Dr. Trey Malone

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Publications

In addition to my peer-reviewed publications, I frequently blog on the MSU AFRE Voices page.  Recent topics include:

I also appear regularly on the Connect-2-Consumer podcast with Bridget Behe.  Recent episodes include:

Peer-Reviewed Publications

Malone, T. & J.L. Lusk. 2018. “Releasing the Trap: A Method to Reduce Inattention Bias in Survey Data with Application to U.S. Beer Taxes.” Economic Inquiry.

This study uses discrete choice experiments to explore the efficacy of prompts targeted at reducing inattention bias. Upon receiving feedback, inattentive respondents are given the opportunity to reanswer a so‐called “trap question” that checks for attentiveness. We find that individuals who miss trap questions and do not correctly revise their responses have significantly different choice patterns as compared to individuals who correctly answer the trap question. Adjusting for these inattentive responses has a substantive impact on policy impacts. Results, based on attentive participant responses, indicate that a minimum beer price would have to be substantial to substantially reduce beer demand.

Malone, Trey & Jayson L. Lusk. 2018.  “A Simple Diagnostic Measure of Inattention Bias in Discrete Choice Models.” European Review of Agricultural Economics. 45(3): 455-462.

This note introduces a simple, easy-to-understand measure of inattention bias in discrete choice models. The metric, ranging from 0 to 1, can be compared across studies and samples. Specifically, a latent class logit model is estimated with all parameters in one class restricted to zero. The estimated share of observations falling in the class with null parameters (representing random choices) is the diagnostic measure of interest – the random response share. We validate the metric with an empirical study that identifies inattentive respondents via a trap question.

Malone, Trey & Jayson L. Lusk. 2018. “An Instrumental Variable Approach to Distinguishing Perceptions from Preferences for Beer Brands.Managerial & Decision Economics. 39(4): 403-417

Recent developments in behavioral economics have prompted interest in identifying how product perceptions and beliefs influence decision-making. Using a branded discrete choice experiment for beer, this article uses the control function approach and plausible instruments to correct for the endogeneity problem in a way that is applicable in a wide range of circumstances. Even after correction, we find perceptions substantially affect consumer choices. In the context of brand equity for beer brands, we find that the perceived taste and brand familiarity are key determinants of choice.

Malone, Trey and Jayson L. Lusk. 2018. “Consequences of Participant Inattention with an Application to Carbon Taxes for Meat Products.” Ecological Economics. 145: 218-230.

Despite widespread use in nonmarket valuation, data quality remains an ongoing challenge for survey methods. One key concern is whether participants attentively respond to survey questions or whether they exert less than full effort. To determine the prevalence and consequences of inattention bias in surveys, we estimate how meat demand varies across people who do and do not miss trap questions. Using a split-sample design with discrete choice experiments for meat products, we explore three different trap questions to determine how many potentially inattentive respondents are identified by each method. We find that individuals who miss trap questions respond differently to the choice experiment than individuals who correctly answer the trap question. Inattention generates vastly different compensating variation estimates of a carbon tax, ranging from 3.56 cents per meal choice for the least attentive to 6.13 cents per meal choice for the most attentive.

Malone, Trey and Jayson L. Lusk. 2018. “If You Brew it, Who Will Come?  Market Segments in the American Beer Market.”  Agribusiness: an International Journal. 34(2): 218-230.

This article uses data collected from a large number of representative United States beer drinkers to identify potential market segments through consumers’ taste perceptions of various beer brands. We use several well-established marketing research methods to show that distinctive segments of the beer market underlie aggregate demand for craft beer. Using exploratory factor analysis, we find that consumers tend to group beers by two underlying factors of taste. We then use cluster analysis to provide a description of how market segments are influenced by brand familiarity. Overall, this article highlights consumer heterogeneity in the modern U.S. beer market and provides an example of how one might use primary data to analyze segmentation in a growing but highly competitive market.

Malone, Trey and Dustin Chambers. 2017. “Quantifying Federal Regulatory Burdens in the Beer Value Chain.” Agribusiness: an International Journal. 33(3): 466-471.

Abstract: While the literature has discussed the impacts of specific regulations in the broader marketplace, nothing has been published that identifies the total number of federal regulatory restrictions imposed upon an entire agribusiness value chain. This letter uses a dataset generated via machine learning methods to count the total number of federal regulations imposed on the beer value chain. We show that 94,212 federal regulatory constraints influenced the beer value chained in 2012, with the majority of constraints being imposed at the brewery level.

Malone, Trey and Jayson L. Lusk. 2017. “The Excessive Choice Effect Meets the Market: A Field Experiment on Craft Beer Choice.” Journal of Behavioral and Experimental Economics. 67(2): 8-13.

Abstract: Research in psychology suggests that, somewhat paradoxically, providing consumers more choices can reduce the likelihood of making a purchase, producing the so-called excessive choice effect (ECE). To the extent an ECE exists, firms have an incentive to alleviate the effect through a variety of institutional nudges that promote consumers to make a choice.  This study empirically tests the effectiveness of two institutional nudges on the ECE in a field experiment at a bar.  Focusing on craft beer sales, we manipulate the number of options on the menu and use institutional nudges (a control menu, a menu with a special prominently displayed, and a menu with Beer Advocate scores).  In the field experiment, the ECE was alive and well using the control menu, but the effect reversed itself when the menu included Beer Advocate Scores.  Our results suggest the ECE might be turned on and off by manipulating search costs.

