Food & Economics
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Scoops on socio-economics of agriculture, food, health & technology worldwide (not necessarily endorsements). CLICK on the titles to get to the full, original, and possibly hyperlinked versions!
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On food security and the economic valuation of food - Chavas (2017) - Food Pol

On food security and the economic valuation of food - Chavas (2017) - Food Pol | Food & Economics | Scoop.it

The paper presents an economic evaluation of food and the cost of food insecurity. Building on behavioral regularities of consumer behavior, the analysis estimates the benefit of food at the individual level and at the world level. It finds an inverted-U relationship between food benefit and income. 


At the individual level, the “food benefit/income” ratio starts at 0 under extreme poverty, increases with income to reach a maximum of 4.4 when income per capita is around $13,000, and then declines slowly as income rises. The paper shows very large aggregate net benefit of food... 


The paper has evaluated the value of food and the cost of food insecurity. This is relevant for food policy to the extent that reducing food insecurity... is seen as an important policy goal. Achieving this goal can be done in several ways: by increasing world food supply, by improving access to food, and by increasing consumer food purchasing power. Currently, there is enough food to feed the world population. This has focused the food policy debate on access to food and on the linkages between food security and the distribution of food purchasing power. 


Increasing individual access to food can be done through markets, through income redistribution policies and/or through food policies. And redistributing food purchasing power can involve reducing the cost of food for the poor (e.g., through food stamps), increasing income of poor households (through economic development and/or through income transfers policies), and redistributing food toward food-insecure individuals (e.g., through food aid)... 


This paper has taken a step toward addressing these challenges by exploring the economics and welfare evaluation of food and food security...The analysis... establishes linkages between food demand and the value of food, with implications for the aggregate value of food in the world. It finds that the aggregate net benefit of food is very large, with an estimated value $88 trillion. 


The analysis also evaluates the cost of food insecurity. The properties of food demand indicate that aversion to food insecurity is a prevalent characteristic of human behavior, with a coefficient of relative risk aversion equal to 2.7. This implies that the cost of food insecurity can be large, especially in situations of exposure to significant downside risk... 


http://doi.org/10.1016/j.foodpol.2017.03.008


Alexander J. Stein's insight:
The authors estimate that the benefit of food has a value of $88 trillion. They also estimate that a 20% shock on the food consumption of the world population of 7 billion people (with an asymmetric downside risk) represents a cost of food insecurity of about $1-2 trillion. In terms of ballpark figures, that's about as big as the global cost of hunger that has been estimated by various authors to be also in the range of $1-2 trillion: http://doi.org/10.1016/j.gfs.2014.09.003
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Opinion: the effects of technology adoption on food security: linking methods, concepts and data - Sumberg (2016) - Food Sec

Opinion: the effects of technology adoption on food security: linking methods, concepts and data - Sumberg (2016) - Food Sec | Food & Economics | Scoop.it

In a recent article... Magrini and Vigani (2016) address the critically important question of the effects of agricultural technology adoption by African smallholder farmers on household food security. Specifically they... test hypotheses concerning the effects of technologies... (the use of improved maize varieties and use of inorganic fertilizer on maize) on four pillars of food security – availability, access, utilization and stability. Causal effects were investigated... [but] a commensurate level of critical attention was not given to the treatment variable, technology adoption.

To bring technology adoption into their analysis the authors used responses to two questions... “What type of seed did you purchase?” and “Did you use any inorganic fertilizer?”... In relation to the first question, if at least one plot was sown with improved seed the household was considered to have adopted the technology improved maize varieties; similarly, if inorganic fertilizer was reported to have been used on at least one plot then the household was considered to have adopted fertilizer technology. 


To be clear: adoption is being treated as a simple binary variable so for each surveyed household there is either adoption or no adoption. Further, adoption is always, in effect, rounded up – for example, the application of any type or quantity of inorganic fertilizer on only one of the three maize plots associated with household A makes this household a fertilizer adopter, even if the other two plots received none.

In treating adoption in this way Magrini and Vigani have followed others... who have previously used matching techniques to investigate the effects of smallholder technology adoption. By-and-large this body of literature treats adoption as conceptually and empirically unproblematic... There are at least two reasons why it is unsatisfactory, and likely leads to erroneous conclusions. 


First, a binary conception of adoption does not reflect the realities of technological change... processes of technological change amongst smallholder farmers are seldom simple, linear or binary. Rather they are characterised by trying, adaptation, learning, partial or temporary adoption, dis-adoption and incorporation into existing technology repertoires. 


Further, the binary treatment of adoption ignores the potentially important effects of how a particular technology is actually used – e.g. the rate, timing and method of fertilizer application. If an improved maize variety is planted late, at too wide a spacing and without adequate soil preparation, in what sense has the technology been adopted? What is the rationale for placing a case like this in the same treatment group as one where the same improved maize variety is planted in a more timely fashion, at a more appropriate spacing, and into better prepared and fertilized soil?

Second, the widely accepted approach of considering any level of use of a technology as sufficient to indicate adoption – and to classify a household as an adopter – calls into question the robustness of the treatment group classification, and runs the risk of systematically overestimating the importance of adoption, while underestimating the impacts of the new technology. Why should a household that has used fertilizer on only a quarter of its maize plots be considered in the same treatment group as one that fertilized every maize plot? Other things being equal, would the expected food security (or other) impacts not be significantly greater for the latter than the former?

The question... is clearly very important. However, the ability to derive meaningful conclusions from these studies is severely constrained by the limitations of the concept of adoption, the requirements of the analytical method for two unambiguous treatment groups (adoption / non-adoption), and the limitations of the available data (primarily household surveys that were not designed to investigate complex processes of technological change)... 


This literature... suggests a largely methods-based and thus misguided response to the call for more rigorous impact evaluation. No matter how sophisticated the matching protocol, if it is not informed by an equally sophisticated – and rigorous – conception of technological change, the analysis will yield little insight. Finally, a much needed re-boot of research in this area will depend on new investments in data collection that is sensitive to the non-binary, non-linear, socially-embedded processes and dynamics of technological change. 


http://dx.doi.org/10.1007/s12571-016-0626-2


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Nutritional impacts of rising food prices in African countries: a review - Yu & Shimokawa (2016) - Food Sec

Nutritional impacts of rising food prices in African countries: a review - Yu & Shimokawa (2016) - Food Sec | Food & Economics | Scoop.it

This paper investigates the influences of food price spikes on nutritional outcomes in six African countries: DR Congo, Ethiopia, Malawi, Nigeria, Tanzania, and Uganda. Drawing on the estimates of food demand elasticity with respect to food prices in previous studies, we constructed the elasticity of calorie and protein consumption with respect to food prices... 


