Studies in Everyday Life

The Free Market Is Not Efficient: Unfettered Greed Undermines Fair Competition

2011-12-29T08:53:00.000-08:00

Thanks to Jesse for his great comments on my previous post.

>> I think it is useful to separate profits by their source: value added vs rent seeking.

I completely agree. This is an idea I've thought about for a while. In the simple competitive equilibrium model, there's no distinction between the sources of profit. All agents are acting rationally, so they are all made better off by participating in the market.

But economics does not do a great job of addressing two key distortions: deception and manipulation. Even behavioral economics models focus on behavioral biases like time inconsistency, prospect theory, overconfidence, etc. But we almost completely overlook the possibility that wide swaths of the economy make money through deception and manipulation.

Preferences are malleable - this fact is at the heart of consumerism. How do we compute the welfare implications of a market system if it creates needs in order to fulfill them? Are people better or worse off if they would have been perfectly happy without a smart phone, but felt compelled to buy one because everyone else had one? Sometimes marketing is innocuous - simply informing us that a useful product is available. Most marketing, however, contains elements of deception and manipulation, creating subconscious and emotional associations that gin up sales but ultimately leave us empty.

Once we confront the mercurial nature of human preferences, separating "true" value-creation from profiteering becomes philosophically, psychologically, and especially economically confounding. Because economists don't know how to deal with it, we just ignore it. Thus, even the idea of "value added" profits quickly fall apart when we consider the impact of deception and manipulation.

Finance has taken deception and manipulation to an extreme through multifarious versions of fraud, shrouding risk in complexity, and subverting the government. Willful deception was at the heart of every piece of the mortgage crisis - appraisal fraud, liar's loans, deceptive selling of toxic CDOs, deceptive AAA ratings. Financial firms and markets compel the government to intervene aggressively by holding the economy hostage, making campaign contributions, and exerting ideological influence. In finance, the "freer" the market has become, the further it's moved from fair competition.

Deception undermines markets. Manipulation undermines markets. Both lead to economic inefficiency. Yet deception and manipulation are also incredibly lucrative investment opportunities. Because economists have no uniform framework to address these distortions, we focus on attacking government as a source of inefficiency. This in turn breaks down the rules that limit deception and manipulation.

Competition works when there are rules. Rule-governed competition in sports promotes the development of extraordinary physical ability. If we eliminated rules in sports, people wouldn't get faster or stronger. Sports stars would just be the psychopaths willing to go the furthest to undermine their opponents. This is what has happened in finance and other industries where we've embraced the ideology of unfettered self-interest.

While sweeping (e.g. government) reform is crucial, I think that moral and cultural reform are essential as well. Given the gridlock in our political system, I think that moral clarity is necessary to build the political will to pass meaningful regulatory reform in any case. In the financial industry, I'm convinced that no regulation can be effective without changing the moral framework. Bankers will always be wilier and more voracious than the regulators, so unless they themselves change, they'll always find ways to subvert the rules (not to mention rule-making!). True reform has to come from within.

We as a society seem to have given up the fight on moral grounds - we've accepted the ugliness of finance and consumerism as necessary for America to function. I argue that we can't give up. Unfettered greed (with emphasis on unfettered) is the cause of our problems, not a necessary evil. From a scientific standpoint, simplistic, Randian notions about the efficiency of the free market are simply wrong.

Meat Week: My Battle with Compulsive Social Responsibility

2011-12-14T17:44:00.000-08:00

I don't know why, but I always end up with the opposite problems as most people. While other kids whined for toys and playtime, I detested presents and demanded more math. If mindless consumption and debt-fueled excess are the American disease, my peculiar malady is CSR: Compulsive Social Responsibility.

I blame it all on Kant and moral universality. From a very young age, whenever I think of doing something I instinctually ask myself - what would happen if everyone in the world did the same thing? Is that a world I'd want to live in? When my parents said "Eat your peas - there are starving kids in Africa!" I really took it to heart.

And the answer is NO! I do NOT want to live in an inequal society where the rich run profligate, a world denuded of wildlife and choked with pollution. Armed with the latest lifecycle analysis, I've treated my life as an experiment in social engineering, systematically shearing away all sources of social and environmental harm.

