Journal of Agricultural and Food Industrial Organization

The Journal of Agricultural and Food Industrial Organization, from the Berkeley Economic Press, has a request for papers about the economics of anti-trust law in livestock and poultry markets:

Litigation and legislative proposals concerning marketing methods for livestock and poultry necessarily involve economic theories as well as the application of antitrust law and competition policy concepts. The litigation has invoked antitrust law, the Packers and Stockyards Act, as well as other statutes governing agriculture markets such as the check-off provisions that subsidize promotional activities on behalf of the industry. Legislative proposals include expanding the PSA, express prohibitions on certain methods of buying livestock, and proposals for a more general, agriculture specific regulation of competitive practices. These various efforts to re-order the operation of livestock and poultry markets raise major questions concerning the reconciliation of current industrial organization economics (both theoretical and empirical) with antitrust law, competition policy, and other market regulations.

The Berkeley Economic Press is a web-centered family of economic journals with novel solutions to both the ordinarily dysfunctional labor market for peer-reviewing and the dreadful problem of price gouging by commercial scholarly journals.

Restaurant hygiene grade cards

Ginger Zhe Lin and Phillip Leslie write in the latest issue of Choices about restaurant hygiene grade cards, in which Los Angeles restaurants were required to post a report card showing how they scored in city health inspections. Their clever study analyzes the reasons why many restaurants had poor hygiene in the period before the new report cards were introduced in 1998. Even in this early period, consumers had some information about hygiene, such as could be seen in bathroom cleanliness for example, but they were ignorant about most of the shortcomings health inspectors could identify. Also, restaurants with a tourist clientele appeared to do worse than restaurants with predominantly repeat customers. Then, after the new policy was instituted, hygiene improved sharply. The authors even compile data on hospitalizations to suggest that lower foodborne illness resulted after 1998.

In conclusion, the use of restaurant hygiene grade cards in Los Angeles has been a great success. By increasing the provision of information to consumers, powerful economic incentives are created for restaurants to improve hygiene, leading to a significant improvement in public health outcomes. Moreover, because the DHS already perform inspections, the grade cards create negligible additional cost for the government.

Economists tend to perceive many food safety issues as information failures -- the problem is that sellers know something about the quality of the product that buyers don't know. The delightfully non-bureaucratic solution to many information failures is to make sure that customers get the information they deserve.

So when are we going to get nutrition information for restaurants? Currently, leading companies such as McDonald's and Subway provide such information on the internet and frequently on information sheets available in-store upon request. In the past, for different reasons, we happened to report in U.S. Food Policy that Fuddruckers and Quizno's (also here) appear to hide much of their nutrition profile from their customers. In the case of Quizno's, I wrote management to ask for nutrition information with no success. Do you think nobody cares? Think again! An informal review suggests that the two most frequent search items that lead people to read U.S. Food Policy -- bringing perhaps a couple dozen hits daily -- are "Quizno's nutrition" and "Fuddruckers nutrition."

Go ahead, Fuddruckers and Quizno's. Please take my traffic away. Establish nutrition information sites to provide customers with much-desired nutrition information for your whole product line. Maybe they'll stop reading further down the list of results on their search engine and never look here for opinion and commentary.

The economic advantages of obesity

Slate's Daniel Gross posted a half-sarcastic article on Thursday last week about the business opportunities presented by an increasingly overweight U.S. population. Thanks to James Chapman for suggesting the link in an email message while I was away.

Like the discussion a couple weeks ago about including breast milk in national income accounts, Gross' article reminded me of a professor's explanation many years ago about some of the quirks of computing gross domestic product: for example, if the government printed money and buried it in deep holes, so that people had to shovel the money out again, all of this activity would appear to add positively to GDP.

Similarly, I have been wondering recently about the role of meat consumption in answering a question I frequently hear in nutrition circles: do USDA farm subsidy programs contribute to obesity? The argument is often that corn subsidies in particular may encourage overconsumption of products such as high fructose corn syrup. But I think the majority of corn is used as animal feed in the United States. To the extent that any farm program lowers market prices for corn, it would make meat production less expensive. Meat is such a resource inefficient way of producing calories. I wonder if such farm programs would actually promote less obesity.

Suppose there were a "national income account" for food calorie production, import, export, and consumption from all farm commodities. In this "national calorie account," would subsidizing meat production through lower corn prices be equivalent to burying currency in holes in the ground? Would it generate lots of unnecessary economic activity (and producer income) while squandering calories and lowering the total amount of food energy consumed in the United States?