Increasing cereal prices has the largest negative influences on both calorie and protein consumption... the magnitude of the influences may differ by regions and the country’s dietary patterns. The negative influences are particularly large in rural areas and in the countries whose diets highly depend on a single staple cereal... 


Our findings highlight the importance of stabilizing cereal prices to reduce calorie deficiency while it may not be enough to improve protein deficiency.


http://dx.doi.org/10.1007/s12571-016-0605-7


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Structural approaches to modeling the impact of climate change and adaptation technologies on crop yields and food security - Islam &al (2016) - Global Food Sec

Structural approaches to modeling the impact of climate change and adaptation technologies on crop yields and food security - Islam &al (2016) - Global Food Sec | Food & Economics | Scoop.it

Achieving and maintaining global food security is challenged by changes in population, income, and climate, among other drivers. Assessing these threats and weighing possible solutions requires a robust multidisciplinary approach. 


One such approach integrates biophysical modeling with economic modeling to explore the combined effects of climate stresses and future socioeconomic trends, thus providing a more accurate picture of how agriculture and the food system may be affected in the coming decades. 


We review and analyze the literature... and present a case study that follows this methodology explicitly modeling drought and heat tolerant crop varieties. We show that yield gains from adoption of these varieties differ... but are generally comparable in scale to (and thus able to offset) adverse effects of climate change. 


However, yield increases over the projection period are dominated by the effects of growth in population, income, and general productivity, highlighting the importance of joint assessment of biophysical and socioeconomic drivers to better understand climate impacts and responses. 


http://dx.doi.org/10.1016/j.gfs.2016.08.003


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We need to measure natural capital wealth, not income alone - UNEP (2016) 

We need to measure natural capital wealth, not income alone - UNEP (2016)  | Food & Economics | Scoop.it

With the endorsement of a resolution on “Sustainable Management of Natural Capital for Sustainable Development and Poverty Reduction” during the recently held United Nations Environment Assembly… a new era of correcting the compass to measure sustainable human well-being has begun. Conventional income (the market value of output) has been treated as a proxy for human well-being for too long. The limitations of the system of national accounts – where pollution abatement activities show up as income and biodiversity loss goes unnoticed – are becoming better understood. 


From an environmental sustainability perspective, traditional income measurement is defective because it only partially treats natural capital stock in its coverage. While wealth (and natural capital) is a stock, income is a flow (a return on wealth). Understanding this difference is critical. Conventional GDP is adept at measuring flow, but it can only partially measure wealth. GDP can capture net financial assets, physical assets, partial human capital… It has great difficulty in capturing and measuring the physical aspects of natural capital like ecosystem services, let alone their economic value. 


Most existing valuation in accounting processes relies heavily on exchange/transaction values, where there is no measure in place to capture what economists and ecologists call ”environmental externalities” (the depletion and degradation of natural capital)… Today, we, the global population, are each emitting about five tons of carbon per annum into the atmosphere; a quarter of global land has been degraded since the beginning of the 21st century; and biodiversity is declining at an alarming rate. Tropical forests are continuing to be cleared for crops, and overfishing continues to damage marine ecosystems causing a collapse in fish stocks. 


Economists have been warning about these types of anomalies for a long time. More recent thinking… highlights the need to look for better measurements of changes in human prosperity. The error of equating income with well-being can be rectified if the accounting profession pays attention to wealth (stock) measurement in an inclusive/comprehensive manner… Multilateral institutions consider the wealth of a nation, not its income, before extending any financial help, and don’t accept poor quality balance sheets. 


UNEP, with others, has been working on this. The Inclusive Wealth (IWR) Report 2014 emphasizes the need to measure man-made, human and natural capital. The methodology and data can easily be extended to social and cultural capital… The forthcoming 2016 report aims to do this for over 170 countries… IWR 2014 suggests that produced capital, as measured by GDP, represents only about 18 percent of the total wealth of nations. 


While there have been increases in GDP and the Human Development Index, natural capital actually declined in 127 out of 140 countries between 1990 and 2010… Worldwide, while GDP rose by 50 percent from 1992 to 2010, IWI [the Independent Wealth Index] rose by only 6 percent. This is because in the wider ambit of sustainable development GDP fails to account for sources of wealth such as nature and human progress…  


Countries cognisant of their stock of natural capital… can invest in the protection and restoration of natural capital. IWI is a macroeconomic tool that enables policymakers to understand the trade-offs of different scenarios and policies. For example, Brazil, which has 56 per cent of its land under forest cover, experienced a decline in its forest wealth from 1990 to 2000. However, it was able to reverse this trend between 2000 and 2010 due to its conservation policies, the strict enforcement of forest laws, and by discouraging agricultural expansion in forest lands… 


IWI complements GDP as a multi-purpose indicator. It is capable of tracking stocks of wealth in human, natural and produced capital. IWI lends itself to monitoring and reviewing progress towards the SDGs… Target 8.1 which is currently measured by GDP growth with a target of 7 per cent per year (a measure of growth in the level of transactions). IWI complements this by emphasizing the growth of wealth…  


http://unep.org/stories/Ecosystems/Natural-Capital-Wealth.asp


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Cost of agronomic biofortification of wheat with zinc in China - Wang &al (2016) - Agron Sust Develop

Cost of agronomic biofortification of wheat with zinc in China - Wang &al (2016) - Agron Sust Develop | Food & Economics | Scoop.it

Biofortification is a strategy for overcoming human zinc (Zn) deficiency, especially in rural areas of developing countries... Biofortification by foliar Zn application has been demonstrated at small scale, but not at large scale due to the absence of economic analysis... We conducted the first cost-effectiveness analysis using the method of “disability-adjusted life year” [DALY] measuring the health burden. 


We... quantified the cost of agronomic biofortification of wheat with Zn in three major wheat-growing regions of China. Our results show that the current annual health burden due to human Zn deficiency, defined as numbers of disability-adjusted life years lost, is [1.4 million DALYs for the three regions]. 


Comparing with traditional wheat diets... the consumption of agronomically Zn-biofortified wheat... could increase the daily Zn intakes... These... reduce the health burden due to human Zn deficiency in these regions by up to 57%. 


According to cost-effectiveness analysis, the cost for saving one disability-adjusted life year in these regions ranges from US$ 226 to US$ 594 for foliar Zn application alone... [and] from US$ 41 to US$ 108 when foliar Zn and pesticide applications are combined to reduce labor costs. This cost of US$ 41-108... is lower than the World Bank’s [benchmark for cost-effective interventions]...  


