Health Information Impacts on Seafood
Demand: Experimental Auction Approach
Hirotsugu Uchida1, Cathy A. Roheim2, and Robert J. Johnston3
1
Department of Environmental and Natural Resource Economics, University of Rhode Island
Department of Agricultural Economics and Rural Sociology, University of Idaho
3 George Perkins Marsh Institute (GPMI) and Department of Economics, Clark University
2
International Institute of Fisheries Economics and Trade Conference 2014
Brisbane, Australia, July 7-11, 2014
Motivation
• Challenge in communicating information
• On health risk and benefit information across different species, sources
and for different consumers.
• National Academy of Sciences study:
• “Research is needed to develop and evaluate more effective
communication tools when conveying health benefits and risks of
seafood consumption.”
Motivation (2)
• Focus group sessions in RI revealed:
• Have mixed and conflicting perceptions of fish as a
healthy food option, but also carry risks due to
contaminants.
• Perceive farmed fish to have lesser health benefits and
greater health risks than wild fish.
• Lack knowledge about where to obtain unbiased and
objective information about seafood’s attributes.
• Have difficulty balancing health risks and benefits for
farmed fish.
• Similar findings in other parts of the world
• c.f., Verbeke et al. (2005): survey in Europe
Research questions
• Policy question: how to increase demand for
farmed seafood in the US?
• Will informing consumers do the trick?
• How does the information affect, if any, consumers’
purchasing behavior?
• Content of information (health benefit vs. risk)
• Source of information (govn’t agency, university
researcher, etc)
• Are the effects different across:
• Information types?
• Product types?
Method: Auction experiment
• Three products to bid on
• Wild salmon fillet, farmed salmon fillet, swordfish steak (all 1lb)
• Simultaneous, second price sealed bid auction.
• Two information interventions.
Round 1
Round 2
Round 3
Round 4
Round 5
Round 6
Wild
Farmed
Swordfish
Wild
Farmed
Swordfish
Wild
Farmed
Swordfish
Wild
Farmed
Swordfish
Wild
Farmed
Swordfish
Wild
Farmed
Swordfish
Information
content
Information
source
• Other controls
• Consumption timing issue  use of vouchers
• Budget effect  use of binding round
Information treatments
• Used four information sources:
• US government (FDA): focusing on risks (of mercury)
• Industry: focusing on the benefits (omega-3 DHA)
• University scientist: balanced information but slightly more
towards the risk; explicit mention of farmed vs. wild salmon.
• National Academy of Sciences: similar to University info, but
explicit in relative terms—but also requires more effort to
understand.
(1)
Salmon, Atlantic, farmed
(1)
Salmon, Atlantic, wild
(2)
(13)
(2)
(1)
(13)
(122)
(29)
(81)
(112)
b
Oyster, Pacific
Rainbow trout, farmed
Oyster, eastern, wild
Salmon, Pacific
a
b
c
Rainbow trout, wild
Tilefish
a
a
a
a
Tuna, white, canned
Swordfish a
Shark
(5)
Pollock, Atlantic
(8)
Flounder/sole
(21)
a
a
Halibut, Atlantic and Pacific
a
a
(2)
Oyster, eastern, farmed
(4)
Scallops, bay and sea (100g)
(6)
(61)
(10)
(4)
(2)
Crab, king b
King mackerel a
Ocean perch, Atlantic a
Shrimp, mixed b
Clams, mixed
b
a
(10)
Cod, Pacific
(10)
Tuna, light, canned
(8)
Haddock a
(8)
Catfish, wild
(8)
Catfish, farmed
a
a
a
(10)
Cod Atlantic
(26)
Lobster, northern b
150 0.00
-0.30 -0.15
Methylmercury
(μg)
0.15
0.30
0.45
0.60
0.75
0.90
1.05
EPA/DHA (g)
1.20
1.35
1.50
1.65
1.80
1.95
Information treatments (2)
Explicit mention
of salmon
University
N = 55
NAS
N = 68
FDA/Ind
N = 60
Industry
N = 60
Health RISK
Health BENEFIT
FDA
N = 61
No mention
of salmon
• Total of six information treatments
• Five treatments with actual information, plus
• One no-information treatment as control (N = 58).
Data
• Descriptive statistics
• Total 32 sessions, 362 participants.
