Source: UNIV OF MINNESOTA submitted to
THE IMPACTS OF CHANGING CONSUMPTION PATTERNS,GLOBALIZATION, HEALTH CONCERNS, AND STRUCTURAL CHANGES ON THE FOOD INDUSTRY AND CONSUMERS
Sponsoring Institution
State Agricultural Experiment Station
Project Status
REVISED
Funding Source
Reporting Frequency
Annual
Accession No.
0074689
Grant No.
(N/A)
Project No.
MIN-14-048
Proposal No.
(N/A)
Multistate No.
(N/A)
Program Code
(N/A)
Project Start Date
Jul 1, 2011
Project End Date
Jun 30, 2016
Grant Year
(N/A)
Project Director
Senauer, B. H.
Recipient Organization
UNIV OF MINNESOTA
(N/A)
ST PAUL,MN 55108
Performing Department
Applied Economics
Non Technical Summary
Major changes are occurring in the demographics and lifestyles of the American consumers and in the structure of the food industry. There is a slower growth in population and income, a widening of the income distribution among households, rising food inflation, much more ethnic diversity, and a shift towards an older population. With the current difficult economic times for many households, many consumers have very tight food budgets. In addition, there is more focus on the relationship between food and health, especially with the rising rate of obesity. Consolidation at every level of the food supply chain has been widespread, creating an industry where there are fewer big retail food chains with more bargaining power visa via manufacturers. WalMart has become the largest U.S. grocery retailer with its super-center format and low prices, which has been exerting enormous competitive pressure on traditional supermarkets. At the same time, upscale food retailers, such as Whole Foods have done well. They are meeting the demands of some consumers for foods with particular characteristics such as organic foods,free range poultry and livestock,health supplements,and foods produced sustainably. The same price-oriented and quality-oriented dichotomy exists in food service with fast food chains being the best example of the former and upscale restaurants of the latter. Moreover, the diversity of places where consumers can obtain food grows as does the variety of types of foods. Better knowledge about changes in the demand for food products will greatly enhance the predictability of sales and profits in major segments of the food industry. Much previous research has been done to look at the effects of consumer trends on the demand for food and the implications of the changing structure of the food industry being driven by consumer trends, heightened competition, and new technologies. The purpose of this project is to take the analysis in new directions. Particular attention will be given to the relation between health concerns, food demand, and the industry response, especially in terms of the access of low-income households to healthy diets. Much also remains to be learned about the effects of new technologies and changing food industry structure on consumer food choices and welfare. Over 30 percent of the U.S. corn crop is now used for bio-fuel production. Considerable previous research on the impacts of bio-fuels exists, but a better understanding is still needed concerning their effects on food supply and prices, food companies, and consumers. Some of the most interesting research questions now relate to the impacts of the increasing globalization of the food system. It is vital to better understand how the food industry responds to continuing changes in food demand and how changes in the food supply chain affect consumers. All this research will help provide insights into the future shape of the food system in this country and around the globe.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6045010301010%
6046230301015%
6075010301015%
6076230301015%
6105010301010%
6106230301010%
7245010301015%
7246230301010%
Goals / Objectives
This project will identify broad trends that will help predict future directions in the food industry and the implications for food availability and costs and consumers' welfare. Both consumer trends and structural changes within the food supply chain will be considered. The expected research outputs include improved knowledge of the effects of socioeconomic trends on food consumption patterns and the relationship between changing consumption patterns and the structure and dynamics of the food industry, especially the retail food business. The project results will also provide further insights into the effects of technological and structural changes in the food industry on consumers. The results of this research should provide a better understanding of consumer motivations to select diets and lifestyles that contribute to better nutrition and health, and how they might be influenced. The project will study consumers' food choices and their impact on consumer health and welfare.This objective will include the analysis of the effects of the food assistance programs, such as the Supplemental Nutrition Assistance Program,formerly referred to as food stamps, on the access of lower-income households to healthier diets. The impacts of the global integration of the food supply chain on food distributors, processors, and retailers and on consumers' welfare will be studied. The outputs will include an evaluation of the spread of modern supermarkets in emerging economies and their impacts on consumers and the food supply chains. Further knowledge will be gained concerning the growth of consumer markets for value-added food products in the rapidly growing emerging economies. This research will examine the impacts of the use of crops, such as corn, to increasingly produce bio-fuel, which represents a major technological and structural change. The project's results should increase our understanding of the effects of bio-fuels on food supplies and prices, consumer and producer welfare, and possible environmental externalities not reflected in market prices.
Project Methods
In many cases more recent data from the same sources used in previous research undertaken on this project will be utilized. These data sets include Census data, the Consumer Expenditures Survey (CES), the A.C. Nielson food purchase data, the American Time Use Survey, and the National Health and Nutrition Examination Survey (NHANES). In addition to containing detailed information on individuals' health status, the NHANES data contains a rich set of socioeconomic data, as well as nutritional status from a 24-hour dietary intake study. It can be utilized to analyze not only individuals' food consumption patterns, but also the nutritional quality of their diets. With the CES, changes in households' food expenditures for specific food categories can be studied as they are affected by socioeconomic factors. Data from Living Standards Measurement Surveys (LSMS) can be used to study food expenditure patterns in developing countries. Food and Agriculture Organization national-level food balance sheet data can be used to study international food consumption trends. Data from trade associations, such as the Food Marketing Institute, will be utilized to study food industry trends. Statistics are available for bio-fuels from the Renewable Fuels Association for the United States and Brazilian Sugarcane Industry Association (UNICA). Based on the economic theory of consumer behavior and marketing psychology, statistical and econometric techniques will be applied to the types of data sets discussed above to analyze the relationship between patterns of food consumption and attitudes towards food and health with identifiable characteristics such as income and household size. The proposed future research will involve considerable personal computer power and software to sort and correlate data, run appropriate econometric models (Tobit, double hurdle models, statistical models to aggregate categories like factor analysis or principal components; non-parametric techniques, when appropriate) and other analytic techniques that may become apparent as work progresses. Any original consumer survey will begin with focus groups and pilot tests of the survey instrument. Surveys of consumers and food enterprises will be part of the data gathering methods. The case study approach can be useful for studying specific company or industry related opportunities, problems, and possible decisions. The research on the globalization of the food system, particularly as it relates to an emerging middle class and changing patterns of food consumption, will use many of the standard analytical approaches of demand and consumption analysis, but focused on utilizing household surveys and food balance sheets from the relevant countries. As well as the analysis of efficiency and externalities, techniques from welfare analysis have been utilized to examine the impacts of bio-fuels. This research will greatly benefit from the strong links the University of Minnesota has formed with companies throughout the food industry. In order to carry out the proposed research additional sources of funding will be sought from USDA and other government agencies, plus private foundations.

Progress 01/01/13 to 09/30/13

Outputs
Target Audience: The target audiences include food and agricultural industry professionals, facutly and students in agricultural and applied economics, government policy makers, and the general public. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? The issue of labeling genetically engineeered foods was a new area of research for the principal investigator, so this work required the development of his professional expertise on this topic. This professional development should be valuable in future project research. How have the results been disseminated to communities of interest? The principal investigator (PI) was the author of a Food Policy Research Center Issue Brief on lableing genetically engineered (GE) foods. Issue Briefs are circulated to Minnesota state legislators and other relevent policy makers by the Center. The PI was interviewed for an article on lablelijng GE foods that will appear in the January 2014 issue of Capital Issues, a publication of the Council of State Governments, What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? Research during this reporting period was focused on Project Objective 1, identifying broad trends that help tp predict future directions in the food industry and the implications for consumer choices and consumers' welfare. The major accomplishments, which this project made possible, involved an analysis of the very timely issue concerning the possible mandatory labeling of foods containing genetically modified organisms (GMOs). Over 25 states are currently considering legislation that would require such labeling. Most U. S. processed foods contain GMOs. Requiring the labeling of foods containing GMOs would create a major structural change within the food supply chain (Objective 1), with significant impacts on consumers, producers, and the food industry. A primary outcome of this research was an assessment of the major arguments for and against the mandatory labeling of genetically engineered (GE) foods, The reasons for labeling include the consumer's right to know, genetic engineering is still controversial, some do not trust the governement regulatory process, many countries already mandate lableing, and a majority of consumers support it in polls. The main arguments against lableing include viewing it as a false warning that GE foods are risky, consumers already have GE-free options such as organic foods, consumers' choices could be reduced, and the cost of food could increase. State GE lableing laws are likely to face legal challenges in the courts. Federal action on the issue is unlikely. However, in the private sector, one grocery chain has already taken action to require GE-product labeling and other food companies may also, plus GMO-free certification is becoming more widespread.

Publications

  • Type: Journal Articles Status: Published Year Published: 2013 Citation: Senauer, B. 2013. Mandatory Labeling of Genetically Engineered (GE) Foods: the Showdown Begins. Choices 28(3). Senauer, B. 2013. Considering the Mandatory Labeling of Genetically Engineered (GE) Foods in the U.S. Issue Brief, Food Policy Research Center, University of Minnesota, August.


Progress 01/01/12 to 12/31/12

Outputs
OUTPUTS: The PI chaired and helped organize an invited paper session at the Allied Social Science Association (ASSA) annual meeting in Chicago, January 5-8, 2012. The session title was "The New Normal: the Food and Agricultural Economy" with four papers presented, one of which was co-authored by the PI. The PI was interviewed for and quoted in "It's a food shelf. It's a grocery store" by Bob Shaw in the St. Paul Pioneer Press newspaper, April 11, 2012. He was interviewed for and quoted in the Minnesota Public Radio (MPR) segment by Julie Siple, "Jump in food need has Minnesota schools looking for ways to help", which aired on May 7, 2012. He was interviewed for and quoted in "Midwest drought expected to push up food prices" by Pat May, which appeared in the San Jose, CA Mercury newspaper, July 25,2012. The PI was interviewed for and quoted in an MPR report, " Gluten-free is the way to go for food companies and retailers" by Martin Moylan in an MPR report on July 30, 2012. The food stamp publication by the PI was used as the basis of a report on the news program of the CBS television station in Boston, MA on Sept. 6, 2012. The ASSA session, and resulting publication, helped disseminate the PI's research to other social scientists. The radio segments and newspaper reports provided for the dissemination of his professional knowledge and expertise, acquired through his prior research, to the broader public. PARTICIPANTS: The PI collaborated with Timothy Beatty, an Associate Professor in the Applied Economics Dept. at the University of Minnesota, in organizing the session at the Allied Social Science Association meeting and in the research for and preparation of their paper, which was presented there and has since been published. TARGET AUDIENCES: The target audiences include food and agricultural industry professionals, faculty and students in agricultural and applied economics, government policy makers, and the general public. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
The major findings and results, which this project made possible, involve the crucial role that food stamps, now officially the Supplemental Nutrition Assistance Program (SNAP), played for low-income households during what is now widely referred to as the Great Recession and the slow economic recovery that has followed. Average monthly SNAP participation increased from 26.7 million people in fiscal year 2007 before the recession to 46.5 million Americans in December 2011. The two main government programs assisting struggling low-income households, many facing severe financial hardships as they lost their jobs and/or homes, have been unemployment benefits and food stamps. SNAP has significantly improved the well-being of recipients, 47 percent of whom are children under age 18. In 2010, food stamps accounted for over 10 percent of all food sales by retail food stores. The additional spending due to SNAP also has benefited local communities. Every $5.00 in additional food stamp purchases has been estimated to generate $9.20 in total spending in local economies. SNAP participation has increased the most in some of the states with the largest jump in unemployment, such as Rhode Island.

Publications

  • Beatty,T. and Senauer,B. 2012. The New Normal U.S. Food Expenditure Patterns and the Changing Structure of Food Retailing. American Journal of Agricultural Economics, Advance Electronic Access published May 30, 2012.
  • Senauer, B. 2012. The Role of Food Stamps in the Recession. Communities and Banking, Federal Reserve Bank of Boston, 23(4): 4-6.


