Thursday, April 09, 2020

Steak-umm Tweet Storm Tackles Coronavirus and Science Literacy

Have you ever heard of the company Steak-umm or their thin sliced frozen steak products (think Philly cheesesteak) found in a number of grocery stores across the country? If you have a twitter account you may have come across a seemingly random tweet or retweet by folks a bit perplexed by why this company was sharing tips about misinformation related to the coronavirus epidemic sweeping the country.

I've been historically a bit of a critic of a number of companies and brands for their often deceptive approaches to food marketing. In Thinking Fast and Slow About Consumer Perceptions of Technology and Sustainability in Agriculture and The 'free from' Nash Equilibrium Food Labeling Strategy I discuss how food marketing efforts leverage consumer behavioral biases to promote their products at the expense of science literacy and possibly in direct contradiction to consumer preferences related to healthy and sustainable food systems.

There are big costs to these marketing tactics (which borderline misinformation and disinformation campaigns). In their research "Monetizing disinformation in the attention economy: The case of genetically modified organisms (GMOs)" Ryan, Schaul, Butner and Swarthout provide an in depth background on the attention economy, disinformation, the role of the media and marketing as well as socioeconomic impacts. They articulate how how rent seekers and special interests are able to use disinformation in a way to create and economize on misleading but coherent stories with externalities impacting business, public policy, technology adoption, and health. These costs, when quantified can be substantial and should not be ignored:

"Less visible costs are diminished confidence in science, and the loss of important innovations and foregone innovation capacities"

See additional links that follow for more background and context around behavioral economics and food marketing tactics. But in a world where deceptive advertising has often often been the norm and even praised (Chipotle comes to mind see here and here), out of nowhere comes this viral storm of tweets from Steak-umm pushing back against misinformation related to coronavirus:

In explaining 'why' they think their messaging was so effective they state:

They clearly get that evidence doesn't necessarily move the needle when it comes to science communication and persuasion. As discussed in a number of the posts below consumers tend to believe the things that maximize utility, not necessarily their science or policy literacy. How emotional attitude (system 1) drives beliefs about benefits and risks and overrides careful thinking about the strength of actual evidence.

The heroes of the day, @steak_umm have clearly figured this out and demonstrate that in addition to the coherence of the story, entertainment value goes a long way getting folks to pay attention.

Related Links

Thinking Fast and Slow About Consumer Perceptions of Technology and Sustainability 

Rational Irrationality and Satter's Hierarchy of Food Needs 

The 'free from' Nash Equilibrium Food Labeling Strategy

Polarized Beliefs on Controversial Science Topics

Voter Preferences, The Median Voter Theorem, and Systematic Policy Bias

Thursday, January 23, 2020

The Food Desert Mirage

If you build a new supermarket in a food desert, will low income households go there to buy healthier food? Are Dollar Stores cornering the market in poor neighborhoods reducing options for healthy food choices?

There is a misconception, a mirage if you will, related to the relationship between proximity of super markets that sell healthy foods and actual consumption and health effects. As discussed in this New Food Economy article 'Is it time to retire the term food desert':

"The idea that supermarkets enter into food deserts and all of a sudden provide access to healthy food is a little bit of a misconception"

Public Health literature provides evidence that households in lower income neighborhoods tend to eat less healthy food. These neighborhoods are often characterized as being food deserts due to the lack of access to healthy groceries for a given geography. Policy and discussion involving food deserts is often colored by an implicit or assumed causal relationship between food deserts (lack of supply of healthy food options) and nutrition and health outcomes. Failure to better understand this causal relationship can lead to potentially bad policy decisions. According to this City Journal article 'Unjust Deserts'  some communities have essentially banned or greatly restricted Dollar General from operating their stores which provide a variety of low priced products. However, some research questions a relationship between food choices and the presence or absence of a Dollar General store.

In a Health Economics Review article (Drichoutis, 2015), using a combination of difference-in-difference and propensity score matched analysis authors looked at the relationship between BMI in children and the proximity of Dollar General Stores and failed to find a relationship.

