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Annual Review of Resource Economics - Volume 14, 2022
Volume 14, 2022
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Agriculture for Development: Analytics and Action
Vol. 14 (2022), pp. 1–16More LessFor many poor countries and for a majority of poor people in the world, agriculture broadly defined can be one of the most effective instruments for development. Yet using agriculture for development, while widely advocated in the development profession and effectively practiced by a number of countries, remains too often well below potential. At the invitation of the editors of the Annual Review of Resource Economics, we retrace how we have used our academic and activist careers to promote agriculture as an instrument for development. We show how access to assets, the design of agrarian institutions, the creation of income opportunities for rural households, and understanding their behavioral responses can lead to successful modernization of agriculture and its transformation toward farming systems, value chains, and local rural nonfarm economies instrumental for development. We encourage younger colleagues to pursue and fulfill this mission by combining analytical rigor, attention to behavior, commitment to activism, and a long-term vision of the development process.
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Meat Consumption and Sustainability
Vol. 14 (2022), pp. 17–41More LessMeat has become a controversial topic in public debates, as it involves multiple sustainability dimensions. Here, we review global meat consumption trends and the various sustainability dimensions involved, including economic, social, environmental, health, and animal welfare issues. Meat has much larger environmental and climate footprints than plant-based foods and can also be associated with negative health effects. Technological options can help to increase the sustainability of meat production, but changes in consumption are required as well. At least in high-income countries, where people consume a lot of meat on average, notable reductions will be important. However, vegetarian lifestyles for all would not necessarily be the best option. Especially in low-income countries, nutritious plant-based foods are not available or affordable year-round. Also, livestock production is an important source of income for many poor households. More research is needed on how to promote technological and behavioral changes while managing sustainability trade-offs.
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The Economic Impacts of Walmart Supercenters
Vol. 14 (2022), pp. 43–62More LessOur purpose is to review the economic impacts of Walmart's disruption of the food retailing industry. This review synthesizes the extant knowledge and research findings related to the economic impacts of Walmart's entry into, and subsequent domination of, food retailing in the United States and more broadly globally. The findings suggest five broad generalizations: (a) Walmart's physical growth in the United States has slowed considerably, but the company is growing rapidly in terms of total assets, digital capabilities, international presence, and sales per square foot; (b) Walmart's entry and presence are associated with lower food prices for households; (c) Walmart has considerable negative impacts on large competitors, particularly supermarkets, but the evidence for Walmart's deleterious impacts on small businesses is limited; (d) there is no consensus on the impact of Walmart on local employment, but most studies on the topic point to a modest increase in retail employment; and (e) Walmart likely increases food access but does not improve dietary quality.
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Methodological Advances in Food Choice Experiments and Modeling: Current Practices, Challenges, and Future Research Directions
Vol. 14 (2022), pp. 63–90More LessIn recent decades, discrete choice experiment research applied to food choices has grown rapidly. Empirical applications include investigations of consumer preferences and demand for various food attributes, labeling programs, novel products and applications, and new food technologies. Methodological contributions include advances in the form of new theories, elicitation methods, and modeling. This study focuses on the latter and (a) reviews recent methodological contributions in the food choice experiment literature, (b) examines existing knowledge gaps, and (c) discusses possible future research directions.
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Developments in Agricultural Crop Innovations
Vol. 14 (2022), pp. 91–108More LessThis review focuses on two emerging areas of agricultural product development, namely vertical farming and alternative animal products. We note that the drivers of this type of food innovation are a combination of factors that are resource based or supply chain based or reflect shifts in tastes, preferences, and food ethics. We conclude that leafy greens produced in vertical farms are now established in a rapidly growing market and that the plant-based meat alternatives in the form of burgers and nuggets are well established. For the nascent cultured meat sector, it is still too early to predict how widely it will penetrate into the conventional meat and fish markets based on current production methods, cost, and consumer acceptance, but investments in technological improvements are progressing.
