Food and Drink

If you pulled over one hundred people on the street, and asked them to state a religious belief they hold, I’m not sure you would get any answer more plausible than “the pyramids were built for the storage of grain.”  Would you now?

Yet we mock Ben Carson for this, but we do not make fun of those who believe openly in the Trinity, Virgin Birth, ex cathedra, and many other beliefs which are to my mind slightly less plausible claims.  It’s not so different from the old prejudice that Mormon beliefs are somehow “weirder” than those of traditional Christians, except now it is secularists picking and choosing their religious targets on the supposed basis of sophistication.  The Seventh Day Adventists, Carson’s church, are of course weirder yet.

I doubt the storage claim is true as a dominant explanation, but should there not be some storage — of something — in a profit-maximizing or rent-maximizing model of pyramid supply and inventory management?  Maybe Ben’s economic intuition confirmed what he had heard in church.  And what about Coase’s durable goods monopoly model?  In that treatment the monopolist stores grain, admittedly for the pyramids variable Coase was hermetic in his exposition, perhaps properly so given how much is at stake here.  And “remains of storage pests have been found in grain recovered from pyramid tombs.”  Further argumentation along these lines can be found in F. Zacher’s classic 1937 article “Vorratsschädlinge und Vorratsschutz, ihre Bedeutung für Volksernährung und Weltwirtschaft” (Cowen’s Second Law), which by now has been cited over nineteen times (twenty in fact).

The Quran notes that the pyramids were made of baked clay, when instead according to many standard accounts much of the pyramids are made of quarried limestone (yet even that question is murky and I would not entirely count out the Quranic exposition).  Presumably many Muslims, who ascribe a holy status to the Quran, would defend the baked clay proposition in some manner.  How often is that thrown in their faces?

Might Joe Lieberman, an Orthodox Jew, possibly hold some views about Joseph which are not literally true?  After all, those stories do come from the Torah.

Besides, our Founding Fathers had some pretty strange notions about pyramids.  Most of them did a pretty good job in office.

What Ben Carson has done is to commit the unpardonable sin of talking about his religion as if he actually takes it seriously.

Loyal MR readers will know that I am myself a non-believer.  But what I find strangest of all is not Ben Carson’s pyramids beliefs, but rather the notion that we should selectively pick on some religious claims rather than others.  The notion that it is fine to believe something about a deity or deities, or a divine book, as long as you do not take that said belief very seriously and treat it only as a social affiliation or an ornamental badge of honor.

Bully for Ben Carson for reminding us that a religion actually consists of beliefs about the world.  And if you’re trying to understand his continuing popularity, maybe that is the place to start.

Where to park your food truck?

by on November 3, 2015 at 2:30 pm in Economics, Food and Drink | Permalink

Here is Eliot Abrams, doctoral student at the University of Chicago who is working on modeling food truck behavior:

Modeling food truck parking locations is complex, as there are around 70 active food trucks parking at more than 30 locations in Chicago. Thankfully, there is plenty of data because food trucks need to advertise their locations. Since 2011, Andrew Violette, who runs ChicagoFoodTruckFinder.com, has been tracking the city’s food trucks based on their Twitter feeds. I pulled 34,328 parking records from Violette’s website and created a simulation of how food trucks park.

This exercise translates the observed food truck movements into information on the relative number of customers a truck serves at each location on a given day. The number of customers is a function of many variables, such as the day of the week and the location chosen by the truck. I focus on estimating how customer traffic is impacted by the number and diversity of other trucks parking at the location and by the past frequency with which the truck has parked at the particular location. Just like Hotelling’s ice cream vendors, food trucks should (and do) choose their locations in response to these dynamics in order to maximize their profit.

As part of the same symposium, here is, Drew Davis, Booth MBA and most importantly a guy who runs food trucks:

In Wrigleyville, we ended up getting a lot of people out for Sunday strolls, running errands. We’re near a drugstore and a grocery store. By experimenting, we got to the right answer. We don’t want to be a destination in itself. We’d much rather make ourselves part of people’s everyday experience, a part of their lives.

At Booth, there’s always the question: Does the data exist and can I get it?  I could generate data from our truck sales. But you can really only compare results if the day of the week was the same, the spot was the same, and the weather was the same. By the time you’ve made all those cuts in the data, the analysis would be horrendous. I work much better with stories.

