The Role of Economic and Consumer Sciences in CFSAN
By Peter Vardon, Ph.D., Clark Nardinelli, Ph.D., Steve Bradbard, Ph.D., and Richard Williams, Ph.D.
Most people find it surprising that social scientists work at the U.S. Food and Drug Administration (FDA), alongside microbiologists, nutritionists, chemists, toxicologists, food technologists, lawyers, and many other professionals. Twenty-two social scientists are employed at FDA’s Center for Food Safety and Applied Nutrition (CFSAN) alone. In this article, we will describe the important role CFSAN’s social scientists have in designing more effective food safety and nutrition policies.
Why Social Science is Important
Effective food safety and nutrition policies improve public health without imposing unnecessary costs on industry or the public. To implement effective policies, CFSAN decision makers need to know what changes in manufacturing practices are likely to reduce the risk of food-related illness from adulterated or contaminated foods and what changes in consumer eating practices are likely to provide greater health benefits. CFSAN decision makers also need to know how to construct regulations and consumer messages that will motivate food producers to change manufacturing practices and consumers to change poor eating habits. Although health scientists and physical scientists in the Center can identify the nutritional properties of foods and the safety risks associated with certain manufacturing practices, it is the social scientists who can best predict how manufacturers and consumers will actually respond to food safety and nutrition policies.
To provide CFSAN the best possible social science, Richard Williams, Ph.D., CFSAN’s Associate Director for Social Sciences, has assembled the Economics Staff led by Clark Nardinelli, Ph.D. and the Consumer Studies Staff led by Steve Bradbard, Ph.D. Both staffs are in the Office of Regulations and Policy and report directly to Dr. Williams and Peter Vardon, Ph.D., Assistant Director for Social Sciences. The social scientists on these staffs include economists, psychologists, agricultural economists, sociologists, and statisticians—most have advanced degrees and are recognized throughout the government and their fields for their expertise.
The Economics Staff estimates the benefits and costs of different regulatory options. The Consumer Studies Staff investigates the public’s knowledge, attitudes, and practices concerning food safety and nutrition. For many projects, the two staffs work together. If, as one policy option, CFSAN were considering a warning label to help the public avoid a certain hazard, these staffs would: 1) analyze the public’s knowledge of the hazard; 2) determine which label statements or graphics most effectively help consumers understand the hazard; 3) estimate how many consumers are likely to change their eating habits because of the warning labels; 4) estimate the costs of changing labels to incorporate the warning; 5) estimate the costs to consumers who change their behavior; and 6) determine the costs and benefits associated with other regulatory policy options for dealing with the hazard.
Consumers might respond to new food safety or nutrition information by purchasing different foods or by changing the way they store foods and prepare meals. Manufacturers in the food industry might respond to new food safety or nutrition information in more complicated ways. They might reformulate their products to make them safer or more nutritious. They might change their manufacturing practices to reduce the risk of contamination. They might change their product lines to eliminate less nutritious foods. They might even go out of business if the burden of changing product lines reduces profits below the break-even point. Consumers and manufacturers respond to positive and negative incentives, and social scientists have learned how to estimate those responses. The changes consumers and manufacturers make will ultimately change the public’s exposure to health hazards.
In the early years of the FDA, the agency could easily identify actions whose public health benefits exceeded their costs. With obvious hazards and no obvious risk trades-offs, the benefits of most regulations greatly exceeded their costs. Over time, the combination of effective food safety regulations, advances in food science, and improvements in manufacturing processes and technologies has resulted in significant advances in food safety and nutrition. As a result, the benefits of more recent regulations may not be as immediate or as obvious as they once were. Instead, the benefits may come several years down the road, possibly in the form of a reduced likelihood of developing certain health problems or in a delay in when such problems may arise. When the effects of regulation take several years to appear, determining the costs and benefits to society can be difficult. Or perhaps the agency must choose between two regulatory options, one that addresses a long-term nutrition problem and one that addresses a short-term food safety problem. In these types of situations, careful economic analysis is needed and the Economics Staff plays a leading role in assessing the effects of the Center’s food safety and nutrition policies. In fact, over the last 25 years the Economics Staff has provided CFSAN management with an economic analysis for virtually every proposed regulation.
