Both nationally and globally, food waste is a big issue. In 2012, US homes threw away about 35 million tons of food. Before food reaches our homes, at every step of production and distribution, there is some proportion of food lost. Taken together, one report has said that the total food that is wasted in North America is about 40 percent of total production. We devote a lot of resources to grow food in this country, and yet, about 40 percent of it is just wasted.
That loss is huge, especially when we have about 50 million individuals who live in food-insecure households in the United States. If we can reduce some of the food waste, we can save valuable resources and divert them to feeding the hungry in America with nutritious food.
On the macro level, there is a need to improve logistics and transportation so that less food is wasted by the time it reaches the grocery store shelves. Some large grocery chains have agreed to sell produce rejects in their stores. Unsold groceries at grocery stores that are not beyond their expiration dates could be sent to local food banks or areas that are termed to be food deserts so that they are not thrown away, and thus, wasted.
We can also do our part to reduce food waste. If we have unopened canned foods, we can donate them to the nearest food bank. Churches, universities, and community organizations can hold food drives that collect unused, unopened and unexpired food from houses and send them to food banks. These can help in part, to reduce food waste in our communities.
Saturday, January 23, 2016
Friday, January 22, 2016
What makes a man poor?
This op-ed of mine was published in the newspaper "Dhaka Tribune" on January 19, 2016
Recent reports by the Bangladesh government and certain donors show that Bangladesh has made some impressive progress in reducing poverty and extreme poverty. If this trend continues, Bangladesh can be free from extreme poverty within a short period of time.
However, as more people shed the poverty status in Bangladesh, steps should be taken to see if their quality of life has improved as well. Therefore, the government should apply different measures of well-being, ones that reflect whether the lives of the poor have improved.
This calls for updating the current method of measuring poverty. Nobel laureate Amartya Sen said that, to measure poverty, one needs to first identify who is poor, and then use certain mathematical functions to come up with a method of measuring poverty.
Traditionally, the identification of who is poor has been done using a poverty line. It is an income level set by the government, and if someone earns below that line, that person is considered poor. But some poverty experts say that relying solely on income to assess the poverty status of a person may not indicate whether the person is free from other material hardship.
The national poverty line of a person is $1.13 per person per day in Bangladesh (Bangladesh Development Update), which is about Tk90. Thus, a person living in Dhaka and earning Tk100 a day is officially considered to be non-poor, but their housing, transportation, and other expenses may be too high for there to be enough left to spend on food and other activities, and of course, for savings.
This person may not be income poor, but their calorie intake may not be equivalent to that of a non-poor person.
Therefore, in addition to income, other dimensions of well-being such as food, housing, sanitation facilities, education, and health should be measured to see if the employed poverty-alleviation tools have been effective.
Currently, the Bangladesh Bureau of Statistics periodically measures such dimensions of the population in different surveys. All that is needed is to combine the measures of these dimensions to one index, one that can tell us the overall quality of life of the poor.
For example, the multi-dimensional poverty index (MPI), devised by Sabina Alkire and James Foster of George Washington University, aggregates different dimensions of well-being into a single index that can show the overall poverty index of a community.
This measure has been adopted by the UNDP in their Human Development Report, and it is used to measure the extent of the deprivation of multiple dimensions of well-being in a country.
Bangladesh can officially use MPI, besides the current income poverty measure, to measure poverty in the country.
This index is sensitive to improvements in different dimensions of well-being, so, if one or more of the dimensions improve, while others stay the same, it can show that the overall quality of life of the poor has improved.
And if a person improves his housing conditions, while income and other dimensions remain the same, the index would indicate that the person’s quality of life has improved.
This index will properly tell policy-makers how pro-poor policies have been improving the lives of the poor across the country.
Recent reports by the Bangladesh government and certain donors show that Bangladesh has made some impressive progress in reducing poverty and extreme poverty. If this trend continues, Bangladesh can be free from extreme poverty within a short period of time.
However, as more people shed the poverty status in Bangladesh, steps should be taken to see if their quality of life has improved as well. Therefore, the government should apply different measures of well-being, ones that reflect whether the lives of the poor have improved.
This calls for updating the current method of measuring poverty. Nobel laureate Amartya Sen said that, to measure poverty, one needs to first identify who is poor, and then use certain mathematical functions to come up with a method of measuring poverty.
