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New Plant Engineering Techniques (NPETs) have path-breaking potential to improve foods by strengthening their production, increasing resistance to biotic and abiotic stresses, and by bettering their appearance and nutritional quality. Can NPETs-based foods succeed in the marketplace? Providing answers to this question, we first develop a simple economic model for R&D investment in food innovations based on NPETs and traditional hybridization methods, to identify which technology emerges under various parameter characterizations and associated economic welfare outcomes. The framework combines the cost of food innovation with consumers’ willingness to pay (WTP) for the new food, highlighting the uncertain and costly nature of R&D processes as well as the role of consumer acceptance of technology, and the cost of ignorance, and regret, if consumers are not fully informed on the technology used to generate the new food. We then apply the framework to a case of NPETs-based new apples using recently elicited WTP of French and US consumers. Our simulation results suggest that NPETs may be socially beneficial under full information, and when the probability of success under NPETs is significantly higher than under traditional hybridization. Otherwise, the innovation based on traditional hybridization is socially optimal. A probable collapse of conventional apples raises the social desirability of new apples generated by NPETs and traditional hybridization.

Presentation ID 16226

We develop and estimate an integrated discrete choice model system of product choice and nutrition information for prepared frozen meals and salted snacks in the United States in the period from 1995 to 1999. The model links consumer observed and latent characteristics (e.g., income, knowledge about nutrition, nutrition label use) to product characteristics (e.g., prices, nutritional attributes) and allows us to obtain consumer preference parameters and demand elasticities with regard to product characteristics. We find that prices, advertising, price reductions, and consumer preferences for taste have a significant effect on the demand for prepared frozen meals and salted snacks, whereas nutrition information and nutrition label use do not. Using the estimated demand parameters we then evaluate the impact of the new mandatory labeling policy. The results show that consumer preferences and purchasing patterns within the prepared frozen meal and the salted snack categories did not change significantly after the implementation of mandatory labeling

In this paper, we propose new research methods and approaches in the area of food safety economics that would improve the allocation and effectiveness of private and public resources and efforts in ensuring food safety. The focus is on approaches that would build a comprehensive understanding of the interdependence between private and public food safety control mechanisms, including direct regulation by process and performance safety standards, traceability requirements, product liability, and product liability insurance; contribute to the development and analysis of loss control functions related to food safety hazards and to the assessment of the insurability of agricultural producers and food processors from such risks; as well as evaluate the impact of food safety hazards on producers and processors and determine whether and how businesses respond to food safety outbreaks affecting other businesses in the same industry.

What are the important determinants of consumer demand and how have they been changing over the last decade? Understanding these factors is crucial for evaluating the benefits and costs of government regulations, such as labeling, intended to influence consumer food choice and, ultimately, public health; for assessing the competitiveness of U.S. agricultral producers and food processors as they choose product designs and marketing strategies; and for assessing the impact of changing consumer demand for food on the agricultural and food sectors of the U.S. economy. The objectives of this paper are to make a significant contribution to demand analysis by basing this understanding on the use of uniquely comprehensive data sets and theoretical/modeling techniques that evaluate demand on the brand level; and to build a comprehensive understanding of the relative importance of different determinants of consumer food choices in the decade from 1993-2002. The overall goal is to analyze what is driving consumer choices and the implications of these drivers for food and nutrition policy in the United States. A particular focus is the relative importance of advertising, other company marketing strategies, nutritional quality, privately and publicly provided nutritional information, and consumer dietary concerns and knowledge in determining consumer demand for food products.

We develop and estimate an integrated discrete choice model system of product choice and nutrition information for prepared frozen meals in the United States in the period from 1993 to 1998, when government regulation of nutrition labeling changed from voluntary to mandatory. The model links consumer characteristics (e.g., income, knowledge about nutrition, nutrition label use) to product characteristics (e.g., prices, nutritional attributes) and allows us to obtain consumer preference parameters and demand elasticities with regard to product characteristics. We find that prices, advertising, price reductions, and consumer preferences for taste have a significant effect on the demand for prepared frozen meals, whereas knowledge about nutrition and nutrition label use do not. Using the estimated demand parameters we then evaluate the impact of the new mandatory labeling policy. The results show that consumer preferences and purchasing patterns within the prepared frozen meals category did not change significantly after the implementation of mandatory nutrition labeling.

This report provides a new economic approach and methodology for analyzing nutritional quality change in manufacturers' food product offerings and food products purchased using a case study of five food product categories in the mid-1990's. Two approaches were used to analyze nutritional quality change in product offerings. The first approach uses a composite nutritional index to measure changes. A second approach, nutrient-by-nutrient analysis, was also used to measure quality change. Overall, the nutrition index analysis showed no significant change in the average nutritional quality of products offered for sale in the five categories.