Food Regulation Cost Benefit Analysis

The basic process of cost-benefit analysis is to think about all of the main effects and side effects of the regulation, and figure out how to put a dollar value on them all so we can compare everything and make sure we are doing more good than harm.

Valuing life and health in dollars sometimes sounds wrong to people, but it has to be done in order to govern intelligently and there is a large and well-researched literature showing how to do it right.

When a regulatory agency passes a regulation that costs money, that makes people poorer (and possibly unemployed). They react by eating less healthy foods, living in more dangerous areas, buying less safe products, working in harder and more dangerous jobs, etc. The value of a statistical life is about $10 million. That means if we pass a regulation that costs $10 million, we are basically killing someone, so we need to make sure that we are saving a life to make up for it.

Of course, quality of life matters as well. If we make enough people live longer and/or healthier lives, it is as good as saving a life. The measurement that is used to tie everything together is a year of healthy life. Giving someone a year of healthy life is valued at about $200,000. We count up the number of years of healthy life that the regulation will give to people, both by preventing premature death and improving their quality of life, and multiply that by $200,000 to find the dollar benefits of the rule.

We could count all of the costs and benefits in years of healthy life, and in a sense we are, but using dollars as the metric makes things easier.

Doing an analysis of food regulation follows the same basic process as any cost-benefit analysis. The only difference is the detailed knowledge of what to measure and how to measure it. We keep data on how many years of healthy life are typically lost due to various kinds of food-related illnesses and disease, and we have data on the size of the food industry and how much it would cost for them to respond to various types of regulation. 

The data is never as good as we would like, of course, and sometimes we have to scramble for estimates of something that we do not know about. The important thing is to make sure that nothing big is being left out, and that we have the right order of magnitude for everything we do measure.

Obesity Article

Here is a long but very good and sensible article on obesity, with an emphasis on social realities, effective change, and not making ideals the enemy of marginal improvements:

 http://www.theatlantic.com/magazine/archive/2013/07/how-junk-food-can-end-obesity/309396/?single_page=true

The author makes a few annoying mistakes, like assuming that vitamins in supplements are as good as those in actual food, and downplaying the fact that two foods with the same calorie count can have very different health profiles, but there are a lot of very good points.

It is still true that, holding all else equal, it is best to avoid processed food. But it is important to remember that a processed food with a good health profile (low calories, low salt, low fat and added sugar) can indeed be much healthier than a natural food or homemade recipe that is loaded with fat and sugar.

Precautionary Principle

The precautionary principle is the idea that new things should be forbidden until they are proven to be safe. It is opposed to our traditions of freedom, which say that people are innocent until proven guilty and should be allowed to do what they want unless the state can prove that they are harming others. It is also opposed to cost-benefit analysis, which says that things should only be forbidden if the likely harm is greater than the likely benefits.

The precautionary principle is closely tied to the human instincts of repugnance and disgust. People are far more likely to apply it to things that seem 'wrong' or 'bad'. Once something flips a mental switch, people enter a new mode of thinking where tolerance disappears and they become extremely conservative and suspicious. Rather than thinking about the new thing in a balanced way, they decide that the new thing is bad and demand impossible proof that it is harmless.

People are especially likely to apply the precautionary principle to food. There are good evolutionary reasons for this. The natural world is full of toxic substances that will kill or sicken someone who eats them. People who ate everything without question were less likely to pass on their genes than people who waited to make sure that the thing was safe before eating it.

Like many instinctive behaviors, the precautionary principle leads to bad results in the modern world. The benefits of modern civilization that have allowed us to escape from the nasty, brutish, and short lives of our ancestors come from scientific innovation. The precautionary principle makes this innovation much harder. Most of the good things of civilization have some kind of associated harm. Sometimes the harm is small, and sometimes the harm is significant, but it is usually much smaller than the benefits. If our ancestors had applied the precautionary principle to every innovation, we would still be in the dark ages.

Sometimes the benefits are hard to see, and the harms are obvious. For example, agricultural chemicals make fresh vegetables cheaper, which allows more people to eat vegetables more often, which improves the diet and delivers small health benefits to large numbers of people. However, those same chemicals cause some people to get cancer. The health benefits from the cheaper vegetables are several orders of magnitude larger than the harm done by the cancer, but the cancer is much more visible, so people pay more attention to it.

