Four agricultural economics faculty at Purdue University’s College of Agriculture recently received research grants from the U.S. Department of Agriculture’s National Institute of Food and Agriculture (NIFA). The grants’ principal investigators (PIs) are Tor Tolhurst, assistant professor of agricultural economics and agricultural policy; Steven Wu, associate professor of agricultural economics; Meilin Ma, assistant professor of agricultural economics; and Dominique van der Mensbrugghe, research professor of agricultural economics and director of the Purdue Center for Global Trade Analysis, which coordinates the Global Trade Analysis Project (GTAP).
Tolhurst and his collaborators’ research explores the use of alternative data — credit and debit card spending — from external partners to measure food-away-from-home, or FAFH, markets. Consumer spending at fast-food restaurants, sit-down restaurants, hotels and cafeterias all fall under the FAFH umbrella.
“In August 2023, 56% of U.S. dollars spent on food were spent at FAFH markets, a lot more than at grocery stores that month. However, this is an industry that requires more research,” Tolhurst says. “Using alternative data will help fill this research gap.”
Looking at behavioral economics in food and environmental policy, Wu and his co-PI will dive deeper into the feasibility of behavioral nudges. Behavioral nudging works on the principle that small, low-cost interventions can have significant impacts on a person’s behavior and can encourage people to make one decision over another.
Wu and his team will build a systematic framework for predicting the outcomes of behavioral nudges. He explains, “We hope to better understand how robust behavioral nudges are in reaction to minor alterations in environment and context, and to better target the use of nudges so that they can be more effective.”
Ma and her team will utilize economic modeling to explore the interaction of government policies and industry programs related to the adoption of sustainable farming practices, such as cover crops, nutrient management and conservation tillage. This project is fueled by an increase in U.S. interest to stimulate economic growth and curtail the negative environmental impacts of food production.
Ma says that despite government policies aiming to promote the adoption of these practices, this area requires more research, particularly on the outcomes of industry-funded incentives.
“Our research will address the fact that there has been little guidance on how to jointly maximize public and private incentives,” she says. “By understanding this, we’ll be able to figure out what the welfare implications of the incentives are on farmers, consumers and industry.”
Van der Mensbrugghe and his GTAP colleagues will use economic modeling to focus on livestock production and its impact on greenhouse gas emissions and strain on the planet’s natural resources. According to the Environmental Protection Agency, the livestock production industry contributed to 10% of U.S. greenhouse gas emissions in 2021.
“As the population continues to grow and as incomes increase, the demand for meat inevitably rises, putting more pressure on the world’s natural resources, resulting in water-quality issues and air pollution, among other consequences,” says van der Mensbrugghe.
Van der Mensbrugghe’s team also intends to apply the principles of circular economy, or the reusing of key resources and their application back into the livestock industry, in its modeling research. In the future, the researchers hope to offer alternative policy solutions.