Progress 01/01/11 to 12/31/11

Outputs
OUTPUTS: The PI participated in a two day workshop of some 50 top-level experts organized by the National Academy of Science to explore methods to improve the measurement of global food insecurity and ways to enhance the sustainability of the global food system, which was held Feb. 16-17 in Washington,DC. A summary of the workshop will be published by the Academy. The PI also made a panel presentation at the Symposium on How We Talk about Feeding the World, which was organized by the Institute for Advanced Studies at the University on Minnesota and held March 3-5 with some 75-100 faculty and students participating. The PI made another panel presentation on Key Indicators, Scope, Limits, and Needs to Improve Existing Metrics at a Round Table organized by the U.N. Food and Agriculture Organization on Monitoring Food Security, which was held in Rome, Italy, Sept. 12-13 with some 250 participants, primarily government officials attending from around the world. On Oct. 7, the PI was the lead speaker and moderator for The Food Industry Center's Learning and Leadership Conference on The Future Global Food System held at the McNamara Center at the University of Minnesota, which was attended by some 90 food industry representatives, faculty, and students. The PI was interviewed for and quoted in two newspaper articles on the increasing participation in free and reduced-price school lunches, because of the financial hardship faced by many American families. One appeared on the front page of the New York Times on November 30, 2011 and the other appeared on the front page of the Star Tribune on December 5, 2011. PARTICIPANTS: Much of the research on this project in 2011 was done in collaboration with Timothy Beatty, Associate Professor in the Dept. of Applied Economics at the University of Minnesota. TARGET AUDIENCES: The target audiences includes food industry executives, faculty and students in applied economics, other researchers, government decision makers, and the general public. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
The major research, which this project made possible, was with my colleague Tim Beatty on the impact of the Great Recession, the worst economic downturn since the Great Depression, and the anemic recovery and still widespread economic hardship on household food expenditure patterns. With data from the government Consumer Expenditure Survey, the food purchasing behavior of American households was examined quarterly for the period 2001-2009, which was the most recent year for which data were available. The analysis was done dividing households into quartiles, each eqaul to 25 percent of the total sample from lowest to highest income. Food spending, adjusted for inflation, declined across all quartiles between 2006, before the recession, and 2009, with the largest decline of 7.8 percent for the highest income quartile, surprisingly. Families were doing more cooking at home and spending less on meals away from home to save money. There was also a clear shift when eating out from full-service restaurants to fast-food outlets, again to economize. These changes in food spending have had major impacts on the food industry. In 2011, low prices were very important in selecting a primary grocery store for 74 percent of shoppers, a marked change from more prosperous times. More coupons are being redeemed to save money. Consumers, especially those with lower incomes, have become very budget conscious in their food spending. Supercenters, such as Walmart Supercenters, warehouse stores, such as Costco, and limited-assortment stores, such as Aldi, with their lower prices have benefited from consumers' frugality. The sales of private-label, also referred to as store-brand, grocery products have been steadily growing, because they generaly cost substantially less than national brands, such as Kellogg.

Publications

  • Senauer,B. and Reardon,T. 2011. The Global Spread of Modern Food Retailing. Chapter 10 in Hamilton,G.,Petrovic,M.,and Senauer,B.(eds). The Market Makers: How Retailers are Reshaping the Global Economy.Oxford University Press,Oxford,UK.pp.231-254.
  • Senauer,B. 2011. Fueling the Future: the Japanese Nuclear Power Catastrophe and Black Swan Events. The Analyst,April,pp.34-36.
  • Senauer,B. 2011. Book Review of Case Studies in Food Policy for Developing Countries. American Journal of Agricultural Economics,93(5):1408-1410.
  • Senauer, B. 2011. FAO's Undernourishment Indicator: Strengths and Weaknesses. National Academy of Science. Measuring Food Insecurity and Assessing the Sustainability of Global Food Systems. National Academy Press,Washington,DC(in press).


Progress 01/01/10 to 12/31/10

Outputs
OUTPUTS: One PI was interviewed for and quoted in newspaper articles on "Food companies look to developing markets to fatten sales" in the "Chicago Tribune", March 14, 2010, and on "Turbulence in grocery industry reflects shifts in food culture" in the "San Jose Mercury News", October 6, 2010. He was interviewed on "How to do healthy shopping without breaking the bank" in the grocery section of a supercenter for a broadcast by Minnesota Public Radio (MPR) of "All Things Considered", which aired on March 20, 2010 and was heard on public radio stations nationally. He was interviewed in another segment on "Combating food illiteracy" broadcast by MPR on March 23, 2010. In addition, he made presentations on "Economic factors affecting food offerings: a case study of five Minnesota school lunch programs" at the USDA, ERS conference on "Incorporating behavioral economics into federal food and nutrition policy" on March 24, 2010 in Washington, DC. He made a presentation on "Recession, consumer food purchasing trends, and the changing food industry value chain" at the "Joint conference on food, agriculture, and the environment" held in San Vito, Italy on August 30, 2010. He presented the endowed Kennedy Lecture at the University of the South on December 2, 2010 on "Food: ethics, the economy, and policy". The other PI conducted several media interviews related to food industry activities and hunger issues and surveys. She was part of a team that is conducting a continuous weekly survey of consumers to track confidence in the safety of the food system with a matching number of media stories about food-borne illness events. A poster on this research was presented at the semi-annual meeting of the International Union of Food Science and Technologists (IUFoST) August, 2010, held n Cape Town, South Africa. Research on this topic continues. An invited paper was presented at the annual meetings of the Agricultural and Applied Economics Association in July, 2010 held in Denver on the Natural Selections recall case study that was completed this year with a teaching module attached. A large public conference was held by The Food Industry Center addressing the issue of food company use of social media for marketing. A White Paper titled "Ending Hunger in Minnesota: Investing in Food Security" was delivered to Second Harvest Heartland and turned into a public paper by them as part of their campaign to end hunger in Minnesota. A Phd. dissertation was completed "On Food Safety in the U.S. Food Supply." Another is in progress examining the effect of information about positive nutrients (omega-3) and the consumption of foods rich in this nutrient (omega-3 eggs). A MS thesis was completed "Statistical Analysis Report for Food-borne Disease Outbreak Probability Project". PARTICIPANTS: Presumably thousands of people could have read the various media articles that quoted Dr. Kinsey and Dr. Senauer, and thousands more heard the two Minnesota Public Radio interviews of Dr. Senauer broadcast nationally. There were more than 75 people at the USDA,ERS conference and the Kennedy Lecture and over 50 at the conference in Italy. There were over 400 faculty and students and public servants at the D.W. Brooks Lecture at the University of Georgia. About 80 registered participants from industry, government and academia participated in the fall conference on social media and food marketing sponsored by The Food Industry Center in cooperation with other University of Minnesota organizations. A number of industry leaders serve as an advisory board for Dr. Kinsey's research and participate in screening survey instruments and project priorities. A typical advisor board meeting will have about 15 industry participants. Funding from the Department of Homeland Security through the National Center for Food Protection and Defense at the University of Minnesota facilitated much of the research. The continuous survey is conducted in cooperation with the AgCenter and Louisiana State University. TARGET AUDIENCES: The target audiences include food industry executives; students and faculty in applied economics, food science and nutrition and public health; government decision makers; directors of school lunch programs; fellow Sloan Foundation research affiliates, and the general public. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
It is through their research on this project that the PIs have gained much of the expertise on consumer food trends and the changing structure of the food industry, which have caused them to be sought out by the media for interviews, and other researchers and scholars to give lectures and participate in conferences. During this year, the research examined the major current trends in the retail food value chain and the forces underlying them. These trends include the expansion of supercenters (selling both groceries and general merchandise), the growth of private-label/store-brand sales, the impact of point-of-sales data, and the effect of the recession and slow recovery on the industry. The results of this research will be published in a forthcoming issue of "Choices". In addition, his work over several years with collaborators from several other universities on the role of retailers as market makers that are reshaping the global economy will be published in a forthcoming book by Oxford University Press in 2011. For example, modern supermarkets are rapidly spreading around the world, which is creating profound changes in how consumers shop for food and what they eat, as well as modernizing the food supply chain. The impact of media stories on the consumer confidence index will help food businesses, government agencies, public health communicators and consumers alike understand the relationship of food safety perceptions and consumer behavior in the market. Work on the returns to investment in anti-hunger activities in Minnesota has been used in a statewide campaign to engage more private and public organizations in helping to stop hunger. Her consulting with a Hunger Survey conducted by Hormel Foods was quoted in news stories by CNN. Lectures and blog postings about the state of the food industry, food safety, and food and nutrition issues (obesity and world hunger), have reached hundreds of people in person and on-line. In particular the D.W. Brooks Lecture at the University of Georgia on "Feeding Billions: Local Solutions or Global Distribution" was well received. The poster at IUFoST was seen and talked about with scholars from all over the world.

Publications

  • Kinsey, J., Seltzer, J., Ma, X., and Rush, J. 2010. Natural Selection: 2006 E. Coli Recall of Fresh Spinach. American Journal of Agricultural Economic, 92(5): (in press).
  • Unnevehr, L., Eales, J., Jensen, H., Lusk, J., McCluskey, J., and Kinsey, J. 2010. Food and Consumer Economics. American Journal of Agricultural Economics, 92(2): 506-521.
  • Senauer, B. and Seltzer, J. 2010. Factors Affecting and Major Trends in the Retail Food Value Chain. Choices, 25(4): (in press).


Progress 01/01/09 to 12/31/09

Outputs
OUTPUTS: In addition to the three publications listed, Dr. Senauer's work on improving school lunch was highlighted in an article entitled "A Lot on their Plates in Solutions," Fall 2009, a magazine published by College of Food, Agricultural and Natural Resource Sciences, University of Minnesota and an article entitled "Out with the Fries, in with Salad" in MarketWatch on August 6, 2009. His school lunch research was also the subject of an article in School Nutrition, October, 2009, a publication of the School Nutrition Association. He was quoted in articles on Home Cooking, Familiar Brands Gain in Popularity during Recession in the Chicago Tribune, January 24, 2009; on the impact of reducing greenhouse gases on food and energy security in Nikkei Sangyo Shibun, a Japanese newspaper, June 5, 2009; and in Signs Point the Way to Healthful Eating in the Star Tribune, July 15, 2009, the Minneapolis newspaper. Jean Kinsey conducted several media interviews related to retail food prices and general trends in the food industry. She is conducting a continuous weekly survey of consumers to track confidence in the safety of the food system with a matching number of media stories about food borne illness events. An invited paper on this research was presented at the annual meeting of the Agricultural and Applied Economics Association meetings in July 2009. It is published in the American Journal of Agricultural Economics, 12/2009. A press release was issued identifying the level of confidence in the safety of the U.S. food system and another about the awareness and reaction to the H1N1 flu -an additional set of questions on the weekly survey of consumers. Both of these press releases generated press calls and republishing in popular press. Two large public conferences were held where students were invited to meet food industry sponsors to learn about career paths and about research at the UMN. The first, in the spring of 2009 was titled "How Safe is our Food Supply Expectations, Technology and Regulation" and the fall 2009 conference was titled "Local Foods and Consumer Demand." Two case studies related to food recalls and the food supply chain were published on the web site of The Food Industry Center, one related to the spinach recall from Natural Selections and one related to the Castleberry recall. A White Paper titled "Ending Hunger in Minnesota: Investing in Food Security" was delivered to Second Harvest Heartland to aid in their campaign to end identify the rates of return to investments in anti-hunger activities. A joint study with the MN Pollution Control Agency was completed surveying MN grocers about their "green practices" in 2009 compared to 1996. The final report is published on line by MPCA and is available on the web site of The Food Industry Center. A Ph.d. dissertation is examining the effect of information about positive nutrients (omrga-3) and the consumption of foods rich in this nutrient. PARTICIPANTS: There were over 100 faculty and students, plus Japanese government ministry and media representatives, in attendance at the Conference on Global Political Economy and Japan, the United States, and China: Cooperation Under Conditions of Global Crisis hosted by the Waseda University Organization for Japan-US Studies and the U.S. Embassy in Japan held on June 4, 2009 in Tokyo. Between 100 and 120 registered participants from industry, government and academia participated in the two conferences on food safety and local foods sponsored by The Food Industry Center in cooperation with other UMN organizations. A number of industry leaders serve as an advisory board for our research and participate in screening survey instruments and project priorities. A typical advisor board meeting will have about 15 industry participants. TARGET AUDIENCES: Food industry executives, students and faculty in applied economics, food science and nutrition and public health, government decision makers, directors of school lunch programs, fellow Sloan Foundation research affiliates. PROJECT MODIFICATIONS: None

Impacts
Dr. Senauer's recent work on school lunch focused on the importance of revising the method used to determine the annual adjustment due to cost increases in the federal reimbursement rate, especially in periods such as late 2007 and early 2008 with rapidly rising food prices. Through the publication and media coverage listed, this work reached policy makers, school lunch administrators, and the public. This work is particularly relevant since Congress will reauthorize the Child Nutrition Act in 2010, which will include revisions affecting the school lunch program. The results of his other research indicate that reducing greenhouse gas emissions could have a major impact on every part of the U.S. food and agricultural system. With a major conference presentation in Tokyo, and the publication and media coverage listed, his research results reached academic, policy makers, and a broader public audience. Dr. Senauer's research on this topic is especially timely with the International Conference on Climate Change in December, 2009 in Copenhagen. The impact of media stores on Kinsey's consumer confidence index and the resulting demand for particular food products will help food businesses, government agencies and consumers alike understand the relationship of food safety and food sales and media coverage of food safety events. Work on the returns to investment in anti-hunger activities in MN will be used in a statewide campaign to engage more private and public organizations in helping to stop hunger. We are providing the intellectual underpinnings for this campaign.