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Changing Farm Size Distributions and Agricultural Transformation in Sub-Saharan Africa
Vol. 14 (2022), pp. 109–130More LessWe review the literature on the distribution of farm sizes in sub-Saharan Africa, trends over time, drivers of change in farm structure, and effects on agricultural transformation and present new evidence for seven countries. While it is widely viewed that African agriculture is dominated by small-scale farms, we show that medium-scale farms of 5 to 100 hectares are a nontrivial—and rapidly expanding—force that is influencing the nature and pace of food systems transformation in Africa. The increased prevalence of medium-scale holdings is associated with farm labor productivity growth and underappreciated benefits to smallholder farmers. However, the rise of African investor farmers is also contributing to the commodification of land, escalating land prices, and restricted land access for most local people. A better understanding of these trends and linkages, which requires new data collection activities, could help resolve long-standing policy debates and support strategies that accelerate agricultural transformation.
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The Economics of Agricultural Productivity in South Africa
Vol. 14 (2022), pp. 131–149More LessAccurate measures of productivity growth are an important policy tool but are difficult to obtain in South African circumstances. In this article, we review work on the measurement of farm-level productivity in South Africa since the earliest attempts at multifactor indices in the early 1990s. The focus is on total factor productivity, but single input measures such as labor and land productivity (yields) are also discussed. Measurements using time-series and cross-sectional data are discussed separately, along with measures to explain the effect of climate change. Data deficiencies are also pointed out. The article concludes that international collaboration should be maintained if important issues such as the COVID-19 impact, food security, climate change, and labor market shocks are to be successfully addressed.
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COVID-19 and Global Poverty and Food Security
Vol. 14 (2022), pp. 151–168More LessThe impacts of coronavirus disease 2019 (COVID-19) on food systems, poverty, and nutrition have been caused by generalized economic recession and disruptions in agrifood supply chains. This article reviews a growing empirical literature assessing those impacts. The review confirms that income shocks and supply disruptions have affected food security and livelihoods more where supply chains were poorly integrated and poverty where market informality had a greater presence before COVID-19. Yet, as the pandemic persists, outcomes remain uncertain and reliable data are still sparsely available. This review also reveals how methodological approaches have evolved during the pandemic, ranging from model-based scenario analyses, telephone survey evidence, case-study analyses, and data collection on policy responses and their effects. This review concludes that while we have good insight into the COVID-19 pandemic's impacts on food security, there is still much that we do not know, requiring much more rigorous hypothesis testing based on reliable and observed data.
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Early Parenting Interventions to Foster Human Capital in Developing Countries
Vol. 14 (2022), pp. 169–192More LessOne out of every three children under age 5 in developing countries lives in conditions that impede human capital development. In this study, we survey the literature on parenting training programs implemented before age 5, with the aim to increase parental investment in human capital accumulation in developing countries. Our review focuses on the implementation and effectiveness of parenting training programs (i.e., training in child psychosocial stimulation and/or training about nutrition). We emphasize the mechanisms that drive treatment-induced change in human capital outcomes and identify the demand- and supply-side behaviors that affect efficacy and effectiveness. Although the literature includes evidence on program features that are associated with successful interventions, further evidence on the dynamics of human capital formation, documentation of medium- to long-term persistence of treatment impacts, and research on the implementation and evaluation of programs at scale are needed to delineate a scalable and inclusive program that provides long-term treatment impacts.
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Empirical Industrial Organization Economics to Analyze Developing Country Food Value Chains
Vol. 14 (2022), pp. 193–220More LessFood value chains (FVCs) in developing countries are transforming rapidly, with some regions in the modern stage (led by supermarkets and large processors) and other regions in a transitional stage (led by midstream small and medium enterprises). With transformation, however, come market-performance issues related to monopoly and monopsony power, vertical bargaining, contracting, and other issues addressed by empirical industrial organization (EIO) researchers. Although the concepts and methods of EIO are evolving rapidly, the two bodies of literature on EIO and FVC transformation as part of the food markets and food industries branches of development economics have not sufficiently cross-pollinated. Applying tools of modern EIO to FVCs in developing countries is now relevant because of the transformation that has occurred and possibly due to the increasing availability of data from surveys of farms, processors, and wholesalers, and for some retailers, from scanner data. We review the transformation trends, the EIO themes and tools relevant to them, and the emerging data sources.
