Consumer Attitudes toward Big Food circa 1900

I've been reading an advanced copy of Maureen Ogle's new book, In Meat We Trust: An Unexpected History of Carnivore America .  I'm about half way through, and so far it is fantastic.  

In one section, Ogle writes about Americans' attitudes toward meat packers in the early 1900s:  

Americans insisted on access to cheap food, regardless of its true cost, but believed the worst of those who made that cheap food possible and abundant

Is it any different today?  By the way, when she's referring to "true cost" she doesn't mean externalities - she's talking about the material costs of raising beef and getting it to market, which the average consumer under-estimates.  

She also cited a magazine article written around the same time about by a journalist who actually understood the the effects brought about by the Swift meat packing company:  

“We make great outcry against the concentrated bigness of the packers, yet the probability is that we would make yet greater outcry if the modern system of food supply were suddenly cut off and we were put back on the basis of local butcher-shops.” He was right. in the United States, the mechanisms of food supply were so efficient that they had become taken for granted  —  and when it came to food, Americans took nothing for granted so much as low price. 

They say that the more things change, the more they stay the same.  Here we are a hundred years later, and it remains the case that the mechanisms of food supply are so efficient that they are taken for granted.

Mirrors in Grocery Carts

One of my colleagues forwarded me this article in the New York Times on some research published in an agricultural economics journal on the effects of "nudges" on consumer purchases of vegetables and produce.  

One part of the authors' research program is looking at how placing a mirror in the cart affects sales (I suppose it is supposed to encourage you to think more about the effects of your purchases on your long term self).  They don't yet know what effects the mirrors will have, but what they have found is the following: 

the scientists tinkered again with the cart, creating a glossy placard that hung inside the baskets like the mirrors. In English and Spanish, the signs told shoppers how much produce the average customer was buying (five items a visit), and which fruits and vegetables were the biggest sellers (bananas, limes and avocados) — information that, in scientific parlance, conveys social norms, or acceptable behavior.

By the second week, produce sales had jumped 10 percent, with a whopping 91 percent rise for those participating in the government nutrition program called Women, Infants and Children. 

This research is being facilitated by a grocery chain, which is interesting.  I find it interesting because this research and the author's article (Michael Moss) position this as research into the "Nudge" phenomenon advocated by many behavioral economists:

Mr. Payne and Mr. Niculescu are pursuing a strategy that behavioral scientists call nudge marketing, an idea popularized by the 2008 book “Nudge,” by the former Obama administration regulatory affairs administrator Cass R. Sunstein and the University of Chicago professor Richard H. Thaler.

Nudge marketing calls for applying just the right amount of pressure to persuade: not too little, not too much.

Here's my beef.  The Sunstein and Thaler book is primarily about government "nudges".  This research is about a grocery store's "nudge".  Retailers try to nudge us all the time - it's called advertising.  And I suspect this store will not continue with the mirrors and special carts if it ultimately hurts sales in the long run. The difference between a store nudge and a government nudge is important: if we don't like what a store is doing, we can leave and shop elsewhere.  Stores have an incentive to only adopt those nudges that consumers actually want, as revealed in their purchase behavior.  Governments, by contrast, have no such accountability or rapid feedback mechanisms.  For these reasons, I think it is important to draw a distinction between marketing and advertising on the one hand and nudging on the other.    

One Year Anniversary

If I'm not mistaken, tomorrow I will have been blogging for a year (my first post was on September 5, 2012).  My goal was to post something almost every day for the first year and I was pretty close (I count 341 total posts over the past year).  I've gone from 0 to over 20,000 page views each month, and have enjoyed the ride.

I'm not sure I can keep up that pace for ever, but I'll keep it up as long as I enjoy it and feel like I'm having some impact.    

To recap the year, the 10 most popular posts to date are: 

Food fear mongering

What is natural food anyway?

 GMOs and crop yields

My interview with John Stossel on GMOs

Study shows GMO feed improves liver health in pigs!

What explains the difference in the the way Americans and French (and Brits) eat?

 The organic food subsidy myth

I was wrong about sustainability.  Well, sort of.

Who is to blame for obesity

Do I work for Monsanto?

One (positive) unintended consequence of obesity

An article forthcoming in the journal Health Economics paper by Dunn and Tefft finds a result I would have never considered.  If you're overweight, it takes more alcohol to make you drunk.  If you're less likely to be drunk, then you're less likely to be involved in drunk-driving accidents.  Ergo, growing obesity rates lead to fewer drunk driving accidents.  Now, I hardly think this is a sign to gain weight or booze it up, but it is interesting nonetheless.     

The abstract: 

We develop a model of alcohol consumption that incorporates the negative biological relationship between body mass and inebriation conditional on total alcohol consumption. Our model predicts that the elasticity of inebriation with respect to weight is equal to the own-price elasticity of alcohol, consistent with body mass increasing the effective price of inebriation. Given that alcohol is generally considered price inelastic, this result implies that as individuals gain weight, they consume more alcohol but become less inebriated. We test this prediction and find that driver blood alcohol content (BAC) is negatively associated with driver weight. In fatal accidents with driver BAC above 0.10, the driver was 7.8 percentage points less likely to be obese than drivers in fatal accidents that did not involve alcohol. This relationship is not explained by driver attributes (age and sex), driver behaviors (speed and seatbelt use), vehicle attributes (weight class, model year, and number of occupants), or accident context (county of accident, time of day, and day of week).

HT: Andreas Drichoutis

Experimental Auction Summer School

For the 3rd year in a row, I've had the privileged to co-teach a summer school for the University of Bologna in Italy with Rudy Nayga, Andreas Drichoutis, and Maurizio Canavari.  The topic of the school is experimental auctions, which is a method used to measure consumer preferences and study consumer behavior. 

We have a great group of students this year from Italy, Germany, Sweden, France, South Africa, China, Thailand, and the U.S, among other places.   Here are a few of us learning a bit about the history of Bologna on our day off.

We also caught a couple races at the Dino and Enzo Ferrari Autodrome race track in Imola.  After the Ferrari's and Lamborghini's cleared the track, they had an interesting race with Mini Coopers.

Today we are back at work thinking about economics, consumer behavior, food policy, and food marketing.   

My colleagues have had a good time harassing me about eating horse meat (yes, I willingly ate some two days ago and I'm pleased to say it was perfectly eatable as I've previously argued) and organics (for my latest take on that one see here), and why Americans eat differently than Europeans.  

Here's the whole group just outside the classroom: