Pew Survey on Consumers, GMOs, and Trust in Science

About a week ago, the PewResearchCenter released a new report (report summary here) on GMOs, organic, and trust in food science.  The report has already been covered quite a bit in the media, but I thought I'd share a few observations on the study's headline results.  

First, the study finds:

“Four-in-ten Americans (40%) say that most (6%) or some (34%) of the foods they eat are organic. ”

It's hard to know what to make of this claim as "some" is a pretty loose category.  One important point to keep in mind here is that USDA data reveal that, except for a few exceptions like lettuce or carrots, for most foods the percent of production that is is organic is typically far less than 5%. 

The study also finds:

“The minority of U.S. adults who care deeply about the issue of GM foods (16%) . . . are also much more likely to consider organic produce healthier”

The finding is consistent with prior research showing that WTP for organic is heavily influenced by the desire to avoid pesticides and GMOs.  In fact, there was a lot of attention given to the organic industry's support of the new mandatory labeling law for GMOs, which allowed disclosure via relatively innocuous QR codes.  The organic industry has worked to make sure people know non-GMO is not synonymous organic.  In other words, these two attributes (organic and non-GMO) are likely demand substitutes for consumers, and the organic industry knows this.  

One of the highlighted conclusions from the study is:

“The divides over food do not fall along familiar political fault lines. ”

I'm not so sure.  While I agree things like concern for GMOs or preferences for organic don't have strong correlations with political ideology, the same can't be said for people's desires to regulate GMOs (say via labels or bans) or subsidize organics .  See, for example, this paper entitled "The political ideology of food" I published in Food Policy in 2012. From the abstract:

“Food ideology was related to conventional measures of political ideology with, for example, more liberal respondents desiring more government involvement in food than more conservative respondents . . .”

As I've written about in the past, I think it is important to separate "food preferences" from "policy preference", and on this last issue, there are big partisan and ideological divides.   

Much of the news coverage I saw about the report focused on the results related to American's trust in scientists and GMOs.  The study reports

“Americans have limited trust in scientists connected with genetically modified foods.”

 The study also reveals only about half the respondents think scientists think GMOs are safe to eat.  Well, Pew's other research shows us that it is more like 88%.  Thus, people under-estimate scientists beliefs about the safety of GMOs.  One might think then, that the answer is to just tell people about the scientific consensus regarding GMOs.  However, my research with Brandon McFadden suggests this probably won't have much affect.  In our study, the biggest determinant of how an individual responded to information about the science on GMOs was their prior belief about the safety of GMOs.  In fact, about a third of the people who thought GMOs were unsafe prior to information said they thought GMOs were even more unsafe after receiving statements from the National Academies of Science, the American Medical Association, etc. indicating GMOs were safe (we called these folk "divergent"); the plurality of people who thought GMOs were unsafe just ignored the scientific information indicating GMOs were safe.  This behavior is a form of motivated reasoning that Dan Kahan has discussed extensively in his work on cultural cognition.  We look for the information that supports our prior beliefs and ignore or discount the rest.  

On this issue of trust in scientists and GMO foods: it is important to note that trust in virtually ALL institutions is down over time.  Gallup has been tracking trust in about a dozen institutions since the 1970s.  Aside from a few exceptions (like the military and police), trust is way down for most institutions.  For example over 65% of people had a great deal or a lot of trust in "church or organized religion" in the 1970s, whereas today the figure is 41%.  For "public schools", confidence was running about 60% in the mid 1970s, but today is only 30%.  Newspapers went from around 40% to now around 20%.  "Big business" from around 30% to now around 18%.   "The medical system" from 80% to 39%.  Similar trends exist for congress, the presidency, organized labor, banks, and so on.   

As a result, it is important to ask how much trust is there in scientists . . . compared to what?  I haven't asked this question specifically in regard to GMOs in particular or food science in general, but a while back I asked on my monthly Food Demand Survey (FooDS):  “How trustworthy is information about meat and livestock from the following sources?” Fifteen sources were listed (the order randomly varied across respondents), and respondents had to place five sources in the most trustworthy category and five sources in the least trustworthy category. A scale of importance was created by calculating the proportion of times a meat and livestock information source as ranked most trustworthy minus the proportion of times it was ranked least trustworthy.

We found:

“The USDA and FDA were reported as most trustworthy with 50% more people indicating the source as most trustworthy than least. A University professor from Harvard were seen as slightly more trustworthy than one from Texas A&M, but both were viewed as less trustworthy than interest groups like the Farm Bureau, the CSPI, or the HSUS.

News organizations, and particularly food companies, were viewed as least trustworthy. Chipotle was the seen as the least trust worthy organization studied – the restaurant chain was placed in the least trustworthy category 69% more often than in the most trustworthy category.”

