Posts Tagged ‘Self Promotion’

The Economics of Obesity

Monday, February 25th, 2013

I will be participating in the “Weight of the Fox Valley Summit” this week, ostensibly to talk about the economics of obesity.  Economists, of course, get their fingers in a lot of pies, and so this turns out to be a very broad ranging topic.  For example, this USDA Economic Research Service workshop includes topics from why have Americans become more obese to labor market impacts of obesity, to what you might expect — implications for health insurance and economic costs of obesity.

I haven’t published in this area, but I did spend a year working with colleagues and students at Carnegie Mellon on a database charting obesity in the American population, so I have some idea of the basic issues.  For those of you interested in an introduction, as always I recommend you go through the back issues of the Journal of Economic Perspectives to see what the profession has been up to.  As per usual, you don’t have to go back very far to find some work by some top scholars in the area:

Jay Bhattacharya and Neeraj Sood (2011) “Who Pays for Obesity,” Journal of Economic Perspectives, 25(1): 139-158

David M. Cutler, Edward L. Glaeser, and Jesse M. Shapiro (2003) “Why Have Americans Become More Obese?“ Journal of Economic Perspectives 17(3): 93-118.

Those should provide a reasonable, readable introduction to the economics literature on the topic, chock full of references to the primary research.

Another good source for a rough approximation is the EconTalk archive.  I learned a lot listening to Russ Roberts interview Darius Lakdawalla.  Here’s a nice cite on differential costs, with the surprising finding that the overweight and obese might actually live longer than “normal” weight folks, but spend a higher proportion of their years battling diabetes, hypertension, heart disease, and osteoarthritis.   The authors estimate an additional $40,000 in lifetime medical expenses for the obese compared to someone with normal weight.  Here’s that cite:

Darius Lakdawalla, Dana Goldman, Baoping Shang, The Health And Cost Consequences Of Obesity Among The Future Elderly, Health Affairs (2005)

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American Capitalism as A Delicious Milkshake

Friday, February 22nd, 2013

One of the greatest films you are ever likely to see about the intensity, competition and dynamism in American capitalism, There Will be Blood, is the midnight movie tonight in the Warch Campus Cinema.  As I watched the movie, I marveled at how all of those people and resources made their way into the middle of backwater nowhere within days of identifying a promising play. If you are a night owl type, I recommend you stroll over and see it.

As for the famous “milkshake” reference, that has to do with the “fugitive” nature of petroleum.  Indeed, as I tell my students, oil is more like buffalo, and gold is more like cows.  Gary Libecap has written extensively on oil field unitization as a solution to the “milkshake” problem.  Indeed, yours truly knows a thing or two about how this all played out.

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Economics Colloquium, February 5 at 11:15

Thursday, January 31st, 2013

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Waiting for Godot, and for Corporate Social Responsibility?

David Gerard

Lawrence University

Milton Friedman famously wrote ‘The Social Responsibility of Business is to Increase its Profits,’ and ever since (and probably even before) the economics profession has been scratching its collective head wondering whether this is indeed our professional consensus.  In this talk, I put on the ‘mainstream economist’ hat and give an overview of some of the central issues in organizational economics, and the implications of this literature on the balancing of corporate profits and other (potentially) desirable social objectives. 

The target length for the talk is 40 minutes.

Tuesday, February 5

Steitz Hall 102

11:15a.m. – 12 p.m.

Update:  Looks like we made the front page.

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The College Wage Premium — the VORP addendum

Wednesday, November 21st, 2012

Welcome to those of you who found the site via the Lawrence Today piece on the value (over replacement) of the liberal education.  As promised, this post explains what is going on Figure 3.5 from Erik Brynjolfsson and Andrew McAfee’s Atlantic Monthly piece, ”Why Workers are Losing the War Against Machines.”  This is a really nice discussion that touches on the future of labor markets for skilled and unskilled workers, and I will use Brynjolfsson and McAfee’s e-book in my intro class during winter term.

The original source is Figure 4a of Daron Acemoglu and David Autor’s “Skills, Tasks and Technologies: Implications for Employment and Earnings,” a working paper from the National Bureau of Economic Research (NBER) that will find a home in the Handbook of Labor Economics  (the authors’ PowerPoint presentation can be found here).

At one level, the story is transparent. You can see over time that the wage premium for people with college degrees and graduate degrees have grown substantially, while high school graduates and dropouts actually seem to be losing ground since the early 1970s.  That is the basic message.

The purpose of this post is simply to unpack the elements of this particular characterization of “changes in wages” to give an idea of how some truly great economists have addressed the problem.  I hope that you will see why this characterization is likely to be more compelling than the plotting of raw data that we often spattered about these days.