The thing is, I like doing all this. I believe in enjoying the things that are good for the world, instead of bending the world to suit what I enjoy. I don't feel that I'm making sacrifices or compromising my happiness by refusing to travel or eschewing restaurants. If I learned today that rutabagas could reverse climate change, I would eat them every day and enjoy every bite. But until now, I haven't acknowledged the idea that individual action might have its limits.

Mighty systems are at work - economic, social, and political - designed to undercut individual mindfulness. And that's where I get stuck. I go into paroxysms when Patrick suggests driving a mile to Trader Joe's when it's raining outside, even though we walk there most of the time (What about those Africans again? They're not whining about some puny rain, so why should I?). The recent breakdown of my wireless router made me feel despondent and powerless in the face of the technological cycle of planned obsolescence and cheap crap designed to break and impossible to fix.

The sad thing is that while modern capitalism prides itself on unlimited choice, innovation also destroys choice. The choice of being happy with what we have, instead of buying something new. The choice of buying a small, energy-efficient house in St Louis. I don't have the choice of being a part of this society and connecting with the people around me without harming something or someone. Yet, the ostensible infinity of choice makes social responsibility seem so alluringly, ruthlessly possible.

So, as an antidote to CSR, I'm trying an experiment. To confront the idea that I cannot solve the world's problems in the microcosm of my life. To grapple with the idea that trying to do good in the world - or even, just to live in the world - requires steeling myself against the daily moral compromises that right now eat away too much of my dignity. I'm going to do the anathema to my gradually veganizing brain. I'm eating meat, for a week.

I don't think eating meat will lead to some kind of life-changing epiphany. I'm not trying to convince myself that eating meat is ethical or good for the world. I just want to feel ok with compromise, with giving in - a little - to hypocrisy. I'm blazing a new personal frontier: going with the default option.

And lastly, a public service announcement:
Have you or a loved one experienced the following symptoms in the past 12 months? Obsessive recycling, anti-pesticidal tendencies, loss of appetite for non-local produce, blurred vision under incandescent bulbs, gardening under the age of 50? Do you bike to work, and/or feel smug about biking to work? Do you use the word "sustainability" in social conversation?

If so, you may be suffering from CSR. Contact your doctor today, and see whether fuck it is right for you.

The Myth of the Banker-Philanthropist

2011-12-04T13:47:00.000-08:00

Here's my response to Justin's comments on my last post about how banking can be an ethical career by channeling high-powered capital toward good causes. According to ethicist Will Crouch, "if you spend your money wisely, you can do much more good by taking a lucrative career such as banking than by pursuing a conventional ‘ethical’ career such as charity work."

It's a wonderful idea, especially in theory, that basically underlies the whole reason I'm in finance in the first place. In fact, I think ethical banking goes hand in hand with my idea of softening the ideology of self-interest. But as long as infinite self-interest prevails in finance, I don't think ethical banking is viable.

First, two of my favorite economic fallacies

The partial equilibrium fallacy: This is a common and powerful argument in economics, but which sometimes has destructive consequences. Crouch states "if you decide not to be a charity worker, someone else will take your place, and so the benefit you provide would have happened anyway."

Financiers use the same logic to justify amoral actions: "If I don't rip off this investor, someone else will."

On an individual level, both may be 90% true. But if everyone uses these arguments, there would be fewer charity workers, and there would be economy-collapsing levels of fraud. The partial equilibrium argument thus can lead to disastrous social consequences, and I don't consider it a valid justification for doing an action.

Contrast the economic logic with moral logic:
"Do unto others as you would have them do to you."
"Act only according to that maxim whereby you can, at the same time, will that it should become a universal law."
The Darwinian fallacy. This follows similar logic as above, that financial agents cannot but exercise infinite self-interest, because if they didn't someone else would and they would be outcompeted in the market.