The tools of science can give us good estimates of how much harm something is likely to cause. Because all good science deals with probabilities and not certainties, it is impossible to prove that something will have zero harm. Even if we predict some harm, we may also predict that the benefits are likely to be much larger than the harm. In both of these situations, a scientific cost-benefit analysis will say to do something, while the precautionary principle will say not to.

However, the precautionary principle makes better stories and narratives than science, because it is closer to human instincts. It feels more moral for people to apply the precautionary principle than to crunch numbers. Often, these feelings are what drive policy. People trust their instincts instead of the scientific method, and stop or delay new technologies. The end result of this is that we are stuck with old and inefficient ways of doing things, wasting valuable resources that could be used to improve our lives and our society.

Naturalistic Fallacy

The naturalistic fallacy, or the appeal to nature, is the belief that natural things must be good and unnatural things must be bad. This belief causes a lot of problems in the food market.

A big problem comes from the fact that the word 'natural' has no real meaning or definition. It is just a vague fuzzy concept that is different for everybody. This means that advertisers and marketers can use the word to mean almost anything they want. A recent court decision threw out a case where a company was being sued for using high fructose corn syrup in a product and calling it 'all-natural'. I personally would consider corn syrup to be a synthetic substance, because it comes from a factory, but the court ruled otherwise.

This is a good object lesson. There are a lot of words like 'natural', 'fresh', 'fair', and 'healthy' that sound good but are hard to define in terms of numbers or logic or things that can be measured in a lab. When you see someone using those words, you should assume that they are trying to manipulate you.

In fact, a good rule to follow is to never trust anything on a food package outside the nutrition facts panel. There are a few rules about what can and cannot be said, but they are fairly easy to slither around. On the rare occasions when I buy packaged foods, I only look at the ingredients and nutrients in the nutrition facts panel and consider everything else on the package to be meaningless noise.

But even if the word 'natural' had a clear legal definition that was consistently enforced, it would not be a good guide to healthy eating. Lots of natural things, like slabs of organic red meat loaded with saturated fats, are not healthy and should only be eaten in moderation if at all. Lots of unnatural things, like iodine in salt, are public health miracles that save billions of people from nasty diseases.

It is true that chemical factories produce a lot of substances not found in nature. But it is not true that our body is helpless to deal with these things. In nature, plants are in a constant state of chemical warfare with the things that want to eat them. Humans have an amazing ability to detoxify these poisons. We can eat and enjoy things like chocolate that are full of chemicals that can kill other mammals like cats and dogs. The detox systems of our bodies can usually deal with nasty artificial chemicals the same way they deal with nasty natural chemicals.

For example, we now know that even the detox systems of a fetus can render harmless the amounts of BPA found in our food. If you do not know what BPA is, then you do not need to. If you have read or heard that it is harmful, than you can stop worrying.

Our instincts want to classify everything as bad or good, and then to completely avoid bad things while seeking more of the good things. The naturalistic fallacy is a subset of that problem. The world does not work like that. The dose makes the poison. Essential vitamins can kill you in large doses. Nasty chemicals are harmless at small doses. As in many things, moderation is the key.

Now, however, I should point out that many of the fundamental rules for a healthy diet are similar to the naturalistic fallacy. You should limit your consumption of packaged food and eat lots of raw agricultural commodities. You should avoid eating things like refined sugar in quantities larger than the human body evolved to handle. You should remember that many important nutrients like calcium will only help you if you eat them in food, and that dietary supplements with those same nutrients are worthless or even harmful because the nutrient is in an unnatural form that the body cannot absorb properly.

As usual, the conclusion is to avoid simplistic thinking about the world, and consider the science and evidence. Understanding the sciences of biology and chemistry and psychology will allow you to make good decisions about things you have not seen before, while relying on simple intuitions or trying to memorize a list of good and bad things will not lead to good results.