The authors conclude:

"Combatting the ill effects of a bad diet involves educating people to change their eating habits. That’s a more complicated project than banning dollar stores. Subsidizing the purchase of fresh fruits and vegetables through the federal food-stamp program and working harder to encourage kids to eat better—as Michelle Obama tried to do with her Let’s Move! campaign—are among the economists’ suggestions for improving the nation’s diet. That’s not the kind of thing that generates sensational headlines. But it makes a lot more sense than banning dollar stores."

A paper from the National Bureau of Economic Research this past year took a very exhaustive look at the relationship between food deserts, poverty, and nutrition. "THE GEOGRAPHY OF POVERTY AND NUTRITION: FOOD DESERTS AND FOOD CHOICES ACROSS THE UNITED STATES." Working Paper 24094 (

This paper helps provide a very rigorous empirical understanding of these relationships that can be leveraged for more effective policy and interventions to improve nutrition and health.

They used a very rich dataset consisting of:

1) Nielsen Homescan data - 60,000-household panel survey of grocery store purchases

2) Nielsen’s Retail Measurement Services (RMS) data - 35,000-store panel of UPC-level sales data (this covers 40% of all U.S. grocery store purchases)

3) Nielsen panelist survey data on nutrition knowledge

4) Entry and location data for 1,914 new supermarkets by zip code

Among the many findings uncovered in this data source was the following:

"over the full 2004-2015 sample, households with income above $70,000 purchase approximately one additional gram of fiber and 3.5 fewer grams of sugar per 1000 calories relative to households with income below $25,000."

Their data reflects what has been found in the public health literature in relation to low income households and nutritional health. In addition, household food purchase data was transformed using a modified version of the USDA's Healthy Eating Index (HEI) based on dietary recommendations. These various sources were brought together to give a very rich picture of household choice sets, retail environment, consumption patterns, and nutritional quality.

Using a regression based event study analysis and a structural demand model they examine the impact of supermarket entry on the nutritional quality of changes in food purchases. They also are able to separate the main drivers explaining the differences in the measured nutritional quality index (HEI) of food purchases between low and high income groups.

They model household and income group preferences using both constant elasticity of subsitution (CES) and Cobb-Douglass utility specifications. They apply this model to the rich data sources mentioned above using a Generalized Method of Moments (GMM) framework and use the model estimates to simulate policies that allow households of different incomes to be exposed to similar prices and product availability. (i.e. to make apples to apples comparisons and determine what's driving healthy vs. unhealthy food choices among low income households in food deserts vs. wealthier households).

Key Findings:

1) When new supermarkets open in what was formally a food desert, they find most of the changes in consumption are related to shifting purchases from more distant super markets to the new local super market. The change in the healthy eating index or substitutions away from unhealthy purchases from convenience and drug stores to more healthy food was minimal. This is because even in food deserts among low income households, willingness to travel was quite substantial and mitigated the lack of access to local healthy food.

" households in food deserts spend only slightly less in supermarkets. Households with income below $25,000 spend about 87 percent of their grocery dollars at supermarkets, while households with incomes above $70,000 spend 91 percent. For households in our “food deserts,” the supermarket expenditure share is only a fraction of a percentage point lower"

"one supermarket entry increases Health Index by no more than 0.036 standard deviations for low-income household"

They conclude that access to supply of healthy food or lack thereof explains only about 5% of the difference in the healthy eating index between low and high income households. Access does not appear to be driving the nutrition-income relationship.

2) Most of the differences in healthy vs unhealthy food choices by income group are driven by demand factors...i.e. preferences. When faced with the same choices and same prices, lower income households simply made purchases with a lower HEI.

"The lowest-income group is willing to pay $0.62 per day to consume the healthy bundle instead of the unhealthy bundle, while the highest-income group is willing to pay $1.18 per day."

They find that wealthier households value fruit three times the rate of lower income households and twice the rate for vegetables compared to lower income households.

Policy Implications

The authors reference studies by Montonen et al (2003) and Yang et al (2014):

"consuming one additional gram of fiber per 1000 calories is conditionally associated with a 9.4 percent decrease in type-2 diabetes" and consuming "3.5 fewer grams of sugar per 1000 calories is conditionally associated with a ten percent decrease in death rates from cardiovascular disease."