Malone, Trey and Jayson L. Lusk. 2017. “Taste Trumps Health and Safety: Incorporating Consumer Perceptions into a Discrete Choice Experiment for Meat.” Journal of Agricultural and Applied Economics. 49(1): 139-157.

Abstract: Consumers implicitly incorporate their perceptions of products into their decision processes, yet little research has explicitly focused on how those perceptions influence demand for meat.  This study incorporates taste, health, and safety perceptions into a discrete choice experiment for meat products at a grocery store.  Our results indicate that taste is the most important perception as a one unit increase in the perceived tastiness (on a -5 to +5 scale) of a food product leads to a 60 cent increase in willingness to pay, while equivalent increases in perceived health and safety lead to 31 and 21 cent increases, respectively.

Malone, Trey and Jayson L. Lusk. 2016. “Brewing Up Entrepreneurship: Government Intervention in Beer.Journal of Entrepreneurship and Public Policy. 5(3): 325-342. [Outstanding Paper Winner, Editorial Board]

Abstract:  While previous studies have looked at the negative consequences of beer drinking often as a prelude to discussing benefits of laws that curtail consumption, this paper seeks to understand the downside of such regulations insofar as reducing entrepreneurial activity in the brewing industry.  Using a unique data set from the Brewers’ Association that contains information on the number and type of brewery in each county, this study explores the relationship between the number of breweries and regulations targeted at the brewing industry. Zero-inflated negative binomial regressions are used to determine the relationship between the number of microbreweries and brewpubs per county and state beer taxes, self-distribution legislation, and on-premises sales.  We find that allowing breweries to sell beers on-premises as well as allowing for breweries to self-distribute have statistically significant relationships with the number of microbreweries, brewpubs, and breweries. We do not find an economically significant relationship between state excise taxes and the number of breweries of any type.  Results suggest that whatever public health benefits are brought about by alcohol laws, they are not a free lunch, as they may hinder entrepreneurial development.

Malone, Trey and Jayson L. Lusk. 2016. “Putting the Chicken Before the Egg Price: An Ex Post Analysis of California’s Battery Cage Ban.”  Journal of Agricultural and Resource Economics. 41(3): 518-532.

Abstract:  California legislation outlawed the use and sale of battery cages for egg-laying hens in 2015. While a number of ex ante studies projected the effects of the housing prohibitions, the ultimate ex post effects are unknown. Using a price series reported by the USDA, we study the movement of daily egg prices in California and the United States before and after the law’s implementation. Depending on the methods used, we find that Californians now pay between $0.48 and $1.08 more for a dozen eggs. The estimates suggest an annual reduction in California consumer surplus of between $400 million and $850 million.

Some of my working papers can be found on my ResearchGate profile.

Other Articles and Appearances

Stein, Jeff. 2018. “Republicans say they’ve slashed taxes on small breweries. But big alcohol may be the biggest winners.” Washington Post Wonkblog. January 3.

Malone, Trey. 2017. Incorporating Behavioral Principles in Primary Data Collection and Analysis with Application to Beer Demand. PhD Dissertation.

Malone, Trey. 2017. “EconTalk.org [podcast]. July 17, 2017. ‘Tamar Haspel on Food Costs, Animal Welfare, and the Honey Bee.‘ Library of Economics and Liberty.” American Journal of Agricultural Economics.

Malone, Trey, and Joshua C. Hall. 2017. “Can Liberalization of Local Food Marketing Channels Influence Local Economies? A Case Study of West Virginia’s Craft Beer Distribution Laws.” Policy Watch. 6(2): 54-58.

Abstract: Over the past decade, local food systems have been identified as having a significant influence on regional economies. Using a recent change in West Virginia’s craft beer distribution laws as a case study, we show that although employment might not experience a statistically significant change due to additional legalized marketing channels, wages did experience a significant increase. Our findings suggest that state economies might benefit from reducing restrictions on small, local producers.

Malone, Trey, and Martin Stack. 2017. “What do beer laws mean for economic growth?Choices Magazine.

Notte, Jason. 2017. “How can craft beer companies survive? Use ratings.” MarketWatch, April 9.

Hofer, Franz D. 2015. “Beeronomics: An Interview with Trey Malone.” Tempest In a Tankard: Intellectual Ferment of a Different Kind, January 14.

Shideler, Dave and Trey Malone. 2013. “Measuring Community Retail Activity.”  Oklahoma Cooperative Extension Service. AGEC-1049.

Malone, Trey. 2013. “An Examination of What Might be Done to Move Modeling Local Foods Forward.” Master’s Thesis.

Malone, Trey. 2012. “Spotlight on… Guymon.” Oklahoma Economist. 3rd Quarter. Federal Reserve Bank of Kansas City.

Malone, Trey and Brian Whitacre. 2012. “How Rural Is Our Local Food Policy?”  Daily Yonder, September 17. Center for Rural Strategies.

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