or would a more accurate film show the bat shedding feces near a field of broccoli, sickening people consuming fruits and vegetables instead of meat? Is it true that animal welfare and food safety are trade-offs, or are they instead complements? When we pay more for humane meat, are we also getting safer food or are we accepting greater risk? These are the questions we investigate in the present article.

and

Americans today consume more poultry than any other meat product so even if a meal containing poultry is safer than beef or pork, more illnesses may result from poultry consumption simply because chicken is consumed on such a large scale. Using the data in Table 1 to claim poultry is risky is a bit like claiming roads in Texas are more dangerous than those in Wyoming simply because more Texans die in car crashes—however, the population size of the two states would seem the more logical culprit. Analogously, the volume and value of the food should be taken into consideration when comparing risks. Consumers might voluntarily accept riskier food if they value it more.

and in summary:

In general, production systems that provide animals outdoor access have the potential to expose animals to pathogens, viruses and other parasites. In some cases, it appears that this potential is realized. However, in other cases, perhaps due to effects of lower stocking densities or better managerial competence, the risks can be alleviated or even reversed. In short, animal housing conditions are but one factor, and a far from deciding factor, affecting food safety.
However, consumers don’t always see it that way. Consumers conflate perceptions of safety with perceptions of animal welfare. They are not necessarily irrational in doing so, as care and managerial competence in one domain are likely to be correlated with meticulousness in another.