Farm technology adoption: tractor edition

In a paper recently published by the American Economic Review, Rodolfo Manuelli and Ananth Seshardi write on the slow adoption of the tractor in American agriculture:

The abstract:

Many new technologies display long adoption lags, and this is often interpreted as evidence of frictions inconsistent with the standard neoclassical model. We study the diffusion of the tractor in American agriculture between 1910 and 1960-a well-known case of slow diffusion-and show that the speed of adoption was consistent with the predictions of a simple neoclassical growth model. The reason for the slow rate of diffusion was that tractor quality kept improving over this period and, more importantly, that only when wages increased did it become relatively unprofitable to operate the alternative, labor-intensive, horse technology.

A couple thoughts.  It is amazing that, what today seems ubiquitous on the farm, took almost 50 years to reach near full adoption.  The decline in use of horses and mules is quite dramatic.  It is also interesting to see how changes in relative prices (in this case, wages, and the quality-adjusted tractor price) have big impacts on technology adoption.  From a broader perspective, this historical look is a good reminder that the benefits of technologies developed today often take a long-time to fully be realized, and that adoption rates are influenced by a whole host of factors that may, at first blush, seem to have little to do with the technology.  It also reminds us of the risk of rejecting food and farm technologies today.  When we get 50 years down the road, we can't suddenly decide we wish things were different.  It takes time.

Have American Diets Improved?

We are constantly told things like: "Americans have a national eating disorder" (that's Michael Pollen in Omnivore's Dilemma) or that Americans live in a "toxic food environment" (that's Kelly Brownell in the book Food Fight).

How does that hyperbole match up with the facts?  

Maybe Americans were eating poorly in the past.  But are they eating better today?

Recently released research by Tim Beatty, Biing-Hwan Lin and Travis Smith in the American Journal of Agricultural Economics suggests the answer is "yes" - we are eating better.

They write:

Conventional wisdom maintains that the quality of the American diet has been deteriorating for at least the past two decades. In contrast, we document a previously unknown pattern of improvement in U.S. dietary quality. We find statistically significant improvements for all adults over the period 1989–2008, at all levels of dietary quality.

and

Although we find that higher-income individuals consistently have higher dietary quality than low-income individuals, we also find some evidence that the gap is shrinking over the sample period.

and

We also show that most of the improvement in dietary quality can be attributed to changes in food formulation and changes in demographics. Moreover, we find that changes in food formulation help explain considerably more of the improvement in dietary quality for low-income individuals than for higher-income individuals.

Fruits and Veggies and the Food Dollar

Last week, I put up a post show the trend in share of consumers' at-home food dollar allocated to meat, dairy, and poultry items.  I had a couple inquiries asking about fruits and vegetables. Using the same data source, I calculated the share of at-home food dollars going toward fresh fruit, fresh vegetables, processed fruits and vegetables, and the total going toward all three from 1959-2013.

During the 1960s and 70s, consumers allocated a smaller share of their food budget to fresh fruits and vegetables, and more toward processed.  The overall trend in share of expenditures spend on F&V was down from 1950 to about 1992.

However, starting in the early 1990s, there has been a slow up-tick in share of expenditures allocated to total F&V, from about 10% of total at-home food expenditures to about 12%.  Over time, there was a precipitous decline in the share of food dollar allocated to processed F&V, but this was more than compensated for by an increase in the share of the at-home food dollar allocated to fresh vegetables.  

Expenditure shares can sometimes be misleading if there are big price changes, so it is also useful to look at actual consumption.  Here is data from the USDA-ERS (see table 2 in the "general" spreadsheet) on per-capita consumption of fresh vegetables since 1980. 

Americans are today eating about 56lbs more fresh vegetables than they did in 1980, a 50% increase.  These data exclude potato consumption, so the upward trend is not some kind of french-fry effect.  

It is a bit ironic that the upward trend in fresh vegetable consumption, and the recent leveling off, mirrors the change in obesity rates over time.  Tells us that obesity is a complicated problem.

Overall, these data would seem to suggest we're eating a little better (not worse) than we did 20 to 30 years ago.  

Assorted Links

A nifty tool from Google that let's you easily compare the nutritional content of two foods

New FDA rules are set to outlaw beer makers' sales of spent grain to livestock feeders

Are small farms really more animal welfare friendly? 

More evidence of local elections to ban or require labeling of GMOs

More on Soda Taxes

The Huffington Post just ran a piece I wrote in response to prior post in the same outlet by a doctor advocating for soda taxes.  Here are some excerpts: 

Jeff Ritterman, Vice Present of the Board of Directors for his local chapter of the Physicians for Social Responsibility recently wrote on The Huffington Post that we should "Tax a Cola, Save the Planet."

I've read lots of editorials advocating soda taxes, but this one beats them all in promising what a soda tax will deliver. He argues that:

"A simple policy change like the Soda Tax can help us waste less water, lower our GHG production, and lessen the pollution of our air, water and soil. At the same time, it can fund vital programs in our schools, parks and neighborhoods to improve nutrition and physical education opportunities for our children. It's a win-win-win: a win for the environment, a win for our children, and a win for our communities."

Wow, one tax will do all that! H.L. Mencken reportedly said that "for every complex problem there is an answer that is clear, simple, and wrong."

After discussing the literature showing how price changes and soda taxes cause people substitute toward other beverages and foods, I argued:

Ritterman argues that a soda tax will results in less soda being consumed, and he's probably right. But does that mean that there will be less water and less aluminum consumed? Well, it depends what consumers drink and eat instead of soda. If people instead drink more milk or more beer, as previous studies have suggested, will water consumption really be cut? If more cows are needed to produce more milk due to the increased demand caused by soda taxes, will greenhouse gases really fall?

Ritterman is right to suggest that enacting a soda tax can raise revenue for the government. But, that hardly makes it an economically efficient thing do. A tax is akin to reducing in one's income. No one likes having less income. Using taxes to direct people to buy goods they didn't purchase before the tax cannot make people better off.