Marc F. Bellemare Posts

There is less than one month until my book Doing Economics: What You Should Have Learned in Grad School–But Didn’t comes out on May 10.

One of the things that most people don’t realize about the book-publishing business is the importance of pre-orders, which act as an early signal of interest in a given book. If you are planning on buying the book, I would like to encourage you to pre-order it here, which will ensure that you receive the book on the day it is released (see the expected delivery date for my own pre-order below), and your credit card will not get charged until your copy of the book ships.

You have pre-ordered your own copy but know someone who is about to enter grad school to do quantitative social science, is already in grad school doing so, or is about to start a position doing so? This would make for a great gift for them.

Not the most elegant of titles, I realize, but that is nevertheless the title of a new working paper which Online Agricultural and Resource Economics Seminar co-founder and co-organizer Jeff Bloem and I recently finished drafting. Here is the abstract:

In May 2020, in the early days of the SARS-CoV-2 pandemic, we launched the Online Agricultural and Resource Economics (OARES) seminar in an effort to maintain a semblance of normalcy for scholars in the field of agricultural and applied economics. The goal of the OARES was to break down the privilege barrier in two ways: (i) by featuring for the most part research by junior, female, or minority scholars, and (ii) by bringing frontier research to those who may not have had access to a regular seminar series prior to the pandemic. Against those goals, we discuss the contribution of the OARES to diversity, equity, inclusion, and belonging in agricultural and applied economics.

In the paper, we first analyze attendance data for 70 regular OARES presentations, finding that there is no apparent tradeoff between attendance on the one hand and the gender, race, or seniority of the speaker, and further finding that there is no relationship between attendance and a talk’s general topic area (i.e., development, environmental, or food and agricultural economics).

Second, we discuss where the 17 papers presented at OARES that are already published have been published, which includes top general journals (e.g., the American Economic Journal: Applied Economics, the Journal of the European Economic Association, and the Review of Economics and Statistics), top field journals (e.g., the American Journal of Agricultural Economics and the Journal of Development Economics), as well as some general science journals (e.g., Environmental Research Letters and Nature Human Behavior).

Finally, we discuss some of the lessons learned from two years of the OARES. Those lessons are that (i) there is a demand for diversity, (ii) there is no trade-off between diversity and merit, (iii) people can and do adapt to new circumstances, (iv) research topic is unrelated to attendance, (v) attendance follows predictable seasonal patterns, (vi) the marginal benefit of organizing the OARES exceeds the marginal cost, and (vii) we can foster diversity, equity, inclusion, and belonging by building community.

This is very much a first draft of this paper, and so we welcome comments and suggestions.

That’s the title of a new working paper my PhD student Chris Boyd (who’s on the market this year; hire her, she is wonderful!) and I finished over the holidays.

This paper picks up where my coauthors Yu Na Lee and David Just left off in our 2020 American Journal of Agricultural Economics article on producer behavior in the face of output price risk. An old theoretical conjecture in the literature is that in the absence of insurance, a risk-averse producer responds to the presence of price risk by cutting back on how much she produces, in an effort to reduce her exposure to income risk; much of agricultural policy (i.e., agricultural insurance) in high-income countries is predicated on that hypothesis.

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 (iii) the introduction of voluntary insurance causes the average producer on the market to produce more in situations of price risk than in situations of price certainty. Additionally, (iv) purchasing the voluntary insurance causes the average producer to produce more in situations of price risk relative than in situations of price certainty, but when looking only within 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.