The combined foliar application of Zn plus pesticide to wheat is highly cost-effective. But it is less cost-effective than the genetic biofortification because the cost for saving one “disabilityadjusted life year” by the genetic biofortification could be less than US$ 20 due to long-term effects. 


Even so, the cost of the agronomic biofortification for overcoming human Zn deficiency in China is competitive with the cost of medical supplementation (US$ 399), food fortification (US$ 153), and dietary diversification (US$ 103). 


Moreover, the foliar application of Zn alone or plus with pesticide has simultaneously increased the wheat yield by a range of 3- 7 % in seven countries including China... 


http://dx.doi.org/10.1007/s13593-016-0382-x


Alexander J. Stein's insight:
The authors focus only on the “three major wheat cropping systems in central and northern China”. Given that these three regions account for 95% of total wheat production in China, this is perfectly fine when it comes to projecting the application of Zn fertilisers (costs of application and increase in Zn content in the wheat). However, the authors then (unnecessarily) limit their analysis of the *impact* of Zn-rich wheat consumption to these regions, and, furthermore, point out that “foliar application of Zn… increased the wheat yield by a range of 3-7% in seven countries including China”.

This means the authors might underestimate the benefits of the fertilisation approach: To the extent that the wheat produced in these three regions is not only consumed locally but also exported to the rest of China (even if rice may dominate diets elsewhere), there will be a positive health impact in these other regions. (For instance, De Steur et al. 2012, whom the authors also refer to, calculated the total burden of ZnD in China to be 2.6 million DALYs lost, whereas the authors only consider that the Zn-rich wheat can have an impact on the 1.4 million DALYs that are lost in the three regions of their analysis). Hence, the number of DALYs saved is probably higher than what the authors calculated. 

Because the costs for the Zn fertilisation of wheat in the three target regions don’t change, this means that the cost-effectiveness of Zn fertilisation is better than what the authors report. (While not discussed in the text, given that China exports less than 1% of its wheat production and only imports 2-3%, trade impacts can probably be ignored.) Moreover, had the authors taken into account the profits that would be generated by the reported yield gains – which could be used to directly offset some of the fertiliser costs – the net monetary costs that entered their cost-effectiveness analysis could have been lower, improving their results even further… 

As the authors acknowledge, though, in the longer term breeding crops for higher zinc levels (or minerals in general) is more cost-effective still, not least because then the recurrent costs for the zinc fertiliser are avoided. (Unless the soil is zinc deficient.) 
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Global and regional health effects of future food production under climate change: a modelling study - Springmann &al (2016) - Lancet 

Global and regional health effects of future food production under climate change: a modelling study - Springmann &al (2016) - Lancet  | Food & Economics | Scoop.it

One of the most important consequences of climate change could be its effects on agriculture. Although much research has focused on questions of food security, less has been devoted to assessing the wider health impacts of future changes in agricultural production. In this modelling study, we estimate excess mortality attributable to agriculturally mediated changes in dietary and weight-related risk factors by cause of death for 155 world regions in the year 2050... 

We linked a detailed agricultural modelling framework, the International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT), to a comparative risk assessment of changes in fruit and vegetable consumption, red meat consumption, and bodyweight for deaths from coronary heart disease, stroke, cancer, and an aggregate of other causes. 


We calculated the change in the number of deaths attributable to climate-related changes in weight and diets for the combination of four emissions pathways... and three socio-economic pathways... which each included six scenarios with variable climatic inputs.

The model projects that by 2050, climate change will lead to per-person reductions of 3·2% in global food availability, 4·0% in fruit and vegetable consumption, and 0·7% in red meat consumption. These changes will be associated with 529 000 climate-related deaths worldwide, representing a 28% reduction in the number of deaths that would be avoided because of changes in dietary and weight-related risk factors between 2010 and 2050. 


Twice as many climate-related deaths were associated with reductions in fruit and vegetable consumption than with climate-related increases in the prevalence of underweight, and most climate-related deaths were projected to occur in south and east Asia. Adoption of climate-stabilisation pathways would reduce the number of climate-related deaths by 29-71%, depending on their stringency.

The health effects of climate change from changes in dietary and weight-related risk factors could be substantial, and exceed other climate-related health impacts that have been estimated. Climate change mitigation could prevent many climate-related deaths. Strengthening of public health programmes aimed at preventing and treating diet and weight-related risk factors could be a suitable climate change adaptation strategy. 


http://dx.doi.org/10.1016/S0140-6736(15)01156-3


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Putting a price on nature, literally - ASU (2016)

Putting a price on nature, literally - ASU (2016) | Food & Economics | Scoop.it

Researchers figure out a way to put a price on untapped natural resources with the goal of trying to sustainably manage those assets. We know that nature is valuable, but how does this value compare with other assets? Not as lumber or drinking water or a fancy dinner, but as standing forests, healthy aquifers or living organisms – what is the dollar value of this natural capital?

The research team developed an interdisciplinary equation to estimate the current monetary value of natural resources, like groundwater, before it is pumped to the surface and used.

To calculate the value of natural capital, you start with the same economic principles used to value traditional assets, then factor in changes in ecosystems and human behavior that influence the appreciation or depreciation of that natural resource... The result is a figure that can be compared on a balance sheet with traditional assets like real estate, factory machinery and infrastructure.

“Without an apples-to-apples valuation approach, the value of natural capital cannot be measured against other assets and expenses... Our work can help governments and businesses track the sustainable use of natural resources.” The authors’ quantitative framework enables the valuation of natural capital in a way that is grounded in economic theory, accounts for biophysical and economic feedbacks and can guide interdisciplinary efforts to measure sustainability.

To illustrate their framework, the authors applied it to the value of groundwater in the Kansas High Plains Aquifer. The aquifer is rapidly depleting as farmers use the water to support food production... By depleting groundwater... Kansas created an annual loss in wealth approximately equal to the state’s 2005 budget surplus. “Without a calculation like ours, policy makers would lack critical information about how food production impacts our water wealth”... 


The authors’ framework can help policy makers develop better measures of local, regional or even national sustainability... “Sustainability is ultimately about making sure that the portfolio of assets we give future generations – including natural capital, but also our knowledge and physical infrastructure – is at least as valuable as the one we inherited... Our research helps us do a better job of bringing nature into the balance sheet of society, so that policy makers and business leaders can do a better job of evaluating trade-offs.”