Improvements of the HEI definitely could be a driver for better health. However focusing on access may not be the greatest way to lever change. Certainly the correlations between income, food deserts, and healthy eating hold in this study and can be great flags to predict or identify which populations may need intervention. However, as this study points out the intervention should be based on theoretical and causal relationships that go beyond the supply of healthy foods and focus on aspects related to food preferences and demand. The authors conclude:

"For a policymaker who wants to help low-income families to eat more healthfully, the analyses in this paper suggest an opportunity for future research to explore the demand-side benefits of improving health education—if possible through elective interventions—rather than changing local supply."


Drichoutis, A.C., Nayga, R.M., Rouse, H.L. et al. Food environment and childhood obesity: the effect of dollar stores. Health Econ Rev 5, 37 (2015).


Tuesday, January 21, 2020

Are Fruits and Vegetables Becoming Less Nutritious?

Here are some highlights from research on this topic:

--> Mineral nutrient composition of vegetables, fruits and grains is not declining.

--> Allegations of decline due to agricultural soil mineral depletion are unfounded.

--> Some high-yield varieties show a dilution effect of lower mineral concentrations.

--> Changes are within natural variation ranges and are not nutritionally significant.

--> Eating the recommended daily servings provides adequate nutrition.


Robin J. Marles, Mineral nutrient composition of vegetables, fruits and grains: The context of reports of apparent historical declines, Journal of Food Composition and Analysis, Volume 56, 2017,
Pages 93-103, ISSN 0889-1575,

HT: James Wong

Saturday, January 18, 2020

GWP* Better Captures the Impact of Methane's Warming Potential

Understanding the differences in the way CO2 vs methane behaves is fundamental to understanding their respective roles impacting climate change, and personal and policy decisions related to mitigating future warming. A practical example, properly accounting for these differences, the global impact of U.S. beef consumption (or other ruminant food sources) over time in terms of carbon footprint (related to enteric emissions) could be even less than previously understood. Understanding this can help direct attention to those areas where we can make the biggest difference in terms impacting climate change.


 Allen, M.R., Shine, K.P., Fuglestvedt, J.S. et al. A solution to the misrepresentations of CO2-equivalent emissions of short-lived climate pollutants under ambitious mitigation. npj Clim Atmos Sci 1, 16 (2018) doi:10.1038/s41612-018-0026-8

"While shorter-term goals for emission rates of individual gases and broader metrics encompassing emissions’ co-impacts2,6,31 remain potentially useful in defining how cumulative contributions will be achieved, summarising commitments using a metric that accurately reflects their contributions to future warming would provide greater transparency in the implications of global climate agreements as well as enabling fairer and more effective design of domestic policies and measures."

See also:

A Green New Deal for Agriculture?

Religiousity, Beef, and the Environment

EconTalk: Matt Ridley, Martin Weitzman, Climate Change and Fat Tails

Some Beef Related Posts From the Incidental Economist

I'm a big fan of the Incidental Economist blog where I have learned a lot about healthcare economics. Recently healthcare economist Austin Frakt has shared some video monologues discussing meat, fake meat, health and the environment.

In the first video he discusses some recent research related to meat consumption and health, mainly there is no evidence that red meat presents a major health concern. And the challenge of observational data and research related to this:

However, in this  next video, I think the facts being referenced are making some assumptions that need clarification. Mainly, there seems to be an assumption that beef produced and consumed in the U.S. is exchangeable with beef produced in developing countries or that land devoted to beef production is exchangeable for land that could be used for food production purposes. Reducing consumption of beef in the U.S. likely won't have the impacts on consumption in other countries in the simplified way this story is often told.  U.S. beef accounts for .5% or less of global greenhouse gas emissions accounting for fossil fuel and grain consumption, as well as land use alternatives. And most of the land used for beef production isn't suitable for any other type of food production. Ruminants are able to convert inedible plant and fiber on marginal lands to highly palatable nutrient dense food sources. Adding a little grain (accounting for ~ 7% of the U.S. corn crop) can shorten the time grazing and increase production actually decreasing lifecycle greenhouse gas emissions.

n this final video, Dr. Frakt discusses how alternative/fake meat products are in fact NOT a healthier alternative to real beef:

Saturday, September 14, 2019

Welfare Analysis: Just Do It!

Some time ago I wrote a couple posts discussing some of the issues in microeconomics that perplexed me the most in graduate school.

