November 18, 2002
Ag economist calculates value of knowing that food's safe
WEST LAFAYETTE, Ind. A lack of information about food safety is causing many impoverished mothers in Africa to buy name-brand infant food that costs about five times more than the generic brand, according to Purdue University researchers.
Economist William Masters and graduate student Diakalia Sanogo studied child malnutrition and the value of food certification testing in Mali in western Africa. The researchers calculated that the average mother would pay about 30 percent of the cost of the higher priced infant food just for the quality information alone.
"We all know that spending money on fancy brands instead of generics can be a problem, but it's usually a small problem," Masters said. "In the case of infant foods, about 6 million children die of malnutrition every year in the world, and purchasing lower-cost infant foods could save at least some of them."
The study, published in the November issue of the American Journal of Agricultural Economics, involved 240 women at 10 different shopping centers in the city of Bamako. Sanogo offered the women a can of the name-brand infant food, roughly the equivalent of a day's pay, and then bargained with them to trade for other choices.
One common factor in the trades the women made was whether the mothers trusted that the food contents were actually what they claimed to be. If the quality and safety of cheaper infant foods could be guaranteed, people would be confident enough to buy the generic brand at a savings of as much as 57 cents a pound, Masters said.
Government and independent inspections in the United States have been in place for so long that many people take them for granted. At the same time, consumers are demanding more information about quality, so interest in testing is rising, Masters said.
"The issue of certification and quality control in the United States is huge," Masters said. "We have the world's best safety inspection and control system, but we often don't know what people will pay for information."
Regardless of income or education, mothers refuse to buy the unknown, Masters said. There is no food certification system in Africa, but Masters suggests if foods were certified safe, children's overall health would improve.
"Certification is only one of many intervention possibilities," Masters said. "Up to now, aid agencies have preferred to give away food, not knowing that there might be a way to fix the marketplace so that parents could afford to buy enough quantity themselves. This is a way of fixing the market and changing the way the markets work."
Independent quality testing would encourage market competition, reduce costs and increase food quantities, Masters said.
Independent certification in Africa could take as long as 10 years to set up and might be modeled after Underwriters Laboratories, which depends on voluntary participation and is self-funded, Masters said.
Masters designed a new kind of market survey for this study using an approach first developed by 1996 Nobel Prize winner in economics William Vickrey. The use of experiments in economic research is fairly new, Masters said, because until recently experts couldn't agree on how the questions should be asked.
But this year's Nobel laureate and former Purdue professor Vernon Smith established the use of experiments as a tool in empirical economic analysis. The Mali experiment provides data for ideas formed by 2001 Nobel winner George Akerlof, who discovered that there's economic value in people's trust of information.
"This study not only verifies Akerlof's idea with empirical data, but applies it to an issue of huge humanitarian importance," Masters said.
The researchers found that specific food content information wasn't all the women sought.
"We had more people than we wanted, and at the beginning we thought it was because we were giving away free food," Sanogo said. "But women who weren't involved in the survey were staying afterwards to find out how to better feed their children. We were surprised."
The research was funded by the U.S. Agency for International Development.
Writer: Maggie Morris
Contact: Beth Forbes, (765) 494-2722; email@example.com
Source: William Masters, (765) 494-4235; firstname.lastname@example.org
Ag Communications: (765) 494-2722; Beth Forbes, email@example.com; http://www.agriculture.purdue.edu/AgComm/public/agnews/
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A publication-quality photograph is available at ftp://ftp.purdue.edu/pub/uns/masters.infant.jpeg