How should food policy issues be decided?

Not only is it the case that people are likely to differ in their opinions about the desirability of mandatory GMO labeling or soda taxes, but they are also likely to differ in how they think such issues should be decided.  

A while back, I ran across this paper by Gaskell and colleagues published in Science.  They sought to categorized citizens in terms of their attitudes about how technology should be governed by asking two questions relating to whether decisions about technology should be made by 1) experts vs. average Americans and 2) moral and ethical issues vs. scientific evidence on benefits/costs.  

In the latest edition of the Food Demand Survey (FooDS), I applied these questions to five food policy issues.  Unlike Gaskell's work I also allowed respondents to have different answers for different issues.  

The first question asked: “Decisions about food policy should be based mainly on the views and advice of experts OR decisions about food policy should be based mainly on the views of the average American.”  The second question asked: “Decisions about food policy should be based mainly on the moral and ethical issues involved OR decisions about food policy should be based mainly on the scientific evidence of risk and benefit.”  Then five food policy issues were listed in random order: labeling of genetically modified food, use of growth hormones, legality of selling raw, unpasteurized milk, use of the term "natural" on packaging, and the tax charged on sugar sodas.

Here's what we found.

More than 70% of respondents wanted policy decisions related to GMO labeling and use of growth hormones to be based on expert advice rather than the views of the average American. I find that result rather striking in light of the fact that opinion polls show large numbers of people saying they want GMO labeling.  Here, we see that a large majority thinks this sort of issue should NOT be decided by the views of the average American.  That would seem to imply that folks do not think GMO labeling should be settled by ballot initiative.  

In stark contrast to the other food policy issues, almost 70% wanted decisions about soda taxes to be based on the views of the average American rather than the "elites".  

Recall that we also asked about whether decisions should be based on morals and ethics or based on scientific evidence on risk and benefit.

For three issues, milk pasteurization, hormones, and GMO labeling, the majority thought decisions should be based on science.  There was a split on natural labeling.  For soda taxes, the majority thought moral issues should be the deciding factor.

As with the prior research, we used the answers to categorized people into one of four categories for each of the five food policy issues.  “Scientific elitists” wanted policy decisions made by experts on the basis of scientific evidence, “moral elitists” wanted policy decisions based made by experts on the basis of moral issues, “scientific populists” wanted the average American to make decisions on the basis of scientific evidence, and “moral populists” wanted the average American to make decisions on the basis of moral issues.

A plurality of respondents were "scientific elitists" for GMO labeling, use of growth hormones, and legality of selling raw milk.  The same was true for use of the term "natural" on labeling, but there was a larger share of "moral elitists" in regard to this issue than for others.  Finally, for soda taxes, "moral populists" described the largest share of respondents.

A natural question is whether these categories explain people's attitudes about the food policies.  Gaskell et al. showed that "scientific elitists" in regard to general technology were the majority citizen type in their surveys and this type had more favorable attitudes toward biotechnology and nanotechnology than other consumer types - particularly moral populists.

I find something similar here as well.  Take for example, the 4-category breakdown on GMO labeling.  I find that "scientific elitists" on GMO labeling express the lowest level of concern about eating GMOs (an average score of 3.06 on a 1 to 5 scale of concern), whereas "moral elitists" and "scientific populists" had scores of 3.41 and 3.43.  Moral populists averaged 3.34.  There also seems to be a political dimension to people's views about how these food policy issues should be decided.  For example, scientific elitists and scientific populists were slightly more conservative (about 3.05 on a 1 to 5 scale of liberal to conservative) than were those who focus more on moral/ethical issues (score of about 2.9 on the scale).  Those identifying with the Democratic party were more heavily represented in the "moral elitist" category than they were in other categories.  

Food Demand Survey (FooDS) - July 2014

The July 2014 edition of the Food Demand Survey (FooDS) is now out.

There was a  decline in consumers' willingness-to-pay (WTP) for all food products, primarily because WTP last month was abnormally high.  In fact, WTP for all meat products is higher this month than was the case a year ago.

Consumers continue to expect to see higher meat prices in the coming weeks, but there is reduction in inflationary expectations in comparison to last month, particularly for beef.

There is a reduction in concern for all food issues this month relative to last, particularly for Salmonella, E. Coli, and "pink slime."  

We added three new "ad hoc" questions that I'll discuss in separate posts.

What will it take to reduce obesity rates?

We've witnessed a lot of positive change in the past 30 to 40 years.  More convenient transportation, more air conditioning, less strenuous jobs, less smoking, less expensive food, etc., etc.  All of those changes are cause for celebration.  They are, however, also all factors that likely contributed to rising rates of obesity we've witnessed over the past several decades.

Here's what I had to say about it in the Food Police

“We can’t disentangle all the bad stuff we don’t like about obesity with all the other good things we enjoy like driving, eating snacks, cooking more quickly, and having less strenuous jobs. Yes, we can have less obesity but at the cost of other things we enjoy.

