Calorie Labeling at Harvard

“There have been some suggestions that we need to post calories at schools and certainly in college dorms … it’s not really a good solution, and Harvard recently removed this information for fear of contributing to eating disorders, because students were going in and selecting their foods based on the calories and not necessarily the nutritional value.”

That's from Anding, Roberta A. Professor, Baylor College of Medicine and Texas Children’s Hospital. “Lecture 20: Obesity—Public Health Enemy Number One.” Nutrition Made Clear from the Teaching Company (HT Bailey Norwood; one transcript is here)

Food insecurity remains essentially unchanged

Yesterday the USDA Economic Research Service released a report on the prevalence of food insecurity in the U.S.  Over 14% of US households (that's 17.5 million households or 49 million people) remain food insecure, a number that hasn't much budgeted since the recession began in '07-08.

As pointed out in a Wall Street Journal editorial today, the USDA's measure of food insecurity isn't a direct measure of hunger.  Rather, the measure is derived from responses to a set of survey questions.  Respondents are shown 10 questions (18 if they have children), and if they respond "yes" more than three times to questions like, "In the last 12 months, did you or other adults in the household ever cut the size of your meals or skip meals because there wasn’t enough money for food?" then the household is classified as food insecure.  

Over at the US Food Policy blog, Parke Wilde remarks:

“In previous years, the United States solemnly adopted targets for reducing the prevalence of food insecurity from 12% (the level observed in the mid-1990s) to 6%. As my chart (based on USDA data) shows, this effort to improve U.S. food security has failed. Yet, neither Democrats nor Republicans talk much any more about any substantial realistic strategy for poverty reduction — with serious objectives, quantitative targets, and implementation steps. Though food assistance is of course important, poverty reduction is the most promising approach to improving household food security in the United States.”

James Bovard in the WSJ notes that the food insecurity results are surprising given the rise in food stamp participation over this period

“In 2013 the USDA reported that federal food programs—most notably food stamps provided by the Supplemental Nutrition Assistance Program (SNAP)—“increase food security by providing low-income households access to food, a healthful diet, and nutrition education.” But food insecurity was more widespread in 2013 (14.3%) than in 2007 (11.1%), while food-stamp recipients rose to 47 million from 26 million.”

Bovard makes an interesting and relevant observation.  However, I'm not sure that I fully agree with his characterization of the literature on the (lack of) causal relationship between food stamp participation, food insecurity, and hunger.  It could be that we would have had even higher rates of food insecurity had enrollment in food stamps not swelled.  As econ-speak: we didn't observe the counter-factual.  

A few comments I've read point out that food insecurity would likely have been lower in 2013 had we not experienced higher food prices over the last several years (particularly for protein over the past year).  That's almost certainly is true.  Just last year, two USDA-ERS researchers (two of the same people who authored the recent report on food insecurity) published a paper (which I previously discussed here) in the journal Applied Economic Perspectives and Policy showing that food stamp participants who live in areas with higher food prices are more likely to be food insecure than food stamp participants who live in areas with lower food prices.  They write:

“We find that the average effect of food prices on the probability of food insecurity is positive and significant: a one-standard deviation increase in food prices is associated with increases of 2.7, 2.6, and 3.1 percentage points in household, adult, and child food insecurity, respectively. These marginal effects amount to 5.0%, 5.1%, and 12.4% increases in the prevalence of food insecurity for SNAP households, adults, and children, respectively.”

If we want less food insecurity, one way to achieve that outcome is to have lower food prices.  How to we get lower food prices? Rain would help (but not too much rain).  The primary systematic way to achieve long-term reduction in food prices is through scientific development and technological innovation that increases agricultural productivity.    

When fat taxes meet the supply side

Last week at the European Association of Agricultural Economist's meetings, I saw Louis-George Soler present a keynote talk on food and nutrition policies.  The paper-version of the talk, written with Vincent Réquillart  is being published in the European Journal of Agricultural Economics.

One of the key points of his talk was that much of the policy analysis on effects of fat taxes, soda taxes, veggie subsidies, etc. only consider consumer responses and ignore how firms will react to the policies.  It is often the case that such supply-side responses will substantively reduce the health impacts of the policies.

For example, suppose Congress passed a law banning advertising of sweetened sugared cereal to children.  How might Kellogg's or General Mills respond?  Given that the firms can no longer  use their revenue on promotion and advertising, they might instead re-direct those funds to cost-cutting efforts that reduce the cereals' prices.  Competition moves from who has the most compelling ad to who has the lowest price.  Lower prices will encourage more consumption: exactly the opposite of what was intended by the ban.

Another point they raise is related to the "pass-through" effect of taxes on firms profits and retail prices.  Given the nature of competition between firms and the type of tax (excise or ad valorem), a tax can be "over-shifted" or "under-shifted" to consumers.  Thus, tax policies might cause a larger or smaller reduction in consumption than anticipated.

Take another example.  Suppose the government requires firms to add "high fat" labels to certain products.  The research cited in the Requillart-Soler paper suggests that firms may respond by lowering the price of the high fat items and increasing the price of the low fat items.  While the "high fat" label will tend to discourage consumption, the now lower relative price for high fat items will tend to encourage consumption.  

None of this is to say that food policies won't have any impact on health, only that studies which ignore food companies' responses to the new policy environment will often overestimate the health impacts of food policies.   

Is Food the New Sex?

That's the title of an article by Mary Eberstadt from a couple years ago in the Hoover Institution's Policy Review.  I found the whole thing fascinating.  In the piece, Mary describes the complete reversals that have happened with food and sex.  Over the past half century, sex has become much more liberalized, and much that was taboo is now o.k.  Precisely the opposite has happened with food.  

Here's one interesting sentence

“In the end, it is hard to avoid the conclusion that the rules being drawn around food receive some force from the fact that people are uncomfortable with how far the sexual revolution has gone — and not knowing what to do about it, they turn for increasing consolation to mining morality out of what they eat.”

Slovenia

I'm excited to be in Slovenia this week giving a couple talks at the European Association of Agricultural Economists triennial congress in Ljubljana Slovenia.

One of my talks is an invited plenary address on the implications of behavioral economics for food policy.  The paper version of the talk was recently published by the European Review of Agricultural Economics.

A couple views just outside my hotel.