Are Farm Subsidies Making Us Fat?

In the past couple weeks, there have been a number of popular press articles suggesting that farm subsidies are a big part of the reason Americans eat unhealthy and are overweight. Here's the title from the New York Times: "How the Government Supports Your Junk Food Habit", and Fox News: "Government heavily subsidizes junk food, report suggests", and NPR: "Does Subsidizing Crops We're Told To Eat Less Of Fatten Us Up?". All the hubbub seems to stem from this article by some CDC researchers in JAMA Internal Medicine, which shows people who are more overweight tend to get more of their calories from foods that happen to be subsidized.

But, as we should all know by now, correlation is not causation.  Here's Tracie McMillian in a piece for National Geographic:

“But what the study does not show is the degree to which subsidies—and, in particular, the ones that are currently in place—actually persuade people to eat more of those foods. The researchers, by the way, admit this: “We cannot say [the link between subsidies and consumption] is causal from this study,” says K.M. Vankat Narayan, a lead author.

So while there’s an accepted correlation between low prices and increased purchases, nobody really knows how much farm subsidies matter when it comes to which foods people buy—and eat.”

She's right on the first part and wrong on the second.  There are actual lots of people who know how much farm subsidies contribute to food consumption, and they're called agricultural economists (in fact, McMillian goes on to then cite two prominent food and agricultural economists on the issue: Parke Wilde and David Just).  My view is in line with Wilde's and Just's:

“Indeed, in contemporary America, “the potential impact of the agricultural subsidies on consumption right now is inconsequential,” argues David Just, an agricultural and behavioral economist at Cornell University. Subsidies for farmers are unlikely to have much impact on consumer prices, adds Wilde, because farmers’ share of what we pay at the store is so little. ”

Let me pause right here and say that the question of the causal relationship between farm policy and unhealthy food consumption is an empirical, positive question, not a normative one.  There are a variety of reasons one may think we should or should not have farm subsidies (I generally find myself in the latter camp for reasons I won't go into here), but for the moment let's set the "should" question aside and ask what the evidence actually says on the link between farm subsides and unhealthy eating.  

Here's what I wrote on the issue in a recent Mercatus paper (which came out well before all the JAMA paper and the resulting news stories):

“Despite popular claims to the contrary, research suggests that farm subsidies have likely had little to no effect on obesity rates. First, although such policies may have had some effect on farm commodity prices, these inputs account for only a small share of the overall retail cost of food. For example, in 2013, only 7 percent of the retail price of bread was a result of the farm-gate price of wheat and other agricultural commodities. Even the enormous price swing that took wheat from around $3 per bushel in 2006 to almost $12 per bushel in February 2008 (a 300 percent increase) would be expected to increase the price of bread by only about 14 percent. Second, agricultural policies are mixed, and some policies (such as those for sugar, ethanol promotion, and the Conservation Reserve Program, or CRP) push the prices of agricultural commodities up rather than down. Third, despite the widely varying agricultural policies across countries and over time (see figures 14–16), those policies do not correlate well with differences in food prices and obesity rates across countries or with changes in obesity rates over time.”

In the model I used for the forthcoming paper I wrote on the distributional impacts of crop insurance subsidies, I find that the complete removal of crop insurance subsidies to farmers would only increase the price of cereal and bakery products by 0.09% and increase the price of meat by 0.5%, and would also increase the price of fruits ad vegetables by 0.7%.  So, while these policies may be inefficient, regressive, and promote regulatory over-reach, their effects on food prices are tiny, and depending on which policy we're talking about, could push prices and consumption  up or down.  

For those truly interested, here's a small list of academic papers by economists on the relationship between farm policy and obesity/health (for links to the actual papers, just do a quick googlescholar search).

Alston, Julian M., Daniel A. Sumner, and Stephen A. Vosti, “Farm Subsidies and Obesity in the United States: National Evidence and International Comparisons,” Food Policy 33, no. 6 (2008): 470–79. 

