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Category: Food

Published September 20, 2012

Organic Food: Confirmation Bias or Ambiguity Aversion?

A reader writes:

This might be interesting for you: people are annoyed/unhappy with NPR’s coverage about a report out of Stanford that said organic food isn’t really any healthier than conventional food. Clear case in point showing when people are faced with data and facts that counter their beliefs, they will more often than not completely shut it out and continue with their original belief. It’s much easier to continue believing what you thought before than stretch your mind and possibly acknowledge that you’re wrong or at least don’t have the full story. And we wonder why things don’t get accomplished?

What the reader has in mind is confirmation bias, the cognitive bias that makes people give more weight to empirical evidence that support their beliefs and less weight to empirical evidence that contradicts their beliefs, and about which I have written before in the context of development policy.

Continue readingOrganic Food: Confirmation Bias or Ambiguity Aversion?
Published August 14, 2012

Drought and Food Prices: Yours Truly in the Media

Droughts, and the famines they cause, are rarely down to one factor.

“Food crises rarely, if ever, occur because of an overall lack of food to go around,” said Professor Marc F. Bellemare, an agricultural economist at Duke University in North Carolina.

“Rather, they occur because of structural and political problems. Sure, food is scarce in the Sahel, which makes it very expensive.

“But in most places, when food is scarce, food prices increase, which should in principle provide an incentive for traders to import food and distribute it to the areas that need it most.

“In the Sahel, a drought sparked the current food crisis, but poor infrastructure and conflict combined to create the perfect storm of constraints to food imports and food distribution.”

From an article in the UK version of Metro which was published last week.

And then there’s this, from AllAfrica.com:

There is potential to make and save a lot of money predicting the international market, but governments who have yet to, for example, integrate their own farmers into their country’s domestic agricultural market will find these tools offer little in the grand scheme of their concerns.

In many countries, farmers sell only to their neighbours or farm for their own subsistence, effectively barring them from domestic markets.

Marc Bellemare, a public policy assistant professor at Duke University, said tools like the Food Security Media Analysis are a “laudable effort … but what developing countries need is better infrastructure and governance.”

Countries that still lack access to even basics like decent roads will struggle to take advantage of new technology, in other words.

 

Published August 7, 2012

What Can We Do About Food Price Volatility?

A new article by Brian Wright, of UC Berkeley, in the World Bank Research Observer:

In the long view, recent volatility of prices of the major grains is not anomalous. Wheat, rice, and maize are highly substitutable in the global market for calories, and when aggregate stocks decline to minimal feasible levels, prices become highly sensitive to small shocks, consistent with the economics of storage behavior. In this decade, stocks declined due to high global income growth and biofuels mandates, making markets unusually sensitive to subsequent unanticipated shocks, including biofuels demand boosts in reaction to high petroleum prices, the Australian drought, and other regional grain production problems. To protect their own vulnerable and politically influential consumers, key exporters restricted supplies in 2007, exacerbating the price rise. Understandably, vulnerable importers are now building strategic reserves. To reduce costs and disincentive effects, reserves should have quantitative goals related to targeted distribution to the most vulnerable in severe emergencies. For countries with significant animal feeding or biofuels industries, options contracts to protect the consumption of the most vulnerable from harvest shocks are likely to be more cost-effective than emergency reserves.