The Economics of Food, Health and Nutrition: International Comparisons, Analysis, and Roles for
Issues surrounding food, health and nutrition are gaining in prominence – reports of an ‘obesity epidemic’ appear with increasing frequency. The agricultural and natural resource sectors play a key role in contributing to food, health and nutrition outcomes. Changes in agricultural productivity, the production of new foods, such as functional foods, and shifts in consumer preferences pose new challenges for public policy.
This workshop explored the economics of agricultural and food policies and associated health outcomes. Presentations from international and Australian experts addressed subjects encompassing food and agricultural policy, the economics of obesity, and food labelling and consumer behaviour.
Dr Deborah Peterson B.B.S. (Hons), M.Sc., Ph.D, GAICD
Deputy Secretary, Policy and Strategy, Department of Primary Industries, Victoria, Australia.
Deborah is responsible for providing policy analysis and advice to DPI and its Ministers on agriculture, fisheries, forestry, earth resources, fossil and renewable energy, and energy efficiency. She helps to shape our input to whole-of-government strategies, including climate change, water and regulatory reform. Deborah is also responsible for our corporate and business strategies.
Dr. Bhattacharya is an associate professor in the Center for Primary Care and Outcomes Research at the Stanford University School of Medicine.
His research agenda aims to understand the constraints that vulnerablejayb populations face in making decisions that affect their health status, and in particular the effects of government policies designed to benefit these populations. He is currently involved numerous research projects investigating the effects of Medicare and Medicaid on vulnerable populations, the future of these programs in a changing health care technology environment, incentives and trends in disability and disability insurance claims, childhood nutrition, food insecurity in the United States, and the economics of alcohol and smoking. Dr. Bhattacharya has published in several peer review journals on topics including health care design, medical service utilization, economic costs of workplace injuries, the National School Lunch Program, and HIV policy, to name a few.
Alfred Deakin Professor of Population Health and Director of the World Health Organisation (WHO) Collaborating Centre for Obesity Prevention at Deakin University
Swinburn trained as a specialist endocrinologist in Auckland and his research career began with metabolic and clinical studies at the National Institutes of Health in Phoenix, Arizona and at the University of Auckland. He was the Medical Director of the National Heart Foundation in New Zealand from 1993-2000. His major research interest at Deakin University is centred on obesity prevention, particularly in children and adolescents, and efforts to reduce, what he has coined, the ‘obesogenic’ environment. He has developed and supported a number of community-based demonstration projects in the Barwon-South West region of Victoria and these are linked to similar projects in Melbourne, Auckland, Fiji, and Tonga.
He was President of the Australasian Society for the Study of Obesity (ASSO) from 2005-7 and has been a Steering Group member of the International Obesity Task Force (IOTF) since 1997 and co-chair since 2009. He has also contributed as an Expert Advisor to WHO on obesity at 15 WHO Consultations around the world since 1998. Through these efforts and his many publications and presentations, he is significantly contributing to national and global efforts to reduce the obesity epidemic.
Australian Government Productivity Commission
Jacqueline Crowle joined the Productivity Commission in January 2008 as a senior research economist. In addition to being the lead author of Childhood Obesity: An Economic Perspective, she provided public health related input into the Chemicals and Plastic Regulation study. At present, she is contributing to the Early Childhood Workforce study, where one of her focus areas is early childhood services to Indigenous communities.
Professor, University of California Davis
Julian M. Alston is a professor in the Department of Agricultural and Resource Economics of the University of California, Davis, where he teaches graduate and undergraduate classes in microeconomic theory and the analysis of agricultural markets and policies. At UC Davis, Professor Alston is a member of the Giannini Foundation of Agricultural Economics and serves as director of the Robert Mondavi Institute Center for Wine Economics and associate director for science and technology policy at the University of California Agricultural Issues Center. He was raised on a family farm in northern Victoria, Australia. Prior to beginning in his current position in 1988, he was the Chief Economist in the Department of Agriculture in Victoria. His experience in public policy analysis and advice, and the administration of a large scientific organization shaped his scholarly and applied research interests in the economic analysis of agricultural markets and public policies concerning agricultural incomes, prices, trade, agricultural research and promotion, and food consumption, nutrition, and health. He has published many journal articles, chapters, and books related to these subjects. He is a Fellow of the American Agricultural Economics Association, a Distinguished Fellow of the Australian Agricultural and Resource Economics Society, and a Distinguished Scholar of the Western Agricultural Economics Association.