• Data cleaned for “low bidders”  n = 340
Wild salmon
Bid price
Farmed salmon
Swordfish
Highest
$60.00
$35.00
$40.00
Lowest
$0.00
$0.00
$0.00
Average
$5.95
$4.96
$4.93
($11.99)
($6.99)
($11.99)
(Dave’s)
17
8
39
108
130
47
168
79
male
female
21-30
41-50
61-70
31-40
51-60
>71
Estimation model
• Difference-in-Difference mixed linear model
2
5
j 1
k 1
bidijkt   0  1 Roundt    j PRODij    k INFOik  1 InfoCt   2 InfoSt
5
5
2
2
k 1
k 1
j 1
j 1
 k INFOik  InfoCt    k INFOik  InfoSt    j PRODij  InfoCt    j PRODij  InfoSt
2
5
2
5
  jk PRODij  INFOik  InfoCt   jk PRODij  INFOik  InfoSt   ijkt
j 1 k 1
j 1 k 1
 ij  i . Random parameters
•
•
•
•
PROD = {wild salmon, farmed salmon | base = swordfish}
INFO = {FDA, Industry, FDA-Ind, University, NAS | base = no info}
InfoC: dummy variable for first information (content) intervention
InfoS: dummy variable for second information (source) intervention
Hierarchical structure of mixed
linear model
Individual i
Wild salmon
Farmed salmon
Swordfish
 ij
R1…R6
R1…R6
R1…R6
i
Results (1): Regression output
Variavbles (dependent var = bid)
Constant
Round
Product type (base = swordfish)
wild salmon
farmed salmon
Information type (base = no info)
FDA
Industry (IND)
FDA & Industry (FI)
University (UNIV)
NAS
Treatment timing dummy
InfoC (information content)
InfoS (information source)
Info content x Information type
InfoC_FDA
InfoC_IND
InfoC_FI
InfoC_UNIV
InfoC_NAS
Coefficients
5.323***
(0.537)
-0.0606
(0.0496)
0.545***
(0.170)
-0.469***
(0.151)
Variavbles (dependent var = bid)
Info source x Information type
InfoS_FDA
InfoS_IND
InfoS_FI
InfoS_UNIV
InfoS_NAS
-0.229
(0.723)
-0.0328
(0.784)
0.223
(0.808)
0.664
(0.713)
0.535
(0.671)
-0.145
(0.261)
0.503
(0.339)
-0.193
(0.303)
-0.416
(0.425)
-0.281
(0.311)
-1.205***
(0.404)
-0.992**
(0.460)
Info content x Product type
InfoC_wild
InfoC_farmed
Info source x Product type
InfoS_wild
InfoS_farmed
Info content x info type x product
InfoC_FDA_wild
InfoC_IND_wild
InfoC_FI_wild
InfoC_UNIV_wild
InfoC_NAS_wild
Coefficients
-0.238
(0.392)
-0.304
(0.392)
-0.544
(0.355)
-0.578
(0.402)
-0.176
(0.424)
0.0525
(0.211)
0.0975
(0.183)
-0.432*
(0.259)
-0.543**
(0.271)
0.148
(0.282)
0.715
(0.646)
0.533
(0.351)
1.737***
(0.442)
1.024**
(0.430)
Variavbles (dependent var = bid)
Coefficients
Info content x info type x product (cont)
InfoC_FDA_farmed
0.415*
(0.249)
InfoC_IND_farmed
0.123
(0.281)
InfoC_FI_farmed
0.705**
(0.325)
InfoC_UNIV_farmed
1.430***
(0.416)
InfoC_NAS_farmed
1.608***
(0.489)
Info source x info type x product
InfoS_FDA_wild
0.733
(0.481)
InfoS_IND_wild
0.830**
(0.376)
InfoS_FI_wild
0.266
(0.322)
InfoS_UNIV_wild
0.266
(0.399)
InfoS_NAS_wild
0.0477
(0.371)
InfoS_FDA_farmed
0.383
(0.308)
InfoS_IND_farmed
0.428
(0.316)
InfoS_FI_farmed
0.551*
(0.313)
InfoS_UNIV_farmed
0.697*
(0.386)
InfoS_NAS_farmed
0.198
(0.371)
Observations
Number of groups
6,120
340
Results (2): Information effect
Explicit mention of salmon
Univ Cont Source Total
NAS Cont Source Total
W
0
0
0
W
0
0
0
F
0
0
0
F
0
0
0
S
---
0
---
S
--
0
-
F-I
Cont
Source
Total
Ind
Cont
Source
Total
W
0
0
0
W
0
0
0
F
0
0
0
F
0
0
0
S
0
0
-
S
0
0
0
Health RISK
FDA
Cont
Source
Total
W
0
0
0
F
0
0
0
S
0
0
0
Health BENEFIT
• Limited effect of benefit information.
• Stronger effect of risk information, but
not the case for FDA.
• Information source had no impacts.
No mention of salmon
Results (3): Information effect
Comparisons b/w product types
• Salmon products’ bids are generally higher than swordfish.
• Mostly due to negative effect of information on swordfish bids.
• NAS information had positive effect on farmed over wild salmon.
Information
FDA
Industry
FDA/Industry
University
NAS
Wild vs Sword
0.882 *
(3.29)
1.545 *
(3.44)
0.799 **
(4.22)
2.003 ***
(22.9)
1.071 ***
(7.59)
Farmed vs Sword
0.798 **
(5.11)
0.551
(1.99)
1.256 ***
(9.93)
2.126 ***
(21.1)
1.806 ***
(12.3)
Test statistics in parenthesis.
