Journal Articles and Journal Reviewing

Readers might recall my AAEA president's column from a couple weeks ago, where I highlighted some potentially worrying trends in the academic publishing world associated with agricultural economics.  Since then, I've run across at least two other papers that touch on related themes and problems.  

The first is a paper in the Journal of Economic Perspectives by Jonathan Berk, Campbell Harvey and David Hirshleifer.  The main purpose of the article is to provide some advice to academics on how to referee journal articles.  Their main message, with which I completely agree, is that referees often pay too much attention to minor technical issues and too little attention to the importance of the problem.  Their advice:

“Do not dismiss papers that attack larger issues merely because flaws can be found. The important question that you need to assess is whether the flaws actually invalidate the contribution. If the flaws do not rise to this level and you judge the contribution to be important enough to warrant publication, then you should recommend publication. All papers have flaws, and no amount of revision removes all uncertainties. There is always need for further research to provide deeper perspectives. Try to ask yourself the following question: Flaws and all, would I have been pleased to have written such a paper? If yes, that gives a strong hint that it should be strongly considered for publication, flaws and all. ”

At the beginning, the authors highlight what they see as the main problem:

“The review process for academic journals in economics has grown vastly more extensive over time. Journals demand more revisions, and papers have become bloated with numerous robustness checks and extensions . . . Even if the extra resulting revisions do on average lead to improved papers—a claim that is debatable—the cost is enormous. We argue that much of the time involved in these revisions is a waste of research effort.”

It seems that my colleague, Wade Brorsen, agrees (at lest with some of these points).  Wade's Western Agricultural Economics Association presidential address was recently published. After documenting the increase in paper and complexity, in his usual frank fashion, Brorsen has the following to say:

“One thing that stands out in table 1 is the increase in the length of manuscripts. The increased length is not all bad—since it can sometimes mean more robustness checks and more detail that will help a few readers—but the increased length can also be costly. Not necessarily to authors; as the saying attributed to Blaise Pascal goes: “I didn’t have time to write a short letter so I wrote a long one instead.” The cost is on the reader because it takes more time to read the paper. The cost can also be on the science since the paper may not be read if it is too long. I advocate twenty manuscript pages of text as a target. I select this length because it is roughly my own attention span. Anything much longer and I am not going to read it.”

Brorsen also takes issues with the use of impact factors, the pursuit of the interesting over the important, the use of certain statistical techniques, the lack of simplicity, and more.  He ends as follows:

“I have suggested several changes that our profession needs to make, such as reducing the length of manuscripts and reducing complexity. I am not the first to make such suggestions. The reviewers and editors are us. If we want to change what we value, we can.”

TASTE TRUMPS HEALTH AND SAFETY: INCORPORATING CONSUMER PERCEPTIONS INTO A DISCRETE CHOICE EXPERIMENT FOR MEAT

That is the title of a paper I just published with Trey Malone in the Journal of Agricultural and Applied Economics.  

Here are some of the key results:

“Our participants also indicate that they perceive chicken breast to be the healthiest option in our sample. Both beef products would generate substantial changes in WTP by increasing their perceived healthiness to that of chicken. For example, if hamburger had the same average health perceptions as chicken breast, WTP for hamburger would increase by $0.69. Deli ham, however, would experience an $0.83 increase in WTP if consumers were to believe it was as healthy as chicken breast. Even chicken wings would experience a $0.52 increase in WTP through a perception change.”

and

“The nonmeat options are actually perceived as safer than the meat options. As such, if the average participant perceived hamburger to be as safe as beans and rice,WTP would increase $0.34. Of all products, deli ham would benefit the most by an increase in perceived safety to the level of beans and rice. In fact, our sample indicates that pork products are not very highly appreciated. As noted, deli ham is perceived to be the worst tasting, least healthy, and least safe alternative in the choice set. Those negative perceptions are costly. If participants were to perceive deli ham as equal to chicken breast in taste and health, and equal to the perceived
safety of beans and rice, WTP for deli ham would increase by more than $2.”

You can read the whole thing here.

Where do people eat the most meat?

