Course:FRE460

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Economics of Food Consumption
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FRE 460
Section:
Instructor: Dr. Carol A McAusland
Email: carol.mcausland@ubc.ca (for setting

appointments only)

Office: McML 337
Office Hours: Tu/Th 2-3 pm and by appointment
Class Schedule: Tu/Th 12:30-2 pm
Classroom: MCML 160
Important Course Pages
Syllabus
Lecture Notes
Assignments
Course Discussion

Grading

Activity Percent of Grade
Four Assignments 54%
Midterm Exam 33%
Experiments 2%
Participation (iClicker) 11%
Total: 100%

Text

There is no assigned text for the course. Some supplemental reading will be made available through Canvas.

Gadgets

We will make extensive use of iClickers in this course; always bring yours to class. iClicker questions will occasionally require tedious calculations, so you will also want to have a calculator handy. The calculator on your phone or laptop will usually be adequate. However, you will not be allowed to access your phone or laptop during exams, so you will want to acquire a non-programmable, non-transmitting calculator to use during the midterm and final.

Examinations

Each student may bring one 3"x5" notecard to the midterm and final; notecards can have handwriting on both sides but cannot be typed nor layered. Each student may also bring a non-programmable, non-transmitting calculator. Erasable ink is not permitted, and students wanting the option of a regrade may not use pencil. Other materials, including watches, cellphones, tablets, computers, books, notes, or any device capable of receiving or transmitting data are prohibited. Students may not communicate with anyone other than the instructor/invigilator during the exam. Students will not be permitted to leave the room once the exam has begun. Students must bring and display student ID cards. Impersonation is obviously prohibited.

Academic Conduct

All students enrolled in FRE 460 are expected to read and understand the set of prohibited actions as outlined on UBC's calendarLinks to an external site. Note that submitting answers for another student--- or letting another student submit answers on your behalf---via iClicker or other submitted materials constitutes impersonation and will be subject to disciplinary action including deductions from the course grade and referral to the President’s Advisory Committee on Student Discipline.

Important Dates

  • January 23, 2020 Assignment #1  handed out
  • January 30 Assignment #1 due AT START OF LECTURE (or whenever it is you arrive at lecture). No late assignments will be accepted. No exceptions. Digital submissions acceptable so long as they are received by 12:30 pm January 30, 2020
  • February 13 Midterm
  • February 18 & 20 Spring Break
  • March 5 Assignment #2 handed out
  • March 12 Assig #2 due; same rules apply as for Assignment #1
  • March 19 Assignment #3 handed out
  • March 26 Assig #3 due; same rules apply as for Assignment #1

Lecture Outline

I. The economics of eating stuff that's bad for us

  • A. Rational choice versus behavioural economics (Supplementary reading: Just 2009)
  1. Demand curves, consumer and producer surplus, taxes and deadweight loss
  2. Present discounted value, Decision trees, Quasi-hyperbolic discounting, Time inconsistent preferences
  • B. The economics of obesity (Supplementary reading: Etile 2009)
  1. Timeline
  2. Costs of obesity: Health costs + obesity paradox; Statistical interlude: Correlation vs causation; Statistical Interlude: Multivariate Regression, Ordinary least squares, Statistical significance, p-values; Labour market
  3. Causes of Obesity "Epidemic": Lifestyle Changes (Sprawl, Falling energy expenditure, Snacking); Poverty & food deserts; Changes in Food Supply (Sugar and sugar-sweetened beverages, Falling food prices, Variety, Processing)
  4. Using corrective taxes: Prevalence of soda taxes; Pigouvian justifications; Elasticities; Effectiveness - empirical studies: effect on BMI, other health
  • C. Risky foods (supplementary reading: Fox 2009)
  1. Risk perceptions and aversion
  2. Decision trees with uncertainty
  3. Expected utility
  4. Experimental economics
  • D. Other puzzles in food economics
  1. Mental accounting
  2. Heuristics

II. Consumers and the changing food environment

  • A. Changing nutritional content of food
  1. Biofortification
  2. Nutrient concentrations
  • B. Organics
  1. Getting certified
  2. Better for the environment?
  3. Better for the consumers?
  4. Better for the farmers?
  • C. GMOs
  1. Better for the environment?
  2. David vs Goliath (Schmeiser vs Monsanto)
  • D. Ethical Labels (Supplementary reading: Marette Roosen 2009)
  1. Labels as public goods
  2. Banning offensive technologies
  3. Third Party Labels: E.g. Fair Trade Labels (premiums, transaction costs, and effects on wages)
  4. Congruent claims
  • E. Food Waste
  1. Volume
  2. Role of retailers
  3. Packaging (bottled water & plastic bags)
  • F. Foodmiles (Supplementary reading: Teisl 2009)

III. Food (Mis)Information

  • A. Advertising
  1. Credence, experience, and search goods
  2. Why firms advertise
  3. Generic advertising and checkoff programs
  4. Effects of advertising bans
  5. Marketing innovation
  • B. Food at home
  1. Nutritional labels (and effectiveness of)
  • C. Food away from home (Supplementary reading: Stewart 2009)
  1. Trends & determinants
  2. Health implications
  3. Labeling (and accuracy of)

IV. Wrap Up