I agree that there is a coordination problem, but infinite greed is far from inevitable. Greed itself isn't the problem. It's greed at all costs - the willingness to destroy others for a dime - that's so pernicious. If every company acted on Wall Street-level greed, we'd literally be living in Somalia. Other industries seem able to find a balance. Google and Apple are subject to the same capitalistic forces as Goldman, but I think Silicon valley represents a far more benign flavor of capitalism than Wall Street. If Wall Street can even reign it in to Wal-Mart level greed, I think firms and capitalism would find a way to survive.

Cooperation and empathy are, after all, also products of evolution.

Now onto the meat of the argument. The reason I like the black hole metaphor is that it highlights the inherent instability of absolute greed coexisting with good inside the same system - within an individual or in a society.

The black hole distorts the morality of everything around it. When finance makes profits from moral arbitrage, it puts pressure even on people inclined to do honest work. It directly makes honest work less profitable by cheating away retirement funds, punishing savers, and eliminating jobs. Our willpower is also finite. We're less inclined to do honest work in the face of financiers' obnoxiously ill-gotten riches.

Working in finance as it currently exists and donating the proceeds amounts to firebombing civil society and then paying for its reconstruction. Indebting people, kicking them out of their homes, eradicating their jobs, and then giving them charity doesn't make much sense.

There are also reasons why we hardly see any banker-philanthropists in the industry today. A completely amoral financial sector disproportionately attracts sociopaths and people with no interest in doing good. It's hard for anyone with a conscience to work and succeed in such an environment. Loosening the profit motive is crucial to enabling ethical bankers to enter and stay in the industry.

Doing good also requires a lot of effort. I think being a humanitarian is a lifelong process of learning and engaging with others, not just writing checks. Ethical bankers have to think about what causes they care about, how to solve difficult social problems, and which organizations to support. It's hard to put your heart into doing good and then to go to work ripping people off. Eventually one precludes the other.

In the end, I come to the same conclusion. Allowing one industry to completely flout morality destabilizes and sucks away good from the rest of society. Working in such an industry sucks away good from a person.

The Black Hole at the Center of Society: In Praise of Inefficient Markets

2011-12-03T18:44:00.000-08:00

I've been finding it difficult to reconcile living in the modern economy with living a moral life.

Just by existing in society, I'm complicit in thousands of acts of waste, greed, and exorbitance. I live in one of America's original sparse suburbias, with one of the longest commute times in the country. I buy food from markets that trash hundreds of pounds of edible produce a week. I work in a building that burns megawatt-hours a year on unused lights and computers. And I teach my students that this is progress. These are the things that lacerate my heart with a thousand cuts every day.

My theory about the sweeping popularity of the Occupy movement is that it gives voice to this very same tension in society at large. It's an opening skirmish between the two fundamentally incompatible moral frameworks that are violently colliding.

The market economy, especially financial markets, are premised on arms-length transactions based purely on the profit motive. There are minor caveats to this, for example socially responsible investing and conscious consumerism. But in terms of the financial markets that really drive the economy (currency markets, OTC derivatives, interbank lending), there's simply no room for doing good. Every financial scholar I've read (see Chapter 6 of Rajan's Fault Lines) and every financial reform that's ever been proposed, has taken as a given that the unmitigated greed of the financial sector cannot be changed.

Wall Street argues that greed is necessary for life as we know it - necessary for economic growth, for global trade, for the jobs and products we all depend on. The protesters attack Wall Street for violating the moral norms most of us still believe in - honesty, fairness, and respect, to name a few.

The challenge is that both Wall Street and Occupy Wall Street are correct. Greed is a fundamental part of society as we know it. Anyone who has ever bought things from a store or worked for a business is a part of the system. But greed also undermines the very society it enables.

The problem with finance runs much deeper than the crisis, and deeper than any legislation can address. The problem is that finance is a gaping black hole in society where the normal rules of morality don't apply.

The horizon of unfettered self-interest has lately breached the borders of our personal lives, waging war with our better natures. All of us now act like bankers when making financial decisions. Which waffle iron to buy? The one that's on sale! How to invest for retirement? To maximize return! What is Groupon but a way to turn us all into rapacious arbitrageurs of the cupcake market?

