Wednesday, July 27, 2016

Member in the News: Norbert Wilson

Taxes on Groceries, Not Soda, Are Hurting Poor Americans

Grocery purchases are taxed in 16 states, and the extra cost hits hungry Americans the hardest.
Soda taxes are continuing to bubble up throughout the United States. After Berkeley, California’s soda tax brought in $1.2 million in revenue in its first months, cash-strapped Philadelphia passed a 1.5 cent–per–liter tax in June. In November, several other cities will vote on their own measures, including San Francisco (again) and Boulder, Colorado.

But while soda taxes have proved to be effective both in generating revenue and reducing sugar-sweetened-beverage consumption, not all taxes are created equal. New research suggests that taxing all groceries, as some states and counties do, puts additional pressure on food-insecure households.

Sixteen states have a grocery tax at a state or local level. Such a tax can “cost families hundreds of dollars per year,” according to a recent paper called “Do Grocery Food Sales Taxes Cause Food Insecurity?” Researchers from Auburn University, Cornell University, and the University of Kentucky found that the average rate for these taxes was 4.3 percent. While a extra few dollars per grocery run may not seem like much, for people living off incomes at and around the federal poverty line—just over $2,000 a month for a family of four—a small cost increase is a big deal. A 2013 study found that a $10 increase in food costs for a household receiving benefits from the Supplemental Nutrition Assistance Program (as food stamps are known) can raise the prevalence of food insecurity by 2.7 percent overall. In January, 22.3 million households were receiving SNAP benefits. That small increase would mean an additional 602,100 households would face food insecurity even while receiving government assistance.

It may seem obvious that anything that raises costs could pose financial difficulties for people with little money to spare. Yet, lead author Norbert Wilson said, the argument in favor of grocery taxes is often that the tax is insignificant. But for families struggling to get by, what seems insignificant can look a whole lot different. As incomes rise, the percent of income spent on food shrinks. Only 13.4 percent of total income is spent on food among middle-income citizens, while the poorest spend 34.1 percent on food, or $3,667 per year, according to the USDA.

Read the entire article here:

Tuesday, July 26, 2016

Member Blog: David Zilberman

Agricultural economics as behavioral economics

July 23, 2016
Behavioral economics is perhaps the most important new paradigm in economics in the new millenium. It is based on the idea that people don’t behave rationally, like economics suggests – that they are, in Thaler’s words, Humans (homo sapiens) rather than Econs (homo economicus).

In the 1960s and 1970s, Nobel Laureate Herbert Simon and others developed behavioral economic theories assuming that people satisfy rather than maximize their profit or utility and that their rationality is bounded (i.e. confined). But the foundation for modern behavioral economics came in the 1980s, with Prospect Theory developed by Kahneman and Tversky to explain behavior under risk. While modern behavioral economics is changing the way economics and finance are practiced and which policies are introduced, agricultural economics have integrated behavioral elements into their models and practices since the 1960s. And some of these elements actually became part of mainstream economics.

Agricultural economics originated in two fields: farm economics and farm management. Farm economics was standard economics applied to production and markets of food. Farm management aimed to guide farmers how to make choices, and therefore needed to deal closer with reality, with farmers who are really Humans not Econs. Here I’d like to present some of the behavioral elements that emerged in agricultural economics.

First, decision making under risk has been a major topic of agricultural economics. One of the big challenges of agricultural economists is understanding why farmers didn’t adopt technologies that were shown to have higher yields and profits than traditional practices, especially during the Green Revolution. What agricultural economists realized is that farmers were concerned about risk, especially downside risk. Namely, they would not adopt a technology that doubles yield on average, but during droughts, that may occur 10% of the time, produces much lower yields than the traditional technology. Therefore, agricultural economists applied approaches like ‘safety first’ (where a farmer would say “I’d rather avoid a disaster than increase my average yield”) or similar methods where most of the weight in technology choice is given to avoiding significant setbacks. This extra attention to losses compared to gains is close in many ways to the notion of ‘loss aversion,’ a key element of Prospect Theory that is promoted by behavioral economists to replace the neo-classical ‘expected utility’ approach to address risky choices. Much of the insights of behavioral economics originated from hypothetical and real-life experiments and such experiments are likely to play a major role in the future. Agricultural economists were probably among the first to conduct field experiments where farmers, in India, were given money under various conditions and assessed their risk preferences, and found results that challenged existing expected utility approach.