Joanna Parks is a Ph.D. candidate at the University of California at Davis in the Department of Agricultural and Resource Economics.
Prior to entering the program, Ms Parks received her BA in Economics from the University of California at Davis in 2006 and her MS in agricultural and resource economics from the University of California at Davis in 2009. Her research focuses on the effects of food policy and nutrition assistance programs on health outcomes and methods for estimating the social cost of obesity. More broadly, her research interests include factors that influence health capital investments and risky health behaviors, modeling the channels (economic and biological) through which policy and market interventions influence health outcomes, and differences between the social burden of disease and private willingness to pay for reductions in morbidity and mortality.
Reader in Agri-Environmental Economics, School of Economics, University of Kent
Fraser received his PhD from the University of Manchester in 1992. He has held academic positions in the UK at the University of Manchester, Manchester Metropolitan University and Imperial College. He also lectured in Australia for seven years at La Trobe University. His research interests cover various aspects of agricultural, environmental and resource economics. He has conducted extensive research on agri-environmental policy, household waste management, estimation and measurement of economic efficiency, and most recently non-market valuation. His research has been published in journals such as the Journal of Environmental Economics and Management, Land Economics, American Journal of Agricultural Economics, Journal of Productivity Analysis and the Journal of Applied Econometrics. He has recently completed a second term as an Associate Editor of the Australian Journal of Agricultural and Resource Economics.
Rodolfo M. Nayga, Jr. is Professor and Tyson Endowed Chair in Food Policy Economics in the Department of Agricultural Economics and Agribusiness at University of Arkansas.
Nayga received his PhD from Texas A&M University. Prior to joining the University of Arkansas, he was a professor at Texas A&M University for 11 years. He also was a faculty member at Rutgers University for 4 years and at Massey University, New Zealand for about a year. He was a visiting professor and Fulbright Senior Scholar at Wageningen University, Netherlands in 2001. He has published more than 100 refereed articles in several journals in economics, agricultural economics, marketing, and public health.
Consumer Affairs Victoria
Jane Harris has qualifications in agricultural science and economics from three Australian universities. She has been a State Government policy adviser for ten years, after ten years as a researcher at the Australian Bureau of Agricultural and Research Economics (ABARE). Her focus has been efficient and equitable roles for government, applied to areas such as drought relief, energy efficiency and food labelling. ‘Credence attributes – making honesty the best policy’, a recent Consumer Affairs Victoria research paper, was part of the Victorian Government's submission to the National Review of Food Labelling which is currently underway.
Childhood Obesity: an Economic Perspective
Childhood obesity is the subject of much attention from governments, the community and the media. In this presentation we first consider the causes of childhood obesity and its complex nature. We then consider obesity in an economic framework, by exploring the decision making process, including how individuals respond to changes in incentives and how they make decisions exploring trade-offs between different consumption and exercise choices, and consider possible market failures. We also investigate behavioural economics studies into weight related consumption decisions. Finally, policy options for addressing childhood obesity and the lessons for future policy development are considered.
Taxes and Subsidies on Farm Commodities and Food Products: Useful Weapons in the War on Obesity?