Read the whole thing, Chad Syverson opines as well.

Free Market Food Banks

by on November 3, 2015 at 7:27 am in Economics, Education, Food and Drink | Permalink

Feeding America, the third largest non-profit in the United States, distributes billions of pounds of food every year. Most of the food comes from large firms like Kraft, ConAgra and Walmart that have a surplus of some item and scarce warehouse space. Feeding America coordinates the supply of surplus food with the demand from food banks across the U.S..

Allocating food is not an easy problem. How do you decide who gets what while taking into account local needs, local tastes, what foods the bank has already, what abilities the banks have to store food on a particular day, transportation costs and so forth. Alex Teytelboym writing at The Week points out:

…Before 2005, Feeding America allocated food centrally, and according to its rather subjective perception of what food banks needed. Headquarters would call up the food banks in a priority order and offer them a truckload of food. Bizarrely, all food was treated more or less equally, irrespective of its nutritional content. A pound of chicken was the same as a pound of french fries. If the food bank accepted the load, it paid the transportation costs and had the truck sent to them. If the food bank refused, Feeding America would judge this food bank as having lower need and push it down the priority list. Unsurprisingly, food banks went out of their way to avoid refusing food loads — even if they were already stocked with that particular food.

This Soviet-style system was hugely inefficient. Some urban food banks had great access to local food donations and often ended up with a surplus of food. A lot of food rotted in places where it was not needed, while many shelves in other food banks stood empty. Feeding America simply knew too little about what their food banks needed on a given day.

In 2005, however, a group of Chicago academics, including economists, worked with Feeding America to redesign the system using market principles. Today Feeding America no longer sends trucks of potatoes to food banks in Idaho and a pound of chicken is no longer treated the same as a pound of french fries. Instead food banks bid on food deliveries and the market discovers the internal market-prices that clear the system. The auction system even allows negative prices so that food banks can be “paid” to pick up food that is not highly desired–this helps Feeding America keep both its donors and donees happy.

Food banks are not bidding in dollars, however, but in a new, internal currency called shares.

Every day, each food bank is allocated a pot of fiat currency called “shares.” Food banks in areas with bigger populations and more poverty receive larger numbers of shares. Twice a day, they can use their shares to bid online on any of the 30 to 40 truckloads of food that were donated directly to Feeding America. The winners of the auction pay for the truckloads with their shares. Then, all the shares spent on a particular day are reallocated back to food banks at midnight. That means that food banks that did not spend their shares on a particular day would end up with more shares and thus a greater ability to bid the next day. In this way, the system has built-in fairness: If a large food bank could afford to spend a fortune on a truck of frozen chicken, its shares would show up on the balance of smaller food banks the next day. Moreover, neighboring food banks can now team up to bid jointly to reduce their transport costs.

Initially, there was plenty of resistance. As one food bank director told Canice Prendergast, an economist advising Feeding America, “I am a socialist. That’s why I run a food bank. I don’t believe in markets. I’m not saying I won’t listen, but I am against this.” But the Chicago economists managed to design a market that worked even for participants who did not believe in it. Within half a year of the auction system being introduced, 97 percent of food banks won at least one load, and the amount of food allocated from Feeding America’s headquarters rose by over 35 percent, to the delight of volunteers and donors.

Teytelboym’s very good, short account is working off a longer, more detailed paper by Canice Prendergast, The Allocation of Food to Food Banks.

Canice’s paper would be a great teaching tool in an intermediate or graduate micro economics class. Pair it with Hayek’s The Use of Knowledge in Society. Under the earlier centralized system, Feeding America didn’t know when a food bank was out of refrigerator space or which food banks had hot dogs but wanted hot dog buns and which the reverse–under the market system this information, which Hayek called “knowledge of the particular circumstances of time and place” is used and as a result less food is wasted and the food is used to satisfy more urgent needs.

The Feeding America auction system is also the best illustration that I know of the second fundamental theorem of welfare economics.

Even monetary economics comes into play. Feeding America created a new currency and thus had to deal with the problem of the aggregate money supply. How should the supply of shares be determined so that relative prices were free to change but the price level would remain relatively stable? How could the baby-sitting co-op problem be avoided? Scott Sumner will be disappointed to learn that they choose pound targeting rather than nominal-pound targeting but some of the key issues of monetary economics are present even in this simple economy.