While individuals scientists at either Harvard or Texas A&M were less trusted than some others perhaps it was because it was phrased a single professor rather than a group of professors.  Indeed, the four top groups are all collections of scientists (among other people).  A subsequent survey asked how much people knew about each of these individuals and institutions, and while CSPI is trusted, it isn't well known.  I suspect people were responding to the word "science".  So, I think there is good reason to suspect people trust scientists as much or more than other societal institutions.

The issue of trust and acceptance of GMOs has been researched quite heavily in the academic literature (e.g., see several studies by Lynn Frewer).  In this paper,  she and coauthors show that people's response to information on GMOs doesn't depend on how much they trust the source per se, but rather it's the other way round: people trust the sources giving them the information that fits with their prior beliefs.  So, again we're back to motivated reasoning.  Still, we should acknowledge some research that shows "information matters."  I've done work on this topic, as has Matt Rousu, Wally Huffman and Jason Shogren.  This last set of researchers show, for example, that relatively uninformed people are influenced by information by interested and third party sources.

There is a lot more in the Pew report, but I think I'll leave it here for now.

Farm Size and Animal Welfare

When I published this piece in the New York Times a couple months ago arguing the large farms can, and often are, good for the environment, one of the most common comments/criticisms I received was something along the lines of: "well surely this isn't true for 'factory farms' and animal welfare."  It has been hard to say much about this because the evidence was limited on relationship between farm size and animal welfare.  However, I was recently alerted to this new review article published in the Journal of Animal Science by a group of researchers at the University of British Columbia.  

Among their many conclusions are these:  

“Farm size and animal welfare exhibit no consistent relationship”

and

“Our review does not support the contention that there is a consistent relationship between farm size and welfare on dairy farms or, indeed, other times of livestock farms. Moreover, the differences that do exist are unlikely to be caused directly by size but by other factors associated with size such as economic viability, staffing level, awareness of and exposure to emerging issues, and access to resources (e.g. time, capital, expert consultants, scientific information, etc.)”

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)

The Benefits of Mandatory GMO Labeling

I ran across this post over at RegBlog which notes that the USDA will have to do a cost-benefit analysis of the new mandatory labeling law for GMOs.  The post relies heavily on this paper by Cass Sunstein written back in August.  Sunstein's article discusses the fact that regulatory agencies typically do a very bad job at quantifying the benefits of mandatory labeling policies (and identifying when or why those benefits only apply to mandatory rather than voluntary labels).

Sunstein argues that, in theory, consumer willingness-to-pay (WTP) is the best way to measure benefits of a labeling policy.  I wholeheartedly agree (and have even written papers using WTP to estimate the benefits of GMO labels) but I want to offer a couple important caveats.  

The issue in ascertaining the value of a label isn't whether consumers are willing a premium for non-GM over GM food.  Rather, as emphasized in this seminal paper by Foster and Just, what is key is whether the added information would have changed what people bought.  If you learn a food you're eating contains GMOs (via a mandatory label) but you're still unwilling to pay the premium for the non-GMO, then the the label has produced no measurable economic value.  Thus, a difference in WTP for GMO and non-GMO foods is a necessary but not sufficient condition for a labeling policy to have economic value.  

The Foster and Just paper outlines the theory behind the value of information.  Here's the thought experiment.  Imagine you regularly consume X units of a product.  Some new information comes along that lowers your value for the product (you find out it isn't as safe, not as high quality, or whatever).  Thus, at the same price, you'd now prefer to instead consume only Y units of the product.  The value of the information is the amount of money I'd have to give you to keep consuming X (the amount you consumed in ignorance) in spite of the fact you'd now like to consume only Y.  Given an estimate of demand (or WTP) before and after information, economists can back out this inferred value of information.      

But, here is a really important point: this conception of the value of information only logically applies in the case of so-called "experience" goods - goods for which you know afterward whether it was "high" or "low" quality.  Just and Foster's empirical example related to a food safety scare in milk.  In their study, people continued to drink milk because they didn't know that it had been tainted.  By comparing consumer demand (or consumer WTPs) for milk before and after the contamination was finally disclosed, the authors could estimate a value of the information.  In this case, the information had real value because the people would really have short and long term health consequences if they kept consuming X when they would have wanted to consume Y.

It is less clear to me that this same conceptual thinking about the value of information and labels applies to the case of so-called "credence" goods.  These are goods for which the consumer never knows the quality even after consumption.  Currently marketed GMOs are credence goods from the consumers' perspective.  Unless you're told by a credible source, you'll never know whether you ate a GMO or not.  So, even if a consumer learned a food was GMO when they thought it was non-GMO, and wanted to consume Y instead of X units, it is unclear to me that the consumer experienced a compensable loss.  

