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S278: Food Demand, Nutrition and Consumer Behavior

Annual/Termination Reports (SAES-422): [01/27/2003]

Date of Annual Report: 01/27/2003

Report Information:
  • Annual Meeting Dates: 07/29/02 to 07/29/02
  • Period the Report Covers: 10/2001 to 09/2002

    • Participants:
    Brief Summary of Minutes of Annual Meeting:
    Called to order at 5:00 p.m., July 29th 2002, Regency D, Hyatt Hotel, Long Beach, CA.

    Agenda

    I. Review of Previous Years Research Activities of Meeting Attendees II. Request for 1 Year Project Extension III. Reporting Requirements for Project Termination IV. Other Business

    A brief review of station activities was provided by the members attending the meeting.

    A majority of the meeting was devoted to requesting whether it was possible to obtain an extension to the current S-278 project. Dr. Gould indicated that ample notice had been given to the committee over the last year regarding project termination. Little interest had been expressed to continue with the project. Dr. Gould also noted the cancellation of a stand-alone tentatively planned 2001 Annual meeting given the lack of interest. It was agreed that Dr. Gould will make the appropriate inquires to the project administrative advisor as to the possibility of obtaining a 1-year extension.

    Subject to the obtaining such an extension, the committee agreed to organize a major policy/research conference to be held in the Washington area. The major topic of that conference would be the impact of the 2002 Farm Bill on food demand/nutritional well-being in the U.S.

    A discussion of the role of the Food Safety and Nutrition Section of the American Agricultural Economics Association in place of S278 was undertaken. It was noted that most members of that section are also members of S278.

    Dr. Gould reminded the group of the need to send in their station reports within 60 days of the meeting.

    Meeting adjourned 7:00 p.m.

    Accomplishments:
    Accomplishments and Impacts:

    Summary of Principal Accomplishments

    Over the last year, member efforts were relatively evenly divided between the undertaking of basic research in the development of alternative methods for estimating disaggregated micro-level demand systems, the application of existing methods to food demand analysis and the use of established methods to examine the role of nutrition information and label use in observed food choices of U.S. consumers. New efforts have also been initiated in terms of the analysis of the consumer acceptability of genetically modified foods, and the role of food-away-from-home in meeting U.S. food demand.

    The following is a brief review of accomplishments obtained over the last year. We partition these accomplishments by primary project objective.

    Objective 1: To develop methodologies and estimate the relationships among consumer awareness, knowledge and attitudes about food, nutrition and health; the quality of diets; food attributes; food programs; and economic variables.

    1. Utilized household data to examine the role of health information in consumer use of nutritional labels on food packages via the use of qualitative choice, count data, and switching regression models.

    2. Examined consumers? willingness to accept and pay more for irradiated food products using survey and experimental economics approaches

    3. Examined consumer acceptance of food biotechnology focusing on determining tradeoffs between product, benefit, and technology type (input vs output trait benefits)

    4. Determined the effect of parenting styles and time allocation on children?s dietary behavior

    5. Project members contributed to a published book relating health information and food demand presented at the 2000 International Associated of Agricultural Economics conference held in Berlin, Germany (Chern and Rickertsen).

    6. Examined retail price variability in the fluid milk market and impacts of market structure on such variability.

    Objective 2: To analyze the effects of public policy on nutritional quality, health, food consumption and prices.

    1. Linked demand analysis and industrial organization to better understand unilateral price effects from proposed mergers and acquisitions.

    2. Elasticities of transmission are derived from an econometric analysis of farm-to-retail price spreads for beef and pork.

    3. The market structure for canned tuna products was examined using supermarket scanner data. Evidence of market power was found.

    4. Research was completed on an analysis of the impact of the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) on child health

    5. Examined the interplay of the retail pricing of Coke and Pepsi products using market-level data.

    Objective 3: To analyze the effects of economic and socioeconomic factors on food demand and consumption behavior.

    1. Utilized a household panel to develop profiles of pork consumers in the at-home and away-from-home markets.

    2. Examined the demand for non-alcoholic beverages in the United States.

    3. Developed methodologies to examine the research impacts of aggregating commodities when estimating food demand systems.