Balagtas, J.V., Krissoff, B., Lei, L. and Rickard, B.J., 2014. How Has US Farm Policy Influenced Fruit and Vegetable Production?. Applied Economic Perspectives and Policy, 36(2), pp.265-286.

Beghin, John C., and Helen H. Jensen. "Farm policies and added sugars in US diets." Food Policy 33, no. 6 (2008): 480-488.

Miller,J. Coreyand Keith H. Coble, “Cheap Food Policy: Fact or Rhetoric?” Food Policy 32, no. 1 (2007): 98–111. 

Okrent, Abigail M.  and Julian M. Alston, “The Effects of Farm Commodity and Retail Food Policies on Obesity and Economic Welfare in the United States,” American Journal of Agricultural Economics 94, no. 3 (2012): 611–46.

Rickard, B.J., Okrent, A.M. and Alston, J.M., 2013. How have agricultural policies influenced caloric consumption in the United States?. Health Economics, 22(3), pp.316-339.

Zilberman, D., Hochman, G., Rajagopal, D., Sexton, S. and Timilsina, G., The impact of biofuels on commodity food prices: Assessment of findings. American Journal of Agricultural Economics, 95, no. 2 (2013) : 275-281.

Does Diet Coke Cause Fat Babies?

O.k., I just couldn't let this one slide.  I've seen the results of this study in JAMA Pediatrics discussed in a variety of news outlets with the claim that researchers have found a link between mothers drinking artificially sweetened beverages and the subsequent weight of their infants.

I'm going to be harsh here, but this sort of study represents everything wrong with a big chunk of the nutritional and epidemiology studies that are published and how they're covered by the media.  

First, what did the authors do?  They looked at the weight of babies one year after birth and looked at how those baby weights correlated with whether (and how much) Coke and Diet Coke the mom drank, as indicated in a survey, during pregnancy.  

The headline result is that moms who drank artificially sweetened beverages every day in pregnancy had slightly larger babies, on average, a year later than the babies from moms who didn't drink any artificially sweetened beverages at all.  Before I get to the fundamental problem with this result, it is useful to look at a few more results contained in the same study which might give us pause.

• Mom's drinking sugar sweetened beverages (in any amount) had no effect on infants' later body weights.  So drinking a lot of sugar didn't affect babys' outcomes at all but drinking artificial sweeteners did?
• The researchers only found an effect for moms who drank artificially sweetened beverages every day.  Compared to moms who never drink them, those who drink diet sodas less than once a week actually had lighter babies! (though the result isn't statistically significant).  Also, moms drinking artificially sweetened beverages 2-6 times per week had roughly the same weight babies as moms who never drank artificially sweetened beverages.  In short, there is no evidence of a dose-response relationship that one would expect to find if there was a causal relationship at play.  

And, that's the big issue here: causality.  The researchers have found a single statistically significant correlation in one of six comparisons they made (three levels of drinking compared to none for sugar sweetened beverages and for artificially sweetened beverages).  But, as the researchers themselves admit, this is NOT a casual link (somehow that didn't prevent the NYT editors from using the word "link" in the title of their story).  

Causality is what we want to know.  An expecting mother wants to know: if I stop drinking Diet Coke every day will that lower the weight of my baby?  That's a very different question than what the researchers actually answered: are the types of moms who drink Diet Coke every day different from moms who never drink Diet Coke in a whole host of ways, including how much their infants weigh?  

Why might this finding be only a correlation and not causation? There are a bunch of possible reasons.  For example, moms who expect their future children might have weight problems may choose to drink diet instead of regular.  If so, the the moms drinking diet have selected themselves into a group that is already likely to have heavy children.  Another possible explanation: moms who never drink Diet Cokes may be more health conscious overall.  This is an attitude that is likely to carry over to how they feed and raise their children which will affect their weight in ways that has nothing to do with artificially sweetened beverages.