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Structural Transformation of the Agricultural Sector In Low- and Middle-Income Economies
Vol. 14 (2022), pp. 221–241More LessMovement of labor from agriculture to nonagriculture and the associated increase in farm size through structural transformation are at the core of economic development. We conduct a comprehensive review of the literature exploring the causes and consequences of the transformation. We discuss (a) the size and determinants for the persisting wage gap between agriculture and nonagriculture, (b) policy-induced barriers to structural changes, (c) the role of trade costs and technical change in shaping the nature of structural transformation and comparative advantage of regions, and (d) how the overall development of an economy affects the relationship between farm size and farm productivity and hence changes competitiveness of different scales of farms. We also identify questions for policy and research and the ways in which new sources and interoperability of data can help answer these questions.
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The Economics of Postharvest Loss and Loss-Preventing Technologies in Developing Countries
Vol. 14 (2022), pp. 243–265More LessThis article reviews the recent literature that has evaluated the effectiveness of postharvest loss (PHL)-reducing technologies for grains among smallholder farmers and small-scale traders in sub-Saharan Africa. We also develop a conceptual framework for identifying and quantifying different types of PHL that include physical quantity losses along with quality losses that are both observable (e.g., discoloration, insect damage, mold growth, and odor) and unobservable (e.g., aflatoxin contamination, chemical residues, and nutrient content losses). The framework considers how PHL affects producers, consumers, and society as a whole. We find that although reducing postharvest quantity losses often receives more attention from researchers, it is the loss of quality, particularly unobservable quality issues, that has a large effect on food safety and nutrition. A review of the literature suggests that cost-effective technologies to reduce PHL exist, but facilitating their adoption requires action from both the public and private sectors.
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Rural Employment in Africa: Trends and Challenges
Vol. 14 (2022), pp. 267–289More LessAfrica's rural population continues to expand rapidly, and labor productivity in agriculture and many rural-off farm activities remains low. This review uses the lens of a dual economy and the associated patterns of agricultural, rural, and structural transformation to review the evolution of Africa's rural employment and its inclusiveness. Many African countries still find themselves in an early stage of the agricultural and rural transformation. Given smaller sectoral productivity gaps than commonly assumed, greater size effects, and larger spillovers, investment in agriculture and the rural off-farm economy remains warranted to broker the transition to more and more productive rural employment. The key policy questions thus become how best to invest in the agri-food system (on and increasingly also off the farm) and how best to generate demand for nonagricultural goods and services that rural households can competitively produce. Informing these choices continues to present a major research agenda, with digital technologies, the imperative of greening, and intra-African liberalization raising many unarticulated and undocumented opportunities and challenges.
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Is Agricultural Insurance Fulfilling Its Promise for the Developing World? A Review of Recent Evidence
Vol. 14 (2022), pp. 291–311More LessInnovations in agricultural index insurance have raised expectations that the private sector can overcome shortcomings associated with more traditional indemnity-based products like multiperil crop insurance and strengthen agricultural risk management at scale across developing countries. This article updates previous reviews on agricultural insurance but differs in that it goes beyond the prognosis that recent innovations can help make insurance more commercially viable. As such, it addresses two important challenges that have received limited attention. First, it distinguishes different types of farm households and recognizes that many are excluded from the insurance market, describing additional innovations that can help make insurance more accessible to these excluded groups. Second, it acknowledges that insurance for catastrophic risks is unaffordable for most farmers and summarizes new developments in disaster assistance and safety net programs that can provide broader protection against these risks. The review concludes that cost-benefit analyses of subsidized insurance programs will be crucial for guiding public spending decisions.