Expressing a view with which I'm sympathetic, Sunstein also notes that mandatory labels on GMOs don't make much sense because the scientific consensus is that they don't pose heightened health or environmental risks.  Coupling this perspective with the credence-good discussion above reminds me a bit of this philosophical puzzle published by Paul Portney back in 1992 in an article entitled "Trouble in Happyville".  

“You have a problem. You are Director of Environmental Protection in Happyville, a community of 1000 adults. The drinking water supply in Happyville is contaminated by a naturally occurring substance that each and every resident believes may be responsible for the above-average cancer rate observed there. So concerned are they that they insist you put in place a very expensive treatment system to remove the contaminant. Moreover, you know for a fact that each and every resident is truly willing to pay $1000 each year for the removal of the contaminant.

The problem is this. You have asked the top ten risk assessors in the world to test the contaminant for carcinogenicity. To a person, these risk assessors - including several who work for the activist group, Campaign Against Environmental Cancer - find that the substance tests negative for carcinogenicity, even at much higher doses than those received by the residents of Happyville. These ten risk assessors tell you that while one could never prove that the substance is harmless, they would each stake their professional reputations on its being so. You have repeatedly and skillfully communicated this to the Happyville citizenry, but because of a deep-seated skepticism of all government officials, they remain completely unconvinced and truly frightened - still willing, that is, to fork over $1000 per person per year for water purification.”

What should the Director do?  My gut response to this dilemma is the same as what my Ph.D. adviser Sean Fox wrote in a chapter for a book I edited a few years ago:

“It’s a difficult question of course, and the answer is well beyond both the scope of this chapter and the philosophical training of the author.”

Turkey Prices - Thanksgiving Edition

With Thanksgiving just around the corner, now is as good a time as any to take a look at turkey prices and see how the the price of the centerpiece of the holiday meal has changed over time.

Using monthly data from the Bureau of Labor Statistics (maintained by the LMIC) from January 1980 to October 2016, here is the trend in whole, frozen turkey prices.  In inflation adjusted terms, turkey prices fell by half from 1980 to 2008.  Then, along with other agricultural commodities, turkey prices rose and then fell again.  Still, prices today are about 40% lower than they were in the 1980s in inflation adjusted terms.  The nationwide price of turkey in October 2016 (the last reported by the  BLS) was $1.69/lb.      

An interesting feature of the data in the graph above is the apparent cyclical nature of turkey prices within a year.  This raises the question: are you paying more or less for turkey when Thanksgiving rolls around?  Looking at the monthly data since 1980, the answer might be a bit surprising: November tends to be the month with lowest prices for turkey. Prices of turkey in November tend to be  about 5% lower than the average annual price.  Moreover, October tends to be the month with the highest price for turkey (about 3-4% higher priced than the annual average price).  Thus, the largest price swing happens from October to November with prices typically falling about 8% just prior to Thanksgiving.  

This pattern of price fluctuation might be a bit surprising.  Isn't it the case that demand for turkey is highest in November? If so, shouldn't a demand increase drive up prices?  Yes, but producers also know when demand spikes occur and they can plan production and storage accordingly (this is a fairly highly integrated industry) so that there is ample supply during this time.  Additionally, research on this topic has suggested that retailers might use turkeys as so-called "loss leaders".  Knowing that many consumers will be shopping for turkeys, retailers will offer specials and discounts  on the item everyone is looking for to get them in the door so that they'll buy all the other things it takes to make a Thanksgiving meal.  

Finally, it's instructive to look at proteins more generally.  How pricey is turkey relative to the other big ticket meat items that families might put on their dinner plate?  If turkey got too expensive, you can substitute toward another tasty main course. (Growing up, my family was never a big fan of turkey, so we often opted for steaks or ham).   

Here are the relative price trends since January 2000 (again based on BLS prices).  As of last month, beef steaks are about 4.4 times more expensive (on a $/lb basis) than turkey, and beef roasts are about 3.1 times more expensive than turkey.  Another way to say this is that for the same fixed budget, one could buy four times as much turkey as they could beef steak (no minor issue if a dozen folks are headed to your house).  Pork chops and ham are both about 2.3 times the price of turkey.  That said, beef and pork are more affordable relative to turkey than they were last year at this time.  From October 2015 to October 2016, the prices of the beef and pork products investigated here have fallen 11.8 to 16.6% relative to the price of turkey.  Whole chickens are about the same price as turkeys, though slightly cheaper on per-pound basis.

Now that you know the prices, figure out how many pounds you need to feed the gathering, how much you can spend, and buy whatever it is that brings you and your family the greatest joy.  Happy Thanksgiving!