Publications

  • Degeneffe, D., Kinsey, J., Ghosh, K., and Stinson T.F. 2009. Segmenting Consumers For Food Defense Communication Strategies. International Journal Physical Distribution and Logics Management, 39(5):365-403.
  • Senauer, B. and Ghosh, K. 2009. Adequacy of Federal School Lunch Reimbursement Adjustments, Choices. 24(3);www.choicesmagazine.org/magazine/article.phparticle=85.
  • Senauer, B. 2009. Climate Change and Reducing Greenhouse Gas Emissions: Impacts on Food and Energy Security. WOJUSS International Symposium, Global Political Economy and Japan, the United States, and China; Cooperation Under Conditions of Global Crisis, Report 2009. Waseda University Organization for Japan-US Studies, Tokyo. : 30-35.
  • Senauer, B. 2009. Whether Biofuels Offer An Opportunity That Should be Promoted or Create Problems That Should Be Avoided. The Analyst. The ICFAI University Press, India. 15(6):53-54.
  • Kinsey,J., Harrison, W., Degeneffe, D., Ferreira, G. and Shiratori, S. 2009.Index of Consumer Confidence in the Safety of the United States Food System. American Journal of Agricultural Economics, 91(5):1470-1476.


Progress 01/01/08 to 12/31/08

Outputs
OUTPUTS: In addition to the two publications listed, Dr. Senauer was widely interviewed and quoted by the media on the causes for the rise in agricultural commodity and food prices in 2007 and the first half of 2008. He also made several presentations on the topic. He was quoted in articles in Investor's Business Daily (Jan. 15), the Washington Post (Feb. 27), the Chicago Tribune (April 25), the New York Sun Times (April 25), the Minneapolis Star Tribune (April 26), the Baltimore Sun (April 30), the Chicago Tribune (May 4), Newsweek (May 5), and several other publications. In addition, he did a radio interview on Minnesota Public Radio on June 13 and a television interview with Fox national news for a program broadcast on May 11. He gave talks and presentations on the causes for the rise in food prices to the Kiwanis Club on July 1, the American Agricultural Economics Association on July 28, and at The Food Industry Center Symposium on Future Food Scarcities: Global Causes; Local Consequences on Oct. 23. In addition, he was the co-organizer for a workshop on U.S. Industry and Climate Change: Impacts, Policies, and Responses held April 4-5 at the Univ. of Calif., Berkeley, sponsored by the Sloan Foundation. Jean Kinsey also conducted several media interviews related to retail food prices. Related to research on food companies readiness to defend the food supply an on-line diagnostic tool has been collecting data and is being expanded to accommodate more specific industry sectors. It provides a gap analysis for firms to compare their food defense vigilance to other units in their own company or in their industry sector. A continuous weekly survey of consumers is being conducted to track confidence in the safety of the food system and matched, in time, to the number of media stories about food borne illness events. A census of the food companies in the state of MN is being constructed and analyzed for the impact on state economic activity. A large public symposium attracting 120 participants for industry, government and academia extended the information and findings about "Future Food Scarcities: Global Causes; Local Consequences" was held in the fall. A student dissertation is providing information about how parents' time spent with children in the household affects obesity and subsequently their performance in school. Another dissertation is examining the effect of information about positive nutrients (omrga-3) and the consumption of foods rich in this nutrient. PARTICIPANTS: There were some 30 academic and industry participants at the workshop on U.S. Industry and Climate Change (noted under Outputs). In addition to faculty from the University of California, Stanford University, the University of Minnesota, and other major universities, there were representatives from General Motors, PG&E, Chevron, and other major companies. Over 120 registered participants from industry, government and academia participated in a Symposium we (with The Food Industry Center) sponsored titled Future Food Scarcities: Global Causes; Local Consequences on October 23, 2008. A number of industry leaders serve as an advisory board for our research and participate in screening survey instruments and project priorities. Funding from the Department of Homeland Security through the National Center for Food Protection and Defense at the University of Minnesota facilitated much of the research. TARGET AUDIENCES: Food industry executives, students and faculty in applied economics, food science and nutrition and public health, government decision makers, directors of school lunch programs, fellow Sloan Foundation research affiliates. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Dr. Senauer's papers, presentations, and interviews provided insights into the underlying causes for the increase in food prices for a broad public audience. In this case, the price rises were largely driven by increasing demand, not a supply shortfall, which has typically been the case. The major demand factors were the rising incomes in major developing countries and the rapid growth of biofuels with the rise in the price of oil. This also explains why agricultural commodity prices have fallen so sharply since mid-year as demand has declined. The workshop on U.S. Industry and Climate Change helped initiate a dialogue among academics researching the issue and the industries, which would be affected by efforts to reduce Greenhouse Gas emissions. The entire food and agricultural system from farm inputs to the disposal of household food waste accounts for some 20 percent of U.S. emissions, and would be very much affected by efforts to address climate change. Participating in the Diagnostic Tool for food defense is an education to the participants about practices that will affect their ability to defend the food they handle and their business from terrorist attacks and how this further strengthens their resilience to food safety incidents. The results of the consumer survey on food safety and confidence will inform policy about allocation of funds to protect various potential terrorist targets from attack and how to communicate/educate various types of consumers about food defense. The impact of media stores on consumer confidence and the resulting demand for particular food products will help food businesses and consumers alike understand the relationship of food safety and food sales.

Publications

  • Senauer, B. 2008. Food Market Effects of a Global Shift Towards Bioenergy. American Journal of Agricultural Economics. 90:1226-1232.
  • Senauer, B. 2008. The Appetite for Biofuel Starves the Poor. (op-ed) The Guardian (UK newspaper). July 3.
  • Kinsey J, Stinson T, Degeneffe D, Ghosh K, Busta, F. Consumers Response to a New Food Safety Issue: Food Terrorism. Global Issues in Food Science and Technology, Ed. G.V. Barbosa-Canova GV, Mortimer A, Colonna P, Lineback D, Spiess W, Buckle K, editors. IUFoST World Congress Publication. Elsevier. Forthcoming, May 2009.
  • Kinsey, Jean. Food Policy revised chapter in Encyclopedia of rural America, 2nd Edition, Ed. Gary Goreham 2008.
  • Mancino, Lisa and Jean Kinsey, Is Dietary Knowledge Enough Hunger, Stress and Other Roadblocks to Healthy Eating, USDA, ERS, Economic Research Report, Number 62, August 2008, http://www.ers.usda.gov/Publications/ERR62/ERR62.pdf


Progress 01/01/07 to 12/31/07

Outputs
OUTPUTS: The article by Runge and Senauer, "How Biofuels Could Starve the Poor", published in Foreign Affairs was republished in French, German, and Spanish publications, because of the widespread interest in it. This article has had a major impact on the food vs. fuel debate related to crop-based biofuels. The article was also referenced and/or quoted in scores of news stories, including in the The Wall Street Journal, the Financial Times of India, and Smithsonian magazine, plus editorials in The Lancet and Nature. Ben Senauer did a television interview on CNN on "Ethanol and Food Prices" on June 9, 2007 and was quoted in a September 27, 2007 New York Times article on the effect of higher food prices on food aid. The article by Wagner, Senauer, and Runge, "An Empirical Analysis of and Recommendations to Improve the Nutritional Quality of School Meals," received widespread media attention. The Associated Press wrote a news story based on this article and an interview with Ben Senauer and others that was covered in some version in over 250 newspapers and television news programs, including the Denver Post, Des Moines Register, Forbes, Miami Herald, and KARE 11 - Minneapolis. As a result of a three year survey of food firms' practices related to food protection and defense a diagnostic benchmarking tool has been created and placed on the Web for food companies (manufacturers, wholesalers, foodservice and retail food companies) to use to benchmark their food defense activities against other firms in their sector of the food supply chain. This diagnostic tool will be refined over the coming year. We produced a literature review on food accessibility in the inner city which is being evaluated for publication at ERS. Additional national surveys of consumers regarding concern over food safety/defense reveal a sharp decline (38%) in confidence in the safety of the U.S. food supply since July 2005. Two journal publications, a working paper and several presentations of the consumer survey results have been made. It is the ground work for approved funding for a continuous consumer survey on food safety concerns. A large public symposium attracting 120 participants for industry, government and academia extended the information and findings about sustainable food distribution and school lunch programs with affordable and edible meals. On May 16, 2007, the "Food, Technology, and Individual Privacy Colloquium" was hosted on the University's Minnapolis Campus and focused on issues of RFID use in the food industry and possible complications with individual consumer privacy issues. PARTICIPANTS: Over 120 registered participants from industry, government and academia participated in a Symposium we (with The Food Industry Center) sponsored titled "The Future and Practice of Healthy Foods," was held on October 1, 2006. A number of industry leaders serve as an advisory board for our research and participate in screening survey instruments and project priorities. Approximately 50 people from industry, government and academia registered for the "Food, Technology, and Individual Privacy Colloquium" on May 16, 2007. Experts from the University of Minnesota Law School, Carlson School of Management, Department of Food Science, and the Council of American Survey Research Organizations presented perspectives on technology use and individual privacy in the food industry. Funding from the Department of Homeland Security through the National Center for Food Protection and Defense at the University of Minnesota facilitated much of the research. Colloquium funding was received from the University of Minnesota's Consortium on Law and Values in the Health, Environment and the Life Sciences. TARGET AUDIENCES: Food industry executives, students and faculty in applied economics, food science and nutrition and public health, government decision makers, directors of school lunch programs, fellow Sloan Foundation research affiliates.

Impacts
The article by Runge and Senauer has played a central role in the food vs. fuel debate related to the use of food crops for biofuels, especially U.S. ethanol derived from corn. A model previously developed and published by Senauer and Sur on Ending Global Hunger (Review of Agricultural Economics, 23:68-81) was combined with food price increases due to biofuels forecast by the International Food Policy Research Institute (IFPRI). This model had previously predicted that given the projected rates of economic and population growth and stable real food prices, the number of chronically hungry people in the world would decline to 625 million by 2025 from over an estimated 800 million currently. However, the number is projected to rise to 1.2 billion by 2025 due to biofuels (based on the IFPRI price forecasts), some 600 million more hungry people than otherwise. The key question is how quickly biofuels derived from plant cellulose becomes commercially viable, since then there is no longer a food-fuel tradeoff. Participating in the food firm Benchmark Survey was an education to the participants about practices that will affect their ability to defend the food they handle and their business from terrorist attacks and how this further strengthens their resilience to food safety incidents. The data collected in this survey is being used in Ph.D. dissertations, has been used in a M.S. thesis and to create a diagnostic tool available, free and private, to food firms on our WEB site. A review of research addressing the question of lifetime eating habits - whether they change with age and experience or follow a cohort - was published in a working paper. This was partly in response to inquiries from private food companies and this report will inform this discussion among a wide audience. The results of the consumer survey on food safety and confidence will inform policy about allocation of funds to protect various potential terrorist targets from attack and how to communicate/educate various types of consumers about food defense. Consumers were segmented into 6 groups based on their levels of fear and attitudes towards food safety; this information makes communication to a diverse public more productive.

Publications

  • Runge, C.F. and Senauer, B. 2007. How Biofuels Could Starve the Poor. Foreign Affairs. May/June:41-53.
  • Grainger, C., Senauer, B., and Runge, C.F. 2007. An Analysis of Nutritional Improvements and Student Food Choices in a School Lunch Program. The Journal of Consumer Affairs. 41:265-284.
  • Wagner, B., Senauer, B., and Runge, C. F. 2007. An Empirical Analysis of and Recommendations to Improve the Nutritional Quality of School Meals. Review of Agricultural Economics, 29:672-688.
  • Final Report: Defending the Food Supply Chain: Retail Food, Foodservices and their Wholesale Suppliers, by Jean Kinsey, Ph.D. (P.I.),and Katya Kaynts, M.S., with help from Koel Ghosh, Post Doc, Swati Agiwali, Ph.D. Candidate, Charlotte Friddle, Ph.D. Candidate, Jon Seltzer, Consultant and Lisa Jore, project coordinator. (As a workng paper, it will be available on http://foodindustrycenter.umn.edu/publications December 2007)
  • Stinson T, Kinsey J, Degeneffe D, Ghosh K. Defending America's Food Supply against Terrorism: Who's Responsible? Who Should Pay? Choices. 2007; 22:1 http://www.choicesmagazine.org/1st
  • Stinson T, Kinsey J, Degeneffe D, and Ghosh K. How Would Americans Allocate the Anti-Terrorism Budget? Findings from a National Survey of Attitudes about Terrorism. Homeland Security Affairs. 2007; 3(2), June 2007. http://www.hsaj.org/?article=3.2.3 Kinsey J, Stinson T, Degeneffe D, Ghosh K, Busta, F. Consumers Response to a New Food Safety Issue: Food Terrorism. Global Issues in Food Science and Technology, Ed. G.V. Barbosa-Canova GV, Mortimer A, Colonna P, Lineback D, Spiess W, Buckle K, editors. IUFoST World Congress Publication. Elsevier. (In press)
  • Kaynts K. Being Prepared: Costs and Benefits of Disaster Anticipation in the Food Industry. August, 2007, M.S. Plan B Paper.


