Regulating your food choices vs. retailers' food choices

Suppose the government made it illegal for you to buy sugared soda.  What would be your reaction?  How would you feel?  

Now, suppose instead that the government made it illegal for grocery stores and other vendors to sell sugared soda.  Is your reaction to the second law less visceral than the first?  

I suspect so.  But, here's the key: both laws impose the same restriction on your freedom - the outcomes are precisely the same.

Writing at Forbes, John Goodman notes this dichotomy in the case of California eggs (HT David Henderson)

“California has a new law that requires all eggs sold in the state to come from chickens that are housed in roomier cages. Specifically, the hens “must be able to lie down, stand up and fully spread their wings.”

So how many Californians have been arrested for eating the wrong kind of egg? Zero. Not even one? Not one. Actually, the law doesn’t take effect until January, but even then egg eaters will have nothing to fear. The reason: the law doesn’t apply to people who eat eggs. It only applies to people who sell eggs.

When you stop to think about it, that’s not unusual. Almost all government restrictions on our freedom are indirect. They are imposed on us by way of some business. In fact, laws that directly restrict the freedom of the individual are rare and almost always controversial.”

After discussing various reasons for the differences in the way we respond to individual vs. business restrictions, Goodman concludes:

“Finally, the idea being proposed here seems consistent with history. Over the past two hundred years, we have had a steady migration of people from agriculture to the cities, where they became employees of firms. Over the same period of time we have had a parallel increase in the intrusiveness of government.

Bottom line: if there were no firms, taxes would be much lower, there would be far fewer regulations and government would be a much less important institution in our lives.”

What are the farm-level effects of GMOs?

A new study published in PLoS ONE by Wilhelm Klümper and Matin Qaim surveyed the literature on the farm-level effects of GMO adoption.  They conducted a Meta analysis - a type of quantitative literature review - covering 147 previous studies.

What did they find?

“On average, GM technology adoption has reduced chemical pesticide use by 37%, increased crop yields by 22%, and increased farmer profits by 68%. Yield gains and pesticide reductions are larger for insect-resistant crops than for herbicide-tolerant crops. Yield and profit gains are higher in developing countries than in developed countries.”

This is a a decent study which summarizes what most people who follow the literature already know.  There will, no doubt, be attempts by the anti-GMO crowd to discredit the study.  However, Qaim is a productive, well known agricultural economist.  He’s published in the best outlets in agricultural and development economics, and even in journals like Science and Nature Biotechnology.  

Like any Meta analysis, the study isn't perfect, and is only as good as the studies being reviewed.  A few criticisms.  The analysis didn't much differentiate between insecticides (the use of which has almost certainly fallen) and herbicides (total use is probably up, but because GM producers have switched to less toxic herbicides  the total toxicity is likely down).  Also, some of the underlying studies may not have done a good job separating yield gains from traditional hybrid breeding from gains conveyed by biotechnology per se, so the yield gains attributable to GM may be a bit overstated (e.g., see this study).  What I’m saying here is that corn/soybean yields probably would have increased regardless of whether GM was adopted, so you have to “back out” the increase attributable to GM; some studies do that well, others don’t.  Finally, as you can see in their figures, there is a lot of heterogeneity across studies; the mean effects for yields and profit are positive, but some studies show negative.  

In any event, this is a good study that re-confirms my own reading of the literature.

Paternalism - Immigration Edition

A lot of policies involve group A trying to pass laws that they perceive to improve group B's well-being.  But, how often do we ask group B what they really want?

This new paper by Grace Melo, Gregory Colson and Octavio Ramirez shows how such paternalism can might lead to policies that group B doesn't actually prefer.

“This study presents evidence from a survey and choice experiment on the preferences of Hispanic immigrants who entered the United States illegally for different immigration reform proposal attributes. Key components of the current competing US Senate and House immigration reform bills are considered including pathways to legal permanent residence, temporary work visas, family visitation rights, and access to medical care. The results quantify the value Hispanic immigrants place on different policy attributes and suggest that longer-term work visas are highly valued. Ability to legally work in the United States and a pathway to citizenship are substantially more valued than social services such as medical care and social security benefits.”

Smaller plate size = lower consumption?