Around the world, governments are developing policies, aiming to reduce the prevalence of obesity and its social costs. Various actual or proposed policies are supposed to induce changes in eating habits by changing the relative prices of different food products, and thereby to reduce obesity rates. The most common examples are taxes on particular nutrients (such as the fat or sugar content of foods), on particular food products (such as caloric soft drinks or “sodas”), or on farm commodities used as ingredients (such as corn in the United States). The same kind of thinking is behind proposals, in the guise of obesity policy, to reduce farm subsidies that make relatively fattening foods cheaper (the primary target in the United States is corn), or to subsidize less-fattening foods (in particular fresh fruit and vegetables) either directly or by changing the orientation of agricultural research investments. Many of these policies are likely to be ineffective as obesity policies and many would be regressive, with their incidence falling most heavily on the poor. Among those that may be effective in reducing obesity, many will be inefficient because they are not targeted very closely on the perceived problem—for instance, taxes on calories would be more efficient than taxes on fat, which in turn would be more efficient than taxes on sweetened beverages. The economic efficiency of alternative tax (or subsidy) instruments also depends on the nature and extent of the market failure that they are meant to address. It is not clear that obesity entails very large externalities, even though health-care costs may be pooled, and consequently only a low tax rate would be justified as a correction for these externalities. Enhanced funding for R&D into specialty crops may be a relatively efficient instrument—simply because R&D into specialty crops generates very large benefit-cost ratios even without consideration of any obesity impacts—, but would take decades to have any meaningful impact on consumption patterns and obesity.
Quantifying Obesity in Economic Research: How Misleading is the Body Mass Index?
Obesity is excess body fat that increases the risk of disease and premature death. It is usually measured using a simple function of weight and height known as the Body Mass Index (BMI). Economists use the BMI to determine the prevalence of obesity within the population, to estimate the “disease burden” created by obesity, to establish the additional medical spending attributable to obesity, and to measure the current and potential effects of government policy on obesity. In econometric models, estimates will be biased if the measurement error from using BMI to proxy for obesity is correlated with other covariates. In this paper we use a flexible function of percent body fat and several metabolic factors to construct an obesity index for predicting death and disease. We use this index to show that using BMI leads researchers to misattribute obesity-related health outcomes to other factors such as aging, family health history, alcohol consumption, and household income. Moreover, we show how these biases necessarily generate the opposite implications for studies on the causes of obesity. Specifically, using BMI leads researchers to underestimate the effects of aging, family history of diabetes, alcohol consumption, and household income on obesity. We find no significant evidence of measurement error bias associated with smoking or insomnia. We also show that, compared with our obesity index, BMI generates substantially more false negative predictions of diabetes.
Food Choice and Nutrition Labels: The UK Traffic Light System
In this paper we consider the UK Traffic Light System (TLS) of nutritional food labelling. The TLS has generated much interest in the literature having been the subject of intense research and industry debate We examine various issues relating to the TLS and related nutritional labelling approaches. In particular, we consider the extent to which the public understands and reacts to the TLS. We also present findings from our own research, we have conducted using Choice Experiments (CEs), that examine consumer attitudes and responses to the TLS. Our research highlights how consumers use the TLS. In addition, we consider issues of CE design and implementation relating to complexity and attribute non-attendance that have important implications for the use of CE methods in applied policy research.
Side Effects of Having Informed Choice as an Objective of Government Intervention In Food Labelling
Ten years have passed since ‘information to enable informed consumer choice’ was inserted into national food legislation as a statutory objective in its own right. Previously this had been a means to Food Standards Australia and New Zealand’s primary objectives of food safety and fraud prevention. This paper explores the wider implications of this decision on public expectations; quantity and clarity of messages on labels; and distributional issues such as disproportionate impacts on low income consumers.
Can Nutritional Label Use Influence Dietary and Body Weight Outcomes?
Nutritional labeling has been of much interest to policy makers and health advocates due to rising obesity trends. So can nutritional label use really influence dietary and body weight outcomes? This study evaluates the impact of nutritional label use using the propensity score matching technique. We conducted a series of tests related to variable choice of the propensity score specification, quality of matching indicators, robustness checks, and sensitivity to unobserved heterogeneity using Rosenbaum bounds to validate our propensity score exercise. Results from previous studies and our analysis suggest that nutritional label use improves dietary outcomes but the magnitudes of these effects are small. Using propensity matching technique, we also found that nutritional label use does not generally affect body mass index. Implications of our findings are discussed.
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