We are Wall Street, and we've started believing not just in self-interest, but self-interest for any reason, at any cost. The force of absolute self-interest will disfigure any law, institution, or incentive system that seeks to contain it, making me pessimistic that any reform can succeed without individual and fundamental reckoning.

To recover the gravitational balance, the logic of finance must loosen, our devotion to self-interest made less complete. Not every arbitrage opportunity needs to be taken. Some dollar bills, muddied and hidden down dark alleys, should be left on the ground. Let us forgo Groupons and frequent flyer miles, when they cheapen our conscience. Let our investments earn suboptimal returns, when placed in honest hands.

We'll pay a price for this - it may be the end of the world as we know it - but it will ease the dissonance in our hearts.

Long live inefficient markets.

I Don't Hate Pets: A Polemic

2011-11-07T08:20:00.000-08:00

I don't hate pets. Not the animals themselves. But I'm convinced that many of us who think we love animals - our pets especially - mainly love the way animals make us feel.

I don't hate pet owners. But I think we too easily slip into treating other animals as means toward our own entertainment and emotional fulfillment. And I hate the culture of pet ownership that encourages us to do this without thinking.

We pay lip service to the needs of pets (we walk them, take them to the vet, pay exorbitantly for their upkeep). But not when it really matters. When our needs come head to head with theirs, who inevitably wins?

Instead of engaging them on their terms, we force animals to fit of the gaps in our lives. Like a bonsai kitty, pressed into a mold for heart-shaped sushi. Collared and neutered and declawed and debarked. In modern cities that are ill-suited for the expression of intrinsic dog-ness and cat-ness.

We can't seem to appreciate nature by simple acknowledgement. We have to go there. We have to own it. We have to own it on our own terms so it's clean and convenient and lives and dies at our behest.

But we're not honoring nature by owning pets. We're choosing one life at the expense of another. We're choosing pets above fellow humans. We spend more on pets in a year than the Gates Foundation has during its entire existence to eradicate poverty and disease.

Raising animals after our own image furthers their extinction in the wild. The more grandiose among us poach parrots and lemurs. More insidiously, we marvel when our children catch turtles and frogs. Taking them home and to slowly starve and desiccate. Our cats and dogs make a sport of exterminating local fauna.

Pets are not animals. They are our children who cannot speak and cannot grow up. Upon whom we can freely project our prejudices and gripes and emotional needs without being questioned. This is not what an animal should be.

People are cruel and neglectful and exploitative of other people too. But we can walk away. We can fight back. Our real children will inevitably learn to speak and think for themselves, which compels us to shield them from the worst of ourselves. Pets are children with no rights.

Do I believe that they should have all the rights of human beings? Should Spot be able to sue Bobby for emotional damage? I'm not that crazy.

I surely don't believe that we can or should put all pet owners under surveillance to make sure they treat their animals with respect and humanity. And despite my lingering idealism, I can't envision any awareness campaign that could change our attitudes enough to make pet ownership feel ok to me in this lifetime.

We haven't gotten there with people yet. Peter Singer's "circle of empathy" has a long way to go.

So in the absence of sufficient understanding, respect, and human kindness, and without resorting to outlandish Big Brotherhood, I'm left with only one choice. I have to reject the idea of pet ownership as an ethically tenable, societywide activity.

Organizations like PETA feebly succor the symptom but feed the disease. Instead of those horrible animal shelter commercials starring Sarah McLachlan and Youtube videos of cute cat tricks, I'd be willing to support any measure that makes pet ownership less appealing.

The best way we can love animals is to stay away from them. Please. Help me spread the word.

Benford's law: a revised analysis

2011-10-24T12:30:00.000-07:00

After digging into the Benford's law results from my previous post a bit more, I discovered that a different effect is driving the time-series pattern than I first thought. The reason is that Benford's law only applies to nonzero digits, while accounting data contain many zero values. In my original results, I also failed to account for negative numbers. Zeros and negatives added to the total number of observations but not to the counts for any digit from 1-9, leading to a mechanical "deviation" from Benford's law. Incidentally, the firstdigit package for Stata (the most common statistical software used by economists, and the one I use) suggested by one of the commenters also runs into this problem.