Having read a couple papers that looked at the amount of food people ate when using smaller vs. larger plates, I presumed it was something of a stylized fact that people ate less when using smaller plates.  However, this review study just released in Obesity Reviews, suggests that 

“Evidence to date does not show that dishware size has a consistent effect on food intake, so recommendations surrounding the use of smaller plates/dishware to improve public health may be premature.”

Guess I need to update my beliefs on this one.  Here's the whole abstract:

“It has been suggested that providing consumers with smaller dishware may prove an effective way of helping people eat less and preventing weight gain, but experimental evidence supporting this has been mixed. The objective of the present work was to examine the current evidence base for whether experimentally manipulated differences in dishware size influence food consumption. We systematically reviewed studies that experimentally manipulated the dishware size participants served themselves at a meal with and measured subsequent food intake. We used inverse variance meta-analysis, calculating the standardized mean difference (SMD) in food intake between smaller and larger dishware size conditions. Nine experiments from eight publications were eligible for inclusion. The majority of experiments found no significance difference in food intake when participants ate from smaller vs. larger dishware. With all available data included, analysis indicated a marginal effect of dishware size on food intake, with larger dishware size associated with greater intake. However, this effect was small and there was a large amount of heterogeneity across studies (SMD: −0.18, 95% confidence interval: −0.35, 0.00, I2 = 77%). Evidence to date does not show that dishware size has a consistent effect on food intake, so recommendations surrounding the use of smaller plates/dishware to improve public health may be premature.”

The problem with nudging

Jeremy Waldron in the New York Times Review of Books has one of the best critiques of the "Nudge" approach advocated by Sunstein and other behavioral economists (HT: Tyler Cowen).

After discussing the problem with the elitism inherent in "we" (i.e., the experts) making decisions "them" (i.e., the laypeople), he gets to the issue of dignity:

“Consider the earlier point about heuristics—the rules for behavior that we habitually follow. Nudging doesn’t teach me not to use inappropriate heuristics or to abandon irrational intuitions or outdated rules of thumb. It does not try to educate my choosing, for maybe I am unteachable. Instead it builds on my foibles. It manipulates my sense of the situation so that some heuristic—for example, a lazy feeling that I don’t need to think about saving for retirement—which is in principle inappropriate for the choice that I face, will still, thanks to a nudge, yield the answer that rational reflection would yield. Instead of teaching me to think actively about retirement, it takes advantage of my inertia. Instead of teaching me not to automatically choose the first item on the menu, it moves the objectively desirable items up to first place.

I still use the same defective strategies but now things have been arranged to make that work out better. Nudging takes advantage of my deficiencies in the way one indulges a child. The people doing this (up in Government House) are not exactly using me as a mere means in violation of some Kantian imperative. They are supposed to be doing it for my own good. Still, my choosing is being made a mere means to my ends by somebody else—and I think this is what the concern about dignity is all about”

and

“Choice architects nudge almost everything I choose and do, and this is complemented by the independent activity of marketers and salesmen, who nudge away furiously for their own benefit. I’m not sure I want to live in nudge-world, though—as a notoriously poor chooser—I appreciate the good-hearted and intelligent efforts of choice architects such as Sunstein to make my autonomous life a little bit better. I wish, though, that I could be made a better chooser rather than having someone on high take advantage (even for my own benefit) of my current thoughtlessness and my shabby intuitions.”

Sounds somewhat similar to how I ended my chapter on behavioral economics in the Food Police

“The economist Robert Sugden says the paternalists are wrong: “There is a viable alternative to paternalism. It is what it always has been – the market.” I don’t know about you, but when I walk into a cafeteria, I want the managers to tempt me – to offer me what looks good at a price I’m willing to pay. Yes, this kind of world might require more will-power and self control, but the alternative world of the paternalistic food police would deprive us of the noble act of making a wise choice when we had the freedom to do otherwise. ”

One thing nudging defenders often say is something like: "but companies nudge us all the time . . ."  That is true, but one must recognize that we can opt-out of a company nudge.  Companies are in competition with each other, and if we don't like the results of the company-nudge, another entrepreneur will come along.  Not only that, if the company nudges aren't really in our best interest, why doesn't another company come along, tell us that and sway us to buy their product?  In short, the difference between a company nudge and a government nudge is the the abundance of competition and op-out ability for the one and the lack of competition and monopoly in the other.  

My most recent piece on the topic came out recently in the European Review of Agricultural Economics.