Fortunately economics (at least applied microeconomics) has undergone a bit of credibility revolution.  If you attend a research seminar in virtually any economist department these days, you're almost certain to hear questions like, "what is your identification strategy?" or "how did you deal with endogeneity or selection?"  In short, the question is: how do we know the effects you're reporting are causal effects and not just correlations.  

Its high time for a credibility revolution in nutrition and epidemiology.  

How Fat Taxes Affect the Rich and the Poor

I'm pleased that the Economic Journal has decided to publish the paper Distributional Impacts of Fat Taxes and Thin Subsidies I wrote with  Laurent Muller, Anne Lacroix, and Bernard Ruffieux of the University of Grenoble and the French National Institute for Agricultural Research.  

Here is an excerpt

“How do the price policies differentially affect women at different points in the income distribution? Beliefs about the relative effects of fat taxes and thin subsidies on the poor relative to the non-poor are often premised on two assumptions. First is the assumption that the poor consume less healthful diets than the non-poor, perhaps due to the higher costs of more healthy diets (e.g., Drewnowski and Specter, 2004). The second assumption is that price policies are more likely to benefit low income consumers because low income consumers have more room for improvement, and because of their financial situation, they are likely to be more responsive to price changes. In short, a common view is that price policies can help the poor “catch up” to the non-poor in terms of the healthfulness of their diets.

Our experimental results confirm the first assumption: poor women tended to purchase less healthy food than the non-poor women. The implication is that, holding initial consumption patterns constant, policies which tax unhealthy food and subsidise healthy food will be regressive, favouring the non-poor more than the poor. But, people can change consumption patterns in response to price policies. If the poor are more responsive to price policies than are the non-poor, then inequalities will be dampened. This hypothesis, however, was rejected. Behavioural adjustments to the price policies amplified rather than dampened the divergent fiscal impacts of the price policies.”

In short:

“The tax/subsidy policies serve to widen the gap between the poor and non-poor, increasing the inequality in health and fiscal outcomes. Fat taxes cause the poor to pay disproportionally more for food than the non-poor and thin subsidies primarily flow to the non-poor. These effects occur because the non-poor already consume healthier diets but also because the non-poor are more price responsive than the poor”

Our approach to addressing this issue is quite different than that of previous studies.  Here's what's unique about our appoarch

“The advantage of the experimental set-up is that people’s choice behaviours are directly observed (rather than inferred as in a simulation study). In addition, the setting does not require the use of econometric models to infer behavioural responses. There is no need to assume a functional form or structure for responses; each individual can respond in their own unique way according to their own preferences. The experiment attempts to measure the overall fiscal effect (based on a day’s food choices) rather than simply focusing on one or two foods or a few food product categories. The experiment environment also allows us to study larger price variations (+/- 30%) than would likely have been feasible outside the lab, and as such, makes the price changes particularly salient.”

Here is one of the key figures from the paper.  The figure shows the distribution of price indices (i.e., the relative change in prices paid) after the introduction of a combined unhealthy-food-tax and healthy-food-subsidy policy for low income women as compared to a reference group (i.e, "normal" income women).

The Laspeyres index calculates the change in prices paid relative to the initial pattern of consumption; the Paasche index is similar except that it weights prices paid using the new pattern of consumption.  A greater difference between the two indices reveals greater substitution and responsiveness to the policy.

The figure above shows that 25-30% of  the low income consumers paid more for food after the price policy (they had an index greater than 100), and given the similarity of the two red lines, were less responsive (perhaps because of being more habit prone) than the richer consumers.  Moreover, at the individual level, the Paasche index was higher than the Laspeyres index for 35.9% of low income individuals.  These individuals did not shift their diet in the intended direction.

We ended the paper as follows:

“Whatever health benefits these policies might create, this paper suggests they need to be weighed against the adverse monetary effects they have on some of the poorest people in society.”

