Monday, August 23, 2021

Member Blog: David Zilberman

On the Road Again - The AAEA Meeting in Austin

David Zilberman, professor, agriculture and resource economics | August 23, 2021 

Futuristic Austin

Between August 1st and 4th, I attended the annual meeting of the Agricultural and Applied Economics Association (AAEA) in Austin, Texas. This was the first time in two years that I attended a live conference, and it was much more enjoyable than I expected. Four hundred and fifty members of the association were present, a third of the usual participants, although many more were still Zooming in to join us. It took some time to get used to the hybrid format, but we overcame all the technical glitches and the sessions were quite good. Meeting friends, sharing drinks and meals, and seeing live human faces again (rather than on Zoom) was amazing. What I had especially missed were the reunion events sponsored by university departments, where we reconnected with our students and colleagues, gossiped/ argued about economics, and introduced new job candidates to potential employers.

Conferencing in the Shadow of Delta
The pandemic, and especially the Delta variant, was on our minds. To attend the conference, one needed to be fully vaccinated, but regardless I was concerned and tried to wear a mask despite the inconvenience. We were seated at least six feet apart and people were more reserved than in past times – still, it was a great improvement over the remote meetings. Of course, I had disagreements with other attendees about the vaccination policy. While I have no problem with the association as well as the government mandating vaccinations and masks, others expressed outrage on this violation of the rights of individuals, even people that voluntarily were first to get vaccinated. I argued that there is a strong economic case for government policy to control the pandemic. If people decide to put themselves at risk of infection and there is no external effect, that is a personal choice that the government has no say in. Unfortunately, an infected person may transfer the disease throughout their community, which creates an “externality”, which is a compelling reason for government intervention. The government may target externality-causing behavior through direct control (i.e. mandates) or through incentives (i.e. taxes or subsidies). Taxes have a lot of advantages, and one possible policy would be to tax those people who elect not to get vaccinated when it is available. I presume the tax amount would be in the hundreds of dollars or more, and the proceeds go to the government coffers for the purpose of developing improved vaccines or spending on public goods.

Being in Texas
My argument wouldn’t fly very well with many people in Texas, even in Austin, a blue island in the red ocean. I found this city fascinating, part Silicon Valley, with sleek high-rise buildings inhabited by tech startups, part Nashville, with many great music venues covering many genres (this is still Willie Nelson country), and part Old West. I loved Nashville when I visited it long ago, but the last time I was there I found that it was more corporate and touristy. Austin looks more genuine, at least to a superficial observer such as myself. Austin is also the capital of Texas, and the capitol building is an impressive “Texas-sized” structure. Unfortunately, it is being used only once every two years in this most laissez-faire of the American states.

Near the building, there is a beautiful park with monuments to Texas’s past. I was repelled by one monument, the Confederate Soldier’s Monument, a paean to “the lost cause of the Confederacy”. It offended me for several reasons. First, the monument implied that the fight was for liberty and personal choice (the obsession with “personal choice” led numerous people to their deaths just recently). As an economist, I believe in the notion of revealed preference, which suggests that what you do matters much more than what you say. With my limited knowledge of history, it seems that the plantation owners sent poor common Southerners to fight to maintain their right to profit off humans as property, not human freedom. Secondly, as a Jew, I would be very offended if I had to see a statue honoring Hitler’s struggle to establish the Thousand Year Reich or defend the Holocaust. I’m sure an African American person would feel the same way about this statue and about a community that has never repented for its atrocities. Finally, on the plane to Texas, I read Caste, an excellent book arguing that African Americans are the American “untouchables” suffering from slavery, Jim Crow, and this discrimination persists. In my mind, this statue, erected in 1903, does not belong in a capitol park that is supposed to represent all citizens. There were several statues that honored underrepresented minorities and their contributions to Texas in the park, but to me the glorification of the Confederacy overshadowed all other attempts to be balanced. I admire many aspects of Texas and its contributions to the nation and the world. It is a center of entrepreneurship and creativity, has excellent universities, and leads us in the development of wind power and batteries. The state has a lot to be proud of, but certainly not its Confederate past.

Applied Economics as part of a Multidisciplinary Coalition
The overarching theme of the conference was multidisciplinary research. The Rausser keynote speaker was Ricardo Salvador from the Union of Concerned Scientists, and his comments were discussed by Jim Jones, a leading agricultural engineer from the University of Florida as well as John Antle and Cathy Kling, two distinguished agricultural economists. Salvador emphasized that the biggest challenges of our time require multiple vantage points. He suggested that the transition towards sustainable food systems emphasizing the notion of a circular economy, where waste and pollution are minimized and human benefits are maximized. Jim Jones suggested that economists are crucial in defining and pursuing such objectives and must work with other disciplines on sharing knowledge and exchanging ideas that would result in significant multidisciplinary research and most importantly effective policies. One plausible idea is to have more joint sessions with other disciplines in our annual meetings as well as joint educational research programs. John and Kathy emphasized that economists have the tools to address circularity. This may not be an aim by itself, but can be part of a policy that strives to maximize social welfare subject to economic and environmental constraints.