Want some hummus with a side of coexistence? A restaurant near the coastal city of Netanya recently started offering 50 percent off each plate of the chickpea paste at tables seating Jews and Arabs together.

There is more here, and for the pointer I thank Ari.

Inquiring minds wish to know for the purposes of the next few days…I have my own views, but first would love to hear yours.

A new paper from Fernandez, Gohmann and Pinkston shows that counties in Kentucky that forbid alcohol have more meth labs than otherwise similar counties. I like the research but in truth any paper with both Breaking Bad and Justified references is a winner in my book.

Abstract: This paper examines the influence of local alcohol prohibition on the prevalence of methamphetamine labs. Using multiple sources of data for counties in Kentucky, we compare various measures of meth manufacturing in wet, moist, and dry counties. Our preferred estimates address the endogeneity of local alcohol policies by using as instrumental variables data on religious affiliations in the 1930s, when most local-option votes took place. Alcohol prohibition status is influenced by the percentage of the population that is Baptist, consistent with the “bootleggers and Baptists” model. Our results suggest that the number of meth lab seizures in Kentucky would decrease by 24.4 percent if all counties became wet.

The authors suggest that alcohol users who buy alcohol in places where it is banned become acculturated and familiar with illegal networks making it easier for them to buy meth. In a reverse of the usual story, alcohol prohibition becomes the gateway to other illegal activities.

In my interpretation, however, the association of meth labs and alcohol prohibition is due more to supply side factors than demand side factors. In particular, a long history of moonshine production in dry Kentucky counties leads to an accumulation of knowledge about where to hide the labs, how to evade the law and who to bribe. In this version of the theory, lifting alcohol prohibition doesn’t necessarily reduce meth production because the knowledge and the networks remain in place.

A modified version of the theory can combine demand and supply factors. If there are economies of scope between alcohol production and meth production (such as bribes to local police) then a reduction in the demand for moonshine will raise the costs of producing meth.

Understanding which of these theories holds would make an important contribution to the industrial organization of illegal goods and would also have implications for how best to combat illegal good production.

New data, released by the Centers for Disease Control, show that America’s love for fast food is surprisingly income blind. Well-off kids, poor kids, and all those in between tend to get about the same percentage of their calories from fast food, according to a survey of more than 5,000 people. More precisely, though, it’s the poorest kids that tend to get the smallest share of their daily energy intake from Big Macs, Whoppers, Chicken McNuggets, and french fries.

That is from Robert Ferdman.  By the way:

More than a third of all children and adolescents living in the country still eat some form of fast food on any given day, a number which hasn’t budged in decades, according to the CDC.

And many children are getting alarmingly high proportions of their diet from chicken nuggets and french fries. About a quarter of all kids in the United States get 25 percent of their calories from fast food. And 12 percent of kids get more than 40 percent of their calories from fast food.

The transcript is here, with a podcast version, and there is also a YouTube version at the link, with cleaned-up audio compared to any earlier link you may have come across.  Luigi was wonderful, and also fantastically witty.  The topics included Italy, Donald Trump, Antonio Gramsci, Google and conglomeration, Luchino Visconti, Starbucks, and the surprisingly high productivity of Italian cafés.

Here is one excerpt:

I don’t understand why in the United States the only thing that is really noncompetitive is sports. In Europe, the only thing that is really competitive is sports.

And another:

COWEN: …Angela Merkel, overrated or underrated?

ZINGALES: I think she’s probably underrated. I’m impressed by her ability to, number one, run Europe for the interest of Germans in a very effective way.

The longest bit from me is where I compare and contrast Luigi with Gramsci, another theorist of hegemony, and try to sum up Luigi’s work; you can find that on the video or in the transcript.

And again from Luigi there is this:

…when I arrived in this country 27 years ago, you were not really drinking coffee. You were drinking a dark thing that tastes like I don’t say what because we’re online. The culture of coffee did not exist here.

The culture of coffee and a café where you seat and drink, et cetera, what Starbucks is, is an Italian or at most French culture. Why were you unable to export this? This is my little explanation. By the way, the only country in the world where Starbucks has not arrived is Italy.

Luigi then considers when Italian coffee is better tasting and better run at the artisan level, yet without the same possibilities for corporate expansion.  I liked this sentence from Luigi:

The extreme agency problems of Italy make it difficult to scale firms.

