The easy-going hunter-gather life. Or not.

How many times have you read something like the following?

“Rather than heralding a new era of easy living, the Agricultural Revolution left farmers with lives generally more difficult and less satisfying than those of foragers. Hunter-gatherers spent their time in more stimulating and varied ways, and were less in danger of starvation and disease. . . The average farmer worked harder than the average forager, and got a worse diet in return. The Agricultural Revolution was history’s biggest fraud.”

I've read variations on that theme so often, I assumed it must be (at least partially) true during the early stages of the agricultural revolution.  (The above quote is from a recent, bestselling book by Yuval Noah Harari)

In a post a few days ago, Rachael Laudan makes a compelling case against this conventional wisdom.  In short she challenges the way anthropologists and other researchers classified "work" for hunger-gatherers vs. agriculturalists.  It seems, these researchers didn't take food processing into account.

She re-visits the supposedly lax lives of hunter-gathers, focusing in the following passage on what it takes to turn collected nuts into food (i.e., food processing).   

“8 hours a week spent cracking mongongo nuts (minimum, not clear if this includes preliminary cooking to soften the shell or subsequent time extracting the kernel), p. 270

4-7 hours a week spent making and repairing tools (35-64 mins daily), p.277.

15-22 hours a week spent on butchery, meat cooking, and fuel collection (2.2-3.2) p. 278 (no mention of carrying water in ostrich shells)

In short, between 27 and 37 hours a week spent by each adult on food processing and ancillary activities: fuel, water and tools.

Assume an eight-hour work day. Therefore: 3.5-4.5 days a week spent on food processing, tools, fuel, and water.

That is, given any reasonable sense of work, bushmen spent more time dealing with the food they collected than collecting it.

As so often, food processing for humans takes longer than food production or collection.

And the total work week for the bushmen on the lowest of estimates turns out to be between 6 and 7 eight-hour days (not counting child care).”

There's a lot more at the original post.

It's sometimes said that sacred cows make the tastiest burgers.  

Why aren't all chickens cage free?

Jennifer Chaussee has a piece at Wired on hen housing.  She attempts to answer some questions that I get frequently asked: why isn't the egg industry converting faster to cage free?  Isn't that the trend?  Why aren't we all cage free yet?

She writes

“As it turns out, going cage-free requires much more planning, money, and logistical engineering than the seemingly simple notion of setting some hens free would suggest. Ironically, this massive supply chain overhaul stems from consumer demand to return to the egg-producing practices of our pre-industrial past, but without undoing all the positive benefits of scale, affordability, and safety that were achieved through industrialization. It actually took farmers a really long time to figure out how to put the bird in the cage—and it’s going to take a while to figure out how to get it back out.”

Overall, it's a pretty good piece, and recounts many of the issues we've written about in other places.

When will Chipotle recover?

By now, I suspect everyone is well aware of the fall-out from Chipotle's foodborne illness outbreaks.  While I've previously discussed some aspects of the outbreaks, I want to touch on a different dimension here.  What are the financial consequences and when will Chipotle recover?

First off, it is almost impossible to answer the "when will Chipotle recover" with any degree of certainty.  I've seen several stories on impending lawsuits, and the timing and outcome of those legal disputes are somewhat erratic and hard to predict.  

In any event, let's look at what's happened thus far.  Chipotle started having some outbreaks in late summer and early fall, but when the the CDC began reporting outbreaks associated with Chipotle in early November 2015, that's when things started heading south.  Since the middle of October, Chipotle's stock (symbol: CMG) price has fallen by about 40% (from above $700/share to low-to-mid $400/share).  The overall stock market has been tanking in recent weeks, but as the chart below shows, Chipotle's stock (the solid black line) fell far more than did the S&P 500 (the light purple line).

One of the things this result illustrates is the private incentive for companies to invest in food safety.  Here's a little snippet from my forthcoming book, Unnaturally Delicious, on that topic:

“The reputation conveyed by brand names might allow firms to make a bit more money, but it also exposes them to large potential losses in the event of a product recall or food safety event. Reputation is a two way street, and a once solid name can quickly work against you if it becomes tied to bad news. Research shows that meat recalls by publically traded companies typically result in a 1.5% to 3% loss in shareholder wealth. For branded products like hot dogs, a food safety recall tends to reduce sales by more than 20%, and the negative effects persist for more than four months. ”

The statistics cited in the above paragraph come from a couple academic papers by Michael Thomsen and colleagues (see here and here).  Here's another interesting paper from a group of agricultural economists showing that consumers exposed to information about a food safety outbreak reduced their willingness-to-pay for the affected brand up to 50 days after they received the information.   They conclude:

“Results from this study indicated that consumers are willing to change their purchasing behaviors to avoid unsafe products. Both positive and negative information had an effect on consumers’ WTP. Consumers were willing to pay less for the leading-brand chicken after they received negative food safety information compared to a control group that did not receive this information. Participants that received positive food safety information about Ranger brand chicken were consistently willing to pay more for this safer option than for leading-brand chicken. This suggests that when the information about which brands are safer is available, consumers are willing to alter their purchasing behavior to favor the safer alternative, even if it was a relatively unknown brand. Both of these effects appeared to last well beyond the initial exposure to media information.”