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War, Conflict, and Food Insecurity
Vol. 14 (2022), pp. 313–332More LessThis article reviews the literature at the intersection of war, armed conflict, and food security, focusing on intergroup violent conflicts such as interstate conflict, civil war, insurgencies, state violence toward civilians, riots, and nonstate conflict. We briefly discuss recent trends in conflict and food security and note the channels through which conflict may impact food security in developing countries. Next, we review the quantitative literature, studying the pathways between conflict and food security and their effects on child health and household coping strategies, displacement, changes in factors of production, market and travel restrictions, and insurgent predation. The effect of food insecurity on conflict, related to limited access to land and shocks to commodity prices, is discussed. We briefly survey the effects of aid and assistance programs and then discuss the connection between climate change, conflict, and food security. The review concludes by identifying topics in this field that are ripe for future research.
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Global Change and Emerging Infectious Diseases
Vol. 14 (2022), pp. 333–354More LessOur world is undergoing rapid planetary changes driven by human activities, often mediated by economic incentives and resource management, affecting all life on Earth. Concurrently, many infectious diseases have recently emerged or spread into new populations. Mounting evidence suggests that global change—including climate change, land-use change, urbanization, and global movement of individuals, species, and goods—may be accelerating disease emergence by reshaping ecological systems in concert with socioeconomic factors. Here, we review insights, approaches, and mechanisms by which global change drives disease emergence from a disease ecology perspective. We aim to spur more interdisciplinary collaboration with economists and identification of more effective and sustainable interventions to prevent disease emergence. While almost all infectious diseases change in response to global change, the mechanisms and directions of these effects are system specific, requiring new, integrated approaches to disease control that recognize linkages between environmental and economic sustainability and human and planetary health.
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The Economics of Wildlife Trade and Consumption
Vol. 14 (2022), pp. 355–377More LessThe global wildlife trade dates to antiquity. Recently, its harms to endangered species, animal welfare, and public health have become critical to address. The complexities of the wildlife trade are numerous, including the fact that much of the economic activity is illegal and unobserved. We find that wildlife products are used for sustenance, signaling status, medicine, and entertainment. There is vast heterogeneity in products and species traded. Supply chains extend from biodiverse, low-income regions to richer countries or urban centers. Empirically, we use data findings from the literature to rank countries in terms of intensity of the wildlife trade and identify factors that contribute to wildlife trade. We also identify supply-side and demand-side interventions that can control abuse in wildlife trade. Innovative techniques for observation, econometric analysis, and enforcement are sorely needed to support effective policies to preserve the world's wildlife.
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The Economics of Wildfire in the United States
Vol. 14 (2022), pp. 379–401More LessWildfire is a natural phenomenon with substantial economic consequences, and its management is complex, dynamic, and rife with incentive problems. This article reviews the contribution of economics to our understanding of wildfire and highlights remaining knowledge gaps. We first summarize economic impacts to illustrate scale and trends. We then focus on wildfire management in three phases: mitigation before fires occur, response during fires, and response after fires. The literature highlights economic interdependencies and spillover effects across fire-prone landscapes as the source of economic inefficiencies and motivation for public institutional response. The literature illustrates the complexity of this problem with its myriad threads, including the trade-offs of living in fire-prone environments, the prospects for using controlled fire and mechanical fuel removal for reducing wildfire severity, the decision-making environment that firefighters face, and the economic consequences of wildfire smoke on health. Economics provides valuable insights, but fundamental questions remain unanswered.
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This Is Air: The “Nonhealth” Effects of Air Pollution
Vol. 14 (2022), pp. 403–425More LessA robust body of evidence shows that air pollution exposure is detrimental to health outcomes, often measured as deaths and hospitalizations. This literature has focused less on subclinical channels that nonetheless impact behavior, performance, and skills. This article reviews the economic research investigating the causal effects of pollution on nonhealth end points, including labor productivity, cognitive performance, and multiple forms of decision-making. Subclinical effects of pollution can be more challenging to observe than formal health care encounters but may be more pervasive if they affect otherwise healthy people. The wide variety of possible impacts of pollution should be informed by plausible mechanisms and require appropriate hypothesis testing to limit false discovery. Finally, any detected effects of pollution, in both the short and long run, may be dampened by costly efforts to avoid exposure ex ante and remediate its impacts ex post; these costs must be considered for a full welfare analysis.
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