The presidential election is now less than a week away. In Oklahoma, we will have several "state questions" that will also appear on the ballot. One of the most widely discussed is state question 777 - aka "right to farm".
My colleagues Shannon Ferrell and Larry Sanders put together this short two and half page fact sheet explaining the question and the issues involved. Or, see this power point presentation they also created.
A New York Times article by Danny Hakim came out this weekend arguing that genetically engineered crops (aka "GMOs") have failed to live up to their promise: namely that they haven't increased yields or reduced pesticide use.
The implications seems to be that Hakim believes farmers shouldn't be using biotechnology or that they were duped into adopting. Even if we grant Hakim's premises that biotech crops increased herbicide use and didn't increase yield (as I'll detail below, there are good reasons not to fully accept these claims), the conclusions that benefits are "over hyped" seems a bit misplaced.
To see this, let's consider a different example. When Apple came out with the first edition of the iPhone, one might too have said its benefits were over-promised. After all, we already had flip phones to make mobile calls, the iPod to listen to music, the Blackberry to type emails and texts, and so on. Did the iPhone really offer that much new? Was it all that much better than what previously existed?
Well, rather than trying to studiously compare features of the new iPhone to all the previous devices, shouldn't we just look and see whether consumers actually bought it? Look at the millions of decisions of individual consumers who weighted the relative costs and benefits. It seems millions of consumers judged the new phone to be worth the extra money (indeed, some people stood outside in lines for days to get it). In short, we know the iPhone delivered on its promise because millions of customers bought the phone and have come back again and again to buy new versions.
This is what economists call revealed preferences. If we want to know whether people think product A is better than product B, we don't have to survey and ask, we just have to look and see what they chose.
Ok, what about biotech seeds? Here is a graph from the USDA on farmer adoption of biotech corn, soybeans, and cotton in the U.S. For each of these these three crops, adoption of genetically engineered varieties (including both herbicide tolerant (HT) and insect resistant (Bt)) is over 89% of acres planted. So, when we look at the decisions made by thousands of real-life flesh and blood farmers who have weighted the costs and benefits, they have voluntarily adopted GMOs en mass. The fact that biotech was so readily adopted by farmers (and is still so widely in use) aught to tell us something.
Now, one possible explanation explanation is that farmers have no choice - they have to buy the biotech seed. Yet, as you can read in many places (see here, here, or here), farmers have lots of seed choices. Indeed, farmers pay hefty premiums to have the biotech varieties.
Yet, if we are to believe the NYT's story, farmers are paying these higher premiums but aren't getting higher yields and they're spending more on herbicide. They must be really dumb right? I'm going to reject the dumb farmer hypothesis, which means that either the NYT's data are wrong or there are other benefits to biotech aside from yield (or some combination of both).
The data and comparisons used in the Times story to support their claims are pretty crude (comparing national aggregates over time in the US and France). It is curious they used these data when we have recent, well-done research summaries such as this one from the National Academies of Science. Weed scientist, Andrew Kniss, has the best, most well-reasoned response to the article I've seen.
Kniss writes:
“I have to say this comparison seems borderline disingenuous; certainly not what I’d expect from an “extensive examination” published in the New York Times. The NYT provides a few charts in the article, one of which supports the statement about France’s reduced pesticide use. But the figures used to compare pesticide use in France vs the USA are convoluted and misleading. First, the data is presented in different units (thousand metric tons for France, compared to million pounds in the US), making a direct comparison nearly impossible. Second, the pesticide amounts are not standardized per unit area, which is critically important since the USA has over 9 times the amount of farmland that France does; it would be shocking if the U.S. didn’t use far more pesticide when expressed this way.”
and
“It is true that France has been reducing pesticide use, but France still uses more pesticides per arable hectare than we do in the USA. In the case of fungicide & insecticides, a LOT more. But a relatively tiny proportion of these differences are likely due to GMOs; pesticide use depends on climate, pest species, crop species, economics, availability, tillage practices, crop rotations, and countless other factors. And almost all of these factors differ between France and the U.S. So this comparison between France and the U.S., especially at such a coarse scale, is mostly meaningless, especially with respect to the GMO question. If one of France’s neighboring EU countries with similar climate and cropping practices had adopted GMOs, that may have been a more enlightening (but still imperfect) comparison.
Given all of these confounding factors, I wonder why France was singled out by Mr. Hakim as the only comparison to compare pesticide use trends. Pesticide use across Europe varies quite a bit, and trends in most EU countries are increasing, France is the exception in this respect, not the rule.”