Types of Analyses. Congress and the White House require regulatory agencies to perform a number of economic analyses. They require a benefit-cost analysis, a cost-effectiveness analysis, an analysis of regulatory effects on small business, and an analysis of the burden imposed on consumers and industry by any new paperwork requirements, such as the recordkeeping that might be required to comply with a new food safety regulation. Each of these analyses must meet professional standards, use the best available data, and present results clearly. After CFSAN’s economists complete an economic analysis, it passes through several levels for review, including CFSAN’s senior management, FDA’s Office of the Commissioner, the Department of Health and Human Services, the Office of Advocacy at the Small Business Administration, and the Office of Management and Budget (OMB). Reviewers at all levels of the Executive Branch use the economic analyses when deciding whether proposed regulations are to be approved without change, modified, or on rare occasions even dropped from consideration. In most cases, OMB and the other reviewers rely on the economic analysis when suggesting changes to ensure that the costs of the regulation are justified by the benefits.
The cost-effectiveness analysis is a relatively new requirement by OMB. Cost-effectiveness analysis compares the costs imposed on producers and consumers with the number of lives or life-years saved, whereas benefit-cost analysis compares the costs with the monetary value of the number of lives or life-years saved. Analysts in the Executive Branch use cost-effectiveness analysis to compare the relative success of different federal programs. CFSAN economists recently estimated that the cost to society per life-year saved by the trans fatty acid labeling regulation was $4,500. This is a huge regulatory success compared with other public and private measures, which can cost substantially more per life-year saved.
More than 10 years before the trans fatty acid labeling regulation, CFSAN economists conducted an economic analysis to determine the most cost-effective compliance time for implementing the regulations for the Nutrition Labeling and Education Act (NLEA). They studied a number of possible compliance times and cost-effective exemptions for small food manufacturing firms who sometimes do not produce enough foods to cover the anticipated cost of the mandatory labeling changes. The results of the analysis helped FDA select a compliance date that saved the food industry and consumers nearly a billion dollars.
Economists specialize in examining the role of incentives in changing behavior, and often ask questions that other scientists or policy makers might not ask. When the regulation to require the use of Hazard Analysis and Critical Control Points (HACCP) was first proposed, some believed it would solve almost every food safety problem. When economists were asked to analyze its impact, they asked food firms if the proposed requirements provided incentive to identify and control a range of particular hazards. Careful analysis of their responses showed that the HACCP requirements could not solve some potential food safety problems. In this situation, posing the right questions allowed the Economics Staff to predict the limitations of the requirements. Similarly, by asking certain questions and modeling certain options, economists can help decision makers improve public health policies.
A recent example of how economics is used to help identify the best combination of regulatory options can be found in the development of FDA’s regulations designed to prevent illnesses from shell eggs contaminated with Salmonella Enteritidis. After developing a list of possible requirements that could reduce Salmonella Enteritidis, the agency selected a safe handling label and a refrigeration requirement of 45ºF, in part because the benefit-cost analysis showed that this combination generated larger net public health benefits than any of the alternatives. CFSAN economists estimated the costs to be the sum of the one-time costs of more refrigeration, the cost of new label plates for egg cartons, and the value of the lost consumer satisfaction for those who gave up soft-boiled, poached, runny scrambled or other types of undercooked eggs. They estimated the benefits to be value of the reduced number of illnesses and deaths from Salmonella Enteritidis. The economic analysis identified the most cost-effective refrigeration temperature by showing that mandatory lower refrigeration temperatures increased industry costs without increasing health benefits, while higher refrigeration temperatures reduced industry costs but reduced health benefits by even more.
The Economics Staff also pays special attention to the regulatory burden on small businesses. The Agency tries to give small firms more time to comply with new regulations, and if the Agency has discretion to do so legally, may exempt them from some provisions if their contribution to the total health risk is small and their costs to comply are high. If the economic analyses of a proposed regulation reveal a significant burden on small businesses, the Economics Staff will suggest ways to revise the regulation, so that the costs may be reduced. In testimony to Congress, the Small Business Administration (SBA) recently praised CFSAN for its effectiveness with dealing with the SBA, CFSAN’s careful economic analyses, and the flexibility of its requirements for small firms.
