The Locavore's Dilemma
By David Henderson
The Feature Article on Econlib this month is “The Locavore’s Dilemma” by Jayson L. Lusk and F. Bailey Norwood, both agricultural economics professors at Oklahoma State University. Its subtitle, “Why Pineapples Shouldn’t be Grown in North Dakota,” is, of course, a reduction ad absurdum of the argument for “buying local.”
In their article, Professors Lusk and Norwood apply basic economic principles, specifically, gains from exchange, comparative advantage, and the basics of balance of payments, to make the case that buying local should not be some kind of principled position and the case that government should not encourage or subsidize “buying local.”
One of the most striking things I learned, in editing the piece, was about energy use. They write:
The truth is that the energy expended transporting food is relatively unimportant. According to USDA-ERS data, consumers spent $880.7 billion on food in 2006. Only four percent of these expenditures can be attributed to post-farm transportation costs.
I’ve categorized this post under “international Trade” because the tools normally used in international trade are the ones I use. But it could be categorized simply as “Trade.”
Update: One of the authors of the article, Bailey Norwood, has graciously replied to many of the comments below.