The Information Problem of Food Safety

One of the themes of public choice economics is the problem of information. One of the most important insights about communist or command economies is that they will fail to discover and use the information needed to use society's resources effectively to deliver a good standard of living for everyone. Or, in ordinary language, government bureaucracies do not know what is going in in people's lives and they will fail to make smart decisions.

Even fulfilling the must basic and fundamental functions of a state, protecting people from force and fraud, requires a great deal of difficult and expensive information collection. If a cop is called because of a fight that leaves someone injured, finding out who is at fault can require an entire courtroom trial to collect the relevant information.

Our instincts do not understand this information problem. The modern world is a far more complex place than the ancestral human environment. In a small band of foragers, everybody knew most of the relevant information about everyone else. In that environment, it was relatively easy to operate a communal economy and enforce moral rules. But in today's world, enforcing a seemingly simple moral rule like 'stop people from selling food that hurts people' requires a lot of work to collect the information needed to make good decisions.

Every day, people introduce dozens of new food products to the market, make changes to hundreds more, and make thousands of changes to farming practices or production processes that might affect the health or safety of food. Asking the government to monitor or approve of all of these changes is like asking the government to have a police officer follow every child around as a bodyguard. It would be impossibly expensive and generate far more problems than it would solve.

Some of the things that people do to the food they sell will kill people. This is a fact of life, just like the fact that children will die because of crime or accidents. We can and should work to prevent bad things from happening and, if necessary, punish the people responsible, but we will never be able to guarantee perfect safety. We should not treat all farmers or food processors as if they were criminals.

This means that you have to work to keep your food safe and healthy the same way you work to keep your children safe and healthy. It is impossible for you to inspect farms and warehouses and processing facilities for safety, but you can inspect the ingredient lists and nutrition information and learn to avoid things that might harm you.

Skepticism and vigilance is especially important when it comes to dietary supplements. Things like energy shots, herbal mixtures, and vitamin pills are regulated like food, not drugs, which means that they have never been subject to any kind of scientific test for effectiveness or even safety. The laws here are incredibly complicated, to match the complexity of the situation, but a rough approximation is that the government can only take action against a dietary supplement if it has claims that are provably false, includes ingredients that are known to be unsafe, or is known to be harmful.

There is an additional rule, which says that supplements can only use substances found in nature, but this does nothing to protect you. Nature is full of toxic chemicals. Plants and insects are in a constant state of chemical warfare. Humans have an amazing ability to digest and tolerate the toxic chemicals that plants produce, and by lucky chance some of these chemicals help us in certain circumstances, but you should never assume that natural means safe or healthy.

It seems like it should be easy to use the 'known to be harmful' rule to remove unsafe things from the market, but the information problem makes it much more difficult. It may seem obvious that you should remove an energy shot from the market if healthy people who drink it start dying from heart attacks. But it is a fact of life that healthy people who take no chemicals have a small chance of dying randomly from heart attacks when they exercise. This means that a few deaths is not enough proof for the courts to shut down someone's business, just like circumstantial evidence is usually not enough to lock someone in jail. There has to be good medical documentation and/or enough dead people to become statistically significant.

As a consumer, you should assume that all dietary supplements are guilty until proven innocent, just like all strangers giving candy to your children are guilty until proven innocent. The laws prevent the cops and FDA from making that assumption, but you should be less tolerant.

Science and FODMAP

One of the lessons of economics is that markets only work well if consumers are able to make informed choices. For a variety of reasons, including fundamental flaws in the human thought process, it is hard to make informed choices about issues of diet and health. A natural result of this is that the market for food and diet advice is filled with worthless or dangerous nonsense. Very often the people selling or spreading this junk honestly believe what they are saying or selling, which makes it even more difficult to find that it is nonsense.

In this post, I will demonstrate the basics of how to research food and diet advice with Google Scholar, using the low FODMAP diet as an example of the search process. When researching anything that might be a fad diet, never use a standard web search. You will be buried under an avalanche of junk. There are thousands of nonsense health claims that have thousands of cultlike web-savvy followers, and these people are often very convincing.

People have been believing dumb things about food for all of human history. It is only in the past few centuries that we have developed a tool to find the truth: the scientific method. Many people do not understand what science is, which means that the trappings of science, like labs and machines and big Latin words, are often used to sell junk. Real science is the independent experimental testing of ideas.