And finally:

One thing I can predict fairly confidently is that we are not going to pay the debt.

This is also a worthwhile observation:

When you’re down to one or two kids, the chance that one is an idiot is pretty large.

His favorite film is Visconti’s The Leopard, a good pick.  And he was the public choice scholar who forecast the rise of Donald Trump, as we discuss in the chat.  Self-recommending.

The unknown Anacostia

by on September 7, 2015 at 1:24 pm in Food and Drink, Travel, Travels, Uncategorized | Permalink

BigChair

I am known for giving house guests, especially if they are from abroad, strange tours of random parts of the United States.  Yesterday it was a mix of Northeast D.C. and Anacostia.

Maketto on H St. offers Cambodian and Taiwanese cuisine in hip surroundings.  The Dolcezza factory near Union Market serves gelato without freezing it, so it is superior to the other branches, and Righteous Cheese is the best shop of its kind in town.  St. Elizabeth’s Hospital, in Anacostia, was the first federally supported mental hospital, dating from the 1850s; John Wilkes Booth spent time there.  The architecture looks like something from Shutter Island or a Stephen King novel, and if you are clever you can talk your way in through the front gate.  The Frederick Douglass House is the standard Anacostia site, worth more than one visit.  The Big Chair originally was an advertisement for a furniture company, but has evolved into an Anacostia landmark and it was renovated in 2006.  It since has fallen from the biggest chair in the world to no better than number three.  At The Big Chair Coffee and Grill, reopened by African immigrants I might add, drinks are remarkably cheap.

Overall Anacostia is improving at a rapid clip, with lots of new town home construction and even some shops.  In terms of greenery and views, it is one of the nicest parts of town and someday it will be very expensive indeed.

A conference on Gordon Tullock’s economic, political, and legal research is being held in Founders Hall of George Mason’s Arlington Campus on Friday October 2 and Saturday October 3, 2015.

TullockGordon Tullock was one of the founders of the field of research that came to be called Public Choice.  He was coauthor of one of the most important books in the field, the Calculus of Consent (with Nobel Prize winner James Buchanan) and the first to point out the losses associated with rent seeking. He was also among the first researchers to use economic tools to analyze the law, trial procedures, and judicial systems. His research includes theories of the origin of the state and constitutional governance, the impossibility of revolution, legal systems, government failure, and the economics of science itself. Beyond his own research he was an institution builder. He was the founding editor of the journal Public Choice, a premiere outlet for research on public choice. He helped to launch the Public Choice Society and the European Public Choice Society. He is among the most influential economists never to win the Nobel Prize.

Looks like an excellent conference and event. More information and RSVP here.

Another sign on the door says that a new restaurant will be replacing Charlie Chiang’s and will be “opening soon.”

The new restaurant will be called Amannisahan and will serve Uyghur cuisine, according to the sign. In an indication that a quick reopening may indeed be in the works, Amannisahan says it’s currently hiring restaurant managers and waiters.

Take that Bryan Caplan!  And that’s for Crystal City, VA, by the way here is the Jorma Kaukonen song.

For the pointer I thank Michael Makowsky.

The Maple Syrup Cartel

by on August 23, 2015 at 7:29 am in Economics, Food and Drink | Permalink

Quebec produces more than 70 percent of the world’s maple syrup and the Federation of Quebec Maple Syrup Producers is a cartel every bit as rapacious as OPEC or De Beers. The Federation is government backed and all producers must sell to them. From an excellent piece in the NYTimes:

maple-syrupAfter the spring harvest, farmers from around the province send their syrup to the federation.

…To keep prices high, the federation enforces strict quotas for the province’s 7,400 producers. Instead of flooding the market during years with bumper crops, all syrup produced beyond that amount is stored in the federation’s warehouse, which helps prop up prices by limiting supply. When seasons are lean, it releases the syrup, to maintain stable supply and pricing.

…When the federation suspects farmers are producing and selling outside the system, it posts guards on their properties. It seeks fines from producers and buyers who do not follow the rule. In the most extreme situations, it seizes production.

Addendum: The NYTimes video about rebel maple syrup producers is excellent.

Food has replaced music at the heart of the cultural conversation for so many, and I wonder if it’s because food and dining still offer true scarcity whereas music is so freely available everywhere that it’s become a poor signaling mechanism for status and taste. If you’ve eaten at Noma, you’ve had an experience a very tiny fraction of the world will be lucky enough to experience, whereas if you name any musical artist, I can likely find their music and be listening to it within a few mouse clicks. Legally, too, which removes even more of the caché that came with illicit downloading, the thrill of being a digital bootlegger.

