AGRICULTURAL LAND USE CHOICE: A DISCRETE CHOICE APPROACH

A discrete choice model and site-specific data are used to analyze land use choices between crop production and pasture in the Corn Belt. The results show that conversion probabilities depend on relative returns, land quality, and government policy. In general it is found that landowners are less inclined to remove land from crop production than to convert land to crop production.Land Economics/Use,

OBESITY AND NUTRIENT CONSUMPTION: A RATIONAL ADDICTION?

This study tests for a rational addiction to food nutrients as a potential explanation for the obesity epidemic. A random coefficients (mixed) logit model applied to household scanner data finds evidence of a strong, forward-looking addiction to carbohydrates. Consequently, price-based policies may be effective in controlling excessive nutrient intake.Food Consumption/Nutrition/Food Safety,

Obesity and Nutrient Consumption: A Rational Addiction?

Widespread obesity in the U.S. is a relatively recent phenomenon, reaching epidemic proportions only in the last 15 years. However, existing research shows that while calorie expenditure through physical activity has not changed appreciably since 1980, calorie consumption has risen dramatically. Consequently, any explanation of obesity must address the reason why consumers tend to overeat in spite of somewhat obvious future health implications. This study tests for an addiction to food nutrients as a potential explanation for the obesity epidemic. Specifically, we use a random coefficients (mixed) logit model applied to household scanner data to test a multivariate version of the rational addiction model of Becker and Murphy and Chaloupka. We find evidence of a rational addiction to all nutrients protein, fat and carbohydrates as well as to sodium, but particularly strong evidence of a forward-looking addiction to carbohydrates. The implication of this finding is that price-based policies sin taxes or produce subsidies that change the expected future costs and benefits of consuming carbohydrate-intensive foods may be effective in controlling excessive nutrient intake.addiction, demand, mixed logit, nutrients, obesity., Food Consumption/Nutrition/Food Safety,

Are U.S. Consumers Tolerant of GM Foods?

Genetically modified (GM) foods have caused many controversies. One important controversy relates to tolerance?the impurity rate that is tolerated before a commodity must be labeled as genetically modified. Currently, the United States does not have a specific tolerance or threshold level for GM foods. This paper uses experimental auctions to determine consumers? acceptance of non-GM foods with zero, 1 percent, and 5 percent tolerance for genetically modified material. Our results indicate that consumers would pay less for food that tolerates GM material, but the discount is not significantly different for foods with 1-percent and 5-percent GM content. Key words: genetically modified (GM) foods, contamination thresholds, laboratory auctions, nth-price auction, vegetable oil, tortilla chips, russet potatoesgenetically modified foods; GM foods; contamination thresholds; laboratory auctions; nth-rice auction; vegetable oil; tortilla chips; russet potatoes

Taxing Snack Foods: What to Expect for Diet and Tax Revenues

Health researchers and health policy advocates have proposed levying excise taxes on snack foods as a possible way to address the growing prevalence of obesity and overweight in the United States. Some proposals suggest higher prices alone will change consumers' diets. Others claim that change will be possible if earmarked taxes are used to fund an information program. This research examines the potential impact of excise taxes on snack foods, using baseline data from a household survey of food purchases. To illustrate likely impacts, we examine how much salty snack purchases might be reduced under varying excise tax rates and possible consumer price responses. We find that relatively low tax rates of 1 cent per pound and 1 percent of value would not appreciably alter consumption - and, thus, would have little effect on diet quality or health outcomes - but would generate $40-$100 million in tax revenues.Food Consumption/Nutrition/Food Safety, Public Economics,

Effects and Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food

Food products containing genetically modified (GM) ingredients have entered the market over the past decade. The biotech industry and environmental groups have disseminating conflicting private information about GM foods. This paper develops a unique methodology for valuing independent third-party information in such a setting and applies this method to consumersï¾’ willingness to pay for food products that might be GM. Data are collected from real consumers in an auction market setting with randomized information and labeling treatments. The average value of third-party information per lab participant is small, but the public good value across U.S. consumers is shown to be quite large.