Just as the importance of economic analysis has grown, so has the importance of consumer research. In order to better determine what motivates consumer behavior, it is important to: 1) understand the factors that influence consumers’ choices; 2) construct messages that consumers find both easy-to-understand and motivating; and 3) develop regulations that will likely influence consumers’ actions. One consistent research finding is that how information is conveyed to consumers is at least as important as the quality of the information conveyed. This means that information dissemination alone may not be sufficient when the goal is to help consumers make safer and healthier choices—the agency needs to know how to craft messages that consumers can best use. This can be a challenge because while FDA is a science based agency, communication research indicates that consumers often find detailed scientific information to be incomprehensible.
Among the things the Consumer Studies Staff does is evaluate the effects of communication intended for consumers, such as warnings, advisories and public education messages. This includes looking at how FDA can conduct effective risk communication about bioterrorism under various emergency scenarios. Other research investigates consumer reactions to product characteristics and labeling found in the marketplace. Still other studies provide the agency with important trend data regarding consumers’ food safety and nutrition practices over the past 25 years.
One of the staff’s earliest and most important consumer experiments followed implementation of the NLEA, which mandated nutrition labeling for most packaged foods. Using a mall-intercept study, the Consumer Studies Staff assessed how consumers reacted to the revised format of the nutrition label. Consumers were shown a variety of realistic-looking nutrition labels and were asked to find and compare different nutrient amounts, judge whether front panel claims were true or false, infer the impact of adding a product to their daily diet, and estimate the contribution of specified amounts of a product to their recommended daily intake levels. The research indicated that the food label helped consumers make product selections and confirm their nutrition beliefs. It also revealed that the label is inadequate as a tool for helping most consumers plan their diets, and it showed that many people have difficulty using label information if math is required. Finally, the study found that consumers’ reaction to nutrition information on the food label is strongly influenced by their prior beliefs about health and nutrition. The implication from this research is that consumer education about how to use the food label should include easy, non-quantitative tasks and should focus on personally important nutrients; e.g., instruct consumers with hypertension to look for the amount of sodium in a product.
Another example of CFSAN’s consumer research dates from 1994, when FDA was faced with the challenge of developing a new warning label for dietary supplements containing 30 mg or more of iron (per dose) in response to the fatal poisoning of young children who had accidentally consumed them. CFSAN developed several concepts for a warning message and tested these with focus groups made up of parents. Feedback from the participants revealed that the language tested failed to communicate to parents the magnitude of the hazard—that death of a child could result. This of course was the key message FDA wanted to convey. Based on participants’ comments and suggestions, FDA developed a new and more effective warning message. The new warning message, combined with improvements in child-resistant packaging of iron-containing dietary supplements, helped reduce the number of pediatric deaths caused by the accidental poisoning. The study revealed not only how to effectively alert parents to the risk of pediatric poisoning, but also confirmed the value of qualitative research for improving the communication impact of proposed labeling.
The importance of CFSAN’s consumer research has also grown as recent court decisions have challenged the Agency’s assertions that consumers may be misled by certain claims found on conventional foods and dietary supplements. In evaluating such claims, FDA assesses whether the claim is misleading to consumers and if so, whether the misleading nature of the claim can be remedied (e.g., by the addition of a disclaimer statement.)
Listening to Consumers. FDA uses a variety of mechanisms to gather information to assist in policy formulation. The Agency holds public meetings, which are attended by affected parties in the food safety, nutrition, and regulation fields. FDA also receives letters from stakeholders commenting on regulations. Although this input is clearly important to the Agency, it is also valuable to conduct research to determine first hand what consumers think about food safety and nutrition. By doing so, the Consumers Studies Staff can provide decision makers with a more comprehensive look at consumers’ beliefs, attitudes, feelings and motivations. For example, in focus groups on obesity, our researchers found that consumers had considerable interest in obtaining more information to help them make healthier choices in restaurants. Many responded positively to putting calorie information on menu items and were interested in having a simple symbol that shows which foods are healthier choices.
The Consumer Studies Staff conducts experimental studies, including mall intercept and internet panel studies, to gather information about a cross-section of American consumers. Prior to beginning any study, the research protocols are reviewed by an Institutional Review Board to ensure that the participants are fully informed about the nature of the study, to protect them from any unnecessary harm, and to ensure that their privacy is protected. Subjects who agree to participate in these experiments are randomly assigned to control or treatment conditions. This method allows researchers to statistically compare how groups of consumers react to statements that appear on product labels (e.g., claims, disclosures or warning messages). Additional analyses can provide valuable information about how subjects’ age, ethnicity, geography, household income, level of literacy, health condition, or other possible factors influence their responses to product labels. Ongoing experimental studies assess the ability of consumers to comprehend the labels for qualified health claims, food allergens, carbohydrates, and trans fatty acids.