Progress 01/01/06 to 12/31/06

Outputs
In one research study, data for 330 Minnesota school districts was analyzed to derive recommendations for improving the nutritional quality of school lunches. This study found that lunch sales do not decline when healthier meals with less fat, for example are served and more nutritious lunches do not necessarily cost more, both widely held views. Healthier meals have higher labor costs, but lower costs for processed foods. Indirect costs, paid by the food service to the school district, negatively affect meal quality by decreasing funds to upgrade kitchens and train staff to prepare more nutritious meals. Another study that compared Japan and the United States found only 3.6 percent of the Japanese are obese, based on the international standard, whereas 32 percent of Americans are. The Japanese consume fewer calories than Americans, which can be partially explained by the high price of food in Japan, but primarily by their strong food culture with a traditional diet that is very healthy and an emphasis on food quality, rather than quantity. The average Japanese household spends 23.2 percent of its budget on food, whereas the average U.S. one spends only 13.1 percent. The Japanese are more physically active than Americans because they walk more. The average adult in Japan walks about 3.75 miles per day, whereas the typical American walks only about 2.75 miles. They walk more since owning and operating an automobile is very expensive and public transportation is much less expensive and more convenient, which requires more walking than driving a car. Research on food security is being conducted with additional funds from the National Center for Food Protection and Defense. Articles and working papers are being written related to consumers' reaction to the threat of food terrorism. Consumers indicated that they would allocate more funds to protecting the food supply than other potential terrorist targets. Various consumer segments respond differently to communications about food defense. Benchmarking of retail food firms with respect to their readiness to defend their facilities and the food they handle from terrorist attacks is being analyzed from a national survey of retail food companies, foodservice companies and wholesalers to each of these types of retail food establishments. Another project on the accessibility of food in inner city, poor neighborhoods is using GIS mapping of five target market areas in Chicago using Census, Spectra Marketing Data and Nielson household data to test the hypothesis whether there is less access for fresh/healthy food in poor neighborhoods. A review of the literature on this topic over the last thirty years is completed. (ERS) One study looking at food consumption patterns of women and matching it with clinical data to determine ways to intercede to diminish obesity is almost finished. (NIH). One student is working on projects studying the spread of foodservice establishments across the globe and its potential impact on obesity. PhD. Dissertation. Another student is beginning a study of obesity in children for a PH.D. Dissertation.

Impacts
The research completed provides specific policy recommendations for school lunch programs that will help alleviate obesity in children. A great deal was learned about how obesity might be reduced in the U.S. from the comparison with Japan. The key lessons are that Americans need to eat less, walk more and get more exercise in their daily lives. Americans would naturally walk more if they reduced their over dependence on the automobile and neighborhood environments were more conducive to using public transportation. Understanding the magnitude of the gaps in food accessibility in the inner cities will help to design public policies that can induce retail stores to operate in poor neighborhoods. Learning how consumers would allocate homeland security funds for food protection (relative to airlines) informs public policy about homeland security spending. A benchmark report of food firms will inform food firm and regulators about needed steps to protect the food supply and provide a diagnostic tool for private use. Public health education policy will be enlightened by the findings about obesity in women and their eating habits.

Publications

  • Senauer, Ben. 2006. The Growing Market for High-Value Food Products in Developing and Transition Countries. The Journal of the Food Distribution Research Society, 37:1, March, pp. 22-27.
  • Senauer, Benjamin and Masahiko Gemma. 2006. Why Is the Obesity Rate So Low in Japan and High In the U.S.? Some Possible Economic Explanations. The Food Industry Center, University of Minnesota, Working Paper 06-01.
  • Kinsey, Jean. 2006. Book Review Food Supply Chain Management, Ed. Michael A. Bourlakis and Paul W.H.Weightman, Oxford: Blackwell Publishing Ltd., 2004. in AGRIBUSINESS: An International Journal, 22;1, 1-3
  • Thomas F. Stinson, Jean Kinsey, Dennis Degeneffe, and Koel Ghosh. 2006. How Should Americas Anti-Terrorism Budget Be Allocated? Findings from a National Survey of Attitudes of U.S. Residents about Terrorism. Working Paper 2006-01, The Food Industry Center, University of Minnesota. April. http://foodindustrycenter.umn.edu
  • Kinsey, J.D., Stinson T.F., Degeneffe D.J., Ghosh K., and Busta, F.F. 2006.Consumers Response to a New Food Safety Issue: Food Terrorism, Preconference Proceedings for Internationl Union of Food Science and Technology(IUFOST) - XIIIth Congress of Food Science and Technology: Food is Life; Sept. 19-21, 2006 Nates, France.
  • Degeneffe, Dennis, Jean Kinsey, Stinson, Thomas; and Koel Ghosh. A Segmentation of U.S. Consumers on Attitudes Relating to Terrorism and their Communication Preferences: Findings from a National Survey of Attitudes of U.S. Residents about Terrorism , Working Paper 06-03, The Food Industry Center, University of Minnesota. October 2006 http://foodindustrycenter.umn.edu


Progress 01/01/05 to 12/31/05

Outputs
A research study examined the growing market for high-value food products among the emerging middle class in developing countries. In 12 countries with rapidly growing economies and large populations, the high-value food market was estimated at over 700 million people in 2003, with over 350 million in China and 100 million in India alone. Another study focused on the increasing globalization of the food system. The research identifies push-supply side, pull-demand side, and enabling or external factors as driving this trend. Recent research on the school lunch program studied the factors affecting the food choices of students in the Hopkins, Minnesota High School, which has introduced an innovative new food program, called Royal Cuisine, that aims to improve both the quality and the healthiness of the foods eaten. Since the new program began students are making healthier food choices. Research on food security is being conducted with additional funds from the National Center for Food Protection and Defense. A consumer survey has been conducted to determine the relative value consumers put on defending the food supply as opposed to other potential terrorist targets. Benchmarking of retail food firms with respect to their readiness to defend their facilities and the food they handle from terrorist attacks has been pilot tested and will be in the field in 2006. This is in collaboration with faculty at Michigan State University. Another project on the accessibility of food in inner city, poor neighborhoods is using GIS mapping of five target market areas in Chicago using Census, Spectra Marketing Data and Nielson household data to test the hypothesis whether there is less access for fresh/healthy food in poor neighborhoods. (ERS) One study is looking at food consumption patterns of women and matching it with clinical data to determine ways to intercede to diminish obesity. (NIH) One graduate student is working on that project. One student is working on projects studying the spread of foodservice establishments across the globe and its potential impact on obesity. PhD. Dissertation. Another student finished a thesis studying the rapid rise of supermarkets in China.

Impacts
In terms of economic impact, the rapidly expanding market for high-value food products in some developing countries is creating significant opportunities for food marketers, processors, and producers, including U.S. food companies and farmers. While the process of globalization has been dominated by the major food processors in the past, the emergence of global food retailers is a new force exerting a powerful impact on consumers and food producers. Under the new healthier school food program at Hopkins High School, more food preparation is being done on site creating more employment. In addition, more money is being spent on food supplies, which means the food industry can benefit from higher quality, healthier school lunch programs. Understanding the magnitude of the gaps in food accessibility in the inner cities will help to design public policies that can induce retail stores to operate in neighborhoods where they are currently not present and to improve the quality of food and nutrition to poor people. Learning how consumers would allocate homeland security funds for food protection (relative to airlines) will inform public policy about spending. A benchmark report of food firms will inform food firm and regulators about needed steps to protect the food supply. It will provide them with a benchmarking tool for future use. Public health education policy will be enlightened by the findings about obesity in women and their eating habits.

Publications

  • Mohtadi, Hamid and Jean Kinsey. 2005. Information Exchange and Strategic Behavior in Supply Chains: Application to the Food Sector. American Journal of Agricultural Economics. 83:3. pp.582-599.
  • Liu, Ya-Ming and Jean Kinsey. 2005. The Effect of Competition on the Practice of Outpatient Services for Diabetes Patients in Different Levels of Hospitals. Applied Economics.37. pp.1411-1422.
  • Kinsey, Jean. 2005. Food Safety in Three Dimensions: Safety, Diet Quality and Bio-Security. CHOICES. Dec. online journal of AAEA.
  • Kinsey, Jean. 2005. Emerging Research and Public Policy Issues for a Sustainable Global Food Network. Working Paper 05-04. The Food Industry Center, University of Minnesota.
  • Kinsey, Jean. 2006. Book Review. Food Supply Chain Management, Ed. Michael A. Bourlakis and Paul W.H.Weightman, Oxford: Blackwell Publishing Ltd., 2004. in Agribusiness: An International Journal. 22:1. pp.1-3 in press
  • Senauer,Ben and Mona Sur. 2005. The Link between Poverty and Undernourishment:Uncovering a Methodological Flaw - Reply. Review of Agricultural Economics.27:1 pp. 156-159.
  • Senauer. Benjamin. 2005. The Obesity Crisis: Challenge to the Food Industry. Chapter 1 in T. Phani Madhav editor. Food Industry and Health Concerns: Trends and Cases, ICFAI University Press, Hyderabad, India. pp.3-36.
  • Senauer, Ben and Luciano Venturini. 2005.The Globalization of Food Systems: A Conceptual Framework and Empirical Patterns in Food, Agriculture and the Environment. Ed. Edi DeFrancesco, Luigi Galletto, and Mara Thiene. FrancoAngeli Press: Milan, Italy. pp. 197-224.
  • Senauer, Benjamin. 2005. The Contributions of the ICPD Programme of Action Toward Achieving the Reduction of Hunger,Chapter 22, pp. xxii-1 to xxii-8 in United Nations, Economic and Social Affairs Division. Seminar on the Relevance of Population Aspects for the Achievement of the Millennium Development Goals. United Nations Press, New York, 2005.
  • Kinsey, Jean. 2005. Food Safety and Security Issues in Agrofood Policy and Global Trade. in Food, Agriculture and the Environment. Ed. Edi DeFrancesco, Luigi Galletto, and Mara Thiene. FrancoAngeli Press: Milan, Italy. pp. 47-58.
  • Senauer,Ben and Linde Goetz. 2004. The Growing Middle Class in Developing Countries and the Market for High-Value Food Products. The ICFAI Journal of Agricultural Economics.1:2 pp.7-12.


Progress 01/01/04 to 12/31/04

Outputs
A Ph.D. student is exploring new theories of consumer behavior known as behavioral economics and applying it to their dissertation research on smoking behavior. This exciting new approach allows observed behavior to be explained without having to declare consumers choices irrational. Research on food security is being conducted with additional funds from the National Center for Food Protection and Defense. A consumer survey has been started to determine the relative value consumers put on defending the food supply as opposed to other potential terrorist targets. A benchmarking of food firms with respect to their readiness to defend their facilities and the food they handle from terrorist attacks has been started in collaboration with faculty at Michigan State University. Another project on the accessibility of food in inner city, poor neighborhoods is using GIS mapping of five target market areas in Chicago using Census and Spectra Marketing Data to identify gaps in store availability. One graduate student is working on that project. One student is working on projects studying the spread of foodservice establishments across the globe and its potential impact on obesity (PhD. Dissertation). Another (Masters) student is working on a thesis studying the rapid rise of supermarkets in China. Research on the globalization of the food system developed a conceptual framework and examined empirical patterns in international agricultural trade, foreign direct investment by food companies, and the global spread of fast food restaurant chains and more recently supermarkets. Processed food products are increasingly important in international trade compared to basic agricultural commodities. Rather than supply their international markets by exporting from their home country plants, major multinational food manufacturers choose to invest directly in processing facilities abroad, typically on a regional basis. Supermarkets and other modern food retail formats are spreading rapidly in developing and transition countries in Asia, Eastern Europe, Latin America, and now even in Africa. They have spread beyond the major cities and their customer base is much broader than simply the wealthy segments of society. Moreover, they are having a profound effect on the entire food supply chain, all the way to the farm level. These supermarkets require suppliers who can meet strict quantity and quality specifications, which small suppliers and producers typically can not satisfy. Additional research has focused on the underlying causes of the increasing rates of obesity and overweight among Americans, which increase the risk of most chronic diseases, and its impact on the food industry. The obesity epidemic creates both threats and opportunities for the food industry.

