Marc F. Bellemare Posts

There was a time when only a handful of restaurants would deliver in any given town. Growing up on the south shore of Montreal, the only things you could get delivered were no-frills foods like pizza, poutine, rotisserie chicken, or subs. And when a restaurant did deliver, that service was always offered by the restaurant itself.

Since I was a teenager in the early 1990s, the spread of information communication technologies (smartphones, in particular) has changed the food-delivery landscape radically. First, you can now get a wide array of foods delivered, from cheap chain-restaurant fast food to expensive meals from small independent restaurants. Second, instead of relying on in-house delivery people, most restaurants now rely on third-party services like Doordash, Grubhub, or UberEats. This has important consequences for the environment, labor markets, and nutrition, and these consequences have been amplified by the increased reliance on food-delivery services caused by the COVID-19 lockdowns.

What are the implications of the rise of food-delivery apps–what we refer to as the food-delivery revolution–for policy and research? This is the question my coauthors Eva-Marie Meemken, Tom Reardon, Carolina Vargas, and I tackle in an article in the latest issue of Science.

Here is the abstract:

Globally, consumers have increasingly been getting the meals they consume delivered by third parties such as Doordash, Grubhub, Wolt, or Uber Eats. This trend is attributable to broader changes in food systems and technological and institutional innovation (such as apps and digital platforms and the increased reliance on third parties for food delivery) and has sharply accelerated as a consequence of the lockdowns resulting from the COVID-19 pandemic. Global revenues for the online food delivery sector were about $90 billion in 2018, rose to $294 billion in 2021, and are expected to exceed $466 billion by 2026. The consequences and policy implications of this “delivery revolution” remain poorly understood but deserve greater attention. We offer an overview of the drivers of the revolution and discuss implications for the environment, nutrition, and decent work, as well as recently implemented and potential policy options to address those consequences.

In answering the question posed in the title of this post, my coauthors and I raise many questions of interest to agricultural, environmental, labor, tech, or urban economists. Given that, we hope this paper will launch a thousand ships.

It is always nice to wake up to an email saying one of your papers has been accepted for publication. As the title indicates, my article with Chris Boyd Leon titled “Why Not Insure Prices? Experimental Evidence from Peru” is now forthcoming at the Journal of Economic Behavior & Organization.

You can find the most recent version of this paper here, and here is the abstract:

In a competitive market, a profit-maximizing producer’s total revenue is determined both by the quantity of output she chooses to produce and by the price at which she can sell that output. Of these two variables, only output is in part or wholly within the producer’s control, price being entirely determined by market forces. Given that, it is puzzling that the literature studying the effects of providing insurance to producers in low- and middle-income countries has ignored price risk entirely, focusing instead on insuring output. We run an artefactual lab-in-the-field experiment in Peru to look at the effects of insurance against output price risk on production. We randomize the order of three games: (i) a baseline game in which price risk is introduced at random, (ii) the baseline game to which we add mandatory insurance against price risk sold at an actuarially fair premium, and (iii) the baseline game to which we add voluntary insurance against price risk sold at the actuarially fair premium, but for which we offer a random 0-, 50- or 100-percent discount to exogenize take-up. Our results show that, on average, (i) price risk does not significantly change production relative to price certainty and (ii) neither does the provision of compulsory insurance against price risk, but the introduction of voluntary price risk (iii) causes the average producer on the market to produce more in situations of price risk than in situations of price certainty, and (iv) causes the average producer on the market to produce more in situations of price certainty than in cases where there is no insurance or where insurance is mandatory. When looking only at situations where there is price risk, (v) this is due almost entirely to the insurance rather than to selection into purchasing the insurance. Our findings further suggest that (vi) even in the absence of the discount, the insurance against price risk would have a large (i.e., 70-percent) take-up rate.

It also feels great to be back to writing journal articles after writing a book and a Handbook of Agricultural Economics chapter back to back!

A few weeks ago I was interviewed by Peter Lorentzen, professor of economics at the University of San Francisco, about Doing Economics for the New Books Network podcast.

Afterwards, I remarked to Peter, whom you can follow on Twitter here, that these were the best questions I had had on the book so far. Here is a link to our 40-minute conversation, during which we cover a lot of ground about the economics profession. Peter also has interviews with John List, Ran Abramitzky and Leah Boustan, as well as Mike Munger about their new books.