AAEA annual meeting in Providence

The annual meeting of the American Agricultural Economics Association starting today here in Providence, RI, offers an exceptional number of program items about U.S. food safety and nutrition issues, along with the more traditional fare of agricultural economics topics. Jim Tillotson, Ben Senauer and I are speaking tomorrow (Monday) at 3:30 pm in a symposium session about food industry responses to obesity. Interestingly, the session is sponsored not by the association's Food Safety and Nutrition section, but by the Food and Agricultural Marketing Policy Section (FAMPS). Food manufacturers and retailers, and the economists who work with them, are very interested in nutrition topics lately. The Food Safety and Nutrition Section also has many sessions throughout the conference.

For diversion and education, some folks are meeting local food advocate Noah Fulmer at the Providence Monday farmers' market downtown at 5:20 p.m. Monday at the information table, for a tour and introduction to the produce of local farmers.

Kathleen Merrigan from the Friedman School at Tufts, and former chief of USDA's Agriculture Marketing Service, is the luncheon speaker at the main extension event at noon on Tuesday.

Update (7/27/2005): Corrected spelling of Fulmer's name.

Essential nutrients: food or supplements?

Alice Lichtenstein and Robert Russell offer a remarkable essay on food and dietary supplements in the latest issue of the Journal of the American Medical Association (JAMA). The authors, colleagues on the faculty of Tufts' Friedman School of Nutrition Science and Policy, cast doubt on the value of dietary supplements and emphasize the health advantages of a wholesome diet based on real foods.

The consumption of adequate levels and proper balance of essential nutrients is critical for maintaining health. The identification, isolation, and purification of nutrients in the early 20th century raised the possibility that optimal health outcomes could be realized through nutrient supplementation. Recent attempts using this approach for cardiovascular disease and lung cancer have been disappointing, as demonstrated with vitamin E and beta carotene. Moreover, previously unrecognized risks caused by nutrient toxicity and nutrient interactions have surfaced during intervention studies. The most promising data in the area of nutrition and positive health outcomes relate to dietary patterns, not nutrient supplements. These data suggest that other factors in food or the relative presence of some foods and the absence of other foods are more important than the level of individual nutrients consumed. Finally, unknown are the implications on public health behavior of shifting the emphasis away from food toward nutrient supplements. Notwithstanding the justification for targeting recommendations for nutrient supplements to certain segments of the population (eg, the elderly), there are insufficient data to justify an alteration in public health policy from one that emphasizes food and diet to one that emphasizes nutrient supplements.

Lichtenstein and colleague Miriam Nelson have recently completed the latest book in Nelson's "Strong Women" series: Strong Women, Strong Hearts.

How much energy does it take to make ethanol?

From Robert Bryce at Slate today:

The stickiest question about ethanol is this: Does making alcohol from grain or plant waste really create any new energy?

The answer, of course, depends upon whom you ask. The ethanol lobby claims there's a 30 percent net gain in BTUs from ethanol made from corn. Other boosters, including Woolsey, claim there are huge energy gains (as much as 700 percent) to be had by making ethanol from grass.

But the ethanol critics have shown that the industry calculations are bogus. David Pimentel, a professor of ecology at Cornell University who has been studying grain alcohol for 20 years, and Tad Patzek, an engineering professor at the University of California, Berkeley, co-wrote a recent report that estimates that making ethanol from corn requires 29 percent more fossil energy than the ethanol fuel itself actually contains.

A math problem for you

What is the next element in the following set: {July 1 2002, July 1 2003, July 1 2004, ...}? You're right! So, it makes me wonder, where is the 2005 annual report that USDA's Agricultural Marketing Service must submit to Congress each year, describing the activities of the advertising and promotion campaigns for milk, cheese, butter, and so forth? While the beef, pork, and dairy industries were delighted by the recent Supreme Court decision upholding their constitutionality, this annual report may be more difficult to write this year than in past years. Now that everybody acknowledges these advertising campaigns are the federal government's own work, it may be difficult to explain in a report to Congress exactly what the campaigns do. The challenge is to make the dairy industry happy with the program's aggressive marketing and yet avoid emphasizing the tension between the Dietary Guidelines for Americans and the advertisements promoting increased consumption of high-calorie and high-saturated-fat foods (with fad weight-loss claims).

Update (7/19/2005): edited a run-on sentence.