 

https://asunow.asu.edu/20160205-putting-price-nature-literally

Original article: http://dx.doi.org/10.1073/pnas.1513779113

 

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Welfare impact of higher maize prices when allowing for heterogeneous price increases - Levin & Vimefall (2015) - Food Pol

Welfare impact of higher maize prices when allowing for heterogeneous price increases - Levin & Vimefall (2015) - Food Pol | Food & Economics | Scoop.it

We explore the short-term welfare impact of higher maize prices on different regions and socioeconomic groups in Kenya... Approximately 80% of the population would be negatively affected by higher maize prices and... poor households would lose a larger proportion of their welfare than wealthy households... Rural landless households would lose the most, whereas households with landholdings of five acres or more would gain.

 

We simulate a 25% increase in maize prices and find that rural poverty would increase by approximately 1 percentage point and urban poverty by 0.5 percentage points. Moreover, the impact differs among regions; poverty would increase by 3 percentage points in the rural parts of Coast Province, whereas it would be almost unchanged in the rural parts of Western Province.

 

http://dx.doi.org/10.1016/j.foodpol.2015.08.004

 

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Worldwide Acreage and Yield Response to International Price Change and Volatility: A Dynamic Panel Data Analysis for Wheat, Rice, Corn, and Soybeans - Haile &al (2015) - AJAE

This article estimates a worldwide aggregate supply response for key agricultural commodities – wheat, rice, corn, and soybeans – by employing a newly-developed multi-country, crop-calendar-specific, seasonally disaggregated model with price changes and price volatility applied accordingly.

 

The findings reveal that, although higher output prices serve as an incentive to improve global crop supply as expected, output price volatility acts as a disincentive... implying that farmers shift land, other inputs, and yield-improving investments to crops with less volatile prices.

 

Simulating the impact of price dynamics since 2006, we find that price risk has reduced the production response of wheat in particular... thus dampening price incentive effects. The... increase in own-crop price volatility from 2006-2010 dampened yield by about 1-2% for the crops under consideration.

 

http://dx.doi.org/10.1093/ajae/aav013

 

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Research investment implications of shifts in the global geography of wheat stripe rust - Beddow &al (2015) - Nature Plants

Breeding new crop varieties with resistance to the biotic stresses that undermine crop yields is tantamount to increasing the amount and quality of biological capital in agriculture. However, the success of genes that confer resistance to pests induces a co-evolutionary response that depreciates the biological capital embodied in the crop, as pests evolve the capacity to overcome the crop's new defences. Thus, simply maintaining this biological capital, and the beneficial production and economic outcomes it bestows, requires continual reinvestment in new crop defences.

 

Here we use... data on stripe rust occurrence to gauge changes in the geographic spread of the disease over recent decades. We document a significant increase in the spread of stripe rust since 1960, with 88% of the world's wheat production now susceptible to infection... We estimate that 5.47 million tonnes of wheat are lost to the pathogen each year, equivalent to a loss of US$979 million per year. Comparing the cost of developing stripe-rust-resistant varieties of wheat with the cost of stripe-rust-induced yield losses, we estimate that a sustained annual research investment of at least US$32 million into stripe rust resistance is economically justified.

 

http://dx.doi.org/10.1038/nplants.2015.132

 

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World loses trillions of dollars worth of nature's benefits each year due to land degradation - UN (2015)

To better inform the tradeoffs involved in land use choices around the world, experts have assessed the value of ecosystem services provided by land resources such as food, poverty reduction, clean water, climate and disease regulation and nutrients cycling. Their report... estimates the value of ecosystem services worldwide forfeited due to land degradation at a staggering US $6.3 trillion to $10.6 trillion annually, or the equivalent of 10-17% of global GDP.

Furthermore, the problem threatens to force the migration of millions of people from affected areas. An estimated 50 million people may be forced to seek new homes and livelihoods within 10 years. That many migrants assembled would constitute the world’s 28th largest country...

Effectively addressing land degradation could help avert that humanitarian crisis and add US $75.6 trillion to annual world income... Some 52% of world agricultural land is moderately or severely degraded... However, “the economics of land degradation is about a lot more than agriculture.”

For example, soil is second only to oceans as the planet’s largest carbon sink, while agriculture and land use changes represent the second largest source of greenhouse gas emissions. Addressing land degradation and its causes, therefore, represents a double-sided way to reduce greenhouse gas emissions... 

“Adequate management of agricultural and forestry land uses are amongst the lowest-cost actions that can reduce global warming, and most actions are either neutral cost or of positive net profit to society, requiring no substantial capital investment”...

National studies verify that the value of ecosystem services and benefits far outweigh the cost of preventing land degradation or the cost of remediation in most situations... cost-benefit analyses of sustainable land management scenarios “can be done even with limited data availability... it is imperative to take action now, as every day sees the loss of more productive land that will have to be gained back”... 

Options to address land degradation include reforestation, afforestation, sustainable agricultural practices, and establishing alternative livelihoods such as eco-tourism. Potential economic tools include payments for ecosystem services, subsidies, taxes, voluntary payments for environmental conservation, and access to micro-finance and credit. Facilitating sustainable land management also requires using legal, social marketing, and policy tools.

 

http://inweh.unu.edu/value-land/

 

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How to Write the World’s To-Do List - New Yorker (2015)

How to Write the World’s To-Do List - New Yorker (2015) | Food & Economics | Scoop.it

In 2000, the United Nations... established a series of eight goals to help the world’s poorest people. The Millennium Development Goals, as they were known, were an attempt to address the most basic requirements of human life: reducing the child-mortality rate by two-thirds, reversing the course of the AIDS epidemic, vastly increasing the number of people with regular access to safe drinking water. Other targets sought to move closer to a world without poverty or hunger, in which common diseases have been defeated – a world with universal primary education, gender equality, improved maternal health, and environmental sustainability.

Taken together, the M.D.G.s, which were meant to be completed by the end of this year, can be regarded as the largest collective promise that the world’s governments have ever made to their citizens... Depending upon how one interprets the words in the goals, progress has been mixed. We have not been able to halve the number of people living in extreme poverty, for example, or to lower maternal mortality by two-thirds. And while improved drinking water has been extended to more than 2.6 billion people since 1990... more than six hundred and fifty million still lack access to safe water, and nearly a billion people have no sanitation facilities at all. Inequality has deepened between men and women, between rich and poor, and between much of the developed world and the poorest countries, particularly in Africa.

Yet goals are often a combination of guesswork and dreams. And it has become too easy to make the mistake of thinking... that we ought not to have bothered. There has never been more prosperity, possibility, or promise for a higher proportion of the Earth’s population than there is today. Fewer than half as many people live in complete poverty... as did twenty-five years ago. And although we did not reach the goal of reducing childhood mortality by two-thirds, there is no country... where infant or child mortality is higher than it was before... Between 1990 and 2013, vaccination rates rose dramatically, and mortality rates for children under five declined by forty-nine per cent... Today... a child born in one of the world’s poorest nations is likely to live longer than the richest Americans lived a century ago.