In  Applied Microeconomics: The Strong Axiom of Revealed Preference,Aggregation, and Rational Preferences I discussed some of the properties of consumer preferences that were required to rationalize a demand function. This came down to properties of what is known as the Slutsky substitution matrix which was require to be symmetric and negative semi-definite. These properties satisfy the strong axiom (SA) of revealed preference. As stated in the widely adopted graduate micro text by Andreu Mas-Colell, Michael D. Whinston, and Jerry R. Green (MWG) chances of the SA "being satisfied by a real economy are essentially zero."

In a follow up post Applied Microeconomics: The Normative Representative Consumer and Welfare Analysis I discussed the idea of a 'normative representative consumer.'  In order to have a normative representative consumer, we have to assume a social welfare function, and assume it is maximized by an optimal distribution of wealth according to some specified wealth distribution rule.

Making more 'impossible' assumptions didn't seem to help. And in fact, as I eventually found out according to Arrow's Impossibility Theorem, they really were practically impossible. So....when it comes to policy analysis (like for instance policies related to climate change) how do economists include social welfare in a cost benefit analysis?

There was a really great discussion about this in a Macro Musings podcast with James Broughel hosted by David Beckworth.

James Broughel: "And the welfare measure that they use is a social welfare function that they derive from the Ramsey neoclassical growth model, which is a famous economic growth model. So they take a welfare function from that model, they say this is society's preferences or this is the social planner's preferences or something along those lines. And then their goal is to maximize that....Well, the most obvious problem with this approach is that it relies on this social welfare function, which is supposed to describe the aggregated preferences of everyone in society. And aggregating the time preferences of everyone in society is really just a special case of aggregating the preferences in general, which runs into this issue of Arrow's Impossibility Theorem."

Arrow's theorem* requires that in order for any social welfare function to represent society's preferences (which are an aggregation of individual preferences) it must obey six axioms:

1) It must rank all social states
2) It must obey transitivity (see my previous post about symmetry of the Slutsky substitution matrix)
3) The ranking must be positively related to individual preferences
4) New social states should not affect the ranking of original social states - also referred to as independence of irrelevant alternatives
5) The ranking should not be based on customs overriding individual preferences
6) Rankings are not made by a dictator

Arrow's theorem states that there is no social welfare function that can aggregate preferences or a social decision rule that can satisfy all six axioms. Like I mentioned in my previous posts, it seems like based on 'the math' and the theory, welfare analysis for applied policy work isn't feasible. Maybe we should just limit ourselves to positive analysis (focusing on efficiency). So how do economists approach normative welfare related policy questions?

James Broughel: "they just say, well, that's society's preferences. And this has become a convention in economics, it's done all over the place."

David Beckworth: "Because it's tractable, right? It's easy to do. The math is easy."

James Broughel: "Yeah, you can do the math. But, there really isn't any basis for it. I think that they would, the advocates of this approach would acknowledge that. They would say, our approach is normative, but hey, lots of economists agree on it."

So the tongue in cheek answer is how do you do welfare analysis despite all of the challenges I have discussed? You make some impossible assumptions and 'just do it' because the math is easy....sort of. But reflecting on this over the years I have come to accept there are a number of problems that require these kinds of simplifying assumptions to motivate more critical thinking about the alternatives we face in a policy and decision making environment, as imperfect as that may be.

Most of the pocast was actually about two major schools of thought regarding the appropriate discount rate for doing cost benefit analysis for policies with long term impacts (again like climate change).  Even if we are able to achieve scientific consensus on the impacts of climate change, the actual policy solutions have to be evaluated in terms of the costs today vs. the benefits of mitigating future climate events. That requires a discount rate, which as David and James discuss, there is no solid consensus on what is appropriate. That merits a future post!

*Microeconomic theory:basic principles and extensions. 8th Edition
Walter Nicholson (2002)

Sunday, September 01, 2019

Thinking Fast and Slow About Consumer Perceptions of Technology and Sustainability in Agriculture

Farming is the world’s most important career — that’s why it needs a new image

From AgFunder News:

"Right now the field is in the midst of profound change as advanced technologies including green chemistries, robotics, artificial intelligence, IoT, autonomous vehicles, machine learning, regenerative agriculture and biomimetics transform how farms look and function. It might seem like the stuff of science fiction, but autonomous vehicles, indoor farming and drone pollination are becoming more common throughout the sector.Looking at, and more importantly, talking about farming as a part of the tech revolution has the potential to ignite the curiosity and imagination of the next generation.millennials want meaningful careers that help make the world a better place. Often that interest is funnelled towards jobs in CleanTech, non-profits, the environment or the arts. But farming is an overlooked industry with incredible potential to help improve the world."

