What do cows want?

As many of you know, I've worked a lot on animal welfare issues over the years (e.g., see this book with Bailey Norwood).  One of the biggest challenges is knowing what changes will make a farm animal better off, particularly given the fact changes in housing conditions often improve one dimension of animal welfare while lowering another (e.g., giving animals more space and room might also expose them to aggression from other animals; providing access to outdoors might involve exposure to predators or more variable temperatures).  

It's too bad that animals can't tell you want they want.  Or can they?  Probably because the approach is so similar to the way economists model human behavior, I'm a big fan of a stream of the animal behavior research that looks at what animals choose to infer what they want.  

To illustrate, consider a a variation on the experiment in this 1977 paper by Marian Dawkins.  Imagine an egg laying hen that is given the choice of entering one of two pens with different flooring materials: wire or straw.  

What would the hen choose?  Not surprisingly, hens prefer straw to wire.  So, when presented with this choice, hens will choose to enter the pen with straw flooring.  

But how much do the prefer straw to wire? Well, we can try to make the wire cage a bit more attractive by adding something to it that we know hens like: food.  Now, the hen's choice is as follows:

Now it's not quite as obvious which option is preferable: the wire floor with good tasting food or the straw floor?  Let's suppose our hen still chooses the straw floor.  What now?  Well, we can continue to try to make the wire floor more attractive by adding more food:

We keep adding food until the hen switches from straw to wire, and the amount of extra food required to get the hen to switch from straw to wire is their minimum willingness-to-accept (WTA) compensation for living on a wire floor.  But, the units are in terms of food rather than in dollars.  But this doesn't mean it's not a useful metric.  Once we know the hen's WTA, we can compare the WTA (in units of food) for wire vs. straw floor to WTA (in food) for other things like outdoor access vs. no outdoor access to get a sense of what is most important to the hen.  Heck, because food has an economic value (in dollars) in the human word, we can even convert the hen's WTA to dollars if we really wanted to make comparisons in monetary units.  

Now let me ask a different question: what would you think of a law that required dairy farmers to milk their cows more often?  My presumption would have been that this would reduce milk cows' welfare.  However, this quote in a post from Tyler Cowen at Marginal Revolution suggests cows think otherwise: 

“There’s something very interesting in someone else’s vantage point, which might have a truth to it. For instance, the tagging of cows for automatic milking machines, so that the cows can choose when to milk themselves. Cows went from being milked twice a day to being milked three to six times a day, which is great for the farm’s productivity and results in happier cows, but it’s also faintly disquieting that the technology makes clear to us the desires of cows – making them visible in ways they weren’t before. ”

So the next time you wonder what an animal wants, you might conjure up a creative experiment to let them tell you.

BTW, economists have been studying animal choice behavior for a long time, and it seems animals' behavior is often quite consistent with our "rational" economic models (e.g., see this book by Kagel, Battalio, and Green)

What's going on in your brain?

Ever wonder why you choose one food over another?  Sure, you might have the reasons you tell yourself for why you picked, say, cage vs. cage free eggs. But, are these the real reasons?

I've been interested in these sorts of questions for a while, and along with several colleagues, have turned to a new tool - functional magnetic resonance imaging (fMRI) - to peak people inside people's brains as they're choosing between different foods.  You might be able to fool yourself (or survey administrators) about why you do something, but you're brain activity doesn't lie (at lest we don't think it does).  

In a new study that was just released by the Journal of Economic Behavior and Organization,  my co-authors and I sought to explore some issues related to food choice.  The main questions we wanted to know were: 1) does one of the core theories for how consumers choose between goods of different qualities (think cage vs cage free eggs) have any support in neural activity?, and 2) after only seeing how your brain responses to seeing images of eggs with different labels, can we actually predict which eggs you will ultimately choose in a subsequent choice task?   

Our study suggests the answers to these two questions are "maybe" and "yes".  

First, we asked people to just look at eggs with different labels while they were laying in the scanner.  The labels were either a high price, a low price, a "closed" production method (caged or confined), or an "open" production method (cage free or free range), as the below image suggests.  As participants were looking at different labels we observed whether blood flow increased or decreased to different parts of the brain when seeing, say, higher prices vs. lower prices.  