    4. Examined the econometric implications of using electronic scanner data to conduct consumer demand systems.

    5. Analyzed the impact of branded and generic advertising impacts on a variety of foods using household level data

    6. Examined the changing structure of fluid milk demand utilizing household level data.

    7. Examined the role of household age/gender composition on food demand utilizing household survey data for a number of developed and developing countries.

    8. Undertook an analysis of a consumer study on the food away from home market

    9. Developed a methodology to analyze the consumption of specific foods utilizing household panel data recognizing the role of purchase history in current purchase patterns

    10. The adoption of calcium fortified orange juice was examined using household level data encompassing the 1997-1999 period.

    11. Conducted a national pilot telephone survey on the consumer acceptance of genetically modified (GM) foods in Norway and the U.S.

    12. Undertook basic research as to the impacts of the ignoring of expenditure endogeneity when estimating food demand systems.

    13. Developed alternative econometric methods for estimating disaggregated and censored food demand systems

    14. Investigated the impact of beef, pork and poultry recall events on US meat demand.

    15. Examined the impact of food safety information on US meat demand

    16. Examined selected empirical properties of duality relationships often used in food demand analysis

    Examples of Project Impacts

    1. Data from the third National Health and Nutrition Examination Survey were used to analyze the effects of the WIC Program and other factors on the health of U.S. preschool children. Ordered probit equations were estimated for the physician?s overall evaluation of the child?s health. The WIC Program was found to have a significant positive impact on the overall health of children. In particular, children in households participating in WIC were significantly more likely to be in excellent health. Increased household income also improved their health, but low-birth weight babies were less likely to be in excellent health when they reached their preschool years. Children?s health status was found to vary significantly across region of the country. These results have important policy implications in terms of adding to the evidence of the effectiveness of the WIC program in achieving one of its objectives of improving child health and nutrition.

    2. Found that food label use has a positive impact on dietary quality and on the intake of specific nutrients. For example, in the analysis of the consumption of fortified orange juice found that adoption was higher among households with higher incomes, greater education of the female head, an older female head, or children under 12. These findings generally accord with previous studies of those adopting healthy product alternatives. In this case, adopters include those benefiting more from increased calcium and those better able to understand and utilize diet and health information. From a policy perspective these results point to the need to continue making nutrition information more readily available has this analysis points to adoption of the more nutritious foods (and therefore improved diests) resulting from such information.

    3. Household demand for steak, roast, and ground beef were examined. Findings suggest that demand for roast and other beef are price elastic, while the demands for steaks, roast, and other beef are also elastic with respect to total meat expenditure. Although price appears to be the dominating factor influencing the demand for beef products, the results also document the significant effects of demographic characteristics?such as household composition, urbanization, regional location, home ownership, ethnicity, gender of meal planner, and food stamp participation?on demand for beef products. Furthermore, the study suggests that demand for different cuts of beef should be treated differently.

    4. An analysis of price variability in the U.S. retail fluid milk market found strong evidence that search cost related strategic firm and consumer behavior exists in this market. Results showed that purchase frequency had a negative and significant relationship with price dispersions and measures of price cost margins during the study period. This negative relationship implied that market for milk products that are bought at a higher frequency were more competitively priced. Given that consumers willingly use fluid milk to partially determine their store decision, it is surprising the degree of price dispersion noted in this study. Ff food retailers are willing to price milk to extract rent in the overall scheme of confusing pricing and promotion strategies that are at work, it only seems likely that more extensive forms of price dispersion strategies are used on less frequently purchased food items. The analysis also suggests that there are significant levels of price-related search on the part of consumers. Income and race have significant impacts suggesting different groups have differing ability to search for food. More detailed studies on consumer welfare and search cost are needed to uncover the specifics of these apparent differences and the subsequent firm-level responses. Future research is also suggested to uncover more specifically the mechanisms of consumer search in food retail markets. Another relevant issue is the decomposition of the retail level mark-ups into search cost related rents and premium generated by product differentiation.

      Impact Statements:
      2. Showed that increased nutrition information and has a positive impact on the quality of the U.S. diet.
      3. Showed importance of food labels in making food purchase decisions
      4. Greatly expanded the methodology for examining food demand at the household (individual) level
      5. Showed the positive benefits in the particpation in supplemental food assistance programs.
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