Significance levels are indicated as: * (10%), ** (5%), and *** (1%).
Wild vs Farmed
0.083
(0.03)
0.994
(1.53)
-0.456
(2.32)
-0.123
(0.13)
-0.734 *
(3.54)
Results (4): Information effect
Comparisons b/w info types
• No difference for wild and farmed salmon.
• All information types have similar effect (incl. no effect)
• For swordfish, University information had more negative
impacts than other information types (excl. NAS)
SWORDFISH
FDA
Industry (IND)
FDA-Industry (FI)
University (UNIV)
NAS
FDA
0
0.289
(0.33)
0.393
(1.42)
1.351
(8.51)
0.738
(2.33)
Industry
FDA-Industry
University
NAS
0
***
0.104
(0.04)
1.062
(2.97)
0.448
(0.50)
0
*
0.958
(3.96)
0.344
(0.47)
**
0
-0.613
(1.06)
0
Note: each value represents the difference ROW – COLUMN. For example, 1.351 means FDA information
effect on swordfish is $1.35 higher than University information effect.
Test statistics in parenthesis. Significance levels are indicated as: * (10%), ** (5%), and *** (1%).
Conclusion
• Very limited influence of health benefit information.
• Information that emphasizes the health benefit had almost no impact
on demand for farmed salmon.
• Explicitly distinguishing farmed vs. wild salmon may be effective for
affecting demand for farmed salmon on the basis of health benefit.
• Strong influence of health risk information.
• Negative and significant impacts on swordfish demand.
• Information source-wise:
• University was effective for risk information.
• FDA was very ineffective even for risk information.
Acknowledgement
• Funding for the project
• Agriculture and Food Research Initiative
Agricultural Economics and Rural Communities Program
• Collaborators
• Lighthouse Consulting Group, Inc.
• Dave’s Marketplace
• Research assistants
• Miho Tegawa
• Adam Stemle
Contact information
UCHIDA@URI.EDU
Experimental auction
• Key designs
• Second-price sealed bid with $70 endowment.
• Three seafood products: 1lb fillet of (a) wild salmon, (b) farmed salmon,
and (c) swordfish.
Experimental auction
• Key designs
• Second-price sealed bid with $70 endowment.
• Three seafood products: 1lb fillet of (a) wild salmon, (b) farmed salmon,
and (c) swordfish.
• Simultaneous bidding: make bids for each product at the same time.
• Mimic actual grocery shopping experience.
• Two information treatments:
1. Contents on seafood health risks and benefits.
2. Source of the information provided.
• Binding rounds
• Avoid budget-effect in multiple auction rounds experiment.
• Pre- and post-auction surveys
•
•
•
•
Demographic characteristics.
Seafood purchasing attributes (frequency, attitudes, etc).
Risk perceptions on seafood and information.
Perceived market prices for each product auctioned.
Information treatment:
FDA/EPA
Information treatment: Industry
Food Marketing Institute, Int’l Food Information Council, Nat’l Fisheries Institute,
Nat’l Healthy Mothers, Healthy Babies Coalition
Information treatment: University
C.R. Santerre, Ph.D., Foods and Nutrition, Purdue University
Information treatment: NAS
Mercury
Omega-3s
(1)
Salmon, Atlantic, farmed a
(1)
Salmon, Atlantic, wild a
(2)
Oyster, Pacific
(13)
b
Rainbow trout, farmed
(2)
Oyster, eastern, wild
(1)
Salmon, Pacific c
(13)
a
b
Rainbow trout, wild a
Tilefish a
(122)
(29)
(81)
(112)
Tuna, white, canned
Swordfish a
Shark
(5)
Pollock, Atlantic a
(8)
Flounder/sole
(21)
a
Halibut, Atlantic and Pacific a
a
(2)
Oyster, eastern, farmed
(4)
Scallops, bay and sea (100g)
(6)
Crab, king b
(61)
King mackerel a
(10) Ocean perch, Atlantic
a
b
(4)
Shrimp, mixed
(2)
Clams, mixed
(10)
Cod, Pacific
a
(10)
Tuna, light, canned
b
a
(8)
Haddock
(8)
Catfish, wild
(8)
Catfish, farmed
a
a
a
(10)
Cod Atlantic
(26)
Lobster, northern
b
150 0.00 0.15 0.30 0.45 0.60 0.75 0.90 1.05 1.20 1.35 1.50 1.65 1.80 1.95
-0.30 -0.15
Methylmercury
(μg)
EPA/DHA (g)
Data (2): Demographic
130
168
17
8
39
108
male
female
47
79
21-30
41-50
61-70
31-40
51-60
>71
Literature
• Consumers sometimes respond irrationally to risk
information.
• Parsons, et al. (2006)
• Consumers did not react to fish risk warning and
labels.
• Roosen, et al. (2009)
• FDA’s mercury advisory was effective, and also too
effective.
• Shimshack, et al. (2007)