Nonetheless, as the M.D.G. deadline approaches, many people have been left behind. At least a billion people go to bed hungry each night. Millions of women are treated nearly as slaves, and a horrifying number still die in childbirth.

This September, the U.N. will meet to ratify a much broader set of targets – this time called the Sustainable Development Goals... Officially, there are seventeen new goals – and the environment... will receive much-needed attention. But with scores of countries participating in consultations, there are now hundreds of targets, sub-targets, and ancillary targets within the over-all goals. Whether one supported the M.D.G.s or not, it is hard to deny that they provided a focal point – and some sense of shame – for governments and N.G.O.s attempting to eradicate poverty. It will be nearly impossible to focus on the S.D.G.s in the same way because... many seem so broad that they will be easy to ignore.

“Having 1,400 targets is like having none at all, and so governments need to make some hard choices, deciding which targets will offer the greatest returns on investment,’’ Bjørn Lomborg... has written... He argues that the U.N. is diluting its power by attempting to eliminate all problems. He is undoubtedly correct. Costs in the S.D.G. plan rarely seem to be linked to benefits. “Of course, economics alone should not determine the world’s top development aims over the next decade and a half... But ignoring costs doesn’t make difficult choices disappear; it makes them less clear.”

Lomborg is often criticized for his focus on economic calculations – which, he has written, indicate that it would be less effective in the next twenty years to spend money on preventing climate change than on universal education, expanding trade opportunities, or cutting back on indoor pollution caused by poor stoves. In effect... feel-good categories such as those in the S.D.G.s will only create the equivalent of a series of ice-bucket challenges, referring to the millions of showy dollars that were raised last year to address A.L.S. – a terrible disease, but one that afflicts relatively few people.

 

For years, we have had tools such as the disability-adjusted life year (DALY), which was created in the early nineteen-nineties, by the World Bank, and has come to serve as the standard measure for assessing the burden of a disease. In the past, the impact of any illness – the common cold, cancer, and everything in between – was usually evaluated on the basis of how likely it was to kill you. But life without good health also carries enormous costs for individuals, families, and societies. The DALY combines years of potential life lost owing to premature death with years of productive life lost to disability.

That sort of principle, which associates benefits with costs, ought to be applied to massive investments in human development. Unfortunately, we need to choose which terrible blights we need to prevent and which we do not. People hate thinking that way (and they hate those who write about it). Nobody wants to put dollar values on a disease, a treatment, a life, an ocean, or the future of a country. But feel-good virtue alone rarely succeeds, and, if the Millennium Development Goals have demonstrated anything, it is that this planet and the people who live so tenuously on it will survive only if we spend our money on programs that work.

 

http://www.newyorker.com/news/daily-comment/how-to-write-the-worlds-to-do-list

 

Alexander J. Stein's insight:

"That sort of principle, which associates benefits with costs, ought to be applied to massive investments in human development. Unfortunately, we need to choose which terrible blights we need to prevent and which we do not. People hate thinking that way... Nobody wants to put dollar values on a disease, a treatment, a life, an ocean, or the future of a country. But feel-good virtue alone rarely succeeds... this planet and the people who live so tenuously on it will survive only if we spend our money on programs that work."

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Alexander J. Stein's curator insight, July 23, 2015 5:24 PM

"That sort of principle, which associates benefits with costs, ought to be applied to massive investments in human development. Unfortunately, we need to choose which terrible blights we need to prevent and which we do not. People hate thinking that way... Nobody wants to put dollar values on a disease, a treatment, a life, an ocean, or the future of a country. But feel-good virtue alone rarely succeeds... this planet and the people who live so tenuously on it will survive only if we spend our money on programs that work."

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The economic burden of inadequate consumption of vegetables and fruit in Canada - Ekwaru &al (2017) - Public Health Nutr

Public health decision makers not only consider health benefits but also economic implications when articulating and issuing lifestyle recommendations. Whereas various estimates exist for the economic burden of physical inactivity, excess body weight and smoking, estimates of the economic burden associated with our diet are rare. In the present study, we estimated the economic burden attributable to the inadequate consumption of vegetables and fruit in Canada. 


We accessed the Canadian Community Health Survey to assess the inadequacy in the consumption of vegetables and fruit and published meta-analyses to assemble risk estimates for chronic diseases. Based on these inadequacy and risk estimates, we calculated the population-attributable fraction and avoidable direct and indirect costs to society. Direct costs include those for hospital care, physician services and drugs in 2015.

About 80% of women and 90% of men consume inadequate amounts of vegetables and fruit. We estimated this to result in an economic burden of $CAN 3 billion per year, of which 30% is direct health-care costs and 70% is indirect costs due to productivity losses. A modest 1 percentage point annual reduction in the prevalence of inadequate vegetables and fruit consumption over the next 20 years would avoid approximately $CAN 11 billion, and an increase of one serving of vegetables and fruit per day would avoid approximately $CAN 9 billion.

Further investments in the promotion of vegetables and fruit will prevent chronic disease and substantially reduce direct and indirect health-care costs. 


https://doi.org/10.1017/S1368980016002846


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Support for democracy linked to income inequality - MSU (2016) 

Support for democracy linked to income inequality - MSU (2016)  | Food & Economics | Scoop.it

Voter satisfaction with democracy may have... to do with income inequality, or the gap between rich and poor... Political scientists... found that rising income inequality widens the gap in satisfaction with democracy between electoral winners and losers... “The degree of income inequality is the real driver behind electoral winners and losers’ satisfaction with democracy... Elections matter much more for both the rich and poor when income inequality is high.”

Past research found that voters who support winning parties are more satisfied with democracy than those who vote for the losers. In this winner-loser gap theory, the difference in satisfaction levels is smaller in consensus democracies where the losing party can still affect policy outcomes, suggesting an institutional effect. 


But... the effects of economic inequality are more critical to satisfaction with democracy than the institutional effects of political systems. That’s because... As the disparity between rich and poor grows, the poor intensify their demand for the redistribution of wealth. The rich, meanwhile, become more anxious about the possibility of losing income.