Read the entire blog post here:

Wednesday, July 20, 2016

Member Blog: David Zilberman

Why agricultural biotech hasn’t reached its potential

David Zilberman, professor, agriculture and resource economics | July 19, 2016

Some of the key questions we raised as we celebrated the 20th anniversary of the ICABR consortium were “why haven’t GMO crops been accepted and adopted as Green Revolution crops or medical rDNA?” “What are the constraints to the adoption of GMO?” “What are the differences among nations?” Several speakers addressed these questions and here is my interpretation of their answers.

Rob Paarlberg gave a brilliant talk on the political economy of agricultural biotechnology. He introduced several theories that were used to answer these questions, and each theory provides some insight. This is not surprising since agricultural biotechnology has many features and countries are diverse in their policies and politics.

I myself believe that rent-seeking behavior can explain much of the continental divide between Europe and the U.S. Rent seeking means that different sectors of society use their influence, driven by self-interest, to affect politics to their benefit.

Biotechnology companies will lobby for GMOs, while chemical companies that may lose from introduction of substitutes to their products are likely to be less supportive.

There is evidence that consumers benefited from GMOs through lower prices, poor farmers benefited through higher incomes, and that GMOs reduced GHGs and haven’t shown to have adverse environmental effects. However, environmental groups that are concerned about science-based, corporate-controlled technologies oppose GMOs – and are effective in raising doubt about the technology itself and consumers take on this concern.

Another theory that explains part of reality is that different economic blocs may have rival regulatory policies. As GMOs were introduced in the United States, it has a more liberal regulatory framework than the EU, which practically bans production of GM crops. Indeed regulations in the western hemisphere have been close to those of the U.S. while Africa, which closely aligns with European countries, follows their lead. The introduction of GMOs to developing countries has also been impeded by the ability of transnational networks to establish global governance arrangements, like the Cartagena Protocol that imposes strict biosafety regulations on introduction of GMOs. This has been abused by the opposition to GMOs by overstating precaution over apparent benefit making regulatory compliance economically infeasible to implement.

Consumers, who are also voters, have much influence on the fate of GMOs. Much of the debate about GMOs should be about the science – but according to Dominique Brossard, science communication became political, as media outlets become more polarized and people self-select sources that tend to support their prior beliefs.

Furthermore, scientific knowledge is only one input to the final attitude towards a product or idea. For instance, some people object to GMOs because of the perception that large corporations control it and benefit from it – and Monsanto in particular, despite taking risks in developing a technology that has benefited humanity, has a terrible image, some of which is self-inflicted.

Furthermore, the science behind GMOs is complex and scientists are not very involved in the outreach. More effective involvement of scientists in explaining what biotechnology is all about may result in more informed decisions. Pam Ronald and Raoul Adamchek’s presentations suggest that biotechnology is part of a larger strategy to address climate change, and can contribute to making organic farming more productive and widespread.

Read the entire blog here:

Thursday, July 7, 2016

Fulbright U.S. Scholar Program

The Fulbright U.S. Scholar Program provides opportunities for college and university faculty, scientists, practicing professionals, and independent scholars to conduct research and teach in over 125 countries during the 2017-2018 academic year.

Below is a highlighted list of awards across the sciences, technology, engineering, and mathematics that further demonstrate the breadth of interest in scholarship and teaching around the world:
 This list is by no means comprehensive – the Fulbright U.S. Scholar Program offers more than 160 awards across the STEM fields. Further, All Disciplines awards may also be of interest if discipline-specific opportunities do not match your expertise. All Disciplines opportunities are offered in nearly every country, including: Azerbaijan, Brazil, Cameroon, Kyrgyz Republic, Malaysia, and Sri Lanka.