My take? As I've noted in previous posts before, it is pretty well acknowledged that biotech likely increased herbicide (but not pesticide) use, though it is important to consider relative toxicity of different pesticides used (which the Times article didn't do as best I can tell). It is also important to recognize that research shows that adoption of herbicide resistant soy has led to greater adoption of low- and no-till farming practices. And, while the biotech traits have sometimes been incorporated into varieties that were lower yielding, if you look, on average, at a large number of studies, that yield tends to increase with biotech adoption. Moreover, as I wrote in a post about a study in Nature Biotechnology:
“the biotech varieties had an important risk-reducing effects, even if they sometimes led to slightly lower yields. Moreover, biotech can save on other inputs like labor. When I was a teenager, I spent a lot of time hoeing and spraying cotton weeds. That job is (thankfully) now obsolete due to biotechnology. ”
I don't know whether GMOs have fail to live up to their promise. That would require us to know something about farmers' expectations prior to adoption. What I do know is that the vast majority of corn, soybean, and cotton farmers have continued to buy higher priced biotech seeds. Why? The NYT article makes no attempt to answer this question.
You may remember the discussion surrounding a research paper released back in August that used interviews and survey data to suggest that the tax on sodas that went into place in Berkeley caused a significant reduction in soda consumption.
As several other locales are considering new soda taxes in the upcoming election season, this sort of research is valuable in trying to sort out the potential effects of the policies.
Now there is new research by Scott Kaplan, Rebecca Taylor, and Sofia Villas-Boas at UC Berkely. The authors utilize a dataset on retail sales of various drinks in dining locations at "a large university" - presumably Berkeley. Importantly, the authors do not actually look at the effect of the implementation of the tax, but rather they look at what happened to soda sales because of the publicity and information surrounding the vote. That is, they look at soda sales surrounding the time of the vote but before the tax actually went into place.
Here is a figure from the paper summarizing the main findings:
The authors write:
“We find a 30% drop in soda sales relative to other product groups during the post-election
period. In a related and contemporaneous study using survey data, Falbe et al. (2016) find
an average 21% drop in SSB quantity sold. However, because the surveys were completed
only before the election and after the tax implementation, Falbe et al. (2016) are unable to
distinguish whether this effect was from the campaign and election or from the tax itself.
Our results show that soda sales fell on-campus after the soda tax election yet before prices
changed due to the tax. This suggests that comparing pre-campaign to post-implementation
consumption may confound a tax effect with an information effect. This has important
implications for external validity. If the Berkeley SSB tax is replicated elsewhere without
a proceeding campaign war and affirmative election outcome, its effects on consumption
may differ substantially. In other words, given the amount of money spent in the Berkeley
campaign on each side of the battle, it is important to understand how much behavioral
change was due to the election and how much was due to the tax itself.”
My take on the results is that these soda tax policies may well have sizable "signaling" or "information" effects aside from whatever pecuniary effects exist. I have found similar results related to animal welfare regulations: that the publicity surrounding a vote has a significant impact on what people buy aside from whatever impacts the policy actually has on the price or foods offered. In short: information dissemination campaigns may be as important or more important than taxes or bans on products. In my assessment, information policies are often far more justifiable than are more coercive policies that restrict choice.
It will be interesting to see as future research emerges whether and how the actual implementation of the tax changes soda consumption and how long lasting are these information effects.
A recent article in Forbes discussed millennial's eating habits utilizing, it seems, a report from the Food Institute and USDA Economic Research Service Data.
The Forbes article writes:
“Millennials spend 44 percent of their food dollars – or $2,921 annually – on eating out, according to the Food Institute’s analysis of the United States Department of Agriculture’s food expenditure data from 2014. That represents a 10.7 percent increase from prior data points in 2010.
In contrast, baby boomers in 2014 spent 40 percent of their food dollars on eating out or $2,629 annually.”
It's a little hard from this article to really get a nice comparison of millennials food spending without controlling for differences in income and total spending on food at home and away from home. Thus, I turned to the data from my Food Demand Survey (FooDS) where we've been asking, for more than three years, how much people spent on food at home and away from home.
Here is a breakdown on spending on food away from home (expressed as a share of total household income) by age and by income. The black and red dashed lines are the two age groups that could be considered millennials. The results show that for incomes less than about $80,000/year, millennials do indeed spend a larger share of their income on food away from home than do other generations; however, the same isn't necessarily true for higher income households. People in the two oldest age categories spend a lower share of their income on food away from home at virtually every income level. For each age group, the curves are downward sloping as suggested by Engle's Law: the share of income spend on food falls as income rises.
The next graph below shows the same but for spending on food at home. For the lowest income categories, the youngest individuals spend more of their income on food at home than do older consumers; however, at higher income levels, all age groups are fairly similar. Coupling the insights from the two graphs suggests that, at incomes less than about $60,000, younger folks are spending more of their income on food (combined at home and away from home) than older folks.
Finally, here is the share of total food spending that goes toward food away from home by age group and income level. In general, as incomes rise, people spend more of their food budget away from home. That is, richer people eat out more. No surprise there.
Generally speaking, consumers younger than 44 years of age spend more of their food budget away from home than do older consumers. The 24-34 year old age group that is firmly in the millennial generation consistently spends more of their food budget away from home than other age groups at almost every income level.