Once, it felt like watching music videos on MTV was a form of rebellion in plain sight. Nowadays, the channel doesn’t play any music videos. Instead, we have dozens of food and cooking shows, even entire channels like The Food Network dedicated to the topic. Chefs have become elevated to the status of master craftsmen, with names that have risen above the status of their restaurants, and diners revere someone like Jiro of Jiro Dreams of Sushi fame the way a previous generation worshipped the guitar sound of a rock god like Jimi Hendrix.

The food scene today offers a seemingly never-ending supply of scarce experiences, ingredients, and dishes. Cronuts you have to wait in line for a few hours to get your hands on. Pop-up restaurants that serve only on a few nights a week for a few weeks, then disappear forever. Restaurants that you have to sacrifice a goat to just to get a reservation, and then they’ll actually take that goat you killed and prepare your entire dinner from it, nose to tail. A white truffle add-on that tacks $80 on to a single piece of cured hamachi, and oh, the truffle is only available for four weeks a year and came over on a gondola from Alba, Italy, and the hamachi is one of the last of three members of its species so you know, you should probably try it before…oops, sorry, the chef says someone just ordered the last of it. Yep, it’s that couple at the corner table, and that’s the last plate that she’s Instagramming right now.

That is from Eugene Wei, with more of interest at the link, via Graham Rowe.

That is today’s FT “Lunch with” piece, by John Thornhill, and of course she is an economist at Sussex.  I hope the article is not too gated for you.  Here is one bit:

As professor in the Economics of Innovation at Sussex University, Mazzucato is much in demand on the international lecture circuit for her iconoclastic views about how wealth is generated and the public sector’s vital role in promoting innovation. She is as forthright in her opinions as she is eloquent in expressing them.

She also has four children and I can testify she is what they call “a commanding presence.”  In Singapore not long ago I told her she should have her own TV show, and I would not be surprised if this someday came to pass.  Here is more:

Even Silicon Valley’s much-fabled tech entrepreneurs are not as smart as they like to think. Although Mazzucato lavishes praise on the entrepreneurial genius of the likes of Steve Jobs and Elon Musk, she says their brilliance tells only part of the story. Many of the key technologies used by Apple were first developed by public-sector agencies. Most of the key technologies that do the clever stuff inside your iPhone — including its geo-positioning system, the Siri voice-recognition service and multi-touch screen — were the offspring of state-funded research. “Government has invested in basic research, it has invested in applied research, it has invested in concrete companies [such as Tesla] all the way downstream, doing what venture capital should be doing if it was really playing the role it says it plays,” she says. “It is an incredibly active, mission-oriented role.”

In my view she overstates what are essentially some worthwhile points.  For more you can read her book The Entrepreneurial State.  Here is her home page.  Here is her Wikipedia page.  Here is her TED talk.  She is here on Twitter.

From the interview, I enjoyed this line:

I walk in as an economist and I walk out as a life coach…

She ordered the soup and the duck.

No, it is not knowledge of the city’s best dish, nor is it access to all the Yelp reviews, or even an understanding of how the spices in that cuisine work together.

I have a simple nomination.  If you could only know one thing about a city, you would like to know what time the best and most popular restaurants fill up.

If you know that time, you can walk around a restaurant-rich area.  Wait for the best places to start filling up, and then make your move and muscle your way through the door.  Voila, the wisdom of crowds!

If you come too early, you cannot glean information from watching the customer flow because there isn’t any.  If you come too late, the best places are already full, or they have lines which are too long.  But if you are there at just the right time, and attentive to the movement of the crowds, what really can go wrong?

In Singapore the best time to start stalking the hawker centres is about 10:30 a.m., certainly no later than 11.  Otherwise the lines at the best stalls are simply too long.  Just show up at the right time, and assume the Singaporeans know what they are doing.  It works.  In Paris you must be looking for a good lunch restaurant before 12:30.

It is a common theme in food economics that knowledge of people, or knowledge of social mechanisms, is often more valuable than knowledge of food.  Knowing whom to ask and also how to ask is also often more valuable than a detailed knowledge of a cuisine per se.