Bt resistance

A couple recent studies have raised concern that certain corn rootworms are becoming resistant to the Bt produced by biotech corn.  See for examples this paper in the Proceedings of the National Academies of Science by Iowa State University entomologists published last week (some of the same authors seem to have a similar paper published in 2011 in PLOS ONE) and this paper published in Nature Biotechnology this summer.  The most recent study has prompted quite a bit of attention on the web from outlets as varied as Wired and Grist.  

Any pesticide (biotech or not) has the potential to become ineffective over time due to the development of genetic resistance in insect (or weed) populations.  Plant genetic companies, knowing this, tried to implement several strategies to slow the spread of resistance: such as developing several types of Bt that produced different insect-killing proteins (which appears to have had only limited effectiveness) and the planting of refuges.  Refuges refer to the planting of non-Bt corn near Bt-corn, which reduce the selective pressure on rootworms and other pests, and thus potentially increases the length of the effectiveness of the Bt trait.  Originally, corn farmers were supposed to plant a certain percentage of their acreage in non-Bt corn as a refuge, and more recently, we have seen refuge in a bag - the Bt seed is delivered to farmers premixed with non-Bt seed.  

Some sources place the blame on the development of resistance on biotech companies lobbying for lower refuge requirements or on farmers for failing to observe the requirements.  That may be partially true.  Any individual farmer likely faces an incentive to free-ride off their neighbor's refuge (something that can be eliminated with the "refuge in a bag" concept), but it strikes me as incredibly short sighted that biotech companies would willfully advocate for policies that would reduce their long-run profitability (or it may be their interest to allow Bt resistance to develop if they have other products in the pipeline that become more valuable as Bt resistance develops).  

As I see it, the real challenge here is Mother Nature herself.  Agriculture is inherently a struggle against nature.  We have become so accustomed to seeing crop yield gain, that sometimes it is easy to forget that one of the biggest challenges is simply trying to keep up with nature's adaptations to the latest varieties.  The natural state of affairs is yield decline - not yield increase.  Seen in this light, science and technology seldom offer a one-time fix.  It is a constant struggle. We find a solution.  Nature responds.  We try to find another solution.  Nature adapts again.  And on and on it goes.  

No doubt there are many who argue that we should step off this technology treadmill.  We probably can find ways to better work with (or at least accept some drain in efficiency from) natural pests, and that may be one of our adaptions.  But, I think it is foolish to think we can ever really step off the treadmill.  There never was or will be some perfect ecosystem equilibrium.  Bacteria, insects, weeds have been and always will be evolving to get the upper hand on their competitors (that's us and our food crops) and we will do the same.  Our best bet is to try to stay one step ahead knowing our natural competitors won't be far behind.       

Natural and Organic Craziness: It's not just food

My wife likes to buy cosmetics products from a company called Paula's Choice.  One of the things she likes about the company is that it reports on the scientific testing it does on its own products and that of its competitors. 

In any event, my wife alerted me to an interview with the company's owner, Paula Begoun, which I found fascinating.  It seems the cosmetics world is grappling with many of the same issues as the food world.

Paula was interviewed on radio by another cosmetic's industry insider: Karen Yong.  Here are some excerpts from the transcript when the discussion turned to "natural" and "organic" cosmetic products:

Paula Begoun:. . . On the other side of the coin one of the things many cosmetic companies have to deal with is the fear mongering around the evilness of cosmetic ingredients which I've written about extensively and I know you have opinions on.

How are the cosmetics companies, the Lauders, the Shiseidos dealing with this fear mongering that the organic natural cosmetic world is putting out there.

Karen Young:It's frightening and it's probably the biggest thing that I'm confronted with right now. I'll try to narrow it down a little bit because as you know it's a huge category.

Paula Begoun:Wait, you're not frightened about the ingredients, you're frightened by the influence…

Karen Young:The press.

and

And the other piece of that as you alluded to is the whole natural organic green-washing thing, which is so confusing that even those of us who are supposed to understand what's going on here, it's really, really difficult.

Paula Begoun:I'm often shocked by the women really do believe – I get asked it all the time. “Should I be scared of what I'm using. Is it killing me? And I'm using this natural product.” And I know what those products contain. That's what we do for a living here at Paula's Choice is we review everybody else's products and look at what the formulas are and what they contain and what they can and can't do for skin.

