What Are the Welfare Impacts of Fat Taxes and Thin Subsidies?

It’s not every day you come across a new paper and you think “This is the stuff graduate syllabi are made of.” From a fascinating new article by Jayson Lusk and coauthors in the Economic Journal:

We conducted an experiment to study the fiscal impacts of unhealthy food taxes and healthy food subsidies on very low and medium income women in France. The policies tend to be regressive and favor the higher income consumers. Unhealthy food taxes increase prices paid more for low than higher income women. Healthy food subsidies reduce the prices paid more for higher than lower income women. The effects arise because the pre-policy diets of the higher income women tend to be healthier but also because the choices of the higher income women are more responsive to price changes.

Concurrent with the publication of the article in the EJ, Jayson also had a post last week in which he discussed the article’s findings: Continue reading

AJAE Virtual Special Issue on Development Economics

The American Journal of Agricultural Economics (AJAE), the top journal in the field of agricultural and applied economics, has a new virtual special issue (VSI) out on development economics. The introduction to the VSI begins as follows:

In his 1979 Nobel Prize Lecture, development economist Theodore W. Schultz observed: “Most of the people in the world are poor, so if we knew the economics of being poor, we would know much of the economics that really matters. Most of the world’s poor people earn their living from agriculture, so if we knew the economics of agriculture, we would know much of the economics of being poor.” The subsequent years have seen rapid urbanization in many countries, but the insight that agriculture is crucial to the economic lives of many of the world’s poor remains important to policy-makers and researchers alike. As a testament to the enduring validity of Schultz’s statement, agriculture has experienced a resurgence among development economists in the past decade.

This virtual issue of the American Journal of Agricultural Economics showcases ten recent articles that have pushed the frontiers of empirical development economics.

Among others, the VSI includes papers by Jean-François Maystadt and Olivier Ecker on extreme weather and civil war, by Jesse Tack and Jenny Aker on mobile phones and trader behavior, by Hope Michelson on supermarkets and smallholder farmers, by Klaus Deininger and Songqing Jin on sharecropping and investment behavior, by Erwin Bulte et al. on double blind randomized controlled trials, and by yours truly on food prices and social unrest. It is quite an honor to be in such distinguished company and to have one of the papers I have had the most fun writing be selected for this VSI.

ht: Paul Kelleher.

‘Metrics Monday: Type III Errors

Most econometrics students learn about type I and type II errors. A type I error consists in incorrectly rejecting a null hypothesis when it is true; a type II error consists in incorrectly failing to reject a null hypothesis when it is false.

Or, if you are one of those people who, like me, is on the slow end of things and always has to look up their definitions, here is a nifty cartoon to learn the difference between type I and type II errors:


What is this nonsense about type III errors, then? In his Guide to Econometrics, Kennedy wrote: Continue reading