“Our findings suggest that rising income inequality pits political winners and losers against each other... And this conflict over economic interests can undermine citizens’ satisfaction with democracy and lead to instability.” 


http://msutoday.msu.edu/news/2016/support-for-democracy-linked-to-income-inequality/


Underlying study: http://dx.doi.org/10.1016/j.electstud.2016.08.006


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The impact of high-end climate change on agricultural welfare - Stevanović &al (2016) - Sci Advances

The impact of high-end climate change on agricultural welfare - Stevanović &al (2016) - Sci Advances | Food & Economics | Scoop.it

Climate change threatens agricultural productivity worldwide, resulting in higher food prices. Associated economic gains and losses differ not only by region but also between producers and consumers and are affected by market dynamics. On the basis of an impact modeling chain, starting with 19 different climate projections that drive plant biophysical process simulations and ending with agro-economic decisions, this analysis focuses on distributional effects of high-end climate change impacts across geographic regions and across economic agents. 


By estimating the changes in surpluses of consumers and producers, we find that climate change can have detrimental impacts on global agricultural welfare, especially after 2050, because losses in consumer surplus generally outweigh gains in producer surplus. Damage in agriculture may reach the annual loss of 0.3% of future total gross domestic product at the end of the century globally, assuming further opening of trade in agricultural products, which typically leads to interregional production shifts to higher latitudes. 


Those estimated global losses could increase substantially if international trade is more restricted. If beneficial effects of atmospheric carbon dioxide fertilization can be realized in agricultural production, much of the damage could be avoided. Although trade policy reforms toward further liberalization help alleviate climate change impacts, additional compensation mechanisms for associated environmental and development concerns have to be considered. 


http://dx.doi.org/10.1126/sciadv.1501452


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Measuring global hunger: The importance of variances - CEPR (2016) 

Measuring global hunger: The importance of variances - CEPR (2016)  | Food & Economics | Scoop.it

Different survey methodologies are typically employed to produce estimates of global hunger… Short reference periods for each household lead to overstated variances and the confounding of chronic and transient welfare components… A new approach to measuring chronic hunger… tackles this sampling problem by employing an intra-year panel. 


The first two Sustainable Development Goals (SDGs) are to end poverty and hunger. Both goals relate to the proportion of the population living below acceptable thresholds – poverty lines in one case, and dietary energy standards in the other. These goals involve the lower tail of distributions so statistics on living standards have to reliably measure not just means and totals but also variances. Debates about hunger measurement highlight the difficulty of achieving this and the inadequacy of current survey practice. 


The global agency that measures hunger is the Food and Agriculture Organisation (FAO). The FAO use country averages of annual dietary energy per person, from aggregate Food Balance Sheets, and they distribute these across the population by using adjusted estimates of the inter-household variance in calories from surveys. Specifically, FAO dampen variances because the short reference periods for surveys give just a snapshot of the household’s diet for a week, fortnight or month, which causes excess variability. 


Proponents of other approaches argue for directly measuring hunger from household surveys which are deemed by the World Bank to be reliable enough for counting the poor. However, the advocates of the direct survey approach do not emphasise that these diet snapshots will overstate variance and exaggerate the rate living below dietary thresholds. 


The ideal… survey to match what FAO attempt to measure – chronic hunger on an annual basis – would observe the same households over the course of a year. Such a design would show that many short-term shocks tend to cancel out over time. In contrast, a snapshot from a short reference period… will have a higher variance than the true annual variance because some of the shocks, but not their reversal, occur in that short reference period. This snapshot will overstate the chronic hunger rate… 


Thus it should not surprise if surveys report more hunger than FAO estimates. For example, 59% of the population in 12 African countries are undernourished according to surveys, while FAO estimate just a 39% hunger rate for the same countries. Yet what is poorly understood is that these gaps are inherent features of the two approaches. Moreover, any consideration of the intra-year fluctuations causing these gaps is based on misleading narratives about ‘seasonality’… 


A new way to measure chronic hunger from surveys, which accounts for excess variability from just observing a snapshot of diets… also can identify the transient component of hunger… The proposed method needs surveys to see the same households in at least two, non-adjacent periods in the year. This survey design is rare… Seeing the same household repeatedly for, say, two weeks to implement a diary is less informative than seeing it for a week, and then again for another week, six months later. Seeing the same household at two or more times of the year reveals more about outcomes with low auto-correlation since a snapshot of these mis-measures their long-run average… 


To illustrate the method of measuring chronic hunger from diet snapshots, I use survey data from Myanmar, where households were visited twice – six months apart… The correlation between per capita calories in these two times of the year is just 0.45. This low correlation suggests that shocks to calories are partially reversed over the rest of the year. However, if data from a snapshot survey are used to represent the long-run situation, shocks are wrongly locked in as if they occur in every month of the year… 


Short reference period surveys will identify some unknown mix of chronic and transient hunger. Since the appropriate interventions differ – smoothing in one case and raising the mean in the other – distinguishing these two types of hunger should be important to policymakers. These low correlations have little to do with seasonality… households cannot easily smooth their calories over time, due to shocks that may have demographic, health, income, or food price and food availability origins. Thus, surveys that stagger fieldwork over the months of the year to deal with seasonality, but see each household in just one period of the year, cannot capture these shocks and their (partial) reversal… 


Different survey designs, such as intra-year panels, are needed to accurately measure variances and the lower tail of distributions… 


http://voxeu.org/article/measuring-global-hunger-importance-variances


Underlying Working Paper: https://ideas.repec.org/p/wai/econwp/16-07.html


Alexander J. Stein's insight:
There are certainly issues with measuring global hunger, and – as discussed here – survey methodologies and the importance of variances are one of them. However, a bigger question is if looking at calorie availability – as also done here – is really the right measure of "hunger". 

As also pointed out here, there can be shocks that cause transient hunger but that can subsequently be reversed, at least partially. Of course also transient hunger should be eliminated, but generally it’s the consequences of chronic hunger (such as adverse health outcomes, lower educational achievements or productivity losses) that policy makers want to tackle most urgently. 

Why then not look directly at metrics that capture exactly those health losses? (… which also lead to poor school performance and lower productivity…) Measuring the burden of hunger this way would e.g. “automatically” smoothen the impact of transient hunger if it’s reversed in time, it would solve the issue of how much food is acquired vs how much is actually consumed (after storage and other leakages), as well as the issue of food that’s consumed outside of the home, etc. 

Therefore, as I see it, what’s necessary is “Rethinking the Measurement of Undernutrition in a Broader Health Context” http://www.scoop.it/t/publications-of-a-j-stein/p/4030363107/

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Which is the greenest, happiest country in the world? - WE Forum (2016) 

Which is the greenest, happiest country in the world? - WE Forum (2016)  | Food & Economics | Scoop.it

Is life on this planet getting better? When it comes to the progress of nations, how do you measure what matters most? There’s wealth, there’s health, there’s basic human freedoms. These criteria, and others, make regular appearances in a variety of international rankings… 


But a new study takes a different approach. The Happy Planet Index… measures health and happiness not in isolation but against a crucial new gold standard for success: sustainability. 


