Monday, October 5, 2009

Foodie Premium: The price of buying local

James McWilliams, a historian from Texas State University, posted an informative and short article on Freakonomics this morning.

(The picture on the left is of Michelle Obama shopping at the farmer's market in Washington DC which is very close to where I work)
The article that Dr. McWilliams wrote provides a history-centric view of the increase in farmer's markets in the past decade. I tend to view the world through an economics lens so I feel like I have a somewhat-alternative view on farmer's markets.
My giflfriend and I live in a (very for me, fairly for her) liberal neighborhood in DC which happens to facilitate a farmer's market every Sunday as long as the weather permits. When we first moved here (pretty recently) we were very excited about the prospect of eating locally grown, organic (not to mention tasty) vegetables. But because we couldn't fulfill all of our shopping in that market and the construction of groceries is such that you are required to walk through the produce aisle first, we couldn't help but comparison shop. Just for illustration, the ripe tomatoes were $6 per pound at the farmer's market and $2.29 a pound at our local, chain grocery store. A markup of nearly 200%!
This "produce" premium got my economic gears spinning. At first I thought that locavores must definitively be utility, not wealth, maximizers to place such a high premium on nearly identical products (in economics courses the term is undifferentiated). But as I thought about it, such a large group of people wouldn't be so far from the ideal homo economicus. So what other factors must be influencing these John Mackey-haters to flock away from Whole Foods to local markets: a.) the idea that store-bought produce doesn't taste as good as locally grown produce, b.) the notion that enriching neighbors is preferential to filling corporate coffers, c.) along the same lines as (b)-consumer experiences should be personalized in a way that a corporate chain can't provide, d.) the idea that buying from local farmers reduces your carbon footprint due to the large amount of shipping that large grocers do, e.) a deep belief that agrocorporations are genetically altering produce which will lead to health problems.
These are all the reasons that I could imagine why someone would be willing to spend more for what I consider to be the same thing. (a) and (c) I consider matters of preference, (b) and (e) I also consider preferences but that relate to personal politics, while (e) is the only one that can be quantifiably refuted. This article by Christopher Weber and Scott Matthews concludes that the impact of buying local does less to save the environment than is commonly thought, because 83% of the carbon release is in the growth, and not in the transportation, of produce.
But hey, if I ever need to find a large sample of people who have sharply contrasting political views from me on a Sunday morning, I'll know where to look.

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