AAEA Fellow Remarks

Its been a great week in San Francisco at the annual meetings of the Agricultural and Applied Economics Association (AAEA).  In addition to serving as president elect of the association, it was a great honor to be named fellow last night at the award's ceremony.  The fellow recipients didn't get a chance to share any remarks last night and I had a number of people ask me what I would have said.  So, I thought I'd share what I had written on the note card in my pocket.   

“I’m honored to receive this award.

Last year during his fellow’s acceptance speech, my colleague Wade Brorsen, gave great advice: be a chronic finisher. To that I’ll add the following: it’s a lot easier to finish when you work with people you enjoy and on topics you love.

I’m blessed to be a part of this profession. I’m truly proud to be an agricultural economist.

It would be impossible to adequately thank my many mentors, co-authors, and friends who helped make this happen. I’ve had the pleasure of being surrounded by ambitious, problem solving, go-getters. Over late night bar napkins, early morning coffees, and engaging lunches at Little Dooey’s, Harry’s, and Eskimo Joe’s, they taught the value of hard work and instilled a love for learning.

And, as you can see, I have a lovely family. I am eternally grateful for their love and support.

I am humbled to be a relatively young recipient of this award. But, I don’t want anyone to get the idea that this means I’m hanging up my hat. Rather in 10 or 20 years’ time, I hope you’ll look back on my career and say it was like a fine wine – one that continued to get better with age.

Thank you.
”

Big Fat Surprise

I just finished reading Nina Teicholz’s best selling book The Big Fat Surprise, which takes issue with our long-held belief that low-fat diets in general, and diets free of animal fat in particular, best promote good health.  

It’s been an enjoyable read, and the history of the development of our dietary beliefs and guidelines is both fascinating and eye opening.  There is a bit of a tendency in the book for the author to nit pick any study which doesn’t support her hypothesis without applying the same skepticism of those studies which do support it, but overall, she makes a compelling case.  I probably found chapter 10 on "Why Saturated Fat is Good For You" most interesting in that regard.  Teicholz lays bare the sad state of affairs associated with the science behind much of the nutritional advice we’re given.  One takeaway is that we really don’t know as much as is often presumed about what sorts of diets increase/decrease chances or heart attack or cancer.  

There is one nit I want to pick with a phrase in Teicholz’s book.  It is a technical one, but because it is the sort of thing I expect my students to fully understand, I'll delve into it.  On page 167 of the paperback version she writes (about an epidemiological study finding no relationship between breast cancer and consumption of dietary fat), “These conclusions were all associations.  But although epidemiology cannot demonstrate causation, it can be used to reliably show the absence of a connection.” (the emphasis is hers)

That claim is patently false (I'm presuming by "connection" she means "causation").  The trouble with the sort of correlation analysis used in many epidemiology studies is that of missing variables.  We can't observe everything about people's behaviors or about the effects of dietary changes, and that results in "omitted variable bias."  That bias can inflate or reduce the size of a measured effect.   In fact, contrary to Teicholz's claims, omitted variable bias can make a "real" effect look like nothing.

Wikipedia describes the problem, but similar treatments can be found in almost any introductory econometrics textbook.     

Suppose we have the following true relationship:

y=b0 + b1*x + b2*z + e

where y is the chance of breast cancer among women, x is amount of fat consumed, and z is a personality trait reflecting the person's overall health conscientiousness.  The "true" relationship we want to know is given by b1.  

But, suppose we only observe y and x and we don't observe z.  Also suppose that z is related to x in the following way: z = a0 + a1*x + u.  Substituting this equation into the first means that when the epidemiologist runs their analysis they calculate:

y = b0 + b1*x +b2*(a0 + a1*x + u)+ e

or, re-writing:

y = b0 + b2*a0+ (b1+b2*a1)*x + b2*u+e.

So, the researcher looks at the relationship between x and y, and thinks they're estimating the "true" effect b1, but in reality, they're estimating the effect (b1+b2*a1), which could be larger or smaller than b1.  

Suppose b2 takes the positive value of +1.5 (more conscientious women are less likely to develop breast cancer) and a1 is also positive and takes the value of +2 (more conscientious women pay more attention to all that health advice and eat less fat).  This means the effect b2*a1 is positive at the value of +3.  But b1 could be negative (more fat = more breast cancer).  Say, b1=-3.  If the positive effect of b2*a1=+3 outweights the negative effect of b1=-3, so the estimated effect is 3-3=0.  It will look like there is no effect even though there really is one.  Even if the effects don't precisely outweigh each other, the estimated effect could be small enough that it the research concludes it isn't statistically different from zero.

Now, I'm not saying that there is a relationship between fat consumption and breast cancer - rather, I'm just making a conceptual point that omitted variables can result in upward or downward bias.  What I can more confidently say is that only the last part of Teicholz's claim is right:  "epidemiology cannot demonstrate causation."  

Now, there are regression methods that can get us much closer to the truth, but I don't often see these used in epidemiology studies.  In economics, the so-called "credibility revolution" has led to more specification testing and attention to causal-identification using instrumental variables, discontinuity designs, differences-in-differences, and others.  A good introduction to the topics and methods is given in Mostly Harmless Econometrics.

