Health Information Impacts on Seafood Demand: Experimental Auction Approach

Transcription

1 Health Information Impacts on Seafood Demand: Experimental Auction Approach Hirotsugu Uchida 1, Cathy A. Roheim 2, and Robert J. Johnston 3 1 Department of Environmental and Natural Resource Economics, University of Rhode Island 2 Department of Agricultural Economics and Rural Sociology, University of Idaho 3 George Perkins Marsh Institute (GPMI) and Department of Economics, Clark University International Institute of Fisheries Economics and Trade Conference 2014 Brisbane, Australia, July 7-11, 2014

2 Motivation Challenge in communicating information On health risk and benefit information across different species, sources and for different consumers. National Academy of Sciences study: Research is needed to develop and evaluate more effective communication tools when conveying health benefits and risks of seafood consumption.

3 Motivation (2) Focus group sessions in RI revealed: Have mixed and conflicting perceptions of fish as a healthy food option, but also carry risks due to contaminants. Perceive farmed fish to have lesser health benefits and greater health risks than wild fish. Lack knowledge about where to obtain unbiased and objective information about seafood s attributes. Have difficulty balancing health risks and benefits for farmed fish. Similar findings in other parts of the world c.f., Verbeke et al. (2005): survey in Europe

4 Research questions Policy question: how to increase demand for farmed seafood in the US? Will informing consumers do the trick? How does the information affect, if any, consumers purchasing behavior? Content of information (health benefit vs. risk) Source of information (govn t agency, university researcher, etc) Are the effects different across: Information types? Product types?

5 Method: Auction experiment Three products to bid on Wild salmon fillet, farmed salmon fillet, swordfish steak (all 1lb) Simultaneous, second price sealed bid auction. Two information interventions. Round 1 Wild Farmed Swordfish Round 2 Wild Farmed Swordfish Round 3 Wild Farmed Swordfish Round 4 Wild Farmed Swordfish Round 5 Wild Farmed Swordfish Round 6 Wild Farmed Swordfish Other controls Information content Consumption timing issue use of vouchers Budget effect use of binding round Information source

6 Information treatments Used four information sources: US government (FDA): focusing on risks (of mercury) Industry: focusing on the benefits (omega-3 DHA) University scientist: balanced information but slightly more towards the risk; explicit mention of farmed vs. wild salmon. National Academy of Sciences: similar to University info, but explicit in relative terms but also requires more effort to understand. (1) Salmon, Atlantic, farmed a (1) Salmon, Atlantic, wild a (2) Oyster, Pacific b (13) Rainbow trout, farmed a (2) Oyster, eastern, wild b (1) Salmon, Pacific c (13) Rainbow trout, wild a (122) Tilefish a (29) Tuna, white, canned (81) Swordfish a (112) Shark (5) Pollock, Atlantic a (8) Flounder/sole a (21) Halibut, Atlantic and Pacific a (2) Oyster, eastern, farmed a (4) Scallops, bay and sea (100g) (6) Crab, king b (61) King mackerel a (10) Ocean perch, Atlantic a (4) Shrimp, mixed b (2) Clams, mixed b (10) Cod, Pacific a (10) Tuna, light, canned (8) Haddock a (8) Catfish, wild a (8) Catfish, farmed a (10) Cod Atlantic a (26) Lobster, northern b Methylmercury (μg) EPA/DHA (g)

7 Information treatments (2) Explicit mention of salmon University N = 55 NAS N = 68 FDA/Ind N = 60 Industry N = 60 Health RISK Health BENEFIT FDA N = 61 No mention of salmon Total of six information treatments Five treatments with actual information, plus One no-information treatment as control (N = 58).