The formula goes something like this: take the well-being and longevity of a population, measure how equally both are distributed, then set the result against each country's ecological footprint. In this calculation, the most successful countries are those where people live long and happy lives at little cost to the environment. 


So which countries are they? They're not the wealthy Western countries you’d expect to see, or even the progressive Nordic ones that normally bag the lifestyle laurels. Instead… when it comes to people’s ability to live good lives within sustainable limits, Latin American and Asia Pacific countries are ahead of the crowd. 


There’s one country that stands out: Costa Rica, which tops the ranking for the third time. It is the happiest and most sustainable country on Earth… So, what is it doing right? … the highest level of well-being in the world… the longest-lived people… using a mere quarter of the resources that are typically used in the Western world. 


How does it do that? Chiefly through a strong commitment to the environment: 99% of the country’s electricity supply is said to come from renewable sources, and the government has pledged to make the country carbon neutral by 2021. Other factors include robust investing in social programmes such as health and education, with public money that has been all the more plentiful since the abolition of the national army in 1949. 


Wealthier Western countries tend to score highly when it comes to life expectancy and well-being, but the high environmental cost of their way of life sees their ratings plummet. The US, for instance, has one of the largest ecological footprints in the world…  


https://www.weforum.org/agenda/2016/07/greenest-happiest-country-in-the-world/


Underlying report: http://happyplanetindex.org/about/


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An empirical analysis of risk in conventional and organic arable farming in The Netherlands - Berentsen &al (2016) - Eur J Agronomy

An empirical analysis of risk in conventional and organic arable farming in The Netherlands - Berentsen &al (2016) - Eur J Agronomy | Food & Economics | Scoop.it

This paper assesses and compares risk in conventional and organic arable farming in The Netherlands with respect to family farm income and underlying price and production variables... Price risk variables are input and output prices, while yield volatility of different crops is the main production risk variable... 


Results indicate that the risk at the level of family farm income is higher in organic farming. The underlying variables show higher risk for organic farms in crop yields, crop prices and variable input costs per crop. 


http://dx.doi.org/10.1016/j.eja.2016.06.002


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Phosphorus recycling and food security in the long run: a conceptual modelling approach - Weikard (2016) - Food Sec

Phosphorus recycling and food security in the long run: a conceptual modelling approach - Weikard (2016) - Food Sec | Food & Economics | Scoop.it

Food security for all is a global political goal and an outstanding moral concern. The common response to this concern is agricultural intensification, which includes among other things increasing inputs of fertilisers... Phosphorus (P) is essential for agricultural production but large and increasing amounts of P fertilisers stem from depletable mines. This raises sustainability concerns and the possibility of long-term food insecurity. The paper analyses three scenarios for global phosphorus extraction and recycling under discounted utilitarianism.


First, for a benchmark scenario without recycling, food security will inevitably be violated in the long run. Second, if we introduce P recycling, food security can be maintained but food production falls over time... Third, a sustainable (i.e. non-declining) path of food production is feasible... requires greater recycling efforts. Recycling efforts are increasing over time... sustainable food production seems feasible even if it depends on depletable phosphate mines.

 

http://dx.doi.org/10.1007/s12571-016-0551-4

 

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The High Value to Society of Modern Agriculture: Global Food Security, Climate Protection, and Preservation of the Environment - Witzke & Noleppa (2016) - Emerald

The global demand for agricultural commodities may more than double in the second half of the twenty-first century... rapidly growing world needs in food and agriculture can be met by expanding the acreage or cultivation of existing farmland. Because available land for farming is limited, about 90% of future production growth is expected to result from yield growth, with only 10% realized at the cost of acreage expansion... 

We analyze the multitude of social benefits of modern agriculture. We also expand the traditional analysis of the return to research methodology by explicitly including environmental and other benefits of crop yield growth.

A key result of our analysis is that the environmental benefits of productivity growth far exceed the direct economic benefits to consumers and producers from an expansion of production. Hence, restricting analysis solely to price and quantity effects seriously underestimates the social benefits of modern agriculture. The environmental benefits of yield growth in modern agriculture far exceed the traditional measure of social welfare.

 

http://dx.doi.org/10.1108/S1574-871520150000016016

 

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Strengthening the contribution of aquaculture to food and nutrition security: The potential of a vitamin A-rich, small fish in Bangladesh - Fiedler &al (2015) - Aquaculture

Strengthening the contribution of aquaculture to food and nutrition security: The potential of a vitamin A-rich, small fish in Bangladesh - Fiedler &al (2015) - Aquaculture | Food & Economics | Scoop.it

Despite having vitamin A supplementation and fortification programs, the prevalence of inadequate vitamin A intake (IVAI) in Bangladesh is very high, estimated to be 60%. The promotion of a small indigenous fish, high in vitamin A – mola carplet – offers a promising food-based approach to improving vitamin A status of the 98% of Bangladeshis who eat fish... 


We developed baseline estimates of usual vitamin A intake, the prevalence of IVAI and disability-adjusted life years (DALYs) attributable to vitamin A deficiency (VAD)... We designed and modeled the implementation of a MPP [Mola Promotion Program], and calculated the additional vitamin A intake it would provide, calculated new incidence rates of VAD-related health outcomes and estimated MPP-attributable annual changes in DALYs.

 

The MPP's total health benefits were calculated over the program's 11-year phase-in as the annual sum of DALYs saved. The MPP's costs were estimated as the sum of the costs of a small fish program of the Fisheries Development Program plus the costs of mola brood stock, other inputs and additional farmer training-related costs. Program costs and benefits were combined to produce estimates of the cost-effectiveness of the program... 

[The] project would increase average daily vitamin A intakes by 7 μg retinol activity equivalent (RAE), reduce the prevalence of IVAI by 1.1 percentage points, and save 3000 lives and 100,000 DALYs, at a cost of $194 per DALY saved. The MPP's impact would be concentrated among homestead pond-fishing households that would consume 60% of the additional mola produced. Among these, it would reduce IVAI prevalence by 7 percentage points. If the MPP was implemented for at least 20 years, it would... have higher health benefits and lower total costs than a national vitamin A wheat flour fortification program... 

 

http://dx.doi.org/10.1016/j.aquaculture.2015.11.004

 

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How crop prices and climate variables affect yield and acreage - U Illinois (2015)

How crop prices and climate variables affect yield and acreage - U Illinois (2015) | Food & Economics | Scoop.it

When corn prices increase farmers reap higher yields by making changes... About one-third of the yield increase derives from more intensive management practices and two-thirds from cropping additional acreage... 