Your friend trying the diet and then feeling better does not count as an independent experiment. Health can change at random, the placebo effect makes people feel better when they think they are being cured, and confirmation bias makes people remember only what confirms their existing beliefs. Good scientific experiments correct for these problems with a variety of techniques. Whenever someone tells you some 'fact' or theory about food, you need to check, using http://scholar.google.com/, that multiple independent experiments have tested this claim before you make any major changes to your diet based on it. Often you will not be able to read the full text of the articles unless you are at a university or library, but that is ok. Reading the title and abstract and looking at the authors will often tell you what you need to know.

The first result that comes up when I type 'fodmap' into Google Scholar is a review article, summarizing the evidence in favor of using the low FODMAP diet as a treatment for irritable bowel syndrome. This looks like a proper scientific article, written in the right style and using the right words in the right way. I will not go over these, because quacks have learned the 'magic words' and use them as often as they can. I will instead point out a very strong signal that you are dealing with real science: the 'Limitations and potential concerns' section:

The diet is not a panacea for patients with FGID. It provides good relief of symptoms in about 75% of patients, but has little benefit in some. Studies have yet to identify predictive factors of benefit apart from dietary adherence. Intermittent symptoms remain, albeit at a now tolerable level, in many patients since the underlying FGID is not directly addressed by the diet. Patients should not be given expectations of a 'cure'.

...

While these suggestions are all unsubstantiated, they do provide a reminder that this dietary intervention is established for those with functional gut symptoms and is not a diet for otherwise healthy people.

People who are trying to sell fad diets will claim that their diet cures everything in everybody, and this claim will be spread in cult-like fashion by the adherents of the diet.

However, I noticed while reading the review article that the evidence base for the diet is thin. They only cite is only one double-blind placebo-controlled trial of the diet, it only involved a small number of people, and it was run by the same person who wrote the review article. The existence of this one trial is more evidence than most fad diets ever muster, but the fact that there are not more tests is a warning sign.

After reading a little more, I found that there is a small team at a university in Australia that is researching and promoting the diet. They are probably good researchers trying to investigate a promising treatment, but in a situation like that it is very easy for groupthink to emerge and start biasing results. Independent replication is the key to science, and nothing should ever be called scientific until many independent teams have tested it.

So I looked for studies of the diet by people who were not associated with the Australia team. I ignored every article written by any of the authors of the review article. The review article was one strong piece of evidence that FODMAP can help people with irritable bowel syndrome, but nothing else written by the same people should be counted as additional evidence in favor of the diet. It would not be an independent confirmation, just the same people saying the same thing in different places.

Most of the other articles were other nutritionists discussing the diet, and most of them were positive. This is weak evidence in favor of the diet. It is good that other health professionals have evaluated the Australia team's evidence and agree with their conclusions, but nutritionists often have a herd mentality. The history of medicine is littered with worthless things that were believed by thousands of health professionals. The key is independent experimental evidence.

In the end, out of about a hundred articles, I found about half a dozen independent experimental studies of the diet. One of them was in feeding tube patients, and found improvements due to the diet. Another involved testing the gut response to FODMAPs in healthy volunteers, and verified the theory behind the diet. There were tests of the diet in Britain and Norway, although they were not placebo-controlled, that showed positive results.

None of these articles would be considered good evidence in isolation, but they all served as independent confirmation of the science and results presented by the Australia team, and I could not find any article pointing to flaws in their research. I also saw nothing to indicate that there is a better way of treating irritable bowel syndrome. Therefore, I feel comfortable recommending that people with irritable bowel syndrome try out the FODMAP diet.

There is a caveat, however. The diet suggests restricting five types of carbs: fructose, lactose, fructans, galactans, and polyols. The placebo trials only tested the response to fructose and fructans, and the other trials followed the advice of the Australia team to restrict all five. The restriction of the other three is based on theory, not evidence. It may be that their restriction is unnecessary, and it may be that something else also needs to be restricted. The diet in its current form should be considered a first draft, and we need to be open to the possibility that further research will change things. With only a few real studies telling us what we now know, there is a lot of opportunity for things to change.