8 Data Descriptive statistics Total 32 sessions, 362 participants. Data cleaned for low bidders n = 340 Wild salmon Farmed salmon Swordfish Bid price Highest $60.00 $35.00 $40.00 Lowest $0.00 $0.00 $0.00 Average $5.95 $4.96 $4.93 (Dave s) ($11.99) ($6.99) ($11.99) male female >71

9 Estimation model Difference-in-Difference mixed linear model 2 5 bid Round PROD INFO InfoC InfoS ijkt 0 1 t j ij k ik 1 t 2 t j 1 k INFO InfoC INFO InfoS PROD InfoC PROD InfoS k ik t k ik t j ij t j ij t k 1 k 1 j 1 j PROD INFO InfoC PROD INFO j 1 k 1. ij i 2 5 jk ij ik t jk ij ik j 1 k 1 Random parameters InfoS t ijkt PROD = {wild salmon, farmed salmon base = swordfish} INFO = {FDA, Industry, FDA-Ind, University, NAS base = no info} InfoC: dummy variable for first information (content) intervention InfoS: dummy variable for second information (source) intervention

10 Hierarchical structure of mixed linear model Individual i Wild salmon Farmed salmon Swordfish ij R1 R6 R1 R6 R1 R6 i

11 Results (1): Regression output Variavbles (dependent var = bid) Coefficients Variavbles (dependent var = bid) Coefficients Variavbles (dependent var = bid) Coefficients Constant 5.323*** Info source x Information type Info content x info type x product (cont) (0.537) InfoS_FDA InfoC_FDA_farmed 0.415* Round (0.392) (0.249) (0.0496) InfoS_IND InfoC_IND_farmed Product type (base = swordfish) (0.392) (0.281) wild salmon 0.545*** InfoS_FI InfoC_FI_farmed 0.705** (0.170) (0.355) (0.325) farmed salmon *** InfoS_UNIV InfoC_UNIV_farmed 1.430*** (0.151) (0.402) (0.416) Information type (base = no info) InfoS_NAS InfoC_NAS_farmed 1.608*** FDA (0.424) (0.489) (0.723) Info content x Product type Info source x info type x product Industry (IND) InfoC_wild InfoS_FDA_wild (0.784) (0.211) (0.481) FDA & Industry (FI) InfoC_farmed InfoS_IND_wild 0.830** (0.808) (0.183) (0.376) University (UNIV) Info source x Product type InfoS_FI_wild (0.713) InfoS_wild * (0.322) NAS (0.259) InfoS_UNIV_wild (0.671) InfoS_farmed ** (0.399) Treatment timing dummy (0.271) InfoS_NAS_wild InfoC (information content) Info content x info type x product (0.371) (0.261) InfoC_FDA_wild InfoS_FDA_farmed InfoS (information source) (0.282) (0.308) (0.339) InfoC_IND_wild InfoS_IND_farmed Info content x Information type (0.646) (0.316) InfoC_FDA InfoC_FI_wild InfoS_FI_farmed 0.551* (0.303) (0.351) (0.313) InfoC_IND InfoC_UNIV_wild 1.737*** InfoS_UNIV_farmed 0.697* (0.425) (0.442) (0.386) InfoC_FI InfoC_NAS_wild 1.024** InfoS_NAS_farmed (0.311) (0.430) (0.371) InfoC_UNIV *** (0.404) InfoC_NAS ** Observations 6,120 (0.460) Number of groups 340

12 Results (2): Information effect Explicit mention of salmon Univ Cont Source Total W F S NAS Cont Source Total W F S Health RISK FDA Cont Source Total W F S F-I Cont Source Total W F S No mention of salmon Ind Cont Source Total W F S Health BENEFIT Limited effect of benefit information. Stronger effect of risk information, but not the case for FDA. Information source had no impacts.

13 Results (3): Information effect Comparisons b/w product types Salmon products bids are generally higher than swordfish. Mostly due to negative effect of information on swordfish bids. NAS information had positive effect on farmed over wild salmon. Information Wild vs Sword Farmed vs Sword Wild vs Farmed FDA (3.29) * (5.11) ** (0.03) Industry (3.44) * (1.99) (1.53) FDA/Industry (4.22) ** (9.93) *** (2.32) University (22.9) *** (21.1) *** (0.13) NAS (7.59) *** (12.3) *** (3.54) * Test statistics in parenthesis. Significance levels are indicated as: * (10%), ** (5%), and *** (1%).

