Improving the Diets of Children: Understanding the Decision-Making of Parents, Children, and Food Manufacturers by Shannon Allen A thesis submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy In AGRICULTURAL AND RESOURCE ECONOMICS Department of Resource Economics and Environmental Sociology University of Alberta © Shannon Allen, 2019 Abstract The objective of this study is to explore the underlying decision-making that impacts the effectiveness of potential policies that could be implemented by the government in an effort to improve children’s diets and subsequent health outcomes. Under investigation are how food choices could be affected by the following types of policies: 1) a price mechanism at the retail level, 2) a label mechanism similar to one that will soon be found on foods high in sugar, sodium and/or saturated fat in Canada, and 3) a policy targeted at food manufacturers. The price and label mechanisms could influence parents’ or children’s food choices, but likely would not affect all consumers’ choices equally. Some might place more importance on price while others on brand preferences and still others on nutrition information. How children with differing levels of cognitive development would respond to price changes and a traffic light style label when purchasing salty snacks is investigated in the first study. Preferences were elicited via a consequential choice experiment, while cognitive development was assessed through several standardized tasks. Heterogeneity in price sensitivity was established, while responsiveness to the traffic light label appeared somewhat homogenous across the survey sample. How parents with varying characteristics would respond to an explicit, text-based warning label on high-sugar breakfast cereals is the focus of the second study, with data being collected via an online survey including a choice experiment along with measures of nutrition knowledge, purchasing behaviour, and demographic characteristics. Heterogeneity in responsiveness to the warning label was identified both among parents with different characteristics such as nutrition ii knowledge as well as between brands. In terms of food manufacturers, improving our understanding of their strategic behavior will help to identify what types of policy measures targeted at them could be effective in improving the nutritional quality of their products. The last study in this dissertation examines how breakfast cereal manufacturers choose a combination of price, advertising, and nutritional quality for the products in their portfolio and how these decisions correspond to input prices and consumer awareness of nutrition. There is evidence that firms react both to trends in public nutrition awareness and to each other’s actions, and that overall their product portfolios have been improving in terms of nutritional quality over the past two decades. iii Preface This dissertation is an original work by Shannon Allen, while the research projects discussed within were collaborative efforts. Chapter 2 of this dissertation was part of a larger research project being conducted with Sean Cash at Tufts University, Vic Adamowicz at the University of Alberta, and Anna McAlister at Endicott College. This project received research ethics approval from the University of Alberta Research Ethics Board, Project Name “Children’s Response to Information on Foods: Alberta Study”, Pro00034195, Oct. 31, 2012. Chapter 3 of this dissertation was a collaboration with Ellen Goddard at the University of Alberta with findings presented by myself at the Canadian Agricultural Economics Society’s annual conference in June 2017 and at the International Conference of Agricultural Economists in July 2018. This project received research ethics approval from the University of Alberta Research Ethics Board, Project Name “Assessing the effectiveness of warning labels on food for children”, Pro00067440, Sept. 26, 2016. iv Acknowledgments First and foremost, I would like to thank my supervisor, Professor Ellen Goddard for all the time and effort she invested in my studies and academic development as well as for the financial support she secured that allowed me to pursue a PhD and travel to conferences to present my work. I would also like to thank my co-supervisors, Professors Vic Adamowicz and Sean Cash, for all their valuable teachings and research insight. Thanks as well to all the professors from whom I took courses throughout my graduate studies. For financial support, I would like to thank the Co-operative Program in Agricultural Marketing and Business, the Consumer and Market Demand Network, the Public Policy Oriented Consumer Interest Research Group, and from the Faculty of Agricultural, Life, and Environmental Sciences at the University of Alberta, the Support for the Advancement of Scholarship fund and the Food and Health Innovation Initiative. Finally, I would like to thank my family for their love and support, without whom this endeavour would not have been possible! v Table of Contents Chapter 1: Introduction ........................................................................................................................ 1 1.1 Background ........................................................................................................................................ 1 1.2 Factors influencing children’s diets ......................................................................................... 4 1.2.1 Price .............................................................................................................................................. 6 1.2.2 Nutrition and product label................................................................................................. 8 1.2.3 Advertising.............................................................................................................................. 10 1.2.4 Regulation of Food Manufacturers ................................................................................ 12 1.2.5 Limiting access to junk food ............................................................................................. 13 1.3 Problem statement ....................................................................................................................... 13 1.4 Study objectives ............................................................................................................................ 15 1.5 Description of papers .................................................................................................................. 15 1.6 Contribution of study .................................................................................................................. 17 Chapter 2: Children’s response to price and label interventions ..................................... 18 2.1 Introduction .................................................................................................................................... 18 2.2 Literature Review ......................................................................................................................... 19 2.2.1 Taxes ......................................................................................................................................... 19 2.2.2 Graphic labeling mechanisms .......................................................................................... 21 2.2.3 Children as consumers ....................................................................................................... 23 2.2.4 Children’s ability levels ...................................................................................................... 24 2.3 Objective and Research Question ........................................................................................... 24 2.4 Methods ........................................................................................................................................... 25 2.4.1 Theoretical Model ................................................................................................................ 25 2.4.2 Data collection ....................................................................................................................... 26 Table 2.2: Descriptive statistics of sample ............................................................................ 29 2.5 Analysis ............................................................................................................................................ 30 2.5.1 Estimations ............................................................................................................................. 31 2.5.2 WTP calculations .................................................................................................................. 33 2.5.3 Simulation ............................................................................................................................... 35 2.6 Discussion ........................................................................................................................................ 36 vi Chapter 3: Parental response to label interventions ............................................................. 38 3.1 Introduction .................................................................................................................................... 38 3.2 Literature review .........................................................................................................................