So what the data really show is that the fraction of accounting data composed of zeros has increased over time. Most of the discrepancy is due to zeros, although negatives also increase over time. As you can see below, plotting the fraction of zeros accounts for the pattern across time described in my last post.

When ignoring zeros and correctly accounting for the first digits of negative numbers, the data show no clear trend in the deviations from Benford's law from 1970 on. There was a decrease in the deviation during the 1960s and 70s, but that's almost surely because there were many fewer data points early on.

Why have zeros increased over time?

The question still remains as to why zeros have increased over time. The fact that they present a problem already points to the artificiality of accounting data. In a continuous distribution found in nature, the probability that a value was precisely equal to zero would be vanishingly small (and in many cases such as the lengths of rivers and populations of cities, it wouldn't be possible), so the discrepancy wouldn't have manifested at all.

It's perfectly natural for firms to have zeros in some of its accounting items in a given quarter, such as deferred taxes or intangible assets. But zeros for items like total revenues and assets should be rare, there's no reason to expect them to increase over time. In fact, the increase in zeros over time is present in nearly all of the variables. The graphs below show the fraction of zero observations over time for total assets and total revenues.

Why is this occuring? I don't know! There could be a very simple explanation that I'm not thinking of. The trend could be due to benign shifts in accounting conventions, increases in off-balance-sheet transactions, or changes in firm characteristics over time. Or, as I posited originally, it's still possible that zeros indicate a growing gap between accounting numbers and real firm activity over time. Solving this puzzle would likely require more in-depth analysis comparing corporate accounting statements over time and reconciling them with Compustat.

What I do know is that the increasing fraction of zeros in accounting data 1) is present in nearly all of the individual components of corporate balance sheets and cashflow statements 2) is present even within individual firms over time. I also looked at whether deviations from Benford's law and the percentage of zero observations correlate with known cases of fraud such as Accounting and Auditing Enforcement Releases by the SEC, and I haven't found any clear relationship.

Reflections on research bias

After taking a closer look at the data, I'm more cautious about interpreting Benford's law as an aggregate measure of fraud. I think it could still be useful in forensic cases when combined with other detailed evidence about an individual firm. But given the complexity and heterogeneity within a dataset like Compustat, uncovering a broader truth will require more than casual analysis.

Yet, the initial graphs were incredibly compelling, and I may have been over-enthusiastic about posting them right away and insufficiently evasive in interpreting them. My brief investigation of Benford's law reminds me of a microcosm of the decline effect, a phenomenon that's been recently brought to light by Jonah Lehrer and Jonathan Schooler. What they report is that major results in a variety of fields including medicine, biology, and social science tend to decline in magnitude over time, and many cannot be replicated at all.

How might intrinsic biases in our research methods contribute to the decline effect? I can only speak for myself. I was absolutely more keen to post my results because of the striking time-series pattern I found. I chose the variables ex ante based on the most basic components of corporate accounting statements, and I posted the very first set of results that I found. Thus, I can at least confidently say that the results were free of data snooping, another common source of bias in which a researcher tries many sets of results and presents only the ones that support a desired hypothesis.

The tendency to publish new results sooner may introduce scrutiny bias, where novel results receive less testing for robustness than ones based on established methods. This can help explain the decline effect. But the decline effect may be only one example of how the ideal of unbiased truth dies a death by a thousand cuts through the accumulation of faint prejudices in the research and publication process. Just as the accretion of conscious and unconscious gender bias results in tens of millions of "missing" girls in developing countries. While biology sets a clear benchmark for gender parity, we can only indirectly measure research bias by examining how the scientific consensus changes over time.

One way to fight against research bias? Keep digging. Dig until we reach the edges of failure. Maybe journals won't publish the dirt (or maybe academia needs its equivalent of gossip mags), but we at least need to be ready to confront it ourselves. For me at least, this online paper trail will serve as a reminder to stay honest.

Summary of the evidence

With high degree of precision, Benford's law does hold for accounting variables overall when considering only digits 1-9 (for both positive and negative values) and dropping zeros.
Looking only at digits 1-9, there is no clear change in the deviation from Benford's law for all firms over time
The percentages of zeros and negative values in the data have increased over time, for the majority of variables and both across and within firms.