Impacts
Understanding the rapid growth of supermarkets and foodservice establishments in poor and emerging countries will help us know how agricultural producers will need to respond. The most successful global food companies, including food manufacturers, fast food chains and supermarkets, are able to globalize their comparative efficiency advantages at the same time they tailor their operations to the wants and needs of local consumers. Many food companies could profit if there is a shift to a greater focus on quality over quantity in food choices. Understanding the magnitude of the gaps in food accessibility in the inner cities will help to design public policies that can induce retail stores to operate in neighborhoods where they are currently not present and to improve the quality of food and nutrition to poor people.

Publications

  • Ben Senauer and Jean Kinsey. 2004. Fighting Obesity: Do Well By Doing Good. Advantage (February):11.
  • Kinsey, Jean, 2004. Leading changes in Food Retailing: Seven Steps to a Demand -Driven Food System, in Food and Agriculture 2004: Perspectives on Research and Policy, Iowa State University Press, Ed. J.Miranowski and C.G. Scanes, pp. 119-134.
  • Jean Kinsey. 2004. Does Food Safety Conflict with Food Security? The Food Industry Center, Working Paper 04-01, January.
  • Lisa Mancino and Jean Kinsey. 2004. Diet Quality and Calories Consumed: The Impact of Being Hungrier, Busier and Eating Out.The Food Industry Center, University of Minnesota, Working Paper 04-02,January 2004.
  • Kinsey,Jean. 2004. Will Food Safety Jeopardize Food Security? Agricultural Economics 2004, pp. 143-152.Twenty-fifth Proceedings of the International Conference of Agricultural Economists.
  • Kinsey,Jean. 2004. Food Safety and the Codex Alimentatius: A Tortured Process.Cereal Foods World, 49:5,Sept.Oct.pp. 300-301.
  • Kinsey,Jean. 2004. A Treadmill of Variety:A Dilemma of Choice,Cereal Foods World,49:3,May-June,pp.160-162.


Progress 01/01/03 to 12/31/03

Outputs
Two Ph.D. students are exploring new theories of consumer behavior known as 'behavioral economics' and applying it to their dissertation research. This exciting new approach allows observed behavior to be explained without having to declare consumers' choices 'irrational.' One of the students is using these theories to analyze consumers' smoking behavior over time. Another student finished a dissertation on why peoples' eating patterns are inconsistent with USDA recommendations for a balanced and nutritional diet. The later study found that increasing the interval between meals by 30 minutes led to a 2 percent increase in the percent of calories consumed from fat. This effect leveled off after 6.5 hours between meals. Eating in a sit-down restaurant led to consuming 3.5 percent more calories from fat than eating at home; eating in a fast food place increased the percent of calories from fat by 6 percent. Another student is using a hedonic price model to determine the implicit price that the Japanese market pays for soybeans with various characteristics including genetically modified (GM) soybeans. He found Japanese consumers are willing to pay 5.8% more for non-GM soybeans. A Master's student has been exploring the impact of the emerging middle class in developing countries on the market for high-value food products. The central hypothesis of this research is that the largest global growth opportunity for value-ended food products is the growing middle class the third world. Using data for Lima, Peru, 20 percent of households were classified as middle or upper class based on the prevalence of ownership of major durable goods, such as refrigerators and automobiles. Monthly expenditures by the middle class on more expensive foods, such as fresh fruit and red meat, and especially for high value-added products, such as food away from home, are substantially higher, markedly so in some cases. By extrapolating from these results for Lima, a minimum per capita gross national income (GNI) of $6,000 is required for an emerging middle class lifestyle. Based on World Bank data for GNI and income distribution, the size of the middle class is estimated for eleven low and middle income countries with large populations or high rates of economic growth. In China there are some 290 million people in the emerging middle class, in India 91 million and in Brazil 58 million, for example.

Impacts
Identifying circumstances under which consumers choose higher fat foods leads to better explanations and predictions of obesity and subsequent health problems. It can influence the design of nutrition educational programs. It will serve as a model for those who analyze risky behavior related to food consumption by incorporating new behavioral variables. Understanding the rapid growth of supermarkets in poor/emerging countries will help us know how agricultural producers will need to respond.

Publications

  • Kinsey, Jean D. 2002. "Towards Healthy People: Lifestyles and Choices." In Integrating Agriculture, Medicine and Food for Future Health, edited by Allan Eaglesham, Carla Carlson and Ralph W.F. Hardy. Ithaca, NY: National Agricultural Biotechnology Council. (Not listed in 2002 annual report)
  • Kinsey, Jean. 2003. "Cost of Food." In Encyclopedia of Food and Culture, Vol I, edited by Solomon H. Katz and William Woys Weaver. New York: Charles Scribners Sons: 462-65.
  • Kinsey, Jean. 2003. "Distribution of Food." In Encyclopedia of Food and Culture, Vol I, edited by Solomon H. Katz and William Woys Weaver. New York: Charles Scribners Sons: 536-39.
  • Kinsey, Jean. 2003. "Groceries.com: Bringing back the good old days," Cereal Foods World, 48 3 (May/June): 150-51.
  • Kinsey, Jean. 2003. "Grocery Cart." In Encyclopedia of Food and Culture, Vol II, edited by Solomon H. Katz and William Woys Weaver. New York: Charles Scribners Sons: 456.
  • Kinsey, Jean. 2004. "Leading changes in Food Retailing: Seven Steps to a Demand -Driven Food System," in Food and Agriculture 2004: Perspectives on Research and Policy, Iowa State University Press, Ed. J.Miranowski and C.G. Scanes, 2004: 119-34. (Received in 2003)
  • Kinsey, Jean and Brian Buhr. 2003. "E-Commerce: A New Business Model for The Food Supply/Demand Chain." The Food Industry Center, University of Minnesota, Working Paper 03-01, February.
  • Kinsey, Jean and Brian Buhr.2003 "Internet, comercio electronico y control de calidad en la Cadena Alimentaria de EE.UU." Chapter 8 in Internet Trazabildad Y Seguridad Alimentaria, Ed. Julain Briz, Madrid: Ediciones Mundi-Prensa.
  • Mancino, Lisa and Jean Kinsey. 2002. "The Road to Not-So-Wellville: Paved with Good Intentions, Misperceptions." CHOICES, Fall: 19-23. (Distributed in 2003).
  • Andrea Carlson and Ben Senauer. 2003. "The Impact of the Special Supplemental Nutrition Program for Women, Infants, and Children on Child Health." American Journal of Agricultural Economics 85: 2 (May): 480-92.
  • Benjamin Senauer. 2003. "The Obesity Crisis: Challenge to the Food Industry." Working Paper 03-04, The Food Industry Center, University of Minnesota, August.
  • Benjamin Senauer and C. Ford Runge. 2003. "Attack Obesity Epidemic to Combat Rising Health Care Costs" (op-ed article). Pioneer Press (newspaper), November 18.
  • Benjamin Senauer and Linde Goetz. 2003. "The Growing Middle Class in Developing Countries and the Market for High-Value Food Products." Working Paper 03-02, The Food Industry Center, University of Minnesota, March.
  • C. Ford Runge, Benjamin Senauer, Philip G. Pardey, and Mark W. Rosegrant. 2003. Ending Hunger in Our Lifetime: Food Security and Globalization. Baltimore, MD: Johns Hopkins University Press.
  • Kapuscinski, Anne R., Robert M. Goodman, Stuart D. Hann, Lawrence R. Jacobs, Emily E. Pullins, Charles S. Johnson, Jean D. Kinsey, Ronald L. Krall, Antonio G.M. La Vina, Margaret G. Mellon and Vernon W. Ruttan. 2003. "Making Safety First a Reality for Biotechnology Products." Nature Biotechnology 21 (6): 599-601.


Progress 01/01/02 to 12/31/02

Outputs
(Graduate students =5) (Goal 1/Program 2). Two Ph.D. students are exploring new theories of consumer behavior known as 'behavioral economics' and applying it to their dissertation research. This exciting new approach allows observed behavior to be explained without having to declare consumers' choices 'irrational.' One of the students is using these theories to analyze consumers' smoking behavior over time and another is looking at why peoples' eating patterns are inconsistent with USDA recommendations for a balanced and nutritional diet. The later study includes variables like how hungry people are when they eat (time since last meal) and what they believe about their diet and health status. This study helps us understand some of the forces behind increased obesity and its relationship to busy lifestyles and more food being consumed away from home. Results show that a larger portion of calories were consumed were from fat when individuals were hungrier (had a longer interval since the last eating occasion) had consumed more carbohydrates at the previous meal, or ate at a bar, restaurant, or fast food place. On average, increasing the interval between meals by 30 minutes led to a 2 percent increase in the percent of calories consumed from fat. This effect leveled off after 6.5 hours between meals. Eating in a sit-down restaurant led to consuming 3.5 percent more calories from fat than eating at home; eating in a fast food place increased the percent of calories from fat by 6 percent. Another student is using a hedonic price model to determine the implicit price that the Japanese market pays for soybeans with various characteristics including genetically modified (GM) beans. Since 1997 Japan has had a mandatory labeling law for nineteen food products that contain large portions of soybeans (e.g. tofu) and the time series data collected by this student will enable him to determine the differential price paid for GM and non-GM beans since the labeling law and if this differential changes over time. The results of this study will help verify or deny the importance of GM characteristics for the price and marketability of GM beans in Japan.

Impacts
Identifying circumstances under which consumers choose higher fat foods leads to better explanations and predictions of obesity and subsequent health problems. It can influence the design of nutrition educational programs. It will serve as a model for those who analyze risky behavior related to food consumption by incorporating new behavioral variables.

Publications

  • King, Robert. Jean Kinsey, Paul Wolfson and Jon Seltzer. 2002. "The Supermarket Industry at the Start of the 21st Century: Key Findings from the 2000 Supermarket Panel." Journal of Food Distribution Research. 32 (3): 1-13.
  • Mohtadi, Hamid. And Jean Kinsey. 2002. "Information Technology Adoption in Supply Chains: Some Applications to the Food Sector." The Food Industry Center, University of Minnesota, Working Paper 02-02.
  • Carlson, Andrea, Jean Kinsey, and Carmel Nadav. 2002. "Consumers Retail Source of Food: A Cluster Analysis." Family Economics and Nutrition Review 14(2).
  • Kinsey, Jean. 2002. "Food Trends in the 21st Century," Chapter in Best of Minnesota Farms by Tracy Sayler. CI Publishing, Atlanta GA and Menasha Ridge Press of Birmingham, AL.
  • Kinsey, Jean. 2002. "Whole Health for Self-Care - A New Nutrition?" Column in Cereal Food World, 47 (5): 193-94.
  • Kinsey, Jean. 2002. "Food Bargains? Prices Up a Little, Calories up at Lot?" Column in Cereal Foods World, 47 (9): 452-53.


Progress 01/01/01 to 12/31/01

Outputs
(Graduate students =7) (Goal 1/Program 2). Two Ph.D. students are exploring new theories of consumer behavior known as 'behavioral economics' and apply it to their dissertation research. This exciting new approach allows observed behavior to be explained without having to declare consumers' choices 'irrational.' One of the students is using these theories to analyze consumers' smoking behavior over time and another is looking at why peoples' eating patterns are inconsistent with USDA recommendations for a balanced and nutritional diet. The later study will include variables like how hungry people are when they eat (time since last meal) and what they believe about their diet and health status. This should help us understand obesity and other diet related health problems. A third student finished a Ph.D. dissertation using scanner data to determine what defines a loyal customer. Those customers who do virtually all of their grocery shopping at a single store might rightfully be called the most loyal but it turns out they are not the highest spenders nor do they contribute the most to profitability. The only variable that consistently predicted being classified as 'loyal' across all four definitions was the markdown dollars saved. The more customers save by shopping at a store the more likely they are to be classified as loyal by any definition. Two other students wrote a Working Paper on the food distribution channels to the food service sector. Demand for food products is increasing in this channel while it is slowly diminishing in traditional retail food stores. This vital part of the demand chain for agricultural products is expected to capture more than half of all food expenditures in the next few years. These important studies help to understand structural changes in food delivery channels. Another Ph.D. dissertation is being prepared looking at the cost of food born illness in MN. It reviews food safety issues and food born illness scares across the nation. This study will help the state department of health and epidemiologists assess the benefits of vigilance and educational measures aimed to decrease the number of food born illnesses. Work on economic modeling of retail food stores' adoption of information technology and e-commerce continues.

Impacts
The working paper about the food service sector is much in demand by industry and academics since it is one of the only comprehensive reviews of that sector of the food industry. Identifying why consumers make the food choices they do will help those who design food safety and nutrition educational programs and those who analyze risky behavior.