So, the length of time it takes to rebound depends, in part, on what sorts of additional positive and negative information come out about Chipotle.  It may also be useful to look at similar events for other companies.  Taco Bell had a widely publicized Salmonella outbreak a few years back, and it really hit the news around the 1st of February 2012.  Here's a plot of the stock price of YUM! Brands, which owns Taco Bell.

You can see a downward movement in mid 2012, but the price rebounded by the end of the year (before falling again). But, the mid-2010 fall was less than 10%.  This helps illustrate the fact that it's hard to generalize.  How the public responds to a recall depends on how they view the company and how the company responds, among other factors.

It's also useful to take a step back and take a longer view.  Yes, the price of Chipotle has fallen about 40% in the past few months.  But, if you'd bought their stock back in 2008, when the price was around $50/share, you'd still be up over 700% after the recalls.  

11 things to know about GMOs

Over the past year, I'd received a large number of inquiries about GMOs.  Some of the questions were from moms, others from farmers, and sometimes from the media.  It seems a common set of questions continued to come up, so I got together with my colleagues Eric and Cheryl Devuyst to put to together this University Fact Sheet to provide some succinct answers.

We answer the following 11 questions as best we can in a mere two pages.

• What is a GMO?
• Why are crops genetically modified?
• Are GMOs safe to eat?
• What crops in the U.S. are genetically modified?
• What are the environmental effects of GMOs?
• Do farmers need to use more pesticides with GMOs?
• How are GMOs regulated?
• Are GMOs banned in Europe?
• Should food companies be required to label foods with GMOs?
• What are the economic effects of farmers using GMOs?
• What are the potential downsides of GMOs?

You can find our answers here.

How Fat Taxes Affect the Rich and the Poor

I'm pleased that the Economic Journal has decided to publish the paper Distributional Impacts of Fat Taxes and Thin Subsidies I wrote with  Laurent Muller, Anne Lacroix, and Bernard Ruffieux of the University of Grenoble and the French National Institute for Agricultural Research.  

Here is an excerpt

“How do the price policies differentially affect women at different points in the income distribution? Beliefs about the relative effects of fat taxes and thin subsidies on the poor relative to the non-poor are often premised on two assumptions. First is the assumption that the poor consume less healthful diets than the non-poor, perhaps due to the higher costs of more healthy diets (e.g., Drewnowski and Specter, 2004). The second assumption is that price policies are more likely to benefit low income consumers because low income consumers have more room for improvement, and because of their financial situation, they are likely to be more responsive to price changes. In short, a common view is that price policies can help the poor “catch up” to the non-poor in terms of the healthfulness of their diets.

Our experimental results confirm the first assumption: poor women tended to purchase less healthy food than the non-poor women. The implication is that, holding initial consumption patterns constant, policies which tax unhealthy food and subsidise healthy food will be regressive, favouring the non-poor more than the poor. But, people can change consumption patterns in response to price policies. If the poor are more responsive to price policies than are the non-poor, then inequalities will be dampened. This hypothesis, however, was rejected. Behavioural adjustments to the price policies amplified rather than dampened the divergent fiscal impacts of the price policies.”

In short:

“The tax/subsidy policies serve to widen the gap between the poor and non-poor, increasing the inequality in health and fiscal outcomes. Fat taxes cause the poor to pay disproportionally more for food than the non-poor and thin subsidies primarily flow to the non-poor. These effects occur because the non-poor already consume healthier diets but also because the non-poor are more price responsive than the poor”

Our approach to addressing this issue is quite different than that of previous studies.  Here's what's unique about our appoarch

“The advantage of the experimental set-up is that people’s choice behaviours are directly observed (rather than inferred as in a simulation study). In addition, the setting does not require the use of econometric models to infer behavioural responses. There is no need to assume a functional form or structure for responses; each individual can respond in their own unique way according to their own preferences. The experiment attempts to measure the overall fiscal effect (based on a day’s food choices) rather than simply focusing on one or two foods or a few food product categories. The experiment environment also allows us to study larger price variations (+/- 30%) than would likely have been feasible outside the lab, and as such, makes the price changes particularly salient.”

Here is one of the key figures from the paper.  The figure shows the distribution of price indices (i.e., the relative change in prices paid) after the introduction of a combined unhealthy-food-tax and healthy-food-subsidy policy for low income women as compared to a reference group (i.e, "normal" income women).

The Laspeyres index calculates the change in prices paid relative to the initial pattern of consumption; the Paasche index is similar except that it weights prices paid using the new pattern of consumption.  A greater difference between the two indices reveals greater substitution and responsiveness to the policy.

The figure above shows that 25-30% of  the low income consumers paid more for food after the price policy (they had an index greater than 100), and given the similarity of the two red lines, were less responsive (perhaps because of being more habit prone) than the richer consumers.  Moreover, at the individual level, the Paasche index was higher than the Laspeyres index for 35.9% of low income individuals.  These individuals did not shift their diet in the intended direction.

We ended the paper as follows:

“Whatever health benefits these policies might create, this paper suggests they need to be weighed against the adverse monetary effects they have on some of the poorest people in society.”