Diary of a Reformed Cheapaholic

2011-10-15T14:22:00.000-07:00

In my student days, I used to joke that 10% of my brain was dedicated to knowing the exact prices of esoteric cooking ingredients in all the markets around town and optimizing my hoarding strategies to match sales. Given my intense frugality, food was the only thing I could rationalize spending money on regularly, but I sure made the most of it. For a certain breed of middle-class striver, few thrills can match the joy of getting a great deal.

Now that I'm making big bucks as a finance professor, I'm starting to develop some perverse spending habits. One of the funny things about being rich is that you get more stuff for free (faculty spending accounts, promotional textbooks). But now I hate freebies more than ever, and shy away from luxury. I don't like buying things, but I go out of my way to spend money, especially on things I can get for free.

What I've realized is that there are two ways to be cheap. The first is to want less. The second way is to try to get something for nothing. A recent example of the latter is a story I heard on Planet Money. Frequent flyer fanatics purchased thousands of dollar coins from the US mint in order to get miles. They then got free vacations and returned all the coins back to the Fed unopened, abusing both airlines and the government to get something for nothing. This is what I call cheapaholism.

Wanting less is still an attitude I embrace. Most of economics assumes that our preferences are fixed – we only get a certain amount of satisfaction from a given amount of goods. Wanting less turns this idea on its head and asks – what if we could get more satisfaction from the same amount of consumption? Could it be that we've been missing out on a crucial psychological technology, that simply changing our attitudes could do more to improve human well-being than cell phones, the internet, or air travel? We can employ this technology by being grateful, appreciating what we have, and being clever by doing more with less. Changing our attitudes isn't easy and requires effort, but it can be a great investment in the future. In today's uncertain market, the highest-return retirement plan I can think of is making sure I don't increase my standard of living.

Deal hunting is selfish frugality, one side of a zero sum game. While the consumer gets more for less, the merchant, the supplier, and the worker get less for their efforts. Played out repeatedly, the deal-hunting dynamic can cause big vendors like Wal-Mart squeeze their workers (see Nickel and Dimed, by Barbara Ehrenreich), big companies to squeeze profits from unpriced externalities (see climate change), and financial firms to charge byzantine fees that squeeze the poor (see free checking / overdraft fees). Played out at a global scale, the frugality of consumers in China and Germany mixed with the selfish drive for returns played a major role in the financial crisis of 2008. Thinking about the crisis really forced me to confront how personal fiscal responsibility can actually contribute to societywide calamity.

In a complex economy where just buying a cup of coffee starts a chain-reaction of consequences rippling around the globe, our actions have a greater and greater effect on the people and world around us. But our moral and intellectual machinery aren't equipped to handle such far-reaching effects, so our default option is just to do what makes sense for ourselves. That's exactly what we pillory Wall Street traders for doing, and that's what we do when we use Groupon or Priceline to get something for nothing.

Personally, I'll never be able enjoy the cheap thrill of bargain hunting again. Not being able to compute whether my consumption choices might do harm down the line, my default is just not to buy things. One example is fish – I find the governance of the seafood trade so abyssmal and untrustworthy, that I avoid all seafood even when for species purportedly harvested using responsible methods. When there is something I use and enjoy such as music, newspapers, or exotic chocolate, I'm happy to overpay. And I go out of my way to pay for things on the internet, to support content creators and promote free access for those who can less afford to pay.

Prices in a free market may be efficient, but that doesn't make them fair. To me, this inherent tension between fairness and efficiency is at the heart of the growing conflict between the amoral market and the values of normal folk. Furthermore, if we can be deceived by advertising and incomprehensible financial contracts, or if we refuse to pay for things we value such as media content, then prices may not be efficient at all. Reconciling our market behavior with our basic values of justice, fairness, and human rights is the great challenge that American capitalism faces now, and we have to begin with ourselves.

Benford's Law and the Decreasing Reliability of Accounting Data for US Firms

2011-10-09T21:13:00.000-07:00

Important update 10/24/11 - Please see this revised analysis.

