Smartphone Technology Will Raise Farmer Productivity

This NY Times article  reports that more and more U.S farmers are using "the cloud" to store data about their farms' conditions and to use their smartphones to receive advice about how to increase yields and improve soil conditions.  Imagine if you owned 400 acres of land.  Using the GPS on your smartphone, you can keep straight which subplots are under-performing and like a doctor figure out how to "cure the patient". Anticipating that farmers can be helped using "cloud power", companies such as farmlogs are popping up.
FarmLogs makes it incredibly simple to always know what's happening on your farm. Start saving time and money. Ditch the spreadsheets and paper records!


Or consider; Solum.

"The mission of another start-up, Solum, is to expand the store of data that farmers use to make decisions. The company has a central office in Mountain View and a soil analysis laboratory in Ames, Iowa.

Founded by three young men who earned Ph.D.’s in applied physics from Stanford, Solum has created new hardware and software technology for soil analysis. It makes a machine for testing soil nitrate levels that is small enough to be kept on the farm, allowing farmers to perform far more tests cost-effectively in a given field, says Nick Koshnick, one of the founders.

“It turns out that there’s huge variability in yield across a field,” Mr. Koshnick says, “The challenge is to figure out what accounts for the variability. Our soil analysis can be used with GPS mapping to help agronomists figure out what fertilizer to put where.”"

So, note my usual theme.  We are worried about farmer yields under climate change.  This information technology removes X-inefficiency and increases farmer productivity.  Brains and good decisions can offset part of the challenges that Mother Nature poses.  

I predict that farmer variability in output yields across plots at a point in time will decrease as the adoption of this technology increases. 

Is the "American Dream" 997 Square Feet?

I had the pleasure today of getting a haircut (at Supercuts!) and of taking a close look at a house for sale at 267 Colusa Avenue in Kensington, CA.  Here is the zillow report on this house.   I think this 997 square foot house will sell for about $475,000.   The backyard was terrific and that's the key attribute I look for in a house. Any house can have a toliet or a fridge or a couple of bedrooms but for me the backyard is the key.   Now, I agree that a home that is 997 square feet (with 2 bedrooms and 1 bathroom) is tiny but as the U.S enters a period of prolonged austerity --- I believe that it is important for economists to set an example in downsizing.    For those of you who have visited our 1,700 square foot home, you will see a pattern that we are scaling down our consumption so that over time we are likely to live in a 200 square foot house.   This house is 3 blocks from my in-laws and 2.5 miles from UC Berkeley.    If we buy this home, we will be willing to rent it to you for $8,000 a month and we will fill the bookshelves with signed copies of our books.  We need to earn a rate of return on our investment.  

USC Recruits the Terminator to Join its Policy School

The Chronicle of Higher Education reports that Arnold Schwarzenegger has joined the USC Price School of Public Policy with an endowed chair professorship.  Here is a quote:

"Mr. Schwarzenegger and C.L. Max Nikias, the president of the University of Southern California, are set to announce today the establishment of the USC Schwarzenegger Institute for State and Global Policy. The former governor, who holds an honorary doctorate of humane letters from Southern Cal, will be the institute's Governor Downey Professor of State and Global Policy and will serve as the chairman of its board of advisers."


My university doesn't have that type of star power.  Knowing that USC already has the rock god Steve Miller on its faculty and now knowing that Arnold will be there,  I am now willing to walk from my Westwood house to USC each day to teach.  I would hope that somebody would drive me back?  

Back in Berkeley

Since April 1st, I have traveled to the following cities;   Manila, Palo Alto, Berkeley, Budapest, Vienna, Salzburg, Munich, Singapore, Boston, NYC and now back to Berkeley.  While I have enjoyed my travel, I must reiterate that California is the place to be.  When people visit California, they are happy and content.  They sit at the UCLA Faculty Club with a smile on their face and relax.  Unlike when I taught at certain East Coast schools, nobody at UCLA has ever given me a second look because I like to wear sneakers and sometimes don't tuck in a dress shirt.  While I can't name what Californian industries will thrive over the next 20 years, I know that the state's unique quality of life will continue to attract those who like to live well.  As Dora and I flew today, I was looking at a map of Northern California.  There are no real cities north of San Francisco and South of Portland along the Pacific coast.  I told Dora that rather than buying Facebook shares that purchasing that coastal real estate is the right long run investment play.  