It seems a fairly simple question: In which U.S. states do people eat the most meat?  Yet, there is surprisingly little good, publicly available data on this question.  Yes, there are fun maps like this one at Slate, but they are far from scientific or data driven.  

I thought I'd try to partially fill this void by turning to data from my Food Demand Survey (FooDS) that has been running now for almost four years.  Because I've surveyed over 1,000 people in the U.S. for about 44 months, that means I have responses from over 44,000 people spread all across the country that I can use to help look for geographic differences.  

In FooDS, each person is told "Imagine you are at the grocery store buying the ingredients to prepare a meal for you or your household.  For each of the following nine questions that follow, please indicate which meal you would be most likely to buy."  Then, they are presented with nine questions that look like the one below.  The only differences across the questions are the prices assigned to each item and the order of the items.      

For sake of simplicity, I counted the number of times each person chose steak, how many times they chose chicken breast, etc.  Thus, the maximum possible "score" a person could have for each item is 9 and the lowest is 0.  To be clear, this isn't a measure of consumption, but rather it is an index of demand.  It is a measure of how much people "like" each of the choice options relative to all the other choice options.  For point of reference, across all the people in my sample, the most frequently chosen option was chicken breast (chosen on average 2.43 times out of 9) followed by ground beef/hamburger (chosen on average 1.33 times out of 9).  The least popular meat items were pork chop and ham, chosen on average 0.80 and 0.68 times, respectively, out of 9.

I won't go into all the hairy details here (email if you want to know more), but I then estimated some statistical models to infer how often, on average, consumers in each state chose each of the meat options.  Then, I calculated how different (in percentage terms) each state was from the mean number of choices, and I created maps.

I'll start with one that has a very obvious regional pattern: chicken wings.

Chicken Wing Demand by State

Demand for chicken wings is highest in the southeast US, where people chose this option 15% to 44% more often than in the average person in the US.  Consumers in western states like Oregon, Idaho, and Arizona chose wings 15% to 27% less often than the average consumer nationwide.

For other products, there is less of a regional pattern.  Below is the map for beef steak.  Demand for steak is highest in California, Nevada, Washington, Oklahoma, Minnesota, Illinois, Florida, and New York.  Steak demand is lowest in Idaho, Utah, Missouri,  and the Appalachian regions, Tennessee, Kentucky, and West Virginia.

Beef Steak Demand by State

While we are on beef, here is the map for hamburger/ground beef.  For ground beef, demand is generally highest in the upper midwest and is lower on the coasts.

Demand for Ground Beef by State

A somewhat similar pattern emerges for deli ham (shown below), although the location of heaviest demand moves a bit south and east relative to that for hamburger.  

Deli Ham Demand by State

Below is the map for pork chops.  This map is interesting in the sense that there are several instances where some of the highest demand states are situated adjacent to some of the lowest demand states (e.g., Oregon next to California; Oklahoma next to Texas; etc.)  However, one thing to note in the case of pork chops is the scaling: there isn't much difference across any of the states.  Consumers in Missouri have the highest pork chop demand, but only chose pork chops 2.7% more than the average consumer.  Consumers in California have the lowest pork chop demand, but only chose pork chops 3.3% less than the average consumer nationwide.  

Pork Chop Demand by State

The last individual meat product is chicken breast.  As shown in the map below, chicken breast demand is generally highest in the west and the northeast.  I'm not at all surprised to learn that chicken breast demand is near the lowest in my home state of Oklahoma (at -4.5%), trailing only North Carolina, Missouri, and Mississippi.  

Chicken Breast Demand by State

Finally, to round things out, here is a map associated with overall meat demand.  This figure was calculated by determining how many times a person chose any of the six aforementioned meat products (recall there were nine total options, three of which were non-meat).  On average people chose a meat option 7.03 times out of 9 total choices.  However, as the map below shows, there is some heterogeneity across states.  Overall meat demand is highest in the Midwest: consumers in Illinois, Indiana, and Iowa chose any meat option 1%+ more often than the average consumer.  Lowest overall meat demand was in places like California, Arizona, Maryland, Utah, New Jersey, and Massachusetts, where consumers chose a meat options at least 1% less often than the average consumer.  