I tend to agree.

From Drovers:

"Consumers used to want farmers to be local, healthy or safe, but a new word is topping the chart this year, according to a new global study by Cargill. In a word, consumers want farmers to be sustainable."

However the theme above related to the need to promote the technological savy of farmers was echoed in this survey:

"Although 75% of the respondents thought technologically advanced farming was a good thing, very few respondents see farmers that way today. “Technologically savvy” was one of the terms least associated with farmers."

This explains why technological advancements in agriculture that actually improve sustainability (Bt, Glyphosate resistance, finely textured beef, etc.) are often rejected when in fact it delivers much of what they are asking for.

I've written before about some of the challenges related to consumer attitudes and perceptions about agriculture.  See the links below. But along the lines of all of these themes I find a common thread in Daniel Kahneman's Thinking Fast and Slow:

"emotional attitude drives beliefs about benefits and risks and dominates conclusions over arguments."

Bad arguments and misleading intuition are driven by a number of biases mentioned in the book.

One of these biases is the 'affect heuristic' which "simplifies our lives by creating a world that is much tidier than reality. Good technologies have few costs in our imaginary world we inhabit, bad technologies have no benefits, and all decisions are easy. In the real world, of course we often face painful tradeoffs between costs and benefits."

I think this applies very well to food and agricultural technologies vs other kinds of technology.

Good Technology: Impossible Burger/Tesla
Bad Technology: Biotechnology
Easy Decisions: Meatless Monday/Ban Glyphosate

Real World Tradeoffs: U.S. beef contributes less than .5% of global greenhouse gas emissions, so going meatless on Mondays (or campaigning to replace beef with alternatives) likely won't have the impact many consumers believe. We also know that glyphosate is a low toxic herbicide that in combination with biotech traits has helped enable environmentally important farming practices including reduced tillage, reduced energy use, and has helped substitute away from more toxic chemistries(link see also Hybrid Corn vs. Hybrid Cars). Banning glyphosate (or creating a risk and litigation environment effectively banning its continued use) might seem like an easy 'costless' solution but there are definitely tradeoffs.


"System 1 is able produce quick answers to difficult questions by substitution, creating coherence where there is none....The question that is answered is not the one that was intended, but the answer is produced quickly and may be sufficiently plausible to pass the lax and lenient review of system 2"

There definitely seems to be a coherent story among consumers (and voters/politicians) about how good technologies and farming practices (local, natural, organic, non-GMO, vegan etc.) must be sustainable and virtuous while modern (high tech) 'industrialized' technologies and practices must be destructive, risky and harmful. Further, coherence and tidyness implies those advocating a different story with any strong or weak connection to companies producing and marketing these technologies must be biased and non-credible sources regardless of their expertise or what is found in the scientific literature.

It is very difficult to battle the 'coherence' and 'tidyness' of the stories and perceptions that is formed in the minds of consumers and critics of agriculture. This is definitely an area where some food marketers and the 'free from' approach to labeling seems to be most damaging (and profitable?). To say the least, after spending more than a decade studying consumer and voter preferences in relation to food and technology in the agriculture space, I think we are only beginning to scratch the surface. Maybe we have reached a critical mass or turning point in consumer interest in these topics, but can science communication and advocacy turn the tide?

Rational Irrationality and Satter's Hierarchy of Food Needs 
The 'free from' Nash Equilibrium Food Labeling Strategy
Polarized Beliefs on Controversial Science Topics
An Economic Analysis of Preferences for Genetically Engineered Foods
Voter Preferences, The Median Voter Theorem, and Systematic Policy Bias

Sunday, February 24, 2019

Three Big Questions About Modern Monetary Theory

As Modern Monetary Theory (MMT) seems to be underlying a lot of policy debate going into the next election (its the underpinning theory of fiscal policy supported by the likes of Alexandria Ocasio-Cortez), I'm left with a lot of questions as a non-macro economist and a lay economist at that. (for a lite intro to MMT try this NPR Planet Money podcast).

