by Matthew G. Nagler, Associate Professor, Economics and Business, Colin Powell School for Civic and Global Leadership
About six weeks ago, the New York State Attorney General’s office released a report accusing GNC, Target, Walgreens, and Walmart of selling fraudulent dietary supplements. The AG had DNA-tested 24 products from the retailers representing seven supplement types— including such popular products as gingko biloba and St. John’s Wort. All but five of the products were found to contain DNA that was either unrecognizable or from a plant other than what the product claimed to be—including in some cases little more than powdered rice or house plants.
These findings were no big surprise to Edward J. Kennelly, Professor of Biology at Lehman College and the Graduate Center of the City University of New York (CUNY), Fredi Kronenberg of Stanford University, or Bei Jiang of Dali University in China. The three biologists collaborated several years ago on a study of black cohosh, a plant-derived supplement marketed over-the-counter as a cure for hot flashes. They analyzed 11 products and found that three contained no black cohosh, while a fourth that did contain it was also contaminated with a “cousin” plant species. The results of their study are published in the Journal of Agricultural and Food Chemistry.
Shortly after that study was completed, Mr. Kennelly and I met at a CUNY awards dinner. His research results had raised an important question: While, as scientists, his team had been able to identify fraudulent supplements in the lab, was there any way that consumers could ferret out the frauds? This, I knew, was a question economic analysis could answer. Soon Mr. Kennelly, his collaborators, postdoctoral student Chunhui Ma, and I joined together to do a market-focused study of black cohosh adulteration, the results of which are published in the International Journal of Marketing Studies. Our findings lent support to the notion that dietary supplements are an example of what’s called a credence good, a product for which the quality cannot be determined conclusively by consumers even after they buy and use it. Continue reading