Traditionally, the identification of who is poor has been done using a poverty line. It is an income level set by the government, and if someone earns below that line, that person is considered poor. But some poverty experts say that relying solely on income to assess the poverty status of a person may not indicate whether the person is free from other material hardship.
The national poverty line of a person is $1.13 per person per day in Bangladesh (Bangladesh Development Update), which is about Tk90. Thus, a person living in Dhaka and earning Tk100 a day is officially considered to be non-poor, but their housing, transportation, and other expenses may be too high for there to be enough left to spend on food and other activities, and of course, for savings.
This person may not be income poor, but their calorie intake may not be equivalent to that of a non-poor person.
Therefore, in addition to income, other dimensions of well-being such as food, housing, sanitation facilities, education, and health should be measured to see if the employed poverty-alleviation tools have been effective.
Currently, the Bangladesh Bureau of Statistics periodically measures such dimensions of the population in different surveys. All that is needed is to combine the measures of these dimensions to one index, one that can tell us the overall quality of life of the poor.
For example, the multi-dimensional poverty index (MPI), devised by Sabina Alkire and James Foster of George Washington University, aggregates different dimensions of well-being into a single index that can show the overall poverty index of a community.
This measure has been adopted by the UNDP in their Human Development Report, and it is used to measure the extent of the deprivation of multiple dimensions of well-being in a country.
Bangladesh can officially use MPI, besides the current income poverty measure, to measure poverty in the country.
This index is sensitive to improvements in different dimensions of well-being, so, if one or more of the dimensions improve, while others stay the same, it can show that the overall quality of life of the poor has improved.
And if a person improves his housing conditions, while income and other dimensions remain the same, the index would indicate that the person’s quality of life has improved.
This index will properly tell policy-makers how pro-poor policies have been improving the lives of the poor across the country.
Friday, December 25, 2015
What’s next in Bangladesh’s development?
This op-ed that I wrote was published in the newspaper Dhaka Tribune on December 23, 2015.
As Bangladesh embarks on a new era of being a lower-middle income nation, some questions remain about what steps should be taken next to further develop the country. Complicating matters are the large differences in living conditions and economic opportunities between the urban and rural areas of Bangladesh.
Just travelling a few miles outside of the main cities of Dhaka or Chittagong shows stark differences between rural and urban areas of Bangladesh. The government needs to do a balancing act between Dhaka, the other urban areas of Bangladesh, and the rest of the country to ensure that there is a balanced economic growth across the country.
The labour force of Bangladesh is 77 million and growing, according to the World Bank. This can be both a blessing, and a curse. It is a blessing as it provides a cheap supply of labour who can work with low pay and this factor can attract industries that require a large pool of unskilled workers.
However, unskilled workers will earn a low pay, and the only way to develop the nation is to ensure that the labour force becomes productive and demands a higher pay. Bangladesh needs to create 21 million jobs in 10 years, according to Kaushik Basu, the chief economist of the World Bank.
Herein comes the dilemma. How can Bangladesh continue its growth trajectory if it has to rely on attracting industries that only require low-skilled workers? If the country tries to attract industries that require high-skill workers, it will only employ a small fraction of the workforce, and the unskilled workers will be left behind, creating uneven growth.
Moreover, a recent article in The Wall Street Journal indicates the assumption that manufacturing-led growth is a feasible strategy for poor countries to achieve high-income status may not be so true anymore. Many developing countries are experiencing a fall in the contribution of manufacturing sector to GDP according to the article. A number of reasons were given, but one big reason is the rise of China as the world’s manufacturing hub.
As Bangladesh is currently over-specialising in low-end manufacturing of clothes, it is possible that the country may not move to higher-end manufacturing, and may even see the manufacturing sector shrink in the future.
So what hope does a country like Bangladesh have to achieve upper-middle income status in a reasonable amount of time? Improving infrastructure, such as building seaports or a new airport, can help to improve bottlenecks to trade and employ thousands, but will take years to build and decades to realise the full economic impact.
As mentioned above, there is a large pool of unskilled workers that need to be employed, along with the growing number of skilled workers.
While looking at projects that can improve the long run growth prospects of the country, Bangladesh needs to look into steps that can create new employment opportunities. Besides implementing large-scale infrastructure projects, the government can focus on increasing employment in the service sector. It can encourage local transport companies to trans-ship goods from one part of India to another through Bangladesh.