Overall Meat Demand by State

AAEA Early Career Professionals Workshop

Are you a relatively new faculty member?  A new government or NGO employee working on the economics of food, agriculture, health, or the environment?  Within 6 years of having received your Ph.D?  Then I have a deal for you!  

On May 31 and June 1, 2017 the Agricultural and Applied Economics Association (AAEA) will be hosting an early career professionals workshop in Vail Colorado.  Come meet fellow early career professionals and hear from some of the luminaries in the profession about how to effectively get grants, publish, teach, and more.

Registration is only $85 and resort room rates are only $129/night.  Stay tuned because we may even  have some opportunities for some travel grants.  

On behalf of the workshop organizers - Norbert Wilson, Cheryl Devuyst, and myself - we'd love to see you there!

For more details and registration, check out the workshop website.

What's Going on With Wheat Futures?

One of the primary ways farmers have to manage price risk is via the futures market.

Before getting to a potential problem that has emerged, I'll first provide a short primer for those unfamiliar with futures markets 

An Oklahoma or Kansas wheat farmer is likely to begin planting sometime in September or October, but when planting they don't yet know what the wheat price will be at harvest in June or July the next year.  So, to protect themselves against adverse price fluctuations, a farmer might turn to the Kansas City Hard Red Winter Wheat Futures Contract.  The CME Group has a futures contract that settles every year around harvest in July.  Right now, the July 2017 contract is priced at about $4.50/bushel.  

For simplicity sake, let's say a farmer faced the same July 2017 futures price back in September of 2016, and they wanted to protect the price associated with (i.e., hedge) 5,000 bushels of wheat (which is exactly the size of one futures contract).  In September 2016, the farmer would sell one July 2017 contract, receiving  5000*4.50=$22,500.  This action has now contractually obligated the farmer to deliver 5,000 bushels of wheat come July to "offset" their selling position [addendum: while other futures contracts work in this way, this isn't true for winter wheat; rather than delivering wheat, the farm has contracted to deliver a "registered electronic warehouse receipt"].  Normally, however, a farmer doesn't want to go through the hassle of actually having to deliver physical wheat to a delivery point, so they instead buy back (in this example) one futures contract to offset their position when June or July rolls around.  If the price of the July 2017 contract falls from September to July, the farmer makes money from the futures market (e.g., if the price falls to $4.00, the farmer has has to spend 5000*4=$20,000 to offset their original position of $22,500, making $2,500), which helps them offset the loss in expected wheat price they receive when they sell their wheat in the cash market.  Exactly the opposite happens if the price of the July 2017 contract increases - the farmer looses money from the futures market, but receives a higher than expected cash price.  This is why it is said that using the futures market "locks in" the price at the time of planting.  

Although most farmers never actually delivery their wheat to settle their futures contract, this threat of delivery is what ties the futures price to reality.  If, for example, a farmer notices that come July 2017, the July 2017 futures contract is trading at a price well above the cash price being paid for wheat "on the ground" in grain elevators, they have a strong incentive to offset their futures position by actual delivery rather than buying a futures contract.  These arbitrage opportunities are what should force the futures market price to eventually equal the cash market price when July 2017 rolls around.   

All of that is a lead in to this video put out by Art Barnaby at Kansas State University.  It seems that farmers, at least in some situations, are not actually able to deliver wheat to offset their futures positions.  Aside from fundamental concerns about what is being measured by futures market in this case, one farmer in the video says:

“A lot of us were relying on that and felt very betrayed by the fact that what we understood to be a contract was not. ”

[Addendum Barnaby sent me a note of clarification.  The underlying issue here is that farmers have been generally taught and told that they can settle wheat contracts by the delivering physical commodity, when in fact the underlying contract says something different. He indicated: "Farmers are not obligated to deliver 5,000 bushels of wheat; they are obligated to deliver a registered electronic warehouse receipt issued by warehousemen against stocks in warehouses.  This is the reason farmers can’t deliver wheat on a short futures.  You will find this in the contract  . . .The market is trading the value of a CME approved warehouse receipt because that is the only thing that can be delivered."]