As I sit here in Berkeley, protected in this nuclear free zone, I'm enjoying the fresh air and good breeze.  While I can't predict what the state government will do next or how much high speed rail will really cost Californians, I am optimistic about the future out here.  From our travels east, we learned that humidity is no longer our thing.   This blog post has no real point except to try to nudge my friends who live on the East Coast to think about the possibilities in the sun to the west.

Michael Sandel Doesn't Think Like an Economist

I read Jeremy Waldron's review of Sandel's book "What Money Can't Buy" and have a few thoughts.  Unlike Arrow and Debreu,  Harvard's Sandel is a fan of incomplete markets.  He believes that there are more and more market trades taking place that "are gross".    For example, he is grossed out that in Washington DC that a lobbyist can pay a fee to have someone stand in line and wait until they are at the front of the line to attend a Congressional Hearing.  By paying someone a fee, the time poor lobbyist can attend a hearing that otherwise would have been prohibitively costly to attend (measured in the opportunity cost of time).

So, Sandel rejects Becker's 1965 work on the value of time.  As real wages rise and income inequality increases, the gains to trade from one person renting another person's time goes up.  Should we prohibit this?     Let me provide an example.  Suppose there is a low wage person who makes $8 per hour and there is a lobbyist who values her time at $150 an hour. If you must stand on line for 1.5 hours to guarantee you get a seat at the Congressional Hearing then there is a mutually beneficial trade between these two people.  The wage will be any number between $12 and $225.   Given their respective alternatives, any payment to the low value of time person between $12 and $225 makes them both better off.  This is what markets allow but this is what grosses out Dr. Sandel.

UPDATE:  Does society lose when lobbyists attend the meeting?   If "yes", then it is certainly possible that  there is a negative externality associated with this mutually beneficial trade as the "plutocracy" is perpetuated.  But, is this pessimism correct?   Would Congressional politics "work better" if a random set of Americans rather than lobbyists sat at the table?  If you believe the answer is "yes", what is your evidence for this claim?    Lobbyists represent interest groups with a stake in the policy debate.  They provide information (which politicians can ignore)  and they often represent producers who create output and "American jobs".   In the absence of campaign contributions, what criteria would politicians use for judging what are "good policies"?
If you believe that lobbyists have captured politicians and their votes, then you should support smaller government that reduces the impact that lobbyists can have on tilting the playing field toward their clients' desires.

Returning to Dr. Sandel ---   Given that time is our scarcest resource, capitalist economies can only make progress if we figure out how to efficiently use it.  I hope that Dr. Sandel lives to age 200 but if he doesn't achieve this longevity, doesn't he want to focus his scarce time on the things he does best (i.e teaching Harvard students his stuff) rather than standing in line?  If there is somebody who wants to stand in line in his place, why is Dr. Sandel grossed out? He should thank this person and if he really feels so strongly he can offer a tip on top of the going market wage for renting that person's time who stands on line for him.    In the same sense, does Dr. Sandel wash his own laundry or does he bring it to  a dry cleaner?  In this case as well, he is substituting his time for a specialists' time.  Yes, the specialist has better capital equipment for doing the job but it is a time substitution not very different than the "concierge line" that he abhors.

I would like to ask him, does he oppose road pricing to reduce traffic congestion?  Does he like Cambridge Square traffic congestion?   Would he support road pricing?  Road pricing is a similar idea it will save time for both the rich and poor but time is more valuable to the high wage people.   When the majority of the population is low wage, then congestion pricing will not be enacted by the median voter because she prefers  a $0 out of pocket expense for driving (ignoring gas ) and losing time as congestion slows everyone down.

Sandel also appears to believe that participating in markets changes our preferences.  If you are paid for giving blood,  you no longer offer it for free.

This idea appears nowhere in any economics textbook I know of and I would like to know what his evidence is for this claim.  How does capitalism "warp" us?  Is this a repeat of Galbraith's ideas that we are pawns of Madison Avenue?   In my world, we know ourselves and our goals.  We know our resource constraint and we go to the market to purchase goods that help us achieve our life goals while fully aware of the tradeoffs we face.  If you know that you don't know about the tradeoffs you face, then you can hire a consultant (or ask your mom) for a second opinion.

Am I picking on Harvard's Michael Sandel?  I don't think so. Apparently he is the leading moral philosopher of our age.   He holds an endowed chair at Harvard and the NY Times appears to love him.  But, he needs to take Greg Mankiw's econ 10 class!   Read his debate with Eric Maskin over the morality of pollution permits.   Finally, for my friends who study environmental economics -- he rejects the Coase Theorem's core logic.  He appears to argue that it is immoral to locate a noxious facility in a geographic area and compensate those who accept the dump.  Interesting! but inefficient.