We focused on a specific areas of the brain, the ventromedial prefrontal cortex (vmPFC), which previous research had identified as a brain region associated with forming value.  

What did his stage of the research study find?  Not much.  There were no significant differences in brain activation in the vmPFC when looking at high vs. low prices or when looking at open vs. closed production methods.  However, there was a lot of variability across people.  And, we conjectured that this variability across people might predict which eggs people might choose in a subsequent task.  

So, in the second stage of the study, we gave people a non-hypothetical choice like the following, which pitted a more expensive carton of eggs produced in a cage free system against a lower priced carton of eggs from a cage system.  People answered 28 such questions where we varied the prices, the words (e.g., free range instead of cage free), and the order of the options.  One of the choices was randomly selected as binding and people had to buy the option they chose in the binding task.  

Our main question was this: can the brain activation we observed in the first step, where people were just looking at eggs with different labels predict which eggs they would choose in the second step?

The answer is "yes".  In particular, if we look at the difference in the brain activation in the vmPFC when looking at eggs with a "open" label vs. an "closed" label, this is significantly related to the propensity to choose the higher-priced open eggs over the lower-priced closed eggs (it should be noted that we did not any predictive power from the difference in vmPFC when looking at high vs. low priced egg labels).  

Based on a statistical model, we can even translate these differences in brain activation into willingness-to-pay (WTP) premiums:

Here's what we say in the text:

“Moving from the mean value of approximately zero for vmPFCmethodi to twice the standard deviation (0.2) in the sample while holding the price effect at its mean value (also approximately zero), increases the willingness-to-pay premium for cage-free eggs from $2.02 to $3.67. Likewise, moving two standard deviations in the other direction (-0.2) results in a discount of about 38 cents per carton. The variation in activations across our participants fluctuates more than 80 percent, a sizable effect that could be missed by simply looking at vmPFCmethod value alone and misinterpreting its zero mean as the lack of an effect. ”

Excess Supply of Cage Free Eggs?

“Many of the cage-free egg purchase pledges have implementation dates around 2025, which was thought to be the minimum amount of time required for the industry to convert from more than 90 percent cage-housed hens to being predominantly cage free. Unfortunately, many of the retail store purchase pledges don’t contain intermediate benchmarks, and they have provisions for availability and affordability of eggs. Couple this with many consumers’ reluctance to pay the premium for cage-free eggs, and we have the current confusion in the marketplace where surplus cage-free eggs are being sold to breakers at substantial losses for egg producers.”

That's from this article by Austin Alonzo and Terrence O'Keefe. 

At the Fork

A while back, I was contacted by some folks asking if I would agree to be interviewed for a new documentary about livestock production and animal welfare.  I was a bit skeptical and discussion with some of the producers didn't allay my concerns.  I wondered: was I being set up to be the stooge in a Daily Show type interview?  Would my words be taken out of context? There is certainly precedent for these sorts of shenanigans in documentaries, even by well known journalists.  Probably the only thing that kept me talking was the knowledge that the documentary was being made by John Papola, who along with Russ Roberts created the popular Keynes-Hayek rap videos.  

Long story short, I ultimately agreed to be interviewed, and about 10 seconds of my four hour interview can now be seen on screens across the country.  The resulting documentary, At the Fork, was even shown in theaters in Oklahoma  City and Tulsa a week or so ago.

I suspect some of my friends in the livestock industries will find things not to like about the film.  This piece in the National Hog Farmer, for example, questions why some large-scale commercial hog farmers agreed to be interviewed and bristles that the film was financially supported by HSUS and urges viewers at the end to eat less meat.  For my part, I wish more of the questions I was asked about the economics of livestock production and animal welfare made the film - most of the snippets of me contained brief explanations of different production systems.  

But, when it's all said and done, I think Papola did an admirable job trying to get an objective an honest picture of modern animal agriculture.  As I encouraged the producers to do, they actually went and talked to large-scale hog and poultry producers, asked why they did things the way they did, listened, and didn't put them in dim lighting with ominous music.  In fact, the only group who looked like they had something to hide is one large feedlot who wouldn't let the filmmakers on the property.  From my perspective, the only way to counter the argument that no one would eat meat if slaughterhouses and production facilities had glass walls, is to directly challenge the premise and be more transparent.   