Original post:
A few months ago I came upon an old episode of Radiolab, one of my favorite podcasts whose host Jad Abumrad just won a Macarthur Fellowship. The episode was about numbers. It made me nostalgic for my youthful enthrallment with the pristine world of mathematics, before I succumbed to the gritty reality of the financial world. Among the episode's astounding revelations was that babies count on a logarithmic scale.

A second earth-shattering fact is that there are more numbers in the universe that begin with the digit 1 than 2, or 3, or 4, or 5, or 6, or 7, or 8, or 9. And more numbers that begin with 2 than 3, or 4, and so on. This relationship holds for the lengths of rivers, the populations of cities, molecular weights of chemicals, and any number of other categories. What a blow to any of us who purport to have mastered the basic facts of the world around us!

This numerical regularity is known as Benford's Law, and specifically, it says that the probability of the first digit from a set of numbers is d is given by

In fact, Benford's law has been used in legal cases to detect corporate fraud, because deviations from the law can indicate that a company's books have been manipulated. Naturally, I was keen to see whether it applies to the large public firms that we commonly study in finance.

I downloaded quarterly accounting data for all firms in Compustat, the most widely-used dataset in corporate finance that contains data on over 20,000 firms from SEC filings. I used a standard set of 43 variables that comprise the basic components of corporate balance sheets and income statements (revenues, expenses, assets, liabilities, etc.).

And lo, it works! Here are the distribution of first digits vs. Benford's law's prediction for total assets and total revenues.

Next, I looked at how adherence to Benford's law changed over time, using a measure of the sum of squared deviations of the empirical density from the Benford's prediction.

where ^P(d) is the empirical probability of the first digit d.

Deviations from Benford's law have increased substantially over time, such that today the empirical distribution of each digit is about 3 percentage points off from what Benford's law would predict. The deviation increased sharply between 1982-1986 before leveling off, then zoomed up again from 1998 to 2002. Notably, the deviation from Benford dropped off very slightly in 2003-2004 after the enactment of Sarbanes-Oxley accounting reform act in 2002, but this was very tiny and the deviation resumed its increase up to an all-time peak in 2009.

So according to Benford's law, accounting statements are getting less and less representative of what's really going on inside of companies. The major reform that was passed after Enron and other major accounting standards barely made a dent.

Next, I looked at Benford's law for three industries: finance, information technology, and manufacturing. The finance industry showed a huge surge in the deviation from Benford's from 1981-82, coincident with two major deregulatory acts that sparked the beginnings of that other big mortgage debacle, the Savings and Loan Crisis. The deviation from Benford's in the finance industry reached a peak in 1988 and then decreased starting in 1993 at the tail end of the S&L fraud wave, not matching its 1988 level until … 2008.

The time series for information technology is similarly tied to that industry's big debacle, the dotcom bubble. Neither manufacturing nor IT showed the huge increase and decline of the deviation from Benford's that finance experienced in the 1980s and early 1990s, further validating the measure since neither industry experienced major fraud scandals during that period. The deviation for IT streaked up between 1998-2002 exactly during the dotcom bubble, and manufacturing experienced a more muted increase during the same period.

While these time series don't prove anything decisively, deviations from Benford's law are compellingly correlated with known financial crises, bubbles, and fraud waves. And overall, the picture looks grim. Accounting data seem to be less and less related to the natural data-generating process that governs everything from rivers to molecules to cities. Since these data form the basis of most of our research in finance, Benford's law casts serious doubt on the reliability of our results. And it's just one more reason for investors to beware.

As noted by William Black in his great book on the S&L crisis The Best Way to Rob a Bank Is to Own One, the most fraudulent S&Ls were the ones that looked most profitable on paper. That was in fact an inherent part of the scam. So perhaps, instead of looking solely at profitability, we should also consider this more fundamental measure of a firm's "performance." And many questions remain. What types of firms, and what kind of executives drive the greatest deviations from Benford's law? Does this measure do well in predicting known instances of fraud? How much of these deviations are driven by government deregulation, changes in accounting standards, and traditional measures of corporate governance?

