Food Demand Survey (FooDS) - April 2014

The newest release of our Food Demand Survey is now up.

Willingness-to-pay for most meat products was up this month, and consumers reported that they anticipate buying about the same amount of chicken, beef, and pork as in previous months despite expectations of higher prices for all three.  

Reported expenditures on food at home and away from home were down in April relative to March.  

Consumers reported hearing more about Salmonella and E coli and less about pink slime and lean fine textured beef in the news in recent weeks as compared to last month.  Consumer concern dropped the most for GMOs and E. coli and rose the most for beta-agonist and bird flu.

We added a couple interesting ad-hoc questions I'll blog about in a separate post.  

What we think about a label may be as important as the label itself

What believe about a food's ingredients may have a biological effect on our bodies above and beyond the actual nutrient content.

That is the conclusion from a study published in the journal Health Psychology, which was recently covered by Alix Spiegel at the NPR Health blog.

The authors conducted an experiment in which they fed the same 380 calorie milk shake to two different groups of subjects.  The first group was lied to, and were told (via a label) that the shake was a "sensible" 140 calories.  The second group was also lied to, but in the opposite manner: they were told (via a label) that the shake was an "indulgent" 620 calories.  

The researchers measured the levels of a hormone, ghrelin, before during and after the label experiment.  Ghrelin levels are particularly interesting to monitor because they regulate metabolism and help signal hunger or satiety.  After eating a big meal, ghrelin levels fall, signalling us to stop eating.  Eat a light meal, and ghrelin levels remain high, signaling us to eat more.

The authors found that people consuming the "indulgent" labeled shake experienced a significant increase in ghrelin just before consumption (in anticipation) and then a significant decline in ghrelin after consumption.  The change, the authors argue, is consistent with that typically observed after eating a big meal.  By contrast, the level of ghrelin was flat before and after eating the "sensible" shake.   All this is in spite of the fact that the two shakes were exactly the same in every way except for the labels!  

The authors were quoted as saying:

Labels are not just labels; they evoke a set of beliefs

and that labels might

actually affect the body's physiological processing of the nutrients that are consumed.

One way to interpret the results is to place them in the category with other "behavioral biases" in the behavioral economics literature: another piece of evidence that people do not behave rationally.  I see it a bit differently.  The results suggest a kind of "extra" rationality.  Mind over matter.  What we think might well trigger how our body responds.  Marketers might influence what we think about foods, but we have some control over the process too.  

Now, if I can just fool myself into believing that small lunch salad is actually one of the Carl's Jr. "Indulgent Salads", I'll feel fuller and lose more weight! 

The study's sample size was small (N=46), probably because to measure ghrelin they had to insert an intravenous catheter to draw blood at repeated intervals.  So one proceed with caution until more work of this sort is done.  Still, very interesting nonetheless.

Assorted Links

Do organic advocates need GMOs?

The push to legalize sales of raw milk and the associated health consequences

Russian PM says he plans to ban imports of GMOs (the organic claims in the article seem unbelievable; as does the likelihood this could withstand a WTO case)

Does eating organic food reduce cancer risk?

Not so much, according to this paper published a few days ago in the British Journal of Cancer. Here is what the authors did:

We examined the hypothesis that eating organic food may reduce the risk of soft tissue sarcoma, breast cancer, non-Hodgkin lymphoma and other common cancers in a large prospective study of 623 080 middle-aged UK women. Women reported their consumption of organic food and were followed for cancer incidence over the next 9.3 years.

Here is what they found:

At baseline, 30%, 63% and 7% of women reported never, sometimes, or usually/always eating organic food, respectively. Consumption of organic food was not associated with a reduction in the incidence of all cancer (n=53 769 cases in total) (RR for usually/always vs never=1.03, 95% confidence interval (CI): 0.99–1.07), soft tissue sarcoma (RR=1.37, 95% CI: 0.82–2.27), or breast cancer (RR=1.09, 95% CI: 1.02–1.15), but was associated for non-Hodgkin lymphoma (RR=0.79, 95% CI: 0.65–0.96).

Conclusions: In this large prospective study there was little or no decrease in the incidence of cancer associated with consumption of organic food, except possibly for non-Hodgkin lymphoma.

These findings mesh well with other research I've pointed to in the past noting that food pesticide are a relatively small risk in the grand scheme of things. If the results had been the other way around (that eating organic food reduced cancer risk), I would have pointed out that this is an observational study and that it is really hard to identify causation. For example, maybe people who eat organic engage in all kinds of other healthy activities that reduce cancer risks. Organic consumption is likely correlated with income (given the higher price of organic), and higher income folks are likely to be able to better protect against all kinds of illnesses than poorer folks. That's what I would have said had this study shown a correlation between organic consumption and reduced cancer risk.

Thus, it is only fair play to apply the same thinking to this study which generates a result consistent with arguments I've made in the past. The article finds little to no correlation among people who choose to eat organic and cancer risk. But, maybe people at greater risk for cancer in the first place choose to eat more organics, hoping it will reduce the odds? Maybe people who can't afford to eat organic self-protect in other ways, such as more exercise or eating more fruits and veggies? I don't personally find such explanations for the null result very plausible, but these are the sorts of things one must worry about in observational studies.

To really provide a definitive answer to this question, one needs to do a randomized controlled trial. Or, at a minimum, apply some of the more advanced identification methods and sensitivity analyses that are today being used in the best economics papers (eg, regression discontinuity designs, propensity score matching, model specification comparison, etc). In many ways, it seems to me that much of what I read in epidemiology and nutrition reminds me of the state of the econometrics literature in economics 20 years ago.

Two farm policy ideas

Despite the delays in getting a farm bill passed, the final products is not much different than what it has been in the past. Yes, the names of the programs have changed and the details of how payments get calculated have altered. But, these basic fact remain: the federal government remains heavily involved in production agriculture and hundreds of millions of dollars flow from taxpayers to farmers in ways that distort production decisions and lead to inefficient outcomes.

How do we get beyond this status quo? It will require new ideas.

Here are a couple that I've recently run across (although the ideas themselves have been around a while).

The first is an idea discussed by Graig Gunderson of the University of Illinois and three folks from the USDA, Betsey Kuhn, Susan Offutt, and Mitchel Moorehart. In a piece published by the USDA Economic Research Service back in 2004, they make the case for the devolution of agricultural policy - returning to the states the power to make their own farm policies. They write:

Current agricultural policy is concentrated at the Federal level, rather than at more decentralized levels. In light of agricultural diversity among States and the possible advantages to more local control of government programs, it is time to consider whether this concentration of power may impede the ability of agricultural policy to effectively address the new face of agriculture in the United States.

The authors suggest that about a third of federal spending on agricultural policy can be returned to the states via block grants, and they suggest various means for deciding on the allocations.

Second, Greg Colson, Octavio Ramirez, and Shengfei Fu of the University Georgia, in an article just released in Applied Economic Perspectives and Policy, make the case for crop insurance savings accounts as an alternative to subsidized federal crop insurance. They write:

This research explores the viability of an alternative design for crop insurance based upon farmer-owned savings accounts that are regulated, monitored, and marginally assisted by the government. Such accounts could be an effective risk management tool for many farmers and could operate without major government subsidization. Relative to the current program, the proposed design should exhibit minimal moral hazard and adverse selection problems, and since farm-level risk does not have to be priced, the proposed design eliminates the premium rating difficulties that weaken actuarial soundness and trigger the need for substantial external subsidies. In addition, administrative costs should be considerably lower.

Neither of these proposals is perfect or a cure-all, but they both have some promise in shaking up the status-quo and moving in a more promising direction.