Publications

  • Ashman, Sara. Consumer Choice Models with Customer Loyalty Programs in Retail Food Stores. Ph.D. Dissertation, Department of Applied Economics, University of Minnesota, January 2001.
  • Friddle, Charlotte, Sandeep Mangaraj, and Jean Kinsey. "The Food Service Industry: Trends and Changing Structure in the New Millennium," Working Paper 01-02 for The Retail Food Industry Center, Department of Applied Economics, University of Minnesota, 2001.
  • Kinsey, Jean. "The New Food Economy: Consumers, Farms, Pharms, and Science," American Journal of Agricultural Economics 83:5, December, 2001, pp. 1113-1130.
  • Kinsey, Jean. "Food Costs from Two Views," Column in Cereal Foods World 46:6, June, 2001, pp. 250-252.
  • Kinsey, Jean. "Electronic Systems in the Food Industry: Entropy, Speed and Sales" in Tracking a Transformation: E-Commerce and the Terns of Competition in Industries. Chapter in BRIE-IGCC E-conomy Project, Washington D.C.: Brookings Institution, 2001, pp. 253-279.


Progress 01/01/00 to 12/31/00

Outputs
(Graduate students =4) (Goal 1/Program 2) One student working with CSFII-1994/96 data on food consumption classified the retail source of meats eaten at various meals. Meats that were part of complex entrees were counted in the total meat consumption. In sum, we found that 62% of all meat/poultry/and eggs are purchased at grocery store, 13% at a fast food place, 12% at a restaurant, and 12% at other food service places. Thirty-five percent of meat eaten was beef, 12% was pork, 27% was poultry, 9% was fish, 12% were eggs. This finding provides a glimpse at where and when people eat meats and where they purchase them. It illustrates the importance of the supply channels to food service places for agricultural food products. This student is also working on a theoretical project involving consumers' behavior in the face of information about the risks of smoking. A second student analyzed consumer preferences for grocery shopping experiences depending on the type of shopping trip being undertaken. A nationwide survey of consumers was conducted. Six types of shoppers' preferences were identified using cluster analysis. For each cluster, the deviation from the mean preference for each of 33 store characteristics was plotted. Conclusions are that consumers value many characteristics other than low prices; there are several patterns of preferences. This project reviews various data mining techniques and how they can be used to analyze consumer data. A third student is finishing a Ph.D. dissertation using scanner data to determine what defines a loyal customer. Most define their loyal customers as those who spend the most dollars per year. Other ways to define loyalty include total transactions, margin dollars contributed and the ratio of a customer's expenditures at a particular store to the ratio of their total grocery expenditures. Those customers who do virtually all of their grocery shopping at a single store might rightfully be called the most loyal but it turns out they are not the highest spenders nor do they contribute the most to profitability. The only variable that consistently predicted being classified as 'loyal' across all four definitions was the markdown dollars saved. The more customers save by shopping at a store the more likely they are to be classified as loyal by any definition. Two other students have been writing papers on the food distribution channels to the food service sector. These channels are increasing demand for food products that have different requirements than the grocery channel. Identifying the food service divisions in major food manufacturers, one quickly learns that this is a vital part of the demand for agricultural products. These are important studies to understand structural changes in food delivery channels as consumers shift from more traditional grocery stores to take-out and restaurant foods.

Impacts
As food consumption shifts from one source to another at the retail end of the food supply chain, the information from analyzing where consumers get their food helps to signal commodity producers with needed changes in production methods. With new sources of data, new analytic methods are needed. These studies all contribute to finding new ways to analyze and present results from newer data sources related to food consumption and marketing.

Publications

  • Katsaras, Nikolaos. What Data Mining Provides the Retail Food Industry - Building Profiles of U.S. Grocery Shoppers, M.S. Thesis University of Minnesota, Department of Applied Economics, December 2000.
  • Kinsey, Jean and Sara Ashman. 'Information Technology in the Retail Food Industry,' Technology and Society, 22(2000): 83-96
  • Kinsey, Jean. 'Electronic Technology: New Opportunities, New Demands for Retail Food Stores,' Journal of Food Distribution, January, 2000.
  • Kinsey, Jean. 'A Faster, Leaner, Supply Chain: New Uses of Information Technology,' American Journal of Agricultural Economics, 82:5 (December, 2000) pp. 1123-1129.
  • Kinsey, Jean. 'Electronic Systems in the Food Industry: Entropy, Speed and Sales.' Chapter in Tracking a Transformation: E-Commerce and the Terms of Competition in Industries. BRIE-IGCC E-conomy Project (Washington D.C.: Brookings Institute, 2001).
  • Ana R. Quinones and Jean Kinsey. From Paper to Plastic by 2002: Retailers' Perspective on Electronic Benefit Transfer Systems for Food Stamps, University of Minnesota, The Retail Food Industry Center: Working Paper 00-06, August, 2000, 37 p.


Progress 01/01/99 to 12/31/99

Outputs
Early in 2000 a Ph.D. student finished a dissertation in which she is modeling the effect of state supported health insurance on the probability of poor people purchasing health insurance through a state provided health insurance system. In estimating the probability of having self purchased health insurance and what type of insurance, an analysis of risk preference was incorporated. It was found that the uninsured were risk seeking based on the coefficient of risk aversion being negative. Also, the uninsured were not willing to pay an insurance premium as great as the actuarial fair price for a bare-bones health insurance policy for their age or gender. This has implications for state health policy in terms of subsidizing health insurance. A second student is working with USDA data on individual food consumption (CSFII-1994/96). This project classifies consumers by the retail source of their food and then by the types of food they obtain from each source. The implications of this study for agricultural producers lies in the various quality specifications that different retail and food manufacturers require of producers. Fast food places require different types of raw materials than grocery stores or restaurants. As consumption shifts from one source to another, the information signals to producers change and their production practices must change to stay in the market. In spite of almost half of consumers' food dollar going for food-away-from-home this study discovered that 72% of the volume (grams) of food eaten still comes from grocery stores with considerable variation by consumers' age and employment status. The first phase of this project is done and a working paper is published. A third student estimated the price changes that would be necessary to induce consumers to eat the recommended number of food servings as listed on the Food Guide Pyramid and improve nutrition. This paper is published in Food Policy. A fourth student is estimating the determinants of the consumption of fiber and fat among low income households receiving food assistance and among the general population. This master's paper is was completed in June 1999. A fifth student is analyzing shopping patterns to determine what type of consumers prefer what types of food and store experiences. A nationwide survey of consumers food shopping preferences is being analyzed using cluster analysis. Six types of consumers have been classified by the food and store characteristics that are most important to them. Completion is expected in 2000. A sixth student is doing a Ph.D. dissertation using scanner data to determine what defines a loyal customer and what types of shopping patterns they have. It should be completed in 2000. There are important studies to understand structural changes in food delivery channels as consumers shift from more traditional grocery stores to take-out and restaurant foods.

Impacts
The implications of the health insurance risk analysis behavior are important for state health departments and legislators who are considering subsidizing health insurance for the poor and rural people. As food consumption shifts from one source to another at the retail end of the food supply chain, the information from analyzing where consumers get their food helps to signal commodity producers with needed changes in production methods.

Publications

  • Kinsey,Jean. 2000 forthcoming. From Supply to Demand Chain in Six Giant Steps, Minnesota Agricultural Economist
  • Kinsey, Jean and Sara Ashman. 1999. Information Technology in The Retail Food Industry, Technology and Science, 21
  • Kinsey, Jean 1999. The Information Technology Alphabet UPC, SKU, ECR,CPFR, SBT. Invited column in Cereal Foods World, 44:12, December, 1999, pp. 761-762
  • Kinsey, Jean. 1999. Genetically Modified Food & Fiber - A Speedy Penetration of a False Start? Invited Column in Cereal Foods World, 44:7, July 1999, pp. 487-489.
  • Kinsey, Jean. 1999. The Benefits of Food Safety - an Economists View, Invited Column in Cereal Foods World, 44:4 April, 1999, pp. 204-205
  • Ben Senauer and Jean Kinsey. 1999. The Efficient Consumer Response Initiative: Implications for Vertical Relationships Throughout the U.S. Food System Chpt. in Vertical Relationships and Coordination in the food System, Ed. By G. Galizzi and L. Venturini, New York: Physica-Verlag Co., 1999, pages 443-452.
  • Ndayisenga, Fidele and Jean Kinsey. The Impact of Political Contributions by Food Manufacturing Firms on U.S. Farm Policy Journal of Agribusiness, 817:1, Spring 1999, pp. 21-35.


Progress 01/01/98 to 12/31/98

Outputs
(Graduate students=6) During 1998 a Ph.D. student continued to work on a dissertation in which she is modeling the effect of state supported health insurance on the probability of poor people purchasing health insurance through a state provided health insurance system. In estimating the probability of having self purchased health insurance and what type of insurance, and analysis of risk preference will be incorporated. This is an important question when managed health care systems are taking over the industry and public insurance opportunities are being tested and debated. Many of the consumers in the sample are in rural areas and their reasons for purchasing private health insurance (or not) are important in rural development programs. The dissertation should be finished in 1999. Another Ph.D. student is working on a dissertation on the welfare impacts of intergenerational transfers of time and money between family members living in separate households. Data from the Michigan Survey Research Center's Time and Money Tranfer survey is being used. The results will shed light on the fungibility of public and private money transfers between households. Preliminary writing on this project won the student a writing award. It should be done in 1999. A third Ph.D. student is finishing up a dissertation which examines new ways to test the determinants of variation in prices on food products using nonparametric methods. The methodology contributions of this work should help us understand demand shifts or structural changes in food demand. This should also be done in 1999. A fourth student is working with USDA data on individual food consumption (CSFII-1994). This project classifies consumers by the retail source of their food and then by the types of food they obtain from each source. The implications of this study for agricultural producers lies in the various quality specifications that different reatil and food manufacturers require of producers. Fast food places require diffferent types of raw materials than grocery stores or restaurants. As consumption shifts from one source to another, the information signals to producers change and their production practices must changes to stay in the market. In spite of almost half of consumers' food dollar going for food-away-from home this study discovered that 72 percent of the volume (grams) of food eaten still comes from grocery stores with considerable variation by consumers' age and employment status. A fifth student estimated the price changes that would be necessary to induce consumers to eat the recommended number of food servings as listed on the Food guide Pyramid and improve nutrition. This paper was presented at a conference and is being published in a journal. A sixth student is estimating the determinants of the consumption of fiber and fat among low income households receiving food assistance and among the general population. This master's paper should be completed in 1999.

Impacts
(N/A)

Publications

  • Jean Kinsey and Brad Bowland. "How Can the U.S. Food System Deliver Food Products Consistent with the Dietary Guidelines? Food Marketing and Retailing: An Economists View," Food Policy, 1999. (Forthcoming)
  • Carlson, Andrea, Jean Kinsey, and Carmel Nadav. "Who Eats What, When, and From Where?" University of Minnesota, The Retail Food Industry Center, Working Paper 98-5, 1998.
  • Kinsey, Jean. "Concentration of Ownership in Food Retailing: A Review of the Evidence about Consumer Impact," University of Minnesota, The Retail Food Industry Center, Working Paper 98-04, 1998.
  • Kinsey, Jean. "Supermarket Trends and Changes in Retail Food Delivery" USDA, Agricultural Outlook, 1998.
  • Jean Kinsey. "Agricultural Trade Liberalization - Impact on Consumers," National Public Policy Education Conference Proceedings, Chicago: The Farm Foundation, September 22, 1998. (Forthcoming)
  • Kinsey, Jean. "A Review of the Academic Literature on Food Retailing," Actes du Colloque, Grande Distribution Alimentaire, Tome 1, Societe Francaise dEconomie Rurale (SFER), ENSAN-INRA Montpellier, France, 1998, pp.7-19.