Madhu Khanna, a Berkeley alumna and a distinguished professor at the University of Illinois, gave a fantastic presidential address on the important and growing role of multidisciplinary research in our association. By definition, agricultural and applied economics integrates knowledge and methods from economics and other disciplines. The world is not ruled by economists, and frequently scientific and policy agendas are defined by natural scientists. Scientists may identify and model a phenomenon like a climate change. Engineers and scientists may develop applicable solutions. Economists then need to help design policies that will modify behavior and lead to the adoption of these greener solutions. Madhu’s career is an example of doing this well; her research has helped inform the design of precision agricultural practices, voluntary environmental arrangements, and alternative energy. Government agencies tend to increase their support of multidisciplinary efforts and economists, especially applied economists, should be able to benefit from this support. Furthermore, multidisciplinary research provides new avenues for publication by applied economists and should be more recognized in promotion and tenure. I strongly endorse Madhu’s position and believe that we short ourselves by worshipping the “top five” (the top leading economic journals) as the main measures of excellence and capability. I have been fortunate enough to publish in the “top five” in the past, but those were not my best papers. My work has had a greater policy impact when published in agricultural and environmental economic journals or general interest science journals.

Texas Capitol Building

Mixing Economics and Politics
In the past, AAEA meetings emphasized the problems of the farm. However, we are transitioning to emphasizing the problems of the food system and consumers. The prestigious fellow address was given by another Berkeley alumna, Jill McCluskey, the director of Washington State’s School of Economic Sciences. Jill investigated the inequality of access to nutritional food, distinguishing between food deserts (locations where mostly low-income people have minimal access to grocery stores that provide fresh produce and other nutritional foods) and food swamps (areas where most food outlets provide fast and convenient food which may lack in nutritional value). The health of individuals living in these regions with limited transportation options and significant time constraints suffers from a lack of access to healthy food, which in turn may contribute to chronic diseases and obesity. A fundamental insight of this approach is that the main cause of consuming unhealthy diets is lack of income and time pressure. This “nutrition trap” undermines productivity and overburdens health services, at a substantial cost to the rest of society. Conversely, the social gain from improved nutritional health strongly supports a case for government incentives to enhance healthy food access in these regions, along with information resources that can educate consumers and improve nutrition choices.

Prescriptions based on economics are not necessarily implemented. In the end, politics are key in establishing policies. In a symposium on environmental policy in agriculture, Cathy Kling noted that there are few enforced policies in the US that prevent water contamination from fertilizers and other residues used in agricultural production. Nitrates find their way from the Midwest through the Mississippi to the Gulf of Mexico where they have created a massive dead zone, wiping out many of the fisheries and other biodiversities. This problem persists despite the fact that sound technical solutions exist to control contamination at reasonably low costs. Research in the political economy suggests that one reason for this sad state of affairs is that politicians representing farm states supported the Clean Water Act, which regulated water quality in the rest of the economy while exempting agriculture from the scrutiny of the law. Instead, the government established policies to promote ecosystem services, which are subsidies aimed to improve water quality. But these policies are coming short. My collaborator Gal Hochman suggested that one reason that government may not select the policies suggested by economists is that they are concerned that their choice may be overruled with a change in government. Governments with a stronger environmental emphasis may be able to establish regulations that require irreversible investment, rather than environmental taxations that can be easily reversed.

The conference had many other sessions that illustrated how the relative emphasis on farm economics is declining and there is increasing emphasis on other parts of the food supply chain, the environment, development, and interactions between economics and other disciplines.

Awards, Leadership, and Conclusion
Any association like the AAEA is a collection of people, and its challenge is to build loyalty and a sense of family. When people perceive that they receive from the organization, they will tend to give, and it will result in a stronger group. The biggest honor that AAEA bestows on its members is recognized as a Fellow. I really appreciate and respect this year’s Fellows who illustrated the richness of the association. Two of the five new Fellows (Jutta Roosen and Will Martin) are international. Jutta contributes to consumer behavior research and Will on international trade and policy. Will was the president of the International Economics Association and Ralph Christy was the president of the AAEA when I became a fellow. Ralph, a professor at Cornell, was among the first scholars of agro-business and international rural development and recently has been working on agri-food problems in Africa. Tim Richards is a leading scholar of agri-business and supply chains and I believe that this is the main area of growth of agri-food research since much of the action is outside the farm gates. Al Parks has been a leading scholar and educator of A&M Prairie View University of Texas. His research has contributed to the understanding of the potential and management of agricultural biotechnology, crop systems, and livestock, both in economics and general agricultural literature, and he has educated and mentored numerous students, including Ralph Christy. Al Park is the first fellow from a historically black college, and his recognition is long overdue.

The AAEA meeting in Austin reminded me how much I missed this type of gathering and I look forward to future live meetings. I really appreciate the guts of the AAEA board, in particular, it’s President Dawn Thilmany, and its staff headed by Kristen McGuire in deciding about this hybrid form. I hope that next year it will be mostly a live event, and wish that pandemic will be behind us.

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