This is how science works. We collect data in an attempt to understand a complicated world, and we rely on other people to check our work for mistakes. Knowledge advances one experiment at a time. Although we would like to have more data, the data we do have suggests that the FODMAP diet has a good chance of helping people with irritable bowel syndrome. It has passed far more tests than most of the other diets out there.

Aspartame in Milk

You may have seen news stories recently about FDA changing the rules on aspartame in milk. The situation is more complicated than it may appear at first, and illustrates the problems involved in public health policy.

Snopes gives a good overview, as usual, and I have verified it by reading the official documents. Basically, the dairy industry is asking for permission to remove the 'reduced calorie' labels that are currently required on the front of the package of flavored milk with low-calorie sweeteners. The sweetener would still be listed on the ingredients list like it is on all other foods.

The requirement that the dairy industry industry is trying to remove is specific to milk products, and it is several decades old. Back in the early years of the FDA, there were no nutrition fact labels so consumers did not know the nutritional content of foods. The FDA tried to protect consumers from fraud by establishing a 'standard of identity' for many foods. These standards specified exactly what producers could and could not do to the food, preventing them from making changes that would cause consumers to get less value than they thought they were getting.

When these standards of identity were written, obesity was not an issue and a major source of fraud was producers using substitute ingredients that lacked the nutritional value of the real food. Sugar and fat were considered important nutrients, because many people did not get enough of them. If you bought food for your child that you thought had sugar, but the producer had removed sugar to save money, the child could be malnourished.

So the standard of identity for flavored milk was written under the assumption that the milk should be sweetened with actual sugar. If the producer used a 'non-nutritive' sweetener, then they had to show a prominent warning label to inform the consumer that the food did not contain as much nutritional value.

Obviously, things have changed. The FDA no longer operates under the assumption that replacing sugar with a low-calorie sweetener is cheating the consumer of an important source of nutrition. Nutritionists now say that people, especially children, should avoid added sugars, and that sugars in liquid are especially likely to cause obesity because of how the human appetite is regulated.

Children are currently drinking milk flavored with lots of sugar. Often the milk comes from school lunches, where children are making the choice about what to drink. The fact that schools are offering milk loaded with added sugars is a bad thing, but the issues of school lunches and children choosing what to eat are beyond the scope of this post. They are also beyond the power of the FDA to change; school lunch rules are handled by the USDA.

The milk companies would like to sell lower-calorie flavored milk to replace the sugared flavored milk. Aspartame is cheaper than sugar, and less likely to cause obesity, and the companies are run by people who are not monsters and would like children to be healthier. But the problem is that the current standards of identity require a label on low-calorie milk.

This may not seem important, but marketers and graphic designers hate required front-of-package labels, and for good reason. They take up space that could be used to make the product more attractive, and they send the message that something is wrong with the product. If they replaced their high-calorie flavored milk with reduced-calorie flavored milk, their sales would probably suffer and they would lose money. So they petition to change the rule.

It is true that milk flavored with lots of chemicals is worse that ordinary milk, and most people realize this. They want to see some kind of warning labels on these chemical concoctions to encourage children to drink plain natural milk. So they see the news about removing warning labels, without understanding the context, and complain about how the government and big business are trying to poison their children. They do not realize that the children are already consuming the relatively unhealthy flavored milk with loads of added sugars.

I have no idea what the FDA will decide to do in this case, but this looks like a tough decision. The dairy producers are perfectly justified in trying to change an outdated regulation. Children probably would be healthier if they switched from added sugar to aspartame, the same way that diet sodas are healthier than sugar sodas.

Of course, the children would be even healthier if they drank plain unflavored milk, but when making policy decisions you cannot let the perfect be the enemy of the good. This illustrates one of the fundamental rules of economic analysis, thinking at the margin. You cannot compare a proposal to an imaginary perfect world. You have to compare it to the status quo, make a prediction on how things would change, and find out of those changes would make the world better or worse.

But humans do not naturally think like this. The human instinct is to turn everything into a simple narrative of good versus evil, and then to use that narrative to score political points for or against a certain political group. Narrative-based moralizing without consideration of background or context makes it even more difficult for regulatory agencies to design and implement good policy.