Eating Right in America

With the federal new nutritional guidelines coming out today, I suspect there will be a lot of talk about why the guidelines ultimately didn't recommend less meat eating, the impact of the guidelines, and the process behind the formation of the guidelines.

As such, now is probably as good a time as any to share a few thoughts about Charlotte Biltekoff's book, Eating Right in America: The Cultural Politics of Food and Health, which I picked up over the break.  In the book, Biltekoff argues that dietary advice is about much more than just science and represents a social construct laden with moral undertones.  She recounts the history behind several different phases of the dietary reform movements in the US starting with the science-based nutrition efforts (the force behind "home economics") that began in the late 1800s and early 1900s right through to today's alternative food movement (as far as entertaining food history goes, I prefer Harvey Levenstein's Fear of Food).  The thing that unites all the food reformers, Biltekoff argues, isn't the actual diets they recommend but rather the religious fervor of the people recommending the diets.  

She argues that one of the reasons we worry so much about what we eat today is:

“not because of an increase in incidence of diet-related diseases or because of growing knowledge about the role of diet in preventing such diseases, but because of ongoing expansions in the social significance of dietary health and the moral valence of being a “good eater.””

and

“dietary ideals always communicate not only rules for how to choose a “good diet”, but also guidelines for how to be a good person.””

Perhaps we shouldn't be too surprised that as organized religion as been on the decline in recent decades that people are seeking to express their moral chops in other domains - food now being a common choice.

Interestingly, Biltekoff is quite critical of the modern alternative food movement led by Alice Waters and Michael Pollan.  It is a movement that she, quite rightly, says has served to discount scientific evidence and to elevate the role of the senses and tradition.  She also notes how the movement has, "heightened the moral valence of eating right with alternative food, creating higher stakes for food and bad eating than in previous eras" and that it "wielded its own moral force with little-self awareness or critique."  

Biltekoff concludes with the following:

“Given its social and moral freight, eating right is a kind of unexamined social privilege. It is not unlike and is clearly connected to other forms of privilege that usually goes unnoticed by the people who possess them, such as whiteness and thinness. Choosing socially sanctioned diets makes subtle but very powerful claims to morality, responsibility, and fitness for good citizenship. We who are lucky enough to have eating habits that align with the dietary ideals or inhabit the kind of bodies that imply we may think our shapes or healthy preferences are a sign of our virtue, the result of our will, or perhaps nothing more than a lucky twist of fate ... [should understand that] history shows that there are cultural mechanisms that produce the seemingly natural alignment between ideal diets, ideal body sizes, and the habits and preferences of the elite. We should therefore question our common-sense assumptions about the “goodness” of good eaters and be very careful about the subtle forms of social and moral condemnation we mete out, often unconsciously, to “bad eaters.” ”

I tried to put it more plainly in the Food Police: don't be a backseat driver when it comes to food.

Overall, I found the book to be a bit verbose, relativistic, and social-class-focused for my tastes, but it nonetheless provided some good food for thought. 

Lettuce a bigger environmental threat than beef?

On Monday a press release began making the rounds claiming that "Vegetarian and 'healthy' diets are more harmful to the environment" and the story has generated provocative headlines like, "Lettuce three times worse than bacon for the environment."  The results are based on this paper published in Environment Systems and Decisions by Michelle Tom , Paul Fischbeck, and Chris Hendrickson.