As mentioned earlier, as part of the Agency’s effort to determine whether consumers are mislead by certain claims, the staff is currently conducting several studies to evaluate if consumers make erroneous inferences in response to qualified health claims, and if so, whether disclosures or qualifiers can effectively correct the misperceptions. The initial study, which evaluated consumers’ reactions to qualified health claims, has been completed and the staff is now analyzing the results. The researchers will soon be in the field with two additional studies. The first will evaluate the communication effect of health claims that do not mention the substance (such as a nutrient, which is a component of the food) that is the basis for the claim. The study will determine if this results in consumers making erroneous inferences about the substance-disease relationship and other product characteristics. Knowing how consumers respond to two different claims, for instance: “Calcium-rich foods, such as yogurt, may reduce the risk of osteoporosis,’’ versus “Yogurt may reduce the risk of osteoporosis’’ may assist CFSAN policy-makers as they assess the usefulness of different wording in health claims.
A second health claim study will evaluate consumer reactions to qualified health claims for omega-3 fatty acids and monounsaturated fats on both conventional foods and dietary supplements. Consumers will view the claims and make judgments about the level of scientific support for these claims, the likelihood of achieving the stated health benefits or some other benefits, and the overall healthfulness of the product. The findings will help CFSAN better understand how consumers react to actual claims and will determine if the qualifiers help consumers make correct inferences about the substance-disease relationship stated in the claim.
In addition to health claims research, the Consumer Studies Staff has several studies planned to investigate the impact of nutrient content claims on consumer understanding and purchase intent. In January 2006, the trans fatty acid labeling regulation takes effect. To better understand the impact that a declaration of trans fatty acid on the food label has on consumers’ judgment of the healthfulness of a product, the staff is conducting two companion experimental studies. The first study will evaluate several different labels that include variations of a trans fat declaration on the Nutrition Facts Panel (NFP), as well as several disclaimer options (e.g., footnotes) as a way to remedy possible consumer confusion resulting from a trans fat declaration. In the second study, the staff will examine the effects of front panel trans fatty acid nutrient content claims on consumers’ perceptions of the product, and it also will assess whether the information found in the NFP or footnotes can remedy any incorrect inferences consumers might make as a result of reading the front panel claims.
Many Americans are currently interested in the carbohydrate claims that appear on food products. As part of the Agency’s effort to better inform consumers about nutrition, the staff is conducting an internet panel study to determine how consumers react to such nutrient content claims as “carb free,” “low carb,” “good source of carbohydrates,” and “excellent source of carbohydrates.” In addition to evaluating the effects of these claims on their product perceptions, the study will determine if consumers would be more or less likely to purchase a product with these claims. Finally, the study will inquire into their product perceptions and purchase-intent for products that bear undefined terms currently found in the marketplace, including “net carbohydrates” and “carb conscious.”
The Consumer Studies Staff also conducts large, nationally representative population surveys that provide important information for the agency’s food safety and applied nutrition policy decisions. This fall, the staff will begin collecting data for the 2005 Food Safety Survey (FSS). The FSS, which was previously conducted in 1988, 1993, 1998 and 2001, is a random digit-dial telephone survey that provides information that FDA uses for risk assessments, regulatory and policy matters, and consumer education purposes. The trend data reveal changes in food safety practices over time, including food handling, food preparation, and food consumption. After years of no change or slight worsening, large improvements in food safety practices were seen between 1993 and 1998. For example, consumer awareness and knowledge about various food handling practices increased significantly, as did their awareness that microbes such as Salmonella are a serious food safety problem. However, more recent trend data suggest that there are still important food safety issues that need to be addressed with the public. Between 1998 and 2001, the percentage of people who washed their hands after touching raw meat fell from 23% to 15%.