 

“There has been a lot of controversy about the impact of biofuel production and corn ethanol production on corn prices because it affects the estimates of the indirect land-use change caused by corn ethanol... Knowing that corn yields are responsive to corn prices lowers the magnitude of land-use change related to carbon-intensity of corn ethanol.”

The study drew from 30 years of data (1977 to 2007) from... the USDA on county-level corn and soybean yield and acreage in the rain-fed region of the United States... “Using predictions from a variety of climate models, we simulated what the changes would imply for corn and soybean yields... There is a lot of variability. We can expect anywhere from 7 to 12 percent reduction in corn yields under slow-warming scenarios to as much as 40 percent reduction on average under the more rapid-warming scenarios”...

It’s important not to attribute all of the change that might occur in response to climate change to climate variables alone, but to recognize the potential for adaptation while trying to understand what the future might look like under climate change.

“We know from this study that higher crop prices will lead farmers to invest more and improve production on their existing land... And although we cannot disaggregate and specify what the changes were that led to increases in yield, we do find a statistically significant relationship between higher corn prices and higher yield per acre... We know that when a farmer expands corn production, the expansion is onto soybean land and soybean moves onto more marginal land. That’s why we see more of that price increase”... 

Having a longer growing season and warmer weather is beneficial to a crop, but as it creeps closer to threshold levels, more warming can actually have a negative effect... it has a U-shaped effect on crop yields. “We also find clear evidence that having a large number of days above the threshold has a significant adverse impact on crop yields... Compared to temperature, precipitation changes have a smaller impact... South and southeast regions will have a much more negative impact from climate change than the upper Midwest.”

“Our findings provide evidence of the potential for adaptation because farmers can be expected to respond to higher crop prices that may accompany climate change... Consequently, the net impact of climate change may not be as negative because farmers are going to be able to use better practices in order to compensate to some extent”...  

Any assessment of the land-use effect of corn ethanol should consider what this study learned about the responsiveness of corn yield to prices. It is particularly important because the estimate of the indirect land-use change caused by higher corn prices due to corn ethanol uses global equilibrium models and the responsiveness of corn yields to corn prices is an important parameter in those models...

 

http://news.aces.illinois.edu/news/study-shows-how-crop-prices-and-climate-variables-affect-yield-and-acreage

 

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Social Costs of Iron Deficiency Anemia in 6–59-Month-Old Children in India - Plessow &al (2015) - PLOS One

Social Costs of Iron Deficiency Anemia in 6–59-Month-Old Children in India - Plessow &al (2015) - PLOS One | Food & Economics | Scoop.it

Inadequate nutrition has a severe impact on health in India... Iron deficiency is the single most important nutritional risk factor in India, accounting for more than 3% of all disability-adjusted life years (DALYs) lost. We estimate the social costs of iron deficiency anemia (IDA)... in terms of intangible costs and production losses.

We build a health economic model estimating the life-time costs of a birth cohort suffering from IDA between the ages of 6 and 59 months... 

 

IDA prevalence is 49.5% in 6–23-month-old and 39.9% in 24–58-month-old children. Children living in poor households in rural areas are particularly affected but prevalence is high even in wealthy urban households.

 

The estimated yearly costs of IDA in 6–59-month-old children amount to intangible costs of 8.3 m DALYs and production losses of 24,001 m USD, equal to 1.3% of gross domestic product. Previous calculations have considerably underestimated the intangible costs of IDA as the improved WHO methodology leads to a threefold increase of DALYs due to IDA.

Despite years of iron supplementation programs and substantial economic growth, IDA remains a crucial public health issue in India and an obstacle to the economic advancement of the poor. Young children are especially vulnerable due to the irreversible effects of IDA on cognitive development...

 

http://dx.doi.org/10.1371/journal.pone.0136581

 

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Can randomized trials eliminate global poverty? - Nature (2015)

Can randomized trials eliminate global poverty? - Nature (2015) | Food & Economics | Scoop.it

In 70 local health clinics run by the Indian state of Haryana, the parents of a child who starts the standard series of vaccinations can walk away with a free kilogram of sugar... These simple gifts are part of massive trial testing whether rewards can boost the stubbornly low immunization rates...


Following the model of the randomized controlled trials (RCTs) that are commonly used to test the effectiveness of drugs, scientists randomly assigned clinics in the seven districts with the lowest immunization rates to either give the gifts or not... Smaller-scale experiments suggest that the incentives have a good chance of working... 


The problem is not necessarily that people are opposed to immunization, she says. It is that certain obstacles, such as lack of time or money, are making it difficult for them to attend the clinics. “And you can balance that difficulty with a little incentive”... 


This is one of a flood of insights from researchers who are revolutionizing the field of economics with experiments designed to rigorously test how well social programmes work. Their targets range from education programmes to the prevention of traffic accidents. Their preferred method is the randomized trial. And so they have come to be known as the 'randomistas'.

The randomistas have been particularly welcomed in the global development arena. Despite some US$16 trillion in aid having flowed to the developing world since the Second World War, there are little empirical data on whether that money improves the recipients' lives. The randomistas see their experiments as a way to generate such data and to give governments tools to promote development, relieve poverty and focus money on things that work.

Not everyone is convinced. Sceptics argue that the randomistas' focus on evaluating specific aid programmes can lead them to lose sight of things such as energy, infrastructure, trade and corruption – macroeconomic issues that are central to a country's ability to prosper, but that are effectively impossible to randomize. “Development is ultimately about politics”... Nonetheless, the randomista movement is gaining momentum...

 

Demand is only rising. This September, governments will gather in New York under the auspices of the United Nations to approve a new set of Sustainable Development Goals, which are intended to guide investments over the coming decade... the effectiveness of the programmes is likely to be a key concern. “This is front and centre on a lot of people's agenda... Where do we get the biggest bang for our buck?” ... 

Even at lending institutions that have taken this evidence-based framework on board, the portion of investments that is covered by rigorous evaluations is small. “The fad now is let's pilot it, and if it works we'll take it to scale”... Although many of these evaluations more than pay for themselves over the long term, one constraint is the up-front cost... 


But the randomistas have been accused of succumbing to their own biases. Some fear that their insistence on the RCT has skewed research towards smaller policy questions and given short-shrift to larger, macroeconomic questions... “Governments need to know these things... They can't just know about the subset of things that are amenable to randomization”...  

The debate between the randomistas and the old-guard economists is in many ways about status and clout. The latter have spent their careers delving into ever more complex and abstract models... And then “the randomistas came along and said 'We don't care about any of that. This is about who has a seat at the table'”...  
 

http://dx.doi.org/10.1038/524150a

 

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