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The Locavore Challenge

Aug 24, 2010 • Environment, Households, Thinking Economically • 108 Views    1 Comment

Being a locavore is not always easy but it can feel very good. Those of us who are locavores believe that we are helping the planet by saving on transport costs and emissions, patronizing small businesses rather than distant impersonal corporate giants, and eating healthy fresh food. In many ways, locavores can have their cake and eat it too (although it usually is broccoli and local produce). While buying good, healthy food, locavores are helping the planet…

But are they?

In a recent post, I suggested cost/benefit analysis of environmentally friendly preferences such as wind farms, ethanol production, and buying local. Instead, though, we can let price do it for us. As economist Steve Landsurg points out, for local food purchases, cost/benefit analysis involves an undoable amount of research about “land, fertilizers, equipment, workers, transportation and energy costs” and still we would not have considered everything.

Using a tomato as an example, Landsburg explains that the price conveys all we need to know. Assume, for example, that the local tomato laborers would have been more efficient growing grapes. As a result, the tomato supply curve would shift up and to the left because of lower production, and the price of the tomato would increase. You don’t have to ask specifically about cost and benefit because a high or low price provides the answer.

The Economic Lesson

Cost is more than money. Economically defined, it is sacrifice. The cost of a decision is the next best alternative that you sacrificed.

Because the vast assortment of “costs” that relate to producing a good or a service affect the price, consumers who care about the environment can optimize decision making by considering the dollars they are spending. Indeed, all of us can look at a price as a source of information about the good or service we are purchasing. We can use price to become a better locavore.

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  • Emily Hilton

    I was definitely surprised to read that people who buy locally grown food could in fact be doing the opposite of what they intended and hurting the environment. What matters is not how much energy was used to get food from its place of growth to where it

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