Wednesday, November 30, 2011

Legalizing consumption of horse meat


We discuss repugnant transactions in my principles of micro course, and eating horse meat is one of the first items we always discuss. Al Roth's blog does a great job of keeping us up-to-date with the newest repugnant transactions.

Friday, November 25, 2011

Should you buy local foods?

Many friends of mine - good, kindhearted people - make a point of buying local foods.  They think they are helping the world by purchasing foods that are produced closer to home, often by saving transportation costs (and emissions).

This article by Sexton does a good job of explaining why purchasing local foods is not always optimal.

Wednesday, November 23, 2011

Happy Thanksgiving

Happy Thanksgiving Everybody!  This is always one of my favorite holidays.  One thing I love reading every year is Rush's "The Real Story of Thanksgiving".

My favorite quote is at the end:

"The problem with the world is not too few resources. The problem with the world is an insufficient distribution of capitalism."

Here's another post on the issue by Alex Tabarrok

Edit: Found this video after the fact, but another version of the story:

Tuesday, November 22, 2011

Another dumb move ...

What a total joke.  If you put in restrictions that make it more expensive to operate a business, what do you expect firms to do, Mr. Obama?  I expected him to be a leftist, but I didn't think he'd be so incompetent 

Monday, November 21, 2011

SU Economics on Facebook

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Recent publications

I've had a good run recently.  In the past 12 months or so, I've had 8 articles published or accepted.  The only problem with this is almost all my "inventory" got published at the same time, so I will have fewer publications over the next couple of years.  Anyway ... here are summaries of four of my recent papers.

"Estimating the impact of Food and Drug Administration regulation of cigarette package warning labels and the added impact of plain packaging: Evidence from experimental auctions among adult smokers" Health Policy, 102 (1), Pages 41-48.  With (Thrasher, J.F., D. Hammond, A. Navarro, and J.R.Corrigan.)

This article received some good press coverage.

Objective: To estimate differences in demand for cigarette packages with different packaging
and health warning label formats.

Methods: Adult smokers (n = 404) in four states participated in experimental auctions. Participants bid on two of four experimental conditions, each involving a different health warning label format but with the same warning message: (1) text on 50% of pack side; (2) text on 50% of the pack front and back; (3) text with a graphic picture on 50% of the pack front and back; and (4) same as previous format, but without brand imagery.

Results: Mean bids decreased across conditions (1: $3.52; 2: $3.43; 3: $3.11; 4: $2.93). Bivariate and multivariate random effects models indicated that there was no statistically significant difference in demand for packs with either of the two text only warnings; however, demand was significantly lower for both packs with prominent pictorial warnings, with the lowest demand associated with the plain, unbranded pack.

Conclusions: Results suggest that prominent health warnings with graphic pictures will reduce demand for cigarettes. Regulators should not only consider this type of warning label, but also plain packaging policies for tobacco products.

 "The Value of Countermarketing Information to Smokers: Evidence from Field Auctions." Journal of Agricultural and Applied Economics. 43 (4), Pages 607-620.  (With J. Nonnemaker and M. Farrelly) 

Information about cigarettes can help smokers come to an informed decision about what cigarettes to purchase. Countermarketing information can help smokers make informed decisions, but little is known about the value of this information to smokers. In this article, we use data from experimental auctions to estimate the value of countermarketing information that counters industry claims about reduced-risk cigarettes. We find that this information has significant value to smokers who have been exposed to marketing information from tobacco companies touting reduced-risk cigarettes, but we find no evidence it provides value to smokers not exposed to this marketing information.

Colson, G., W.E. Huffman, and M. Rousu "Improving the Nutrient Content of Food through Genetic Modification: Evidence from Experimental Auctions on Consumer Acceptance."  Journal of Agricultural and Resource Economics.  (With Colson, G. and W.E. Huffman)

This paper assesses consumers’ acceptance of nutritionally enhanced vegetables using a series of auction experiments administered to a random sample of adult consumers. Evidence suggests that consumers are willing to pay significantly more for fresh produce with labels signaling enhanced levels of antioxidants and vitamin C achieved by moving genes from within the species, as opposed to across species. However, this premium is significantly affected by diverse information treatments injected into the experiments.

Homegrown Value Auctions with Repeated Rounds and Price Feedback: An Adversarial Collaboration." Forthcoming at the American Journal of Agricultural Economics.  (With Corrigan, J., A. Drichoutis, J. Lusk, and R. Nayga)

It is generally thought that market outcomes are improved with the provision of market information. As a result, the use of repeated rounds with price feedback has become standard practice in the applied experimental auction valuation literature. We conducted two experiments to determine how rationally subjects behave with and without price feedback in a second-price auction. Results from an auction for lotteries show that subjects exposed to price feedback are significantly more likely to commit preference reversals. However, this irrationality diminishes in later rounds. Results from an induced value auction indicate that price feedback caused greater deviations from the Nash equilibrium bidding strategy. Our results suggest that while bidding on the same item repeatedly improves auction outcomes (i.e., reduced preference reversals or bids closer to induced values), this improvement is not the result of price feedback.

Monday, November 7, 2011

A reminder of past folly

The red points are the actual unemployment rates in the US by month.  The rest of the chart was put out by the Obama administration.

Friday, November 4, 2011

The "poor" in the USA ...

Great summary here.  The poor in the USA are the rich in most of the world.

Some highlights:

  • 80 percent of poor households have air conditioning. In 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

  • 92 percent of poor households have a microwave.

  • Nearly three-fourths have a car or truck, and 31 percent have two or more cars or trucks.

  • Nearly two-thirds have cable or satellite TV.

  • Two-thirds have at least one DVD player, and 70 percent have a VCR.

  • Half have a personal computer, and one in seven have two or more computers.

  • More than half of poor families with children have a video game system, such as an Xbox or PlayStation.

  • 43 percent have Internet access.

  • One-third have a wide-screen plasma or LCD TV.

  • One-fourth have a digital video recorder system, such as a TiVo.