That's the title of an interesting new article in the journal Applied Economic Perspectives and Policy by Kent Messer, Marco Costanigro, and Harry Kaiser. Here's the abstract:
Blog
The Effects of Farm and Food Policy on Obesity in the United States
That's the title of a new book by Julian Alston and Abigail Okrent. Right now it's only available as an ebook, but the hard copy should be out soon. Here's the publisher's description.
I had the pleasure of seeing a pre-release copy of the book and provided the following blurb:
How Animal Welfare Laws Affect Egg Prices and Production
Like California, at least five other states (Massachusetts, Michigan, Ohio, Oregon, and Washington) have passed laws that will eventually limit the use of so-called battery cages in egg production, and retailers like Walmart and McDonald's have made pledges to do the same. Because this move started earlier in California, and due to the size of that state and the volume of egg production there, California represent a good case to analyze the effects of these laws.
While I've written on this topic a number of times here on the blog (e.g., here), Conner Mullally and I have finally pulled together a revision of our earlier work that is much more comprehensive and hopefully informative.
One question that I haven't seen much addressed is: what happened to egg production in California as result of their animal welfare laws (these laws include passage of Proposition 2 by voters in 2008 which banned the production of eggs from battery cages and the subsequent passage of state law AB 1437 which banned the sale of eggs from battery cages - both were ultimately enforced on January 1, 2015 via California Department of Food and Agriculture (CDFA) rules)?
Before all of this went down, Dan Sumner and other researchers at UC Davis warned that passage of Prop 2 could lead to an exodus of California egg producers and lead California retailers to increase imports of eggs from other states (that's one reason state law AB 1437 came into being - to try to prevent this outcome). The chart below shows our analysis of the number of egg laying hens in California, which generally confirms the UC Davis researcher's conjecture made back in 2008.
We estimate that:
Here is a graph of egg imports into the state, which Conner obtained via a FOIA request from CDFA, along with egg production in the state.
In addition to these production impacts, we were also interested in the impacts on prices paid by food consumers. To address this issue, we obtained retail scanner data from Nielsen.
Here is a graph of the actual (or observed) price of eggs in California compared to our prediction of what egg prices would have been had the new animal welfare laws not gone into place.
The intractability of the soda tax debate
This recent article claims that the new soda taxes in Philadelphia are causing a larger than expected drop in soda sales.
Did that piece of news change your mind on whether the soda tax is a good or bad idea? My guess is: probably not. As humans, we're adept at finding ways of confirming our prior beliefs and positions. That is, we suffer from various forms of confirmation bias.
Let's take the above story at face value: after the tax was implemented, we find a large reduction in soda consumption. What are the expected reactions by the competing camps? (note: by definition, a large reduction in soda consumption implies that the receipts from the tax are smaller than expected as people are avoiding the tax by buying less soda).
The pro-tax folks would say:
- "Ah-ah! This simple solution has a big public health benefit. It got people to stop consuming all those useless, empty calories, and now we'll finally make headway on obesity and diabetes.”
“This big drop in consumption was accomplished without costing consumers much. In fact their expenditures on soda fell! Now they have more money to spend on healthier items.”
The anti-tax folks would say:
- “We told you this tax policy would cost jobs. Nobody is buying soda anymore, and people will have to be laid off at the beverage manufacturing plants and the beverage distributors.”
- “You promised that the tax would fund public education but there aren’t enough new tax receipts to fund any new programs or to give teachers meaningful raises.”
- “People may have stopped buying soda, but look now they’re buying more [insert the untaxed, unhealthy food of your choice here].
Now, instead imagine the opposite case was observed. Suppose that after the tax was implemented, we find no (or a small) reduction in soda consumption. What are the possible reactions by the competing camps? (note: by definition, a small reduction in soda consumption would imply that the receipts from the tax are higher than expected – the government is raking in money as people are still buying soda and paying the tax).
The pro-tax folks would say:
- “Look at all the new money we’ve raised to finally get to work on [insert your favorite public program or cause here].”
- “We're finally making "Big Soda" pay for all the costs they've been imposing on society.”
- "The soda tax is just one small part of an overall plan to reduce obesity and improve public health."