The Consumer Studies Staff also conducts a Health and Diet Survey (HDS). First administered in 1983, the HDS provides important trend data about consumers’ understanding of diet-disease relationships, as well as the various ways they report using the Nutrition Facts Panel. Over the years, the staff has included new questions to address emerging topics of interest to the agency. The staff recently completed data collection for the 2004 Health and Diet Survey (HDS) Supplement, which evaluated consumers’ awareness and knowledge of the relationship between saturated fat, trans fatty acid, and omega-3 consumption and coronary heart disease. To complement and provide information for the carbohydrate experiment, which looks at consumers’ reactions to specific carbohydrate claims, the 2004 HDS Supplement also evaluated consumers’ general awareness and knowledge about carbohydrates and carbohydrate labeling. In the previous HDS (2002), the staff included questions about dietary supplements. The respondents shared their perceptions about supplements, offered where they obtain information about supplements, and reported their actual use of supplements, both alone and in combination with drugs.
CFSAN’s social scientists play an important role in the Center’s development of regulations, policies, and consumer messages that improve food safety and encourage better nutrition. Over time, food-related technology will continue to evolve, as will our understanding of food-related illnesses and nutrition related health issues. Some of these advances will require CFSAN to reevaluate the adequacy of existing regulations and the methods of communicating Agency advice to consumers. When it comes to deciding what changes need to be made, the Economics Staff and the Consumer Studies Staff will continue to play a key role in ensuring that public health policies are beneficial and the Agency’s advice to consumers is easy to understand.
Peter Vardon, Ph.D., is an economist and Assistant Director of the Social Sciences Staff within CFSAN’s Office of Regulations and Policy. He has been with FDA for 16 years.
Clark Nardinelli, Ph.D., is an economist and the leader of the Economics Staff. He has worked for CFSAN for 10 years. Prior to joining CFSAN, he taught economics at the university level for 14 years.
Steve Bradbard, Ph.D., is a psychologist and the leader of the Consumer Studies Staff. He conducted cognitive, behavioral and social marketing research for 23 years before joining CFSAN four years ago.
Richard A. Williams, Ph.D., is an economist and Associate Director of the Social Science Staff within CFSAN’s Office of Regulations and Policy. He has been with CFSAN for 25 years.
Together, they provide day-to-day leadership for the social science research and analysis in the Center for Food Safety and Applied Nutrition.
Series Editor Sebastian Cianci is a policy analyst and a member of the CFSAN’s Office of Food Safety, Defense, and Outreach. He has worked for FDA for 15 years and serves as the Center’s trade press liaison.
1. These requirements include Executive Order 12866, the Regulatory Flexibility Act 5 U.S.C. §§601-612, the Unfunded Mandates Reform Act (Public Law 104-4), the Small Business Regulatory Enforcement Fairness Act (Public Law 104-121), the Data Quality Act (Public Law 106–554), and the Paperwork Reduction Act (44 U.S.C. §§ 3501-3520)
2. Food Labeling, Safe Handling Statements, Labeling of Shell Eggs; Refrigeration of Shell Eggs Held for Retail Distribution (65 FR 76092 Dec. 5, 2000).
3. The Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act, requires federal agencies to pay particular attention to the burdens placed on small businesses, small governments, small non-profit organizations and other small entities.
4. Testimony of Thomas M. Sullivan, Chief Counsel for Advocacy, U.S. Small Business Administration before the U.S. House of Representatives Committee on Small Business. March 16, 2005, 2:00 p.m., Cannon House Office building, Room 311, Washington, DC, on Improving the Regulatory Flexibility Act—H.R. 682. www.sba.gov/advo/laws/ test05_0316.html.
5. Mall intercept studies are one-on-one interviews or “intercepts” of shoppers in shopping malls or other locations that are widely used to reach a large segment of the population or segments of the population that are difficult to reach.
6. A focus group is a method to discuss issues and concerns about issues that typically last about two hours and is run by a moderator who drives the discussion. Focus groups often bring out users’ spontaneous reactions and ideas and let you observe some group dynamics and organizational activities.
7. A notice of the availability of the focus group report was published in the Federal Register, May 23, 1995 (60 FR 27321). The notice invited the public to comment on this report. The focus group research supported the agency’s tentative conclusion, explained in the iron proposal that many adults are not aware of the danger that an accidental overdose of iron poses to young children.
8. Internet panel studies are surveys conducted on the World Wide Web of respondents with computers.