Sure, the filmmakers didn't hit every nuance and industry talking point about gestation and farrowing crates or about improved resource use and carbon impacts, but this is not an industry film.  Imagine walking up to a stranger on the streets of New York City, Chicago, or Los Angeles and saying: "what do you think about modern livestock agriculture?"  or "here's a camera, go make a film about farm animal welfare in America."  What do you think you'd get?  From the livestock industry's perspective, I'd say they got about the best they could hope for in At the Fork.  

One other positive note.  So many food and agricultural documentaries are filled with anti-market, anti-capitalist undertones (or in many cases overtones).  Papola is a libertarian and you won't find that sort of sentiment in the film.  His is a market-based message: he's going to try to convince you to buy different types of animal products.  I spent a lot of time talking with him about whether government policies were to blame for consolidation in the food sector in general and large confinement operations in animal agriculture in particular.  By and large, I told him I didn't think there was good evidence for that line of argument.  I argued that it was predominately market forces driving these outcomes (none of this made the film).  I'm sure he could have found someone else to say otherwise to fuel a particular narrative, but he didn't and I take that as a sign that he was truly trying to learn and not just push an agenda.  

Enough of my thoughts.  Watch the film and decide for yourself.

Millennials' Food Values

I've given a couple presentations recently on food trends, and in each instance I was asked whether the so-called Millennial generation thinks differently about food issues than older generations.  I haven't spent a lot of time delving into this question because a lot of the willingness-to-pay research I've been involved with over the years suggests demographics don't tend to explain a lot of the variation in willingness-to-pay.

But, given the interest in the subject, I thought I'd take a quick look at some of the data from the monthly Food Demand Survey (FooDS) I've been running for over three years now.  In particular, I pulled the data we ask on so-called "food values."  The question shows respondents 12 issues (randomly ordered across surveys) and asks respondents which are most and least important when buying food.   Respondents have to click with their mouse and drag four (and only four) items in the “most important” box and then do the same for the “least important” box. 

A scale of importance is created by calculating the proportion of times (across the entire
sample) a food value appeared in the most important box minus the proportion of times it
appeared in the least important box. Thus, the range of possible values for a food value is from -1 to +1, where a higher number implies more importance (a +1 would mean the particular food value was placed in the most important box by 100% of respondents). This is a zero-sum scale, and it only reveals relative importance (e.g., how importance taste is compared to price) not overall importance.   

Ok, so here's a graphical illustration of the food values by age group (I've pulled the data over time, so each age group has several thousand observations, yielding margins of error of around +/- 0.025 importance points).

Except for the oldest group, there is agreement in ranking at the top: Taste>Safety>Price.  In the middle-range of importance, there is far less agreement.  Both the 18-24 year old group and the 25-34 year old group could be considered Millennials according to most definitions I've seen.  The Millennials place less relative importance on nutrition than the 55 and older crowd.  However, the top four issues (taste, safety, price, and nutrition) are way more important than the other issues regardless of the generation under consideration.

The Millennials place less importance on appearance but more relative importance on naturalness, animal welfare, convenience and environment than do older generations, particularly the 65 and older group, which compared to the other age groups, places the lowest importance on naturalness, animal welfare, and environment.  There is a big divide when it comes to the importance of origin: the 65 and older group places quite a bit more importance on origin than do people who are 24 years and younger.  

The biggest gap is for origin (there is a 0.30 spread on the -1 to +1 scale) between the youngest Millennials and the oldest group.  The next biggest gap is for naturalness (there is a 0.22 spread on the importance scale) between the oldest group and the 25-34 year old Millennials.  The most agreement is for "fairness."

It might also be instructive to compare all this along another demographic category: gender (margin of error here is +/- 0.014).  

Women place more relative importance on safety, animal welfare, and naturalness than men. Men place more importance on convenience and novelty than women.  The biggest gap is for animal welfare (a 0.19 point difference on the -1 to +1 scale) and then convenience (a 0.16 difference).