00:20:36And lots of natural ingredients that show up in natural products are bad for skin. And I'm looking at this woman telling me I'm so scared other products are killing me and I'm going, yeah, I know, but you're breaking out, your skin is red. I know what you're using isn't protecting you from aging, or sun damage, and on and on. And they're frightened of everybody else's ingredients except the company that is dong the fear mongering.

00:21:00Of course, they never tell you what problem ingredients their products contain, but, yeah, it's an insane – so, how are the Lauders and the Shiseidos, I mean, Lauder is not going to give up. They're not going to go all natural. They know that all natural isn't going to fly for skin. And lord knows an elegant product without silicone is almost impossible. And there's nothing wrong with those ingredients. What are they doing about this aside from I know that the industry went away from parabens.

and

Paula Begoun:Actually, you know, it's interesting, because one of the things that happens when you start making “all natural products” is you increase the need for higher levels of preservatives.

Karen Young:Preservatives!

Paula Begoun:And there aren't any so-called natural, although even the natural preservatives when you have to increase it that much, then you're getting irritation. Preservatives kill things. That's what they do.

Karen Young:Absolutely.

00:24:37You're getting irritation and possibly you're making it more difficult to stabilize the formula.

Paula Begoun:You know, we're just reviewing a product line that, you know, we haven't run into this in a long time. A lot of the natural product lines, while the formulas may have issues in terms of irritating ingredients and jar packaging and fragrance, and I'm going to ask you about jar packaging in just a second, but one of the things that we haven't run into in a very long time is a company claiming that it's all natural but it actually isn't, it actually uses synthetic ingredients.

00:25:15This is one of the first times in a while I would say in the past, I don't know, three, four years that we actually ran into a company that is lying through their teeth. Their products are about as natural as polyester. Do you see that – do you run into that in your research?

Karen Young:Yes.

Paula Begoun:Yeah, you see that, too.

Karen Young:Because as you know there is no definition for natural. It's completely arbitrary. You can use the word anyway you like. And consumers, as you mentioned earlier, consumers are incredibly confused about what does natural mean and what does organic mean. I mean, that theoretically is defined by the FDA and consumers really don't understand that either.

Real-world effect of soda taxes

A new study in the journal Health Economics by Jason Fletcher and coauthors examines whether variation in soda tax policies across states leads to differences in weight and obesity.  

First, the authors note previous work on the issue:

studies using data on individual-level consumption and within-state variation in actual tax rates have found no net measureable effects on population weight. For example, Fletcher et al. (2010a) find that increases in soft drink tax rates decrease soda consumption among children, but do not influence total caloric intake, as children increase their consumption of other high-calorie beverages. This finding is consistent with a similar lack of effects for adults (Fletcher et al., 2010b). Other research taking this approach finds mixed results, demonstrating that average weight in some high risk populations may be more susceptible to soda taxes (Sturm et al., 2010).

Then, they point out a potential problem with this line of research: the variation in tax rates across locations isn't large enough to tell us what will happen if a state passed a "large" soda tax - or whether there are "non-linear" effects:

one concern with the ability of the results from some previous studies to predict the consumption response to large taxes, such as the 18% tax proposed in New York in 2008, and a potential reason for the differences in the results from the various strands of literature is that the existing soda tax rates are too low to be meaningful to most consumers because the average tax rate in 2006 was approximately 5% (Sturm et al., 2010; Todd and Zhen, 2010). Implicit in this argument is that substitution effects would also exhibit a threshold effect, where at high enough soda tax rates, individuals would substitute towards no beverages or low-calorie alternatives (e.g., water).

What did they find?

First, we examine whether there is any evidence of non-linear effects of current soda tax rates, with the idea that if very large taxes could have relatively larger effects, then we should see evidence consistent with this hypothesis based on the larger tax rates in our data, which reach 12%. However, using a variety of specifications, we find no evidence of effects on use or weight for a nationally representative sample of adults.

Our second approach uses a new comparative case-study method that leverages the sudden and large tax increase found in Ohio in the early 1990s. This method creates a ‘synthetic Ohio’ based on a weighted average of states that are most similar to Ohio’s population BMI before the tax was raised. Outside of simulation methods, this is the most informative approach to understanding the potential impact of recently proposed taxes, and it suggests very little evidence that the large tax imposed in Ohio had any detectable effect on population weight. Together, our results cast serious doubt on the assumptions that proponents of large soda taxes make on its likely impacts on population weight.