Online payment sites, such as PayPal, can be allowed to operate in Bangladesh so that small manufacturers can sell their products through online vendors. Non-resident Bangladeshis should be courted to invest in Bangladesh.
Students should be encouraged to be entrepreneurial, and all kinds of facilities, like subsidised office-space for start-ups, can be given to recent college graduates to start their business. But whatever the steps the country takes, there needs to be a balance in employment opportunities so that in the short-run, both skilled and unskilled workers can gain employment to ensure an even development in the country.
As Bangladesh embarks on a new era of being a lower-middle income nation, some questions remain about what steps should be taken next to further develop the country. Complicating matters are the large differences in living conditions and economic opportunities between the urban and rural areas of Bangladesh.
Just travelling a few miles outside of the main cities of Dhaka or Chittagong shows stark differences between rural and urban areas of Bangladesh. The government needs to do a balancing act between Dhaka, the other urban areas of Bangladesh, and the rest of the country to ensure that there is a balanced economic growth across the country.
The labour force of Bangladesh is 77 million and growing, according to the World Bank. This can be both a blessing, and a curse. It is a blessing as it provides a cheap supply of labour who can work with low pay and this factor can attract industries that require a large pool of unskilled workers.
However, unskilled workers will earn a low pay, and the only way to develop the nation is to ensure that the labour force becomes productive and demands a higher pay. Bangladesh needs to create 21 million jobs in 10 years, according to Kaushik Basu, the chief economist of the World Bank.
Herein comes the dilemma. How can Bangladesh continue its growth trajectory if it has to rely on attracting industries that only require low-skilled workers? If the country tries to attract industries that require high-skill workers, it will only employ a small fraction of the workforce, and the unskilled workers will be left behind, creating uneven growth.
Moreover, a recent article in The Wall Street Journal indicates the assumption that manufacturing-led growth is a feasible strategy for poor countries to achieve high-income status may not be so true anymore. Many developing countries are experiencing a fall in the contribution of manufacturing sector to GDP according to the article. A number of reasons were given, but one big reason is the rise of China as the world’s manufacturing hub.
As Bangladesh is currently over-specialising in low-end manufacturing of clothes, it is possible that the country may not move to higher-end manufacturing, and may even see the manufacturing sector shrink in the future.
So what hope does a country like Bangladesh have to achieve upper-middle income status in a reasonable amount of time? Improving infrastructure, such as building seaports or a new airport, can help to improve bottlenecks to trade and employ thousands, but will take years to build and decades to realise the full economic impact.
As mentioned above, there is a large pool of unskilled workers that need to be employed, along with the growing number of skilled workers.
While looking at projects that can improve the long run growth prospects of the country, Bangladesh needs to look into steps that can create new employment opportunities. Besides implementing large-scale infrastructure projects, the government can focus on increasing employment in the service sector. It can encourage local transport companies to trans-ship goods from one part of India to another through Bangladesh.
Online payment sites, such as PayPal, can be allowed to operate in Bangladesh so that small manufacturers can sell their products through online vendors. Non-resident Bangladeshis should be courted to invest in Bangladesh.
Students should be encouraged to be entrepreneurial, and all kinds of facilities, like subsidised office-space for start-ups, can be given to recent college graduates to start their business. But whatever the steps the country takes, there needs to be a balance in employment opportunities so that in the short-run, both skilled and unskilled workers can gain employment to ensure an even development in the country.
Thursday, December 17, 2015
Multidimensional Human Opportunity Index
My paper, co-authored with my colleague Shabana Mitra (Indian Institute of Management-Bangalore) was recently accepted for publication at the journal "Social Indicators Research." The paper, titled Multidimensional Human Opportunity Index, is an extension of the Human Opportunity Index (HOI) developed by the World Bank.
The explanation of the HOI is presented in my earlier blog post. In a nutshell, the HOI first measures the probability of access the children of a country have to a certain basic economic service (such as schooling, clean water, etc.). Let this be M. In the next step, the measure creates bins based on certain characteristics of children that are beyond their control, like their gender, family economic condition, residence, gender of head of household, and other socio-economic factors. In the next step, the probability of access to that service by children in each bin is calculated. The probability of those bins that are below M are selected (if each bin is x, then p(x) is the probability of access for bin x) and the value of HOI is said to be the following:
HOI = M - E(M - p(x) | x is a bin that has access lower than M)
where E(M - p(x) | x is a bin that has access lower than M) is the average of the difference between M and p(x).