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Dispatch from Down Under

Wednesday, July 11th, 2012

I am just returning from the 12th Conference of the Society for the Advancement of Economic Theory at the University of Queensland, which was very successful in that a great many economic theorists from all over the world got together and presented their work. I presented my recent work on falsifiability, complexity, and revealed preference in a session devoted to revealed preference theory.

One of the sessions was a panel discussion on the question “What Can Theory Tell Us About the Financial Crisis?” (My comments below may reflect my (mis)interpretations.) The moderator, Rohan Pitchford (Australian National University) foreshadowed some of the comments to come by stating at the outset that the panelists should feel free to turn that question around, asking what the financial crisis can tell us about economic theory. Some of the comments made were expected—for example, that theory has, of course had everything about the crisis figured out, just take a look at (Name, Year), and (Name, Year), and (Name, Year)… you get the picture. Even granting that (Name, Year) were all brilliant, this is hardly answering the question in a satisfactory way. Another point, often said, but not without reason, is that one should not expect economic theorists to be able to predict when a crisis would take place, and predicting that there would be one (some time) is hardly news. In fact, if the crisis could be predicted correctly, it is often repeated, it wouldn’t take place! And if it did, (some) economic theorists would be very rich.

But some of the panelists made some interesting points.  (more…)

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Economics Colloquium, May 15 at 11:10

Wednesday, May 9th, 2012

Prospects for US Electricity Generation: Carbon Capture &/or Natural Gas

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 David Gerard

Lawrence University

What will be the technology of the future for US electricity generation? Although  carbon capture and sequestration (CCS) has the potential for steep reductions in CO2 emissions, CCS faces many potential regulatory hurdles and public acceptance issues. Moreover, the technology is expensive – both in terms of additional capital costs and the additional fuel needed to capture, compress and transport the CO2.  I talk through some of my recently published work that assesses the decision to build new natural gas and coal-fired plants given future market and regulatory uncertainty, particularly uncertainty about future natural gas and carbon prices. I conclude that  CCS will not be commercially viable without beaucoup public financial support or outright mandates. I finish with some speculation on how the current fracking boom will affect energy and electricity markets. It appears that it will be natural gas all the way down as the principal source of new added generation capacity.

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Tuesday, May 15

Steitz Hall 102

 11:10 a.m.

The talk will draw heavily on:

Fischbeck, P. S., Gerard, D. and McCoy, S. T. (2012), Sensitivity analysis of the build decision for carbon capture and sequestration projects. Greenhouse Gas Sci Technol, 2: 36–45. Available at  http://onlinelibrary.wiley.com/doi/10.1002/ghg.1270/full

Morgan et al., (2009) “Commercial Considerations,” Chapter 9 in Carbon Capture and Sequestration: Framing Issues for Regulation. An Interim Report of the CCSReg Project. Department of Engineering and Public Policy, Carnegie Mellon University. Available at: http://www.ccsreg.org/pdf/CCSReg_3_9.pdf

Gerard D., Wilson E.J. (2009) Environmental bonds and the challenge of long-term carbon sequestration, Journal of Environmental Management, 90(2):1097-1105. Available at https://www2.hhh.umn.edu/publications/2159/document.pdf

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The Marketplace CAFE

Sunday, May 6th, 2012

Yes, I made it to the national airwaves this past week, thanks for asking (and thanks to Adrienne Hill for the interview).

The topic was the Corporate Average Fuel Economy (CAFE) standards, which have been controversial for a variety of reasons since their inception in the 1970s. The basic idea is simple enough, though: if the federal government mandates greater fuel efficiency, people will use less gas.  Because the CAFE standards are politically viable and gasoline taxes are not, the CAFE standards have withstood the test of time, including a beefier rule promulgated by the Obama Administration in 2009.

This week’s issue arose because gasoline tax revenue is funneled back to fund highways and mass transit. Ergo, if we use less fuel, there will be less tax revenue for highways and mass transit.  That is the conclusion of a Congressional Budget Office report from last week:

An increase of about 5 cents per gallon in the gasoline tax would be required to make up the shortfall in revenue projected as a result of the proposed CAFE standards.

And, so, man bites dog and consuming less fuel could lead to an increase in gasoline taxes, and the net result could be higher prices at the pump (Of course, federal gas taxes last went up during the pre-industrial era.  A primary reason for CAFE standards is that Congress is unwilling to move the gas tax off its $0.186/gallon level).

The report generated a minor media buzz, including this very short report on National Public Radio’s Marketplace program where I provided some unsurprising insight.