Here's a portion of the abstract:

“This article measures the changes in energy use, blue water footprint, and greenhouse gas (GHG) emissions associated with shifting from current US food consumption patterns to three dietary scenarios, which are based, in part, on the 2010 USDA Dietary Guidelines . . . . This study finds that shifting from the current US diet to dietary Scenario 1 [same mix of foods but fewer calories] decreases energy use, blue water footprint, and GHG emissions by around 9%, while shifting to dietary Scenario 2 [holding calories consumed constant but shifting away from meat to fruit and veg] increases energy use by 43%, blue water footprint by 16%, and GHG emissions by 11 %. Shifting to dietary Scenario 3, which accounts for both reduced Caloric intake and a shift to the USDA recommended food mix, increases energy use by 38 %, blue water footprint by 10 %, and GHG emissions by 6 %. These perhaps counterintuitive results are primarily due to USDA recommendations for greater Caloric intake of fruits, vegetables, dairy, and fish/seafood, which have relatively high resource use and emissions per Calorie.”

So, what's going on here?  Didn't the authors of the latest (proposed) Nutritional Guidelines suggest less meat eating due to "sustainability" concerns?  Haven't we repeatedly read things like this quote from a story in Time in  2008? 

“It’s true that giving up that average 176 lb. of meat a year is one of the greenest lifestyle changes you can make as an individual. ”

A few comments about this latest study and how it relates to the "received wisdom."

First, meat eating often looks bad in aggregate because the industry is so big.  In the US, we eat a lot of meat.  As a group, animal products probably represent the largest share of food expenditures of any food category.  As a result, we need to put the outcomes on some kind of units where foods can be compared on an even playing field.  There are a lot of options: lbs of food produced, dollars spent, acres used, or as the current study uses, calories.  As I've discussed before:

“. . . meat is relatively (relative to many fruits and vegetables) inexpensive on a per calorie or per gram of protein basis, although meat looks more expensive when placed on a per pound basis. If you want really inexpensive calories eat vegetable oil or crackers or sugar; if you want real expensive calories, eat zucchini or lettuce or tomatoes.”

For what it's worth, this discussion is related to the debate on whether eating healthy is more or less expensive.  As it turns out: the answer depends how you measure it ($/lb or $/calorie) .

Second, it is important to think on the margin, or think in terms of changes.  Meat is bad.  Compared to what?  As I discussed in the Food Police,  many fruits and vegetables are big users of water and pesticides.  So, if we eat less meat, what will we eat more of instead, and what are the impacts of the items we switch to?  This recent study produces results that look a bit different because it looks not just at aggregates but at marginal changes.  

Third, as this study makes clear, "the environment" is not a single thing.  It is multidimensional.  Here's a graph from the paper.

Some foods are better water users, others worse in terms of GHS emission, others produce more calories/acre and spare more land, and so on.  Very rarely are there "have your cake and eat it too" moments, and there are typically tough tradeoffs between health, environment, and taste (and even tradeoffs within each of those categories).  One problem with studies like this is that they don't count the consumer welfare cost from eating a different mix of foods or different number of calories from what they normally consume, so we don't have any sense for the tradeoff between taste and cost on the one hand and health and the environment on the other.  

The last comment is that it's tough for me to evaluate the "quality" of this paper, and one should probably be a bit careful of suffering from confirmation bias.  A lot of the assumptions driving the result actually come from other papers and analyses.  Moreover, the work was published in a relatively new journal (started in 2012) and I know nothing about it. [update: a follower on Twitter informed me that the journal has been around since the 1980's but recently changed its name]  However, it does appear that the authors' results are similar to those in another paper that the Nutritional Guidelines Committee actually discussed in their report.  The committee writes: 

“a report from Heller and Keoleian suggests that an isocaloric shift from the average U.S. diet (at current U.S. per capita intake of 2,534 kcals/day from Loss-Adjusted Food Availability (LAFA) data) to a pattern that adheres to the 2010 Dietary Guidelines for Americans would result in a 12 percent increase in diet-related GHG emissions. This result was modified, however, by their finding that if Americans consumed the recommended pattern within the recommended calorie intake level of 2,000 kcal/day, there would be a 1 percent decrease in GHG emissions.”

But, of course, people don't just follow the guidelines to a tee.  That's one reason why these sorts of guidelines and recommendations should consider consumers' behavioral responses to the policies in question.