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French sterotypes busted

This new paper in the American Journal of Agricultural Economics (coauthored by French and American agricultural economists)  is likely to bust a few sterotypes many Americans have about French eating patterns.  The abstract starts by tackling the first sterotype: that if we Americans would all just eat like the French, we'd be thin and healthy.

“Limited access to healthy food is commonly regarded as a contributing factor to poor dietary choices. The objective of this article is to test this hypothesis in a French context given France’s increasing obesity rates and incidence of poor dietary habits.”

Poor dietary habits among the French? Surely not!  Joking aside, i tis true that French obesity rates are below that in the US, but the trends are similar.  Actually, in the US, the upward trend has leveled off.  But the fact remains, there isn't that much difference between what French and American consumers like to eat.

Secondly, the French must be better eaters because of their frequent trips to all those quaint shops and farmers markets - right?  The paper:   

“our results, which indicate that fewer but larger retail outlets increase the odds of consuming the recommended level of fruit and vegetables.”

So, it seems that that Frechmen and Frenchwomen who eat recommended levels of fruits and vegetables are more likely to do so by getting them in large retail outlets like supermarkets.  

All in all, I think many Americans conflate the images they see on vacations to touristy spots in Paris or Nice for what is typical of everyday living in France.  But, even when I vacation within the US, I tend to eat and shop much differently than I do when living "regularly" back home.  That's why its important to augment our anecdote experiences with data.  

 

What's good for countries is good for communities

A new paper by Trevor Tombe in the American Economic Journal: Macroeconomics provides a cautionary tale for those who think we'd be better off economically if we sourced more food closer to home.  

The paper starts off with this stylized fact

“Agriculture in poor countries has low productivity and high employment relative
to other sectors. Differences in aggregate productivity and income between
rich and poor countries are therefore primarily due to differences within agriculture;
Schultz (1953) calls this the Food Problem”

The problem, it seems, is that poor, agricultural-based countries don't trade.

“Trade data, though, presents a puzzle: with low relative agricultural
productivity, developing countries should be massive food importers; yet, they
are not (see section I.B). The “missing” food imports suggests trade costs may
be important for international productivity differences.”

These "trade costs" that are holding up trade include bad policies like tariffs but also bureaucratic problems like border delays.

The paper has a nice set graphs, and the following shows a few of them related specifically to agriculture.

First, when you don't trade agricultural products with you're neighbors, you tend to be poor.

Countries that have more agricultural trade have higher GDP/worker.  The correlation is 0.68.  Countries that have more agricultural trading partners tend to be richer and more productive.

A lot of local food advocacy is premised on the idea that we need smaller farms with more farmers.  I don't think anyone would argue that greater local food production would mean  more employment in agriculture.  Well, would that be good for the economy?  According to this paper, no. This graph shows a very clear negative correlation between a country's employment share in agriculture and GDP/worker.  More workers in agriculture is typically going to mean lower economic output.  

Finally, this graph shows that the higher the share of food spending on domestic output (i.e., the more local foods purchased), the lower the country's GDP/worker.   

There's no reason to believe what's true of countries wouldn't also be true for states or cities trading with each other.

The author concludes:

“Agricultural trade costs account for roughly 25 percent of the aggregate differences between rich and poor countries. Trade costs in agriculture and manufacturing together account for over 40 percent. Even observable, policy-relevant trade costs (tariffs and border
delays) have important negative productivity effects in poor countries. The food
trade is missing in poor countries and in our models; it should be no longer.”

Buying local good for the economy?

Here's a nice video by Don Boudreaux for MRUniversity on the myth that buying local is good for the economy.  Sometimes a picture (or in this case, video, is worth a 1,000 words).