My authority on the subject stems from a paper I co-authored back in the day, “The Economics of CAFE Reconsidered: A Response to CAFE Critics and A Case for Fuel Economy Standards,” where we make a case that the CAFE standards are a reasonable complement to stiffer gasoline taxes (we also argue for much stiffer gasoline taxes).  I also have talked to US News and the Financial Times, among others. And I will talk to you, too, if you ask me about it.

For a very nice recent treatment, you might check this recent paper, “Automobile Fuel Economy Standards: Impacts, Efficiency, and Alternatives,” in the Review of Environmental Economics and Policy.

For some extremely tasty data, check out Environmental Protection Agency’s Light-Duty Automotive Technology and Fuel Economy Trends.  They’ve been doing this report for years, and I always learn something when I go through the new one.

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The New EPA Carbon Rule and New Coal-Fired Power Plants

Sunday, April 1st, 2012

This past week the EPA finally proposed a rule that would limit carbon emissions from new electricity generation.  The rule is the second of a double whammy for coal producers, who are already under intense competitive pressures from the rapid expansion and steep price decreases from domestic natural gas.

According the the Washington Post:

The proposed rule … will require any new power plant to emit no more than 1,000 pounds of carbon dioxide per megawatt hour of electricity produced. The average U.S. natural gas plant, which emits 800 to 850 pounds of CO2 per megawatt hour, meets that standard; coal plants emit an average of 1,768 pounds of carbon dioxide per megawatt hour.

What this effectively means is that any new coal plant construction would have to be built with carbon capture and sequestration technology, or CCS, (see here for details), making it extremely unlikely that the private sector will finance new coal-fired electricity production any time soon.

What will be the effect of this policy on new plant construction? I recently co-authored a paper* that looked at the new electricity plant construction decision as a function of natural gas and carbon prices, including an analysis of what would happen if there was a requirement that new coal plants have carbon capture technology, and we conclude that building CCS plants with private money is very unlikely.  Here is some background of our analysis from our abstract:

Our objective is to assess the commercial viability of CCS given pervasive future uncertainties, particularly uncertainties about future natural gas and CO2 prices. Using data from the Integrated Environmental Control Model (IECM), we develop an interactive Excel-based spreadsheet tool to compare levelized-average costs of four different new-construction 500 MW power plants: natural gas combined cycle (NGCC) with CCS, NCGG without CCS, supercritical coal with CCS, and supercritical coal without CCS. With low natural gas prices, the NGCC without the sequestration option is the dominant technology. Overall, CCS projects for either natural gas or coal projects are unlikely to be the lowest-cost option for CO2 prices less than $50 per ton.

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“No more gorillas in hysterical herds”

Thursday, June 2nd, 2011

Separated at Birth?

On Sunday, former Senator Russ Feingold will pick up an honorary degree and deliver our Commencement speech as our seniors prepare to march off in glory. Feingold was a notoriously independent voice, as evidenced by his lone vote against the PATRIOT Act. Illustrating the odd second dimension of American politics, this week Tea Party hero, Rand Paul, nearly derailed the reauthorization of the PATRIOT Act

The libertarian press shed a tear for Feingold, even comparing him to the incomparable Wisconsin icon, Robert LaFollette.

As H.L. Mencken wrote of the original LaFollette:

There is no ring in his nose. Nobody owns him. Nobody bosses him. Nobody even advises him. Right or wrong, he has stood on his own bottom, firmly and resolutely, since the day he was first heard of in politics, battling for his ideas in good weather and bad, facing great odds gladly, going against his followers as well as with his followers, taking his own line always and sticking to it with superb courage and resolution.

Suppose all Americans were like LaFollette? What a country it would be! No more depressing goose-stepping. No more gorillas in hysterical herds. No more trimming and trembling. Does it matter what his ideas are? Personally, I am against four-fifths of them, but what are the odds?…You may fancy them or you may dislike them, but you can’t get away from the fact that they are whooped by a man who, as politicians go among us, is almost miraculously frank, courageous, honest and first-rate.

So farewell to Feingold.

Indeed, I bet civil libertarians miss Senator Feingold on the floor, as he and Paul would have made for interesting bedfellows, indeed.  Here’s Lynne Kiesling at Knowledge Problem on some recent trends in security versus liberty tradeoffs.

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Wednesday Night in the Viking Room

Wednesday, February 3rd, 2010

The esteemed economics faculty , along with yours truly, will be behind the bar in the Viking Room this evening.

We are scheduled to begin at 9:30 and end around 11. If you are 21, and you have finished your Milgrom & Roberts reading, see you there!

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