In our paper, Multidimensional Human Opportunity Index (MHOI), we note that a child needs a bundle of basic services for proper growth and development. Besides access to clean water, a child needs access to school, access to healthcare, access to electricity and access to good transportation facilities (this list is not exhaustive). If one of them is absent, it can hinder the proper development of the child. For example, school access would not be of much value if the child is sick and does not have a good healthcare facility nearby, or if the child does not have access to clean water. So, instead of looking at the basic services piecemeal, we create a bundle of basic services that are deemed essential to a child. We then measure the probability of access a child has to that bundle of basic services, and then use the similar method to calculate HOI to calculate MHOI. A higher value of MHOI indicates that across the country, there is a more equal distribution of the bundle of services deemed essential for the development of a child.
We use data from Nepal and Bhutan to show how to apply our data to measure MHOI. We find that only about two-thirds of households in Bhutan and one-half of households in Nepal have access to the bundle of basic services that are essential to the development of a child in 2011; although we do find that the MHOI indicator has been improving in both Nepal and Bhutan for the past 10 years. The MHOI of Bhutan is much higher than that of Nepal, but Nepal is catching up.
Such indices can help us evaluate the overall effectiveness of provision of basic services to the population. It can help countries measure whether they are in path to achieving the Sustainable Development Goals of the UN.
The explanation of the HOI is presented in my earlier blog post. In a nutshell, the HOI first measures the probability of access the children of a country have to a certain basic economic service (such as schooling, clean water, etc.). Let this be M. In the next step, the measure creates bins based on certain characteristics of children that are beyond their control, like their gender, family economic condition, residence, gender of head of household, and other socio-economic factors. In the next step, the probability of access to that service by children in each bin is calculated. The probability of those bins that are below M are selected (if each bin is x, then p(x) is the probability of access for bin x) and the value of HOI is said to be the following:
HOI = M - E(M - p(x) | x is a bin that has access lower than M)
where E(M - p(x) | x is a bin that has access lower than M) is the average of the difference between M and p(x).
In our paper, Multidimensional Human Opportunity Index (MHOI), we note that a child needs a bundle of basic services for proper growth and development. Besides access to clean water, a child needs access to school, access to healthcare, access to electricity and access to good transportation facilities (this list is not exhaustive). If one of them is absent, it can hinder the proper development of the child. For example, school access would not be of much value if the child is sick and does not have a good healthcare facility nearby, or if the child does not have access to clean water. So, instead of looking at the basic services piecemeal, we create a bundle of basic services that are deemed essential to a child. We then measure the probability of access a child has to that bundle of basic services, and then use the similar method to calculate HOI to calculate MHOI. A higher value of MHOI indicates that across the country, there is a more equal distribution of the bundle of services deemed essential for the development of a child.
We use data from Nepal and Bhutan to show how to apply our data to measure MHOI. We find that only about two-thirds of households in Bhutan and one-half of households in Nepal have access to the bundle of basic services that are essential to the development of a child in 2011; although we do find that the MHOI indicator has been improving in both Nepal and Bhutan for the past 10 years. The MHOI of Bhutan is much higher than that of Nepal, but Nepal is catching up.
Such indices can help us evaluate the overall effectiveness of provision of basic services to the population. It can help countries measure whether they are in path to achieving the Sustainable Development Goals of the UN.
Tuesday, December 8, 2015
University and community partnership
The location of colleges and universities in the US is diverse. There are universities located in downtown, suburbs or even in sparsely-populated rural community. In many cases, these universities operate in a 'bubble' where students and faculty have little interaction with the wider community around them. As members of the local community, universities can provide valuable community service that can reinvigorate neighboring areas that suffer from many adverse socio-economic issues - such as low-quality public school system, high poverty rates, lack of jobs, etc.
A model can be the "Great Cities" program of the University of Illinois - Chicago (UIC). Students and faculty of UIC provide services to improve the neighborhood public school system, provide technical education to school children in underprivileged communities,and help to improve the neighborhood housing quality. Elon University has the "It takes a Village Project" where undergraduate students tutor elementary and middle-school students of local, under-performing public schools. Similar projects have been undertaken successfully in some other universities, and some of the best practices are listed in this link.