The anti-tax folks would say:
- “This policy created a bureaucratic agency to oversee the tax, increased the size of government, and look, it didn’t have any impact on obesity or public health as promised.”
- “We told you this was a regressive tax. The majority of the new tax dollars being generated are being paid by lower income households.”
This sort of conundrum shows that it is hard to have an intellectually honest debate about the evidence. It also suggests that policy advocacy (or policy opposition) is often more about competing values or philosophies than it is about empirical evidence (after all, both sides claim to want evidence-based decision making). In general, I think it is troubling if someone can't answer the question: "What evidence would it take to convince you that you were wrong?"
As more locations - from Seattle to Santa Fe - are considering the adoption of soda taxes, it would be useful if folks stated, before adoption takes place, what outcomes would or would not support their initial opposition or advocacy to the tax. Because right now, any post-tax outcome can be interpreted as evidence in favor of either position. Or, just be honest, and say that opposition or advocacy for the tax is not an evidence-based position, but rather one based on some underlying philosophy or set of values.
As for me, I'll admit that much of my opposition to soda taxes is indeed value-based based. I tend to favor freedom of choice and limited government, and I haven't been convinced by the market-failure arguments that would justify the tax. Now, let me put that to the side and say that most of my writing on the subject has argued that, empirically, soda taxes are unlikely to have much effect on obesity/diabetes rates. As a result, I see the policy as an ineffective means to achieve the desired end (by the way if we want to fund more public education, there are likely more efficient was of doing that than taxing soda). Moreover, if it is true that the tax doesn't much change consumption, it implies consumer demand is relatively inelastic, which also implies that the tax burden primarily falls on the consumer rather than the producer (note: economic theory indicates that it doesn't matter whether the tax is technically imposed on the producer or the consumer - it is the underlying elasticities of supply and demand that determine who actually bears the burden of the tax). So, if the claim in the above article is true and the soda tax has a "large" effect on soda consumption, that would undermine many of my empirical arguments against the soda tax.
But, I'm not sure that evidence showing that a soda tax had a large reduction in soda consumption would turn me into a tax advocate. After all, if you showed me that a tax on broccoli caused a large reduction in broccoli consumption, I wouldn't suddenly become a broccoli-tax advocate. Rather, I think the kind of evidence I'd find more persuasive, if one wanted to substantively more me away from an anti-soda tax position, is evidence that soda consumption causes an externality (and "no" the presence of Medicare/Medicaid is not evidence of an efficiency-reducing externality) or that, in this particular case, there were substantively perverse information asymmetries (although the appropriate policy here is probably information provision not a tax), or behavioral biases that citizens themselves want "corrected" via government action (just because a soda tax passes with more than 50% of the vote doesn't really "count" as evidence here because many of the people who vote in favor of the tax don't consume much taxed soda).
Banning Soda Purchases Using Food Stamps - Good idea or bad?
According to Politico:
I've written about this policy proposal several times in the past. It's an example of good intentions getting ahead of good evidence. Do SNAP (aka "food stamp") participants generally drink more soda than non-SNAP participants? Yes. Is excess soda consumption likely to lead to health problems? Yes. But, will banning soda purchases using SNAP funds reduce soda consumption. Probably not much.
In fact, I just received word that the journal Food Policy will publish a paper I wrote with my former Ph.D. student, Amanda Weaver, on this very topic. First is the logical (or theoretical) argument:
If that wasn't transparent, consider the example I gave in this paper I wrote for the International Journal of Obesity:
So, in theory, people can "get around" these sorts of SNAP restrictions very easily making the restriction ineffectual.
Now, back to my Food Policy paper. Our experiment results show the following:
So, maybe restrictions on soda purchases by SNAP recipients will affect their soda consumption after all. Here are our thoughts on that:
Another thing to keep in mind is that such restrictions may limit people's willingness to participate in SNAP in the first place. Even in our experimental context, we find that soda restrictions do indeed affect participation as measured by use of the "coupon" or "stamp" (both whether it is used at all and the amount of the coupon used).
All in all, I think the above discussion shows that despite the intuitive appeal of a simple policy restricting SNAP purchases, the actual consequences are likely to be much more complicated.