14 Results (4): Information effect Comparisons b/w info types No difference for wild and farmed salmon. All information types have similar effect (incl. no effect) For swordfish, University information had more negative impacts than other information types (excl. NAS) SWORDFISH FDA Industry FDA-Industry University NAS FDA 0 Industry (IND) (0.33) FDA-Industry (FI) (1.42) (0.04) 0 University (UNIV) *** * ** 0 (8.51) (2.97) (3.96) NAS (2.33) (0.50) (0.47) (1.06) Note: each value represents the difference ROW COLUMN. For example, means FDA information effect on swordfish is $1.35 higher than University information effect. Test statistics in parenthesis. Significance levels are indicated as: * (10%), ** (5%), and *** (1%). 0

15 Conclusion Very limited influence of health benefit information. Information that emphasizes the health benefit had almost no impact on demand for farmed salmon. Explicitly distinguishing farmed vs. wild salmon may be effective for affecting demand for farmed salmon on the basis of health benefit. Strong influence of health risk information. Negative and significant impacts on swordfish demand. Information source-wise: University was effective for risk information. FDA was very ineffective even for risk information.

16 Acknowledgement Funding for the project Agriculture and Food Research Initiative Agricultural Economics and Rural Communities Program Collaborators Lighthouse Consulting Group, Inc. Dave s Marketplace Research assistants Miho Tegawa Adam Stemle

17 Contact information

18 Experimental auction Key designs Second-price sealed bid with $70 endowment. Three seafood products: 1lb fillet of (a) wild salmon, (b) farmed salmon, and (c) swordfish.

19 Experimental auction Key designs Second-price sealed bid with $70 endowment. Three seafood products: 1lb fillet of (a) wild salmon, (b) farmed salmon, and (c) swordfish. Simultaneous bidding: make bids for each product at the same time. Mimic actual grocery shopping experience. Two information treatments: 1. Contents on seafood health risks and benefits. 2. Source of the information provided. Binding rounds Avoid budget-effect in multiple auction rounds experiment. Pre- and post-auction surveys Demographic characteristics. Seafood purchasing attributes (frequency, attitudes, etc). Risk perceptions on seafood and information. Perceived market prices for each product auctioned.

20 Information treatment: FDA/EPA

21 Information treatment: Industry Food Marketing Institute, Int l Food Information Council, Nat l Fisheries Institute, Nat l Healthy Mothers, Healthy Babies Coalition

22 Information treatment: University C.R. Santerre, Ph.D., Foods and Nutrition, Purdue University

23 Information treatment: NAS Mercury Omega-3s (1) Salmon, Atlantic, farmed a (1) Salmon, Atlantic, wild a (2) Oyster, Pacific b (13) Rainbow trout, farmed a (2) Oyster, eastern, wild b (1) Salmon, Pacific c (13) Rainbow trout, wild a (122) Tilefish a (29) Tuna, white, canned (81) Swordfish a (112) Shark (5) Pollock, Atlantic a (8) Flounder/sole a (21) Halibut, Atlantic and Pacific a (2) Oyster, eastern, farmed a (4) Scallops, bay and sea (100g) (6) Crab, king b (61) King mackerel a (10) Ocean perch, Atlantic a (4) Shrimp, mixed b (2) Clams, mixed b (10) Cod, Pacific a (10) Tuna, light, canned (8) Haddock a (8) Catfish, wild a (8) Catfish, farmed a (10) Cod Atlantic a (26) Lobster, northern b Methylmercury (μg) EPA/DHA (g)

24 Data (2): Demographic male female >71

25 Literature Consumers sometimes respond irrationally to risk information. Parsons, et al. (2006) Consumers did not react to fish risk warning and labels. Roosen, et al. (2009) FDA s mercury advisory was effective, and also too effective. Shimshack, et al. (2007)