When you hear we need a fundamental change to get our waistlines back down to where they were three decades ago, beware that it might take a world that looks like it did three decades ago. I for one am not willing to give up power steering, microwaves, and inexpensive take-out even if my pants now fit a little more snugly.”

Now comes this paper from Åsa Ljungvall at Lund University in Sweden providing some further empirical evidence for this phenomenon:

“The empirical analysis is based on a panel of 31 high-income countries and data for the period 1983 to 2008. It finds a positive and statistically significant relationship between the level of economic freedom and both the level of, and five-year change in, BMI. Decomposing the freedom index into sub-indices measuring economic freedom in five sub-areas (government, legal structure, sound money, trade, and regulations) shows that freedom in the regulations dimension is the most consistent contributor to this result.”

It's tough to know whether this is causation or just correlation, but I do think it represents the tough trade-offs we face in life.  We could all be a bit thinner if we lived in North Korea.  I doubt many of us would be willing to trade our freedom just to drop a few pounds.  

Assorted Links

Nice review of how GMO crops undergo safety evaluations and the scientific discourse on the topic (yes the author works for Monsanto - but who better to comment on the the regulatory ins and outs?)

Do fat and soda taxes represent a form of taxation without representation?

On the economics of mandatory vs. voluntary labeling

Subsidizing fruit and veggie consumption is not likely to reduce weight

A problem with cost-benefit analysis?

I'm a fan of cost-benefit analysis.  The approach provides a systematic way to think through the consequences of public policies and provides a reasonable approach to debate merits and demerits of a policy.  

Cost-benefit analysis shouldn't be the final word on a policy because there are some "rules" we may care about regardless of immediate short-run consequences.  For example, even if a cost-benefit analysis found that the benefits to TV thieves outweighed the costs to prior TV owners, few would support a policy of decriminalizing TV theft, in part because a society that had such little respect for property rights is not likely one that would be prosperous in the long-run (or enjoyable to live in for that matter).   All this is a way of saying that our moral intuitions often conflict (sometimes rightfully so) with a short-term utilitarian premise implied by cost benefit analysis (the trolley problem is a common example).

In the realm of food and public health policy, sometimes the way benefits and costs are calculated are myopic, fail to account for dynamic market responses to policies, and rest on shaky methodological assumptions.  Moreover, when we find that benefits exceed costs, one should also ask: what is preventing the market from capitalizing on this arbitrage opportunity?  Stated differently, there would need to be solid evidence of market failure (or some  government failure) in addition to a positive cost-benefit test to justify a public policy.          

Despite these qualms, I see cost-benefit analysis as a useful tool, and it provides one input into the decision making process.

Lately, I've been thinking about what happens to a cost-benefit analysis when one considers multiple policies - in an environment where are increasing calls for new regulations? 

Suppose one did a cost-benefit analysis (CBA) on mandatory country of labeling for meat.  Then, a CBA on a ban on use of subtherapeurtic antibiotics in meat production.  Then, a CBA on a ban on growth hormones.  Then, a CBA on banning gestation crates in pork production.  Then, a CBA on banning transfats.  Then, a CBA on new water regulations for confined animal feeding operations.  Then, a CBA on a carbon tax on methane production from cows.  (I could go on - these represent but a few of the policies that are commonly batted around that have some impact on meat and livestock markets.)  

Is it possible that each of these policies - in isolation - could pass a cost benefit test, and yet when considered jointly fail the test?  Stated differently, is it possible to strictly follow a cost-benefit rule when adopting public policies (only passing policies that pass a CBA) and wind up with a world that we find as less desirable than the one we started with?

I think the answer may be "yes."  For example, each CBA in isolation will assume that the status quo prevails with regard to every other policy.  But, the general equilibrium effects could differ from these individual partial-equilibrium analyses, particularly if there are nonlinearities.

Tyler Cowen recently linked to a new paper by Ian Martin and Robert Pindyck on policies related to catastrophic events that also seems relevant to this discussion.

“How should we evaluate public policies or projects to avert or reduce the likelihood of a catastrophic event? Examples might include a greenhouse gas abatement policy to avert a climate change catastrophe, investments in vaccine technologies that would help respond to a “mega-virus,” or the construction of levees to avert major flooding. A policy to avert a particular catastrophe considered in isolation might be evaluated in a cost-benefit framework. But because society faces multiple potential catastrophes, simple cost-benefit analysis breaks down: Even if the benefit of averting each one exceeds the cost, we should not avert all of them.”

Cowen summarized the paper as follows: 

“The main point is simply that the shadow price of all these small anti-catastrophe investments goes up, the more of them we do, and thus we cannot do them all, even if every single investment appears to make sense on its own terms.”

Typical CBAs often ignore the the hundreds (if not thousands) of laws that already affect farmers' and food purveyors' ability to operate.  It does make one wonder whether diminishing returns shouldn't feature more prominently in CBA.