Does information on relative risks change concerns about growth hormones?

Consumers often express concern about the use of growth promotants in animal agriculture.  In the beef industry, various growth hormones are administered to cattle to improve and speed the rate of growth (and some would say, improve the sustainability of beef production).  Upwards of 90% or more of feedlot cattle in large feedyards are given hormone implants.

Some consumers are fearful about the safety effects.   For example, the EU has banned imports of hormone-treated cattle from the US for over 20 years (a policy which probably has more to do with protectionism than actual safety concerns).  Other people have argued that these are the cause of decreasing puberty age of girls (which the data doesn't support).

As a result, many in the beef industry have have tried to communicate the fact that the risks from hormones are small to non-existent, and are much smaller than the risks from hormones in everyday foods.  The normal comparison is between how much estrogen is in a hamburger from an implanted steer or heifer vs. the amount of estrogen in other foods like soybean oil or cabbage.  Examples of such discussions appear at BeefMyths.org, US Meat Export Federation, the NCBA, and extension facts sheets from Michigan State University, University of Nebraska, University of Georgia, and many others.

Circulating on the web a while back were some discussions of using some visual strategies to communicate the relative risks from estrogen used in cattle implants.  For example, here is one blog discussing the use of M&Ms to convey the risks.  

The question I wanted to know is whether any of these sorts of communications actually has any impact on the people for whom it is intended.  

In the most recent issue of my monthly Food Demand Survey (FooDS), we sought to address this issue.  1,017 respondents were randomly allocated to one of three information groups or treatments.  In the first no-info group, respondents were simply told, “About 90% of feedlot cattle are given added growth hormones to improve the rate of growth.” And then, respondents were asked, “How concerned are you about the use of growth hormones in beef production?”  

For the second group text-only group, written text was added to convey relative risks of hormone use.  Prior to being asked level of concern, subjects were told, “About 90% of feedlot cattle are given added growth hormones to improve the rate of growth.  The added hormones add about 3 extra nanograms (a billionth of a gram) to a 3 oz serving of beef.  For comparison purposes, the amount of estrogen that naturally occurs in 3 oz of the following foods is: potatoes (225 nanograms), peas (340 nanograms), cabbage (2,000 nanograms), soybean oil (170,000 nanograms).”  

Finally, the third visual+text group was given the same written text but was also shown the above visual illustration using M&Ms allocated to different jars.  

Participants in all three groups answered with their level of concern on a five-point scale (1 = very unconcerned; 5=very concerned).

Information on relative risks caused a small but statistically significant reduction in the level of concern.  The mean levels of concern, on the 5-point scale, were 3.93, 3.71, and 3.66 for the no-info, text-only, and text+visual information groups.  

Without any information on relative risks, over 71% of respondents indicated that they were either concerned or very concerned.  Textual information reduced that frequency to 66%, and visual+text information further reduced the percentage of concerned respondents to 63.6%.   

What we think about a label may be as important as the label itself

What believe about a food's ingredients may have a biological effect on our bodies above and beyond the actual nutrient content.

That is the conclusion from a study published in the journal Health Psychology, which was recently covered by Alix Spiegel at the NPR Health blog.

The authors conducted an experiment in which they fed the same 380 calorie milk shake to two different groups of subjects.  The first group was lied to, and were told (via a label) that the shake was a "sensible" 140 calories.  The second group was also lied to, but in the opposite manner: they were told (via a label) that the shake was an "indulgent" 620 calories.  

The researchers measured the levels of a hormone, ghrelin, before during and after the label experiment.  Ghrelin levels are particularly interesting to monitor because they regulate metabolism and help signal hunger or satiety.  After eating a big meal, ghrelin levels fall, signalling us to stop eating.  Eat a light meal, and ghrelin levels remain high, signaling us to eat more.

The authors found that people consuming the "indulgent" labeled shake experienced a significant increase in ghrelin just before consumption (in anticipation) and then a significant decline in ghrelin after consumption.  The change, the authors argue, is consistent with that typically observed after eating a big meal.  By contrast, the level of ghrelin was flat before and after eating the "sensible" shake.   All this is in spite of the fact that the two shakes were exactly the same in every way except for the labels!  

The authors were quoted as saying:

Labels are not just labels; they evoke a set of beliefs

and that labels might

actually affect the body's physiological processing of the nutrients that are consumed.

One way to interpret the results is to place them in the category with other "behavioral biases" in the behavioral economics literature: another piece of evidence that people do not behave rationally.  I see it a bit differently.  The results suggest a kind of "extra" rationality.  Mind over matter.  What we think might well trigger how our body responds.  Marketers might influence what we think about foods, but we have some control over the process too.  

Now, if I can just fool myself into believing that small lunch salad is actually one of the Carl's Jr. "Indulgent Salads", I'll feel fuller and lose more weight! 

