Showing posts from April, 2011



Sugar, obeseity and a possible regression discontinuity design

Here is a random research idea that may be crazy.  But maybe not.  Either way, I really haven't the time to investigate it seriously. Maybe someone else does have the time. The idea is inspired by two recent things:  (1) Tuesday's seminar by David Just of Cornell University , who does research on the intersection of psychology and economics and is currently doing some interesting work on framing and package sizes ; and (2) an intriguing article by Gary Taubes who investigates whether sugar is toxic .  Taubes is mainly following arguments made by Robert Lustig, a Professor of Pediactrics at UCSF who has an influential YouTube video " Sugar: The Bitter Truth " (nearly 900,000 views--yikes!).  That's a 90 minute tribe explaining Lustig's argument for why sugar is *the* culprit in the obesity crisis.  Lustig is pretty strident. Shrill?  Regardless, I find his arguments compelling.  This is not a quack idea. Anyway. The theory still needs smoking gun evidence

What crop supply response looks like

The other day I asked where the new cropland was going to come from. Today we have William Neuman reporting : When prices for corn and soybeans surged last fall, Bill Hammitt, a farmer in the fertile hill country of western Iowa, began to see the bulldozers come out, clearing steep hillsides of trees and pastureland to make way for more acres of the state’s staple crops. Now, as spring planting begins, with the chance of drenching rains, Mr. Hammitt worries that such steep ground is at high risk for soil erosion — a farmland scourge that feels as distant to most Americans as tales of the Dust Bowl and Woody Guthrie ballads. ... ...Now, research by scientists at Iowa State University provides evidence that erosion in some parts of the state is occurring at levels far beyond government estimates. It is being exacerbated, they say, by severe storms, which have occurred more often in recent years, possibly because of broader climate shifts... The article is a little short

Shouldn't we be taxing gas more heavily?

I was lucky to be able to attend part of the NBER workshop on Environmental and Energy Economics at Stanford last week. My favorite was a talk by Michael Anderson of UC Berkeley.  He spoke about a paper joint with Max Auffhammer, also of UC Berkeley: "Vehicle Weight, Highway Safety, and Energy Policy" Sorry, no link.  The  issue is one that's been talked about many times: an arms race in vehicle weight and safety.  The essential problem is that the heavier my vehicle, the safer it is for me and the more dangerous it is for you.  Now, if we could all commit to smaller lighter cars, we'd pay less for our cars, have better gas mileage, and be no little less safe [please excuse my exaggeration], since when it comes to car-on-car collisions, it's mainly relative size that matters. This sets up a classic prisoner's dilemma in which it's smart for one and dumb for all to buy bigger, heavier vehicles. That basic tension is pretty well known, I think. Wh

What if subprime and CDOs never happened?

I was watching the Inside Job for the other sleepless night (great movie by the way, both substantively and artistically), and I had a thought about the whole bubble and financial crisis that had not really occurred to me before. It's also a point that I think has been generally overlooked in commentary thus far. First, some context: Inside Job does a fine job spelling out the history of deregulation, development of CDOs and growth of the AAA bond market. They also do a really nice job explaining how CDOs worked and ultimately failed and the blatant corruption of the bond rating agencies. These features account for how financial markets were able to innovate new securities in an effort satisfy a nearly unquenchable thirst for low risk assets. The movie basically blames Greenspan for low interest rates. But if Greenspan was at fault, it was only in that he didn't use the Fed's portfolio to help quench the world's thirst for safe assets.  Consider, however, the si

Where's the land?

Corn, wheat and cotton plantings are anticipated to go up, and soybeans down just a smidgen.  That's not too surprising given how high prices are. But where's the land coming from?   According to USDA , the net increase for these (the four largest cash crops besides hay) will be about 10 million acres.  That's nearly one third the size of North Carolina.  Notice in the graph that increases for one crop are typically offset by losses in another.  Most hay land isn't going to be suitable for these crops. Two wild guesses: 1) Prospective plantings are a little too optimistic 2) The Conservation Reserve Program is going to have a hard time enrolling much land in its signups this year. But I don't think these two things can account for 10 million acres.