Progress 01/01/97 to 12/31/97

Outputs
(Graduate students = 4) During 1997 a Ph.D. student continued to work on a dissertation in which she is modeling the effect of state supported health insurance on the probability of poor people purchasing health insurance through a state provided health insurance system. In estimating the probability of having self purchased health insurance and what type of insurance, an analysis of risk preference will be incorporated. This is an important question when managed health care systems are taking over the industry and public insurance opportunities are being tested and debated. Many of the consumers in the sample are in rural areas and their reasons for purchasing private health insurance(or not)are important in rural development programs. The dissertation should be finished in 1998. Another Ph.D. student is working on a dissertation on the welfare impacts of intergenerational transfers of time and money between family members living in separate households. Data from the Michigan Survey Research Center's Time and Money Transfer survey is being used. The results will shed light on the fungibility of public and private money transfers between households. Preliminary writing on this project won the student a writing award. It should be done in 1998. A third Ph.D. student is finishing up a dissertation which examines new ways to test the determinants of variation in prices on food products using nonparametric methods. This methodology contributions of this work should help us understand demand shifts or structural changes in food demand. This should also be done in 1998. A fourth student is working with USDA data on individual food consumption (CSFII-1994). This project classifies consumers by the retail source of their food and then by the types of food they obtain from each source. The implications of this study for agricultural producers lies in the various quality specifications that different retail and food manufacturers require of producers. Fast food places require different types raw materials than grocery stores or restaurants. As consumption shifts from one source to another, the information signals to producers change and their production practices must change to stay in the market. In spite of almost half of consumers' food dollar going for food-away-from-home, this study discovered that 72% of the volume(grams) of food eaten still comes from grocery stores with considerable variation by consumers' age and employment status. This is the beginning of a longer investigation into longitudinal shifts in food consumption. For example, the question of whether food consumption patterns follow age or cohort is still not known and we intend to try and determine this by using three decades of individual food consumption data. Heretofore, studies that project future food demand have assumed that food consumption habits follow age, not cohorts. If incorrect, this will lead to large mistakes with the upcoming boom in retirements with the baby boomer generation.

Impacts
(N/A)

Publications

  • Kinsey, Jean. Globalization of Retail Food Market, Cereal Food World, April, 1998 (Invited Column)
  • Kinsey, Jean. Whats New and Whats Not, Cereal Food World, December, 1997 (Invited Column)
  • Chen, Ming "Intergenerational Transfers: From Parents to Adult Children and From Adult Children to Parents," Staff Paper P97-12, Department of Applied Economics, University of Minnesota, 1997.
  • Kinsey, Jean. Income and Food Consumption: A Variety of Answers Discussion Paper, American Journal of Agricultural Economics, 79(5), December, 1997, forthcoming Kinsey Jean and Ben Senauer, Food Marketing in an Electronic Age Implications for Agriculture, CHOICES Second Quarter, 1997, pp. 32-35.
  • Kinsey, Jean, Food Purchase Protection for Consumers, Encyclopedia of the Consumer Movement, ed. Steve Brobeck, New York: Garland Publishing, 1997.
  • Kinsey, Jean Food Policy, in Encyclopedia of Rural America, Ed. Gary A. Goreham, New York: Garland Publishing, 1997.
  • Pick, Daniel H., Dennis R. Henderson, Jean D. Kinsey, Ian M. Sheldon, "Global Markets for Processed Foods, Theoretical and Practical Issues," Westview Press, 1998.


Progress 01/01/96 to 12/30/96

Outputs
MN-14-048 (Graduate students = 5) During 1996 a Ph.D. student continued to work on a dissertation in which she is modeling different pesticide (fungicide) tolerances and their impact of production costs and retail prices of domestic and imported table grapes. Data was collected from the United States, Mexico and Chile in order to compare changes in consumer and producer welfare in the various countries as pesticide use changes. Another Ph.D. student finished collecting data on the effect of state supported health insurance on the probability of poor people having health insurance and on the availability and quality of health care, especially in rural areas. The dissertation should be finished in 1997. A third Ph.D. student is starting a dissertation on the welfare impacts of trade barriers in finished food products in at least one Asian country. This project is just beginning. A 1996 M.S. Plan B paper on intergenerational transfers of time and money between family members living in separate households was completed. Data was from the Survey of Consumer Finances, Federal Reserve Bank. The research found that 14 percent of families in the U.S. transferred money to others. Transfers from parents to children are more income elastic (.9 verses .6 ) and larger ($4,754 on average) than transfers from children to parents ($2,126 on average).

Impacts
(N/A)

Publications

  • Kinsey, J.and B.Senauer,1996. Food Marketing in an Electronic Age, Implications for Agricultural Producers, III CONGRESS on the Polish Association of Agricultural and Agribusiness Economists, September 26-28, pages 111-117.
  • Kinsey, J.,1996. Food Policy, In Encyclopedia of Rural America, Ed. Gary A. Goreham, New York: Garland Publishing.
  • Kinsey, J., B. Senauer, R.P. King and P.F. Phumpiu, 1996. Changes in Retail Food Delivery: Signals for Producers, Processors and Distributors, Working Paper 96-03, The Retail Food Industry Center, University of Minnesota, August.
  • Kinsey, J.and B. Senauer, 1996. Food Marketing in an Electronic Age: Implications for Agricultural Producers, Working Paper 96-02, The Retail Food Industry Center, University of Minnesota, June.
  • Gabe, T., J. Kinsey, and S. Loveridge, 1996. Local Economic Impacts of Tribal Casinos: The Minnesota Case, The Journal of Travel Research, (V.34, No. 3)
  • Kinsey, J.and B. Senauer, 1996. Consumer Trends and Changing Retail Formats, American Journal of Agricultural Economics, December.
  • Kinsey, J.,1996. Food Purchase Protection, Encyclopedia of the Consumer Movement, New York, NY, Garland Publishing, Inc., accept for pub., 1997.
  • Kinsey, J. and B. Senauer, Food Marketing in and the Electronic Age: Implications for Agriculture, CHOICES, accept for pub. Quarter I, 1997.


Progress 01/01/95 to 12/30/95

Outputs
(Graduate students = 5) During 1995 a Ph.D. student worked on a dissertation in which she is modeling different pesticide (fungicide) tolerances and their impact of production costs and retail prices of domestic and imported table grapes. Data was collected from the United States, Mexico and Chile in order to compare changes in consumer and producer welfare in the various countries as pesticide use changes. Another Ph.D. student started to collect data on the effect of state supported health insurance on the probability of poor people having health insurance and on the availability and quality of health care, especially in rural areas. A 1994 M.S. thesis on the effects of Indian casinos in Minnesota on rural counties' per capita income lead to an article on this topic being accepted for publication in a special issue of the Journal of Travel Research. Another M.S. student studied intergenerational transfers of time and money between adult children and their parents using data from the Survey of Consumer Finances. Preliminary empirical estimation results show that income is the most important determinant of the amount. In connection with The Retail Food Industry Center, a Ph.D. student extracted background information and performance data over a five year period on groceries in the United States and 22 foreign countries. Three source books available in hard copy and on disk (in Word Perfect and Quatro Pro) were prepared. Rankings of these businesses by 6 criteria such as net sales and total asse.

Impacts
(N/A)

Publications


    Progress 01/01/94 to 12/30/94

    Outputs
    In 1994, an analysis of the factors affecting the probability of change in beef consumption in the past year was completed, based on a survey of Twin City consumer meat preferences. Several presentations and papers were completed as a result of this work. A Ph.D dissertation was completed in which the efficiency wage hypothesis was tested using data from subsistence farm households in India. Research indicated that calories affected the efficiency of women's labor while health affected the efficiency of male labor. A second Ph.D. student completed a dissertation which examined the complementary or competing influences of lobbying by farm organizations and food processors. It found that transfers to farmers are not affected by food firm lobbying and that the transfers induced by agricultural lobbies increase when input costs are up and decrease when output prices are up. A third Ph.D. dissertation is a study modeling different pesticide tolerances and their impact of welfare across boarders. Table grapes is the food commodity being analyzed. An M.S. student completed a thesis on the effects of Indian casinos on rural Minnesota counties' per capita income and found a positive correlation with income earned by workers in the eating and drinking and amusement sectors, but no overall effect on per capita income or income earned by retail workers. The study was presented at the 1994 AAEA meetings and selected as the best master's thesis in our department in 1994. Another M.S. student began a thesis o.

    Impacts
    (N/A)

    Publications


      Progress 01/01/93 to 12/30/93

      Outputs
      During 1993 one Ph.D. student finished a survey of consumer meat preferences in the Twin Cities Area. A Probit analysis of the factors affecting the probability of increasing or decreasing beef consumption in the past year was part of the final report on this research. Preferences for fresh, safe and low fat meat dominated results. Journal manuscripts are yet to be written but two speeches have been given to local producer groups. A second Ph.D. student is researching the complementary or competing influences of lobbying by farm organizations, food processors, and consumers. This is a Ph.D. dissertation with the preliminary oral completed. This same student and I also wrote a journal article based on work he did last year on nontariff trade barriers in OECD countries. It was accepted. A third Ph.D. student has started working on a dissertation topic within a USDA cooperative agreement, to model and analyze whether different food safety standards on two sides of a trading boarder are necessarily welfare decreasing for consumers on both sides of the boarder. Most of this project will be done in 1994. A fourth Ph.D. student revised a former research article with new data to study the demand for consumer goods with strict and partial rationing in the Republic of China. This resulted in aa accepted journal article. A M.S. student has almost completed a Thesis on the effects of Indian casinos in Minnesota on rural counties per capita income.

      Impacts
      (N/A)

      Publications


        Progress 01/01/92 to 12/30/92

        Outputs
        (Graduate students = 2) During 1992 an M.S. student pulled the appropriate data from the 1987-88 National Food Consumption Survey in order to study the cohort effect of age on food consumption patterns. This was completed. The rest of the study will be done when another student can be found to work on it with some addition funds. It is a question of importance to all who study food demand and food marketing trends since it tests the long standing assumption/hypothesis that peoples' eating patterns change in the same way as they age regardless of the generation they grew up in. We are consulting with colleagues at USDA, ERS about this work. Speeches and papers continue to be written and delivered on the theme of our 1991 book Food Trends and the Changing Consumer. Speeches were delivered to the MN Dairy Policy Conference, MN Dairy Promotion Council, Value Added Meat Products Symposium, General Mills, and two more are scheduled for early in 1993. One journal article, one semi-popular article and one book chapter were also published on related topics. Food Safety and its relationship to nontariff trade barriers continues to be studied. This year two seminars on the topic and data related to it were presented in Washington D.C. at USDA, ERS, one of them by a graduate student. A cooperative agreement with USDA to obtain and analyze data from UNCTAD and other sources on this topic has produced much data, some of it useful. Some of it still needs to be analyzed. A Ph.D. student is working on this topic for a dissertation.

        Impacts
        (N/A)

        Publications


          Progress 01/01/91 to 12/30/91

          Outputs
          During 1991 work on the impact of food price changes on the Index of Consumer Sentiment was published. Additional work on this topic continues in order to determine if there is a significant difference between the 1960's, 1970's and 1980's. A co-authored book, Food Trends and the Changing Consumer, was published in August of 1991. I have written several papers and given several speeches on this topic since this book was published. The primary interest is in how consumer's preferences are changing and diversifying and how traditional agricultural products can be better marketed in the domestic market. Analyzing the effect of food safety and quality regulations on nontariff measures in international trade is work in progress. A cooperative agreement with USDA on this topic was obtained in the past year. An invited paper was presented on this topic at the January, 1992 meetings of the Comparative Economics Association and the American Agricultural Economics Association. A PhD. student is working on the topic to help determine the worldwide growth in nontariff barriers to trade that have developed around phytosanitary and sanitary trade regulations. Another student has started working on a project to determine if the consumption of food among the elderly (and other age groups) is a function of their age or of the cohort in which they grew up. The 1987-88 National Food Consumption data is being employed; it will be compared to earlier survey results using Compositional Analysis.

          Impacts
          (N/A)

          Publications


            Progress 01/01/90 to 12/30/90

            Outputs
            Estimates of the impact of food price changes on the Index of Consumer Expectations (ICE) was completed and presented in a paper at the Second International Conference on Research in the Consumer Interest, Snowbird Utah, August 9-12, 1990. Results show that food price increases significantly decrease the ICE while food price decreases are insignificant. The hypothesis of nonreversability was not accepted. Food price increases were not as important as other price increases in depressing the ICE. Consumers were found to increase current expenditures on durable goods if they expected to be worse off in the future, i.e. they expect inflation to increase. Tests of structural change in the relationships between prices and the ICE have also been conducted and are in the process of being analyzed. The nonreversability hypothesis is also being tested on gasoline prices. A coauthored book manuscript was delivered to Eagan Press in November, 1990. It addresses trends in food consumption, nutrition information and data, forces driving changes in food consumption i.e. demographics, economics, lifestyle, technology and industry response to an increasingly diverse market for food. The operating title is Consumers and Food Marketing: Trends, Economics, Nutrition and Safety. It should be published in mid 1991. An invited paper was prepared jointly with J. Houck for the International Agricultural Trade Research Consortium meetings in December, 1990.