The study's sample size was small (N=46), probably because to measure ghrelin they had to insert an intravenous catheter to draw blood at repeated intervals.  So one proceed with caution until more work of this sort is done.  Still, very interesting nonetheless.

Effects of restaurant menu labels

Brenna Ellison, David Davis, and I have a paper forthcoming in the journal Economic Inquiry and that is finally available online.

Here's are the study objectives:

The overall purpose of this research is to perform an in-depth examination of menu labeling and pricing policies in a full-service, sit-down restaurant. Specifically, this research determines: (1) whether caloric labels in a fullservice restaurant influence food choice, (2) whether symbolic calorie labels are more/less influential than numeric calorie labels, (3) how effective menu labels are relative to “fat taxes” and “thin subsidies” at reducing calories ordered, and (4) the economic value of menu labels.

Our projections of the short-run effects of different policies (numeric label, symbolic label, 10% tax on high calorie items, or 10% subsidy on low calorie items) on the number of calories ordered at the restaurant we studied are as follows:

The only policy option which resulted in a statistically significant change in calories (where the 95% confidence interval on the change didn't include zero) was a "symbolic" calorie label - essentially a traffic light label with a red dot next t the highest calorie items, a yellow dot next to medium calorie items, and a green dot next to lowest calorie items.  We put the point estimate on the value of the symbolic label at about $0.13/person/meal.

It is important to note that the symbolic label policy option was also the one that had the most detrimental effect on restaurant revenues (these results are in Brenna's dissertation).  Also, curiously enough, Brenna's surveys suggest most people say they don't want the symbolic label.  Here's what we wrote in a different paper discussing a post-meal survey conducted with some of the diners:

Interestingly, despite the calorie+traffic light label’s effectiveness at reducing calories ordered, it was not the labeling format of choice. When asked which labeling format was preferred, only 27.5% of respondents wanted to see the calorie+traffic light label on their menus. Surprisingly, 42% preferred the calorie-only label which had virtually no influence on ordering behavior.

Coming to a Grocery Store Near You: A New Nutrition Facts Panel

According to this story from the AP:

After 20 years, the nutrition facts label on the back of food packages is getting a makeover.

and

The FDA has sent guidelines for the new labels to the White House, but Taylor would not estimate when they might be released. The FDA has been working on the issue for a decade, he said.

and

The revised label is expected to make the calorie listing more prominent, and Regina Hildwine of the Grocery Manufacturers Association said that could be useful to consumers. Her group represents the nation's largest food companies.

Hildwine said the FDA also has suggested that it may be appropriate to remove the "calories from fat" declaration on the label.

It's not yet clear what other changes the FDA could decide on. 

Personally, I think it is a good idea to bring research to bear on the design of the nutrition facts panel.  I've been critical of certain aspects of the implications people draw from the research in behavioral economics.  But, here is an area where the research is useful and has direct relevance.  

The government is going to provide nutrition information anyway (and has been doing it for 20 years), and as such, shouldn't it at least be presented in a way that is most understood by the consumer?  It is impossible to believe that the current little black box with dozens of horizontal lines is the most effective format.  

How do we know which type of information is "most effective"?  Effective, of course, could have many meanings.  One definition could relate to the extent to which the information is accurately understood by the consumer (I'd prefer that over whether the label causes some change in behavior desired by particular nutritionist).  Another way is to see what types of information arise in markets (i.e., what information consumers demand and how companies provide it).  For example, I've notice cereal boxes with color coded labels on the front of the package in the upper left-hand corner.  Similar private initiatives abound.

I'm  sure interest groups on all sides - from food companies to health activists - will want a say.  I just hope solid consumer research is brought to bear on the issue as well.

Is More Information Always Better?

Last year, I wrote a report for the Council on Food, Agricultural, and Resource Economics (C-FARE) on the value of USDA data products.  There, I reviewed much of the literature on the value of providing information about market conditions, and discuss the ability of information provision to resolve some asymmetric information problems.

Thus, I was interested to see this paper published in the American Economic Journal: Policy by Sacha Kapoor and Arvind Magesan (earlier ungated version here).  They write:

We find that although countdown signals reduce the number of pedestrians struck by automobiles, they increase the number of collisions between automobiles. They also cause more collisions overall, implying that welfare gains can be attained by hiding the information from drivers. Whereas most empirical studies on the role of information in markets suggest that asymmetric information reduces welfare, we conclude that asymmetric information can, in fact, improve it.

Asymmetric information improving outcomes?  That is an interesting result - I wonder whether there are examples in markets where something similar is at play?  

I should note that it is possible to imagine other situations where more information isn't always better.  In a paper I published last year with Stephan Marette, we wrote:

In a one-good case with unlimited attention, we show consumer welfare is always improved with the provision of accurate information. However, in a two-good case with limited attention, we show that consumer welfare is not always improved with the provision of accurate information. When attention is constrained, welfare may fall with information provision policies irrespective of their costs. The results suggest information and labeling polices may sometimes be counterproductive when attention is limited