March 2014 Food Demand Survey (FooDS)

The March 2014 release of FooDS is now out.

A few highlights:

• Willingness-to-pay for chicken (particularly chicken wings) was down and willingness-to-pay for pork was up in March relative to February.
• Consumers anticipate buying less beef, pork, and chicken in March than was the case in February.
• For the first time in the nearly year long period we've been running FooDS, GMOs became the issue consumers reported hearing the most about in the news.  Still, consumers were more concerned about issue like Salmonella, E. Coli, and growth hormones than GMOs.  

In March, we asked several questions related to consumers' price knowledge. Results reveal significant dispersion in the prices ($/lb) consumers report expecting to see charged for ground beef, chicken breasts, and pork chops.  

Only 13% of consumers reported shopping for groceries in only one store during the past month, suggesting some degree of cross-store price comparisons; however, almost 50% reporting using loyalty cards most of the time when grocery shopping.

What would Coase say about obesity externalities?

On my favorite podcast, EconTalk, Russ Roberts recently had an engaging discussion with Robert Frank about Ronald Coase's writings on externalities.  Having recently published a paper about externalities in food production, I couldn't help but apply some of their discussion to the topic of obesity.

The usual claim is that obesity creates an externality because of public health care costs (e.g., Medicare, Medicaid).  My health problem imposes costs on you because your taxes pay for my health problems.  There are good reasons for arguing that this sort of externality is not the type that gets economists up in arms: these are simply zero-sum transfers from the healthy to the sick that don't shrink the size of the pie.  When I try to explain that to people, I normally hear crickets chirp and see eyes glaze over.  That this is not an efficiency-reducing externality is true.  But, it is apparently utterly unconvincing.

Back to Econtalk.  Roberts and Frank discussed Coase's observation that externalities cause reciprocal harm, and many times it is tough to really know who is the offender.  If I play drums loud at night do I cause an externality on my neighbor?  Or did my neighbor create the externality by choosing to live next to me?  Coase's answer to this conundrum, it seems, was: "who cares"?

It doesn't matter who is to blame.  The key question is: what is the lowest cost way to alleviate the externality? It could be making my neighbor move.  It could be outlawing my drum set.  It could be requiring that my neighbor construct a sound-proof barrier.  Or, if we could negotiate, it might be me making side payments to my neighbor to let me play (or him paying me not to play).  By avoiding the offender/offendee mindset, a wide range of possible solutions emerge, many of which are likely lower cost than solutions that might initially come to mind.      

In discussions of obesity-related externalities, the implicit assumption is that the obese are the offender causing harm to the taxpayer (or more cynically, that food companies are causing harm to people who become obese, who in turn cause harm to taxpayers).  Coase's insights, however, suggest that taxpayers are also responsible for harm because they've put themselves in the way of the obese.  The externality wouldn't be there to begin with if taxpayers weren't picking up the tab.  

One really low cost way of resolving this externality is to have taxpayers refrain from picking up the tab for the obese (or at least make the obese pay some significant share of their cost).  Many people would find that solution reprehensible: how dare we get rid of Medicare/Medicaid?  Fair enough, but most private insurance plans impose at least some cost via the use of deductibles to avoid the problems of moral hazard (i.e., people behaving in a riskier way because they know they're insured), and yet by fully insulating people from costs, it seems we've moved in exactly the opposite direction with our public health care.  What about "progressive" public health care deductibles that vary with income?

Coase is perhaps best known for his argument that negotiation can resolve the externality dilemma.  This holds if transactions costs are low.  Frank argued in the podcast that when transactions costs are high, and it is unlikely the affected parties can negotiate, the best public policy solution is to try imagine what would happen if people were able to negotiate.  What would this negotiation look like for obesity externalities?  

One party, "the government" might say: "Tell you what, I'll pay your health care costs if you'll just eat the way I tell you, and if you don't, I'll increase the price of many of the foods you like to eat until you eat the way I want you to."  Some people might take that deal.  Others, I suspect, would respond: "just leave me alone."  

Another conversation.  "The obese" might say:  "Tell you what, I'll promise to eat the way you want me to and I won't complain about public policies affecting my tab at the grocery store if you'll just pay my health care costs."  Some tax payers might say "ok."  Other taxpayers, I suspect, would respond: "just leave me alone."