            Impacts
            (N/A)

            Publications


              Progress 01/01/89 to 12/30/89

              Outputs
              A manuscript from the dissertation by Carlo del Ninno, titled "Actual Income: A Measure of Household Welfare Based on Varying Values of Time", was submitted to the Journal of Economic Development and Cultural Change. It received approval subject to revision which is under way. It explores the differences between "actual" and monetary income. A Poster was presented at the meetings of the American Council of Consumer Interests (ACCI) featuring the results of research on Senior Citizen Discounts. Business' motivation for offering these discounts varies from profit to market share to community spirit. Two invited papers were presented at the ACCI meetings. One dealt with quality standards in international trade. The other identified major research issues for the global community. Work continues on the relationships between food prices and the Index of Consumer Sentiment. New econometric models testing asymmetric reactions is being used. A study of the Dietary Guidelines and their impact on domestic food demand and domestic agriculture is completed. A short version of the results were presented at a Policy Workshop in Washington D.C. in November. The paper is titled "Food Quality and Prices." It positions nutritional concerns along a continuum with other food quality characteristics. A comprehensive examination of American demographics and changes in food consumption patterns is being conducted and written up as part of a book titled "The Consumer-Driven Food Market" scheduled for print in 1991.

              Impacts
              (N/A)

              Publications


                Progress 01/01/88 to 12/30/88

                Outputs
                A paper "Estimation of the Value of Time in Rural Philippine Households" was presented at the annual meetings of the American Agricultural Economics Assoc. This (AAEA) paper emanated from a dissertation by Carlo del Ninno, completed in 1987. A manuscript on the same topic has been submitted to the Review of Econ. & Statistics. The model in the paper provides a way to value household and recreation time differently from the wage rate. An M.S. paper was completed by Lorna Vink. A poster session featuring this research was presented at the annual meetings of the AAEA. Major findings of that research are that there are different economic motivations for offering senior citizen discounts: profits and market share. Businesses most likely to offer these discouts are restaurants and pharmacies, in an urban area, in a national chain, selling non-durable goods or services, and with a low percentage of senior customers. Such discounts may diminish as the senior population grows. Continuing Work: The impacts of food prices on consumer's sense of well-being; the impact of American diets moving towards the Dietary Guidelines on the demand for agricultural commodities. Tracking changes in per capita consumption of grains has begun. This work will lead to a more comprehensive examination of worldwide food consumption patterns.

                Impacts
                (N/A)

                Publications


                  Progress 01/01/87 to 12/30/87

                  Outputs
                  A Ph.D. dissertation was completed by Carlo del Ninno. A model was developed toestimate the value of household production and recreation time as a multiple of labor wages for members of rural Filipino households. "Actual Income" for the households was estimated as a function of the various values of time and household technology. It was found that both household and recreation time values were less than the wage rate, and that "Actual Income" is distributed differently than money income. A survey of retail businesses in Minesota has been conducted to determine their offerings of and attitudes toward senior citizen discounts. Results are being analyzed now. A follow-up survey of senior citizens is being planned. Hypotheses being tested are: the offering of senior citizen discounts is consistent with the theory of price discrimination, and the benefits of these discounts are evenly distributed across senior households. A paper was presented at the annual meetings of the Am. Agricultural Economics Assoc. on work on the effect of food prices on consumer sentiment. This paper will be abstracted in the December 1987 Am. J. of Ag. Econ. This work continues; it shows that consumer sentiment and, subsequently, aggregate consumption tends to decline as food prices rise. Work was started examining the potential impacts on food demand and, subsequently, agricultural production if Americans were to eat according to the Dietary Guidelines.

                  Impacts
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                  Publications


                    Progress 01/01/86 to 12/30/86

                    Outputs
                    A manuscript has been written and is under peer review on the study of the impacts of changing food prices on the Consumer Sentiment Index. The practical results of this study illustrate the importance of food price changes on consumers' propensity to buy durable and other goods and thus the link of food prices to the health of the macro economy. Publications on the economic value of information is being published this year. The work illustrates how information can be interpreted to alter the utility function. The empirical applications were to information on gasoline mileage for automobiles (#1 below) and to labeling of clothing (#2 below). Work is continuing on the linkages between changing food consumption patterns and demographic trends. The implications of these changes for agricultural policy is the subject of two publications (#3 and #4 below). The Ph.D. dissertation studying the allocation of household time and household well-being is still in progress. The ability to attach different wage rates to different uses of time is one of the expected outcomes of this work. A commissioned paper reviewing the modeling of household time in agricultural households was prepared and delivered at a symposium sponsered by CSRS (#5 and #6 below).

                    Impacts
                    (N/A)

                    Publications


                      Progress 01/01/85 to 12/30/85

                      Outputs
                      A satisfactory model explaining the impacts of changes in food prices to changesin the Consumer Sentiment Index has been developed. The results should be ready for publ. in early 1986. The implications for food price policy are important because if low food prices lead consumers to increase consumption of other goods, it spurs general economic growth or vice versa. A M.S. thesis, "Discount Coupons and Consumers," was completed in Sept. It includes an extensive review of theoretical literature about the economics of coupons and popular literature about coupon use and abuse. An original survey of local grocery store shoppers' coupon use is analyzed and compared to national findings. A study of time allocation and households' full income (economic well-being) using a combination of traditional approaches to value various uses of time is being conducted for a Ph.D. dissertation. The impacts of technological adaptation on estimated full income will be part of this study using data from the Philippines. Developing a better measure of households' comparative well being is promised by this work. Two manuscripts were written on the links between changing US demographics, household organization, income, and information and the evolution of food consumption patterns in the US. They are the first two publ. listed below. This line of inquiry includes the impacts of the aging population on food expenditures.

                      Impacts
                      (N/A)

                      Publications


                        Progress 01/01/84 to 12/30/84

                        Outputs
                        Research is underway to determine the links between food price inflation and thechanges in the consumer sentiment index. If it can be verified that perceived food price inflation makes consumers feel worse off, there exists important implications for food price policy and its impact on general consumption activity. A study of the economics of food coupons is almost completed as a Master's thesis. It includes an extensive review of literature, a survey of grocery store shoppers and a theoretical chapter defining coupons as forms of price discrimination. A study of the adoption of new technology by households with different characteristics in the Third World is underway for a Ph.D. dissertation. The theoretical framework being employed is the "new household economics." An extensive review of post-war food consumption trends in the U.S. has been completed. This review will be published, in part, in a forthcoming book on The Economics of the Food Processing Industry, ed. C. O. McCorkle. Research done elsewhere by H. Baumann on hog farmers' use of price information was re-evaluated and written up in the context of the economics of education and its impact on the demand for information. This work appears in a staff paper and has been accepted for publication in the European Review of Agricultural Economics.

                        Impacts
                        (N/A)

                        Publications


                          Progress 01/01/83 to 12/30/83

                          Outputs
                          As more food is sold for consumption away from home, knowledge about the potential growth in this market and how it changes the demand for and distribution of food is increasingly important. A second manuscript from a completed study estimating the marginal propensity to consume food away from home is under revision for publication. A Master's Plan B project was completed in June. This paper reported on analysis of beef consumption at home and away from home using USDA Individual Food Consumption Data. This study found, among other things, that income elasticity was higher for steak than other beef cuts, that away from home ground beef consumption increased with women's labor force participation and beef consumption peaks somewhere in middle age. Research is continuing on food away from home consumption including modeling consistent with the theory of the new household economics. A new dissertation is underway to look at the impacts of new household technology. Research is underway to determine the links between food price inflation and the changes in the consumer sentiment index. It is hypothesized that rapid increases in food prices exacerbate inflationary expectations among consumers. If it can be verified that perceived food price inflation makes consumers feel worse-off, there exists important implications for food price policy and its impact on general consumption activity.

                          Impacts
                          (N/A)

                          Publications


                            Progress 01/01/82 to 12/30/82

                            Outputs
                            Estimation of the marginal propensity to consumer (m.p.c.) food away from home (FAFH) out of various sources of household income for married U.S. households has been completed. Households were stratified by region, urbanization and life-cycle stage; estimates of the m.p.c. and income elasticities were made on each strata. It was found that FAFH was closest to a necessity for middle-age, child-free households and for Westerners. The highest income elasticities were in households in the Northeast or whose youngest child was in grade school. The effect of wives' income on m.p.c. FAFH was consistent with theoretical predictions from the new household economics. A manuscript of this study has been submitted for review to a journal and a paper has been submitted for potential presentation at an Am. Ec. Assoc. meeting. As more food is sold for consumption away from home, knowledge about the potential growth in this market and in types of foods needed to supply this market is increasingly important. A study is under way to analyze beef and meat consumption at home and away from home. U.S.D.A. Food Consumption Survey Data is being used. Further explanation of the use of segmented regression has been completed. A manuscript of this work is in progress.

                            Impacts
                            (N/A)

                            Publications


                              Progress 01/01/81 to 12/30/81

                              Outputs
                              The effect of wives labor force participation on food away from home (FAFH) expenditure has shown that income earned by part-time working wives increases the marginal propensity to consume (MPC) FAFH; income earned by full-time working wives decreases the MPC. Contrary to conventional wisdom, these findings were made possible by considering the time wives spent in the labor force as well as their earnings. The implications for future food consumption patterns are most relevant as the trend for wives to work full-time continues. Differences in the (MPC) and income elasticities of FAFH are being examined for different types of households from different regions. One manuscript for this work has been submitted for journal publication. Conceptual and empirical research has been and is being conducted to model and estimate the cost of inaccurate information to consumers and their willingness to pay for better pre-purchase information. Data collected from local new car buyers about their anticipated gas mileage has been used to produce two manuscripts which have been submitted for journal publication (joint with T. roe and B. Sexauer). Results of this research have important implications for the value of spending tax dollars to produce consumer information. Work is continuing on in the areas discussed above as well as the applicability of segmented regression to Engel Curve analysis.

                              Impacts
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                              Publications


                                Progress 01/01/80 to 12/30/80

                                Outputs
                                The first four items listed under publications below summarize progress on studies of housing satisfaction and credit knowledge reported on AD421, January 1980. Marginal propensities to consume (MPC) food away-from-home out of different sources of household income and income elasticities have been estimated from 1975 and 1978 U.S. data. Households are being stratified to study differences among subgroups in the population. Preliminary results show no difference in MPC out of husband's or part-time working wive's income. The MPC food away-from-home out of income from full-time working wive's is less than from other husband/wife labor income. Results of this study will, potentially, help dispell some myths about the effect of working wives on food away-from-home consumption. Research on consumer welfare losses due to misallocated resources due to imperfect information is continuing. Theoretical developments were applied to differences between actual and advertised mileage on 1979 automobiles. This was followed up by a household survey of 1980 car buyers to determine the extent and distribution of misinformation, its impact on car buying decisions and, ultimately, the impact on welfare loss. This issue is of great importance in light of federal dollars spent to "ensure" accurate mileage information.

                                Impacts
                                (N/A)

                                Publications


                                  Progress 01/01/79 to 12/30/79

                                  Outputs
                                  A. A second study of household's satisfaction with housing services has been completed using probit analysis. In this study the sample was stratified by race and further by income, life cycle, and education. The basic hypothesis was that blacks and whites will not have substantially different probabilities of satisfaction with their housing even though blacks have lower quality housing attributes than whites. The hypothesis was accepted; the results are an important contribution to literature on racial discrimination in housing. Analysis of Credit Card Use in Minnesota reported on AD421-6, January 1979, resulted in one paper being presented at a professional meeting and one article being submitted for publication. B. Results of current research in consumer credit show that truth-in-lending regulations cannot meet their intended purpose and that most consumers are willing to pay more dollars for consumer credit than is legally necessary. A manuscript reporting this research has been submitted for journal publication. C. A theoretical manuscript incorporating imperfect information into the basic theory of consumer economic behavior and analyzing welfare losses due to misallocation of resources was prepared jointly with two other faculty members and submitted for publication. This line of research is one I intend to pursue further. One of my graduate students has used the model for empirical work. D. Some work has begun on a new project looking at the consumption of food away-from-home.

                                  Impacts
                                  (N/A)

                                  Publications


                                    Progress 01/01/78 to 12/30/78

                                    Outputs
                                    One study of household's satisfaction with housing services has been completed. In this study, the probability of satisfaction with housing services was estimated using probit analysis. The findings were: the probability of being satisfied with housing increased with home ownership, the quality of housing, the value of owned homes, being located near a city, increased age of the residents, and low density occupancy; mobile home dwellers were the least satisfied. An article title "Housing Tenure and Housing Satisfaction" has been submitted for journal publication. A study of the demand for credit cards by characteristics of Minnesota households and perceived price has been completed using tobit analysis. The findings show that the probability of holding credit cards increased with income, home ownership, urbanity, positive attitudes towards credit, monthly indebtedness, and the use of banking services. The number of credit cards held was found to be a decreasing function of perceived price. People are willing to pay more for revolving credit than existing legislation allows. A journal article has been prepared and is being reviewed, a paper has been presented at the Financial Management Association, another is tentatively scheduled for meetings of the American Council on Consumer Interest. Food away from home expenditures are being analyzed with aggregate data with plans to use cross-sectional data to look at households with one and two earners and different family size.

                                    Impacts
                                    (N/A)

                                    Publications