Such community involvement by universities can improve the surrounding communities and therefore, should be actively encouraged. Every university should have an office dedicated to community outreach, and should encourage faculty and students undertake projects that benefit the surrounding communities. The experience of community outreach programs should be shared, and the best practices should be adopted by other universities. This can help universities be more accessible to the locals, and locals will feel that the universities are part of their community, instead of being a foreign bubble in their locality.
A model can be the "Great Cities" program of the University of Illinois - Chicago (UIC). Students and faculty of UIC provide services to improve the neighborhood public school system, provide technical education to school children in underprivileged communities,and help to improve the neighborhood housing quality. Elon University has the "It takes a Village Project" where undergraduate students tutor elementary and middle-school students of local, under-performing public schools. Similar projects have been undertaken successfully in some other universities, and some of the best practices are listed in this link.
Such community involvement by universities can improve the surrounding communities and therefore, should be actively encouraged. Every university should have an office dedicated to community outreach, and should encourage faculty and students undertake projects that benefit the surrounding communities. The experience of community outreach programs should be shared, and the best practices should be adopted by other universities. This can help universities be more accessible to the locals, and locals will feel that the universities are part of their community, instead of being a foreign bubble in their locality.
Monday, November 16, 2015
Economic Growth in Pre-Industrial Europe
A new economics article, written by Roger Fouquet and Stephen Broadberry addresses GDP per capita of six European countries six centuries before the Industrial Revolution. The main data of the article is summarized in the graph below:
The countries studied are England/Great Britain, Spain, Portugal, Italy, Sweden and Holland. A few things emerged from this graph:
(i) the authors show in the paper that economic fluctuations were not non-existent in pre-industrial Europe. There were incomes rising and falling in the long run.
(ii) there was some growth in income in the long run, although there was major fluctuations of average incomes in the short run. Except for Spain, individuals in the other five countries faced a lot of uncertainty of income from one year to the next, but in the long run, Holland, Portugal and Britain saw incomes grow. Long run incomes in Italy stabilized after 1500, although there was a lot of fluctuations,
History might help to explain why incomes of Britain and Holland rose in the long run, while Spain stagnated, even though they all were colonizing foreign lands. Britain and Holland let private enterprises engage in trade and colonization, at least till the 19th century, while Spain and Portugal kings controlled the trade.
However, the past does not necessarily dictate the present and future. At one instance, Britain, Sweden, Spain and Portugal all had similar incomes (around 1600 AD). Yet today, Sweden is wealthier than Portugal, Spain and Britain. Government policies, education and institutions all can help change growth trajectory of a country.
(i) the authors show in the paper that economic fluctuations were not non-existent in pre-industrial Europe. There were incomes rising and falling in the long run.
(ii) there was some growth in income in the long run, although there was major fluctuations of average incomes in the short run. Except for Spain, individuals in the other five countries faced a lot of uncertainty of income from one year to the next, but in the long run, Holland, Portugal and Britain saw incomes grow. Long run incomes in Italy stabilized after 1500, although there was a lot of fluctuations,
History might help to explain why incomes of Britain and Holland rose in the long run, while Spain stagnated, even though they all were colonizing foreign lands. Britain and Holland let private enterprises engage in trade and colonization, at least till the 19th century, while Spain and Portugal kings controlled the trade.
However, the past does not necessarily dictate the present and future. At one instance, Britain, Sweden, Spain and Portugal all had similar incomes (around 1600 AD). Yet today, Sweden is wealthier than Portugal, Spain and Britain. Government policies, education and institutions all can help change growth trajectory of a country.
Saturday, November 7, 2015
The Uberization phenomenon
It's an interesting phenomenon. Just like how Uber disrupted the traditional taxi cartel of big cities, and also spread taxi services in the smallest towns of the US, other firms are trying to do the same in traditionally regulated industries. Some of these industries are ripe for disruption, and startups are doing so, according to this WSJ article. http://www.wsj.com/articles/the-uberization-of-finance-1446835102
Lending and stock brokerage are seeing a rise in a phenomenon called "Uberizarion" - where peer-to-peer contacts rule. Such disruption will benefit consumers by reducing search cost and can provide borrowers who are usually shunned by banks an avenue to obtain funds. The stronghold of a few financial institutions on these services may be broken soon. Already, we are seeing a decrease in the number of bank branches. Maybe they might be a relic of the past soon?
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