The Value of Verifiable Information in a Controversial Market: Evidence from Lab Auctions of Genetically Modified Food

Two interested parties dominate the current debate on genetically modified (GM) foods: environmental groups and agribusiness companies. For the average consumer to arrive at an informed decision on these new foods, they must rely on information from interested parties. Unfortunately, information from interested parties does not provide an accurate picture of the benefits and risks of new products. This paper examines the effects of information on consumers? demand for new food products, GM-foods, in an environment where information from one or more interested parties is provided. We design and conduct laboratory auction experiments using randomly chosen adult consumers from two large metropolitan areas who are grouped into twelve experimental units and subjected to six randomly assigned information treatments. We find that in this environment, verifiable information has a small but positive value to sample consumers, and the projected annual social value to all processed foods consumed is relatively large for this public good. Such a large potential value may make it worthwhile for the United States to establish a new third party institution that would produce and distribute verifiable information on GM food.

Better Dead Than GM-Fed? Information and the Effects of Consumers' Resistance to GM-Foods in High-Income Countries

This paper addressed the puzzling resistance of Presidents of southern African countries to food aid in 2002, given near certain starvation and long-term negative health effects of malnutrition of their constituents.  First, I show that NGOs led by Greenpeace and Friends of the Earth are disseminating information claiming that GM foods are dangerous to human health and are “Frankenfoods.”  Second, people in European Union countries, who are not in any danger of starvation, have strong preferences for non-GM foods, which they can easily afford.  Over the long term, however, the tastes of EU consumers matter to southern African countries because some of these countries hope to export agricultural products in the future.  GM-food aid, which most likely would contain GM-maize, is seen as a potential contaminant to native African maize varieties, and over the long term to be a threat to south African exports to the EU.  Hence, understanding resistance to GM-food in developed countries is crucial to formulation of better food policies in Africa and to sustainable development.New and important results are reported from a statistical analysis of the market characteristics that push consumers in a high-income country to resist GM foods, with an emphasis on negative information from environmental groups and third-party, verifiable information, which could neutralize misinformation.  For this study, a unique sample of adult consumers participated in laboratory (random nth price) auctions of three food products where labeling and information treatments were randomly assigned to experimental units.  A key finding is that negative GM-information supplied by environmental groups pushes some high income consumers out of the market for GM products and increases the probability that all consumers are out of the market.  However, verifiable information dampens the effectiveness of negative GM-product information.  Hence, a vocal interested source can stymie technology adoption in both rich and poor countries and increase the probability of general malnutrition and micro-nutrient deficiencies and starvation and unsustainable development in poor countries because of the failure to accept food and adopt new GM technology.

Should the United States Regulate Mandatory Labeling for Genetically Modified Foods?

Public debate continues over whether the United States should regulate genetically modified (GM) foods by imposing a mandatory labeling policy. This paper develops a model that shows that a voluntary GM-labeling policy results in higher welfare than a regulated mandatory GM-labeling policy, if consumers can accurately read the signals in each market. We then develop an experiment that shows consumers behave as if they can accurately identify signals for GM foods. Our model and results support the perspective that the United States has been prudent in fending off calls for regulations demanding a mandatory GM-labeling policy.genetically modified foods; laboratory auctions; vegetable oil; tortilla chips; russet potatoes; mandatory labeling; voluntary labeling; nth-price auction

Who Do Consumers Trust for Information? The Case of Genetically Modified Foods

To be effective, groups that disseminate information need the trust of consumers. When multiple groups provide conflicting information on a new product or process like GM-foods, consumers place different levels of trust in the various sources. We present a model of the contributions of personal and social capital of a consumer, and test a multinominal logit model of relative trust in five different sources of information on genetic modification using a unique data set. Among our findings is that an increase in consumer's education lowers the probability of trusting information from government, private industry/organizations, consumer and environmental groups, or other sources relative to information from an independent, third-party source, and conservative religious affiliation reduces the odds of a consumer trusting private industry/organization and increases the odds of trusting nobody relative to an independent, third-party source.