An interview with one of the new Nobel Laureates in Economics, Robert Shiller

There were three economists who shared the Nobel Prize in Economic Sciences this year, and one of them was Robert Shiller, a professor at Yale. He is interviewed by the Washington Post here.

Their topic area is financial markets, so it’s not explicitly food related…but in the interview, Professor Shiller discusses his views on rationality…an important assumption underpinning many economic models, including the ones we use in class. He says, “When I look around, I see a great deal of foolishness, and I can’t believe it’s not important economically.” He’s also skeptical of the idea that everyone will properly manage their retirement savings…people are mired in habit and inertia and you’d need to allocate lots of time and energy to making financial decisions.

These ideas can be related to food economics too…quite clearly on the consumption side, and also on the production side. People do irrational things all the time when it comes to the foods they buy and eat. Habits and psychology are significant drivers of food and health decisions, as any RD or MD can tell you. So…what do you think? Are people rational when it comes to food decisions? Are people each “rational” in their own way, making it hard for economists to model their decisions? Or, are people just not rational at all, and driven mostly by urges and habits when it comes to food? Does it depend on the person? How might the answer affect food policy?

I also appreciate Prof. Shiller’s general skepticism and love of facts.

We’ll get more into this topic area when we talk about market failures later.


Test-tube Meat!

The very first laboratory-grown burger was taste-tested recently in London. This is an amazing scientific advancement, that’s just a little bit icky! Here’s a Washington Post article about the taste test. There’s lots of discussion now about whether lab-grown meat could help solve world hunger, given the huge land + feed+ water + other stuff expense of raising beef in the field.

People are saying that the “hunger problem” in the world is not fundamentally a scarcity problem, it’s a poverty problem. There’s enough food, it’s just people are too poor to access it. This point embodies a lot of Amartya Sen‘s ideas on the entitlement approach (failure of exchange entitlements).

As we will learn in class when we talk about food demand: when people’s incomes increase, the types and quality of food they want to eat changes. We will also learn about whether and how the quantity of food demanded changes as income changes…do you think people want to eat more calories as their incomes go up? What shape might that graph look have, with income on the x-axis and calories “demanded” on the y-axis?

So, what do you think? Do you think test-tube burgers could eventually supplement real meat in the diet? Do you think test-tube burgers could help solve world hunger? What about the nutritional considerations? There are many micronutrient deficiencies which could be fixed by including some animal products in the diet… (vitamin A, iron, iodine….)!

Helpful Links

On the right hand side of this course blog/site, you will find links to useful data sources and news sources.

These sites may help jump-start your assignments that involve working with real data or analyzing current events. If you find another helpful source, please let us know and we can add it!

The continuing debate on SNAP restrictions

There has been a lot of discussion and debate lately about placing further restrictions on the types of food that SNAP (Supplemental Nutrition Assistance Program, the new name for the food stamp program) participants can purchase. For example, alcohol is already not allowed. Here is a nice article from outlining the controversy.

The SNAP program issues pre-paid debit cards to participants, which they can use at grocery stores or convenience stores, and even some farmers’ markets (but not restaurants). So, what do you expect the impact of the SNAP program to be on the demand for food? What types of “food bundles” do you expect people to buy? What are some factors that will influence the foods that people buy? When you go to the store, how important is price versus taste?

This debate seems to have been ignited by the epidemiology of obesity and non-communicable diseases in the U.S. People started asking: since low-income people are more likely to be overweight, why do they need help buying food? Well, that brings us automatically to another interesting question: are healthy diets cheaper, or more expensive? Professor Adam Drewnowski of the University of Washington has done lots of research on this topic, if you’re interested to check it out.