1) What about inflation and central bank independence? In Frederick Mishkin's The Economics of Money, Banking, and Financial Markets  text he devotes quite a bit of material to the empirical evidence and theory relating central bank independence to positive economic outcomes and controlled inflation. It seems that under MMT, the Fed is not very independent at all, and when it comes to fiscal policy, the Fed becomes the government's right arm. If one of the themes of MMT is that government should not be constrained by public debt, but should spend as required to achieve its goals and promote high employment, then an independent fed deliberating over monetary policy would seem to be a bottleneck. Does MMT mean a less independent federal reserve?

2) Okay, what about inflation then??? One of the ideas from MMT it seems is that if money creation and spending begins to generate inflation is that the government can take some of that pressure off by raising taxes. Higher tax rates would reduce spending and investment and cool the economy. I suppose if that works out, the issue of an independent fed would be moot. Taxing, spending, money, and inflation is all handled in a one stop shop - via fiscal policy.

3) Okay.....Who is running the (print) shop? What does public choice theory say about how this will actually work?  If MMT implies a one stop shop for fiscal and monetary policy, where is this authority held? Unless we are talking about drastic changes to the constitution, this has to be worked out between the president and congress with congressional approval. We've seen how that works recently. Beyond the mechanics laid out in our constitution, more importantly is how does this change impact incentives in the overall economy? Sure existing programs might get more funding but what about new funding?  How might we envision a spending plan executed under an MMT regime? One example could be the Green New Deal. As Economist Noah Smith Explains:

"So this quick, rough cost estimate adds up to about $6.6 trillion a year. That’s more than three times as much as the federal government collects in tax revenue, and equal to about 34 percent of the U.S.’s entire gross domestic product. And that’s assuming no cost overruns — infrastructure projects, especially in the U.S., are subject to cost bloat. Total government spending already accounts for about 38 percent of the economy, so if no other programs were cut to pay for the Green New Deal, it could mean that almost three-quarters of the economy would be spent via the government."

The bigger question, and more looming problem than inflation is related to the public choice implications of such a massive infusion of money and power being concentrated in government.

Given conventional views of monetary and fiscal policy, this could be problematic, but under MMT this level of spending might (easily?) be maintained via a combination of money creation and an optimal level of tax rates which could be raised if necessary to dampen inflation if it rears its head as a result. But what about contemporary angst over getting money out of politics? This seems like throwing kerosine on the fire.  Are rent seekers and special interests salivating over this? Recall the Waxman-Markey climate proposal? Rent seekers and special interests flocked in droves according to the Washington Post:

"as the legislation's chances improve, corporations, environmentalists and other interest groups have worked to put their imprint on the bill. The Center for Public Integrity said its review of Senate disclosure records showed that more than 880 businesses and interest groups have registered to lobby on climate change in the first quarter of 2009 -- up more than 14 percent over the same time last year. The groups include coal companies, investment banks, wind and solar firms, state governments, auditing firms and technology companies that might be part of the proposed trading system for carbon." 

As Economist Lynne Kiesling sarcastically commented about this on her blog back in 2009 "I feel really confident in political processes. I’m sure that this political process will serve the interests of science, economic efficiency, and the environment. And I feel really, really well-represented in this process."

This is just one example one government program illustrating the problems related to policies on government spending, taxes, and subsidies. MMT seems to inject money into politics and make it potentially more pernicious than any other time in history.

If we go back to the 70's and 80's, government tried managing the economy and unemployment by expanding the money supply. This led to crazy inflation and high unemployment. One bad government policy led to another and we had price and wage controls to boot. The lesson being it led to a scary level of government intervention in the economy and basic levels of individual decision making. Are we looking at another Economic Stabilization Act of 1970? Payboards and price commissions? Fixing this mess meant a lot of pain and sacrifice going into the 80's. (remember inflation and interest rates and farm bankruptcies back then!)

I need better answers to the questions above, how will this impact inflation and central bank independence, and how does MMT navigate the public choice implications of such a massive change in fiscal and monetary policy?