Food Demand Survey (FooDS) - July 2015

The July 2015 edition of the Food Demand Survey (FooDS) is now out.  

Overall, there seemed to be a slight reduction in demand for most meat products this month compared to June as indicated by a reduction in WTP, a reduction in expectation of price increases, and a reduction in planned purchases.  Some of this might have to do with the fact that there was an uptick in planned expenditures away from home, perhaps due to vacations.

Awareness of and concern for bird flu fell this month compared to last.  In July, there was an increase in awareness and concern among those issues that tend to fall at the bottom of the scale of concern.

Several ad-hoc questions were added this month.  

Overall, respondents were generally satisfied with their lives.  They were asked:  “All things considered, how satisfied are you with your life as a whole these days? Using the scale below, where 1 means you are “completely dissatisfied’ and 10 means you are “completely satisfied”, where would you put your satisfaction with your life as a whole?”

Similar to last month, the most popular response was an 8. 

Despite that, there seemed to be some pessimism with regard to the future in general and food and agriculture in specific.  

We asked,  “If you could be born at any time when would it be?” Participants stating they would choose to be born “in the past, 50 years ago” ranked the highest of the groups
at 31.21%. This may correspond to the category which most closely matched the lag in time from which participants were actually born (i.e., they preferred to be born when they were actually born).  Only 18.1% of participants stated they would choose to be born now.  Less than 20% said they would want to be born in the future.

Participants were also asked: “Overall, when you think about the state of food and agriculture in this country, do you think . . .” About 32% of respondents stated that “things are getting a little worse” for food and agriculture in this country, while only 19% of respondents agreed that “things are getting a little better”. About 27% of respondents stated that “things are about the same as they have been”.

Finally, Brandon McFadden from the University of Florida suggested a question that is a riff off a popular internet infographic showing the number of genes affected by different plant breeding techniques.  

Participants were asked: “For each of the following plant breeding techniques, how many genes are typically altered in the process?” Consistent with the comments in my recent Washington Post interview, the vast majority most consumers do not know how many genes are affected by any plant breeding techniques. Among those who stated an opinion,” selection” ranked the highest, at 7.65%, for not having any genes altered. For selection, having 1 to 4 genes altered ranked highest amongst participants at 11.8%. Hybridization was ranked highest by 11.8% of participants for having 5 to 9 genes altered. About 9% of participants stated that 10 to 19 genes were altered using genetic modification. Genetic modification was the highest of the group of 20 more genes affected at 7.14%. 

Greece

I've been in Greece for the past week teaching a short course on experimental methods used in consumer research.  Given all the news about the financial crisis in Greece, I thought I'd share a few personal observations.

By and large, it's been hard to see much effect of the crisis (but not having been here before, I admit to not having a good reference point).  Restaurants, beaches, and historical sites are full (of Greeks and tourists).  Banks are closed, but I haven't noticed lines outside of ATMs more than a couple people deep, and typically there is no wait at all.  I've been in a couple grocery stores and they were fully stocked.  A common remark I've heard in crowded areas is "Crisis? What crisis?"

None of that is to say things are great for the average Greek citizen.  There are capital controls, so Greeks can only pull out 60 euros (now 50 since banks have run out of 20s) daily from domestic accounts (withdraws from international accounts are not limited).  And, there is a lot of uncertainty and concern about what will happen.  But, a lot of Greeks have been moving their money out of the country in the months and years before capital controls were instituted.  I've been impressed by the knowledge waiters and cab drivers have about the financial situation of the country, and by and large, they seem to be taking it all in stride.  Things don't look too bright for public sector employees - which include all University professors in the country.

Of course, I've largely been in tourist spots in Athens and Crete, which may well be affected differently than other areas (although I did have a layover in Athens on the same day the "no" vote came out and got to witness the party in Syntagma square; hours before the vote came out there were far more journalists and TV cameras than "real people" in the square).  International credit cards still work and are generally accepted, though there is a definite preference for cash.

My overall impression?  Beautiful scenery, great people, and scrumptious food.  I just hope they can find a way to pay off their bills.

Why are people fearful of GMOs?

I answered that question and others like it for Roberto Ferdman in a piece at the Washington Post.

Here's one excerpt

“Ok, let’s talk about the future now. Would you say that we have hit the peak of GMO aversion?

You know, I actually have no idea. These things are really hard to predict. Much harder than most people realize.

Let’s suppose you had some really large food safety scare, which touched GMO crops even tangentially. That would sway opinions incredibly quickly. Now that doesn’t seem like it’s going to happen, and I certainly don’t think it will, but it’s not out of the question.

The other way it could go, however, is that someone introduces a biotech crop that captures the public’s imagination but doesn’t scare them. That way, people warm up to a GMO crop that is more approachable, and in doing so, become desensitized to the bizarreness or strangeness about GMO crops that they once felt.

A perfect example is this new arctic apple, which doesn’t brown. Especially if it isn’t made by some big agricultural behemoth, like Monsanto.

But people might also just realize that most of the cheese they eat is made with enzymes that are genetically engineered. Diabetics, after all, use insulin that is made from a genetically engineered bacteria or yeast.”