Please visit our Science, Technology, Engineering, and Mathematics webpage for more awards, examples of successful projects, and scholar testimonials highlighting the outcomes and benefits associated with completing a Fulbright U.S. Scholar grant.

For eligibility factors, detailed application guidelines and review criteria, please follow this link:

You may wish to view one of our webinars (such as STEM opportunities and How to Craft a Project Statement) and join My Fulbright, a resource center for applicants interested in the program.
Applicants must be U.S. citizens and the current competition will close on August 1, 2016.

Wednesday, July 6, 2016

Get Involved with AAEA’s Communicating-Out Strategy

AAEA’s Communicating-Out strategy is reaching the end of it’s first full year with great success, and we’re looking for ways to build on that success.

The objective is to position AAEA and its members as a “go-to” resource for decision makers at federal agencies, congressional staffers, funding entities, media, industry, NGOs, consumer groups, other stakeholders, and non-member academics by providing reliable and credible insights on topics related to agricultural economics, applied economics, and economics generally.

The strategy is a multi-layer approach that includes new committees, a new emphasis on how we communicate both inside and outside AAEA, while utilizing the resources we already have; members who do amazing work in their respective fields that can and should be recognized in new ways.

The Communications Committee was formed to focus on getting information out to mass media, on social media, and to industry and consumer groups. The Publications Committee is focused more on, well, publications. We are working closely with our editor, Oxford University Press, on how to better highlight the articles that go into our two journals; American Journal of Agricultural Economics and Applied Economic Perspectives and Policy. Choices magazine along with The Exchange are also playing a role in the communicating out strategy. There is also a Government Relations part of this effort, working with C-FARE to reach relevant audiences in Washington, D.C., such as congressional staffers, federal agencies and their staff, funding agencies, and NGO’s.

Another part of the strategy included hiring a new position in the AAEA business office. Jay Saunders is our Communications Manager. He comes to AAEA after 15 years in television news and government public/media relations. He is the go-to person for media requests and communication with members about how to properly promote timely and important research. If you have questions, Jay’s email address is

You’ll also notice some changes at, where you can find a complete list of the news releases we’ve done in the past year. Additionally, you’ll find an area of the website with resources to help inform members and provide ideas and suggestions on best practices and how to get involved in our strategy.

And, this summer at the Annual Meeting in Boston, we will have a session for members on “Working with the Media”; a panel discussion with members of the media and AAEA members who have experience with doing interviews on their research and areas of expertise. This will take place on Tuesday, August 2. Check the Annual Meeting schedule for more details.

This is an exciting undertaking, and one we hope members will participate in. The goal is simple: enhance the visibility of the AAEA and enhance the visibility and value of the science and the profession.

Thursday, June 23, 2016

Free online course on Agriculture, Economics and Nature

The University of Western Australia is once again offering a free online course on the economics of agriculture, natural resources and the environment.

This course is about agricultural production and the interaction between agriculture and the environment. The material presented can help us understand changes that have occurred in agriculture, and support improved decision making about things like agricultural production methods, agricultural input levels, resource conservation, and the balance between agricultural production and its environmental impacts.

The course will be presented by Professor David Pannell, who is one of Australia’s leading economists working in the area of agriculture, natural resources and environment. His research includes work on the economics of farming systems, land conservation, farmers’ behaviour, agri-environmental policy, risk in agriculture, weed management, and environmental management. At the University of Western Australia David is Head of the School of Agricultural and Resource Economics, and Director of the Centre for Environmental Economics and Policy.

The course will be presented over six weeks with a different focus each week. A set of lecture videos, mostly between 5 and 10 minutes in length, are provided each week, together with readings, activities, student forums, quizzes and a final exam. No prerequisites or prior knowledge is needed. Enrolment is rolling and new sessions will be starting regularly. Certificates can be purchased by those who successfully complete the course.
The course is made possible through the generous support of Yara Pilbara Fertilisers. Yara has embraced a strategy of Creating Impact to improve food security and production while safeguarding the environment.   The company believes this course represents a great example of UWA partnering with the private sector to contribute towards global education targeting improved productivity in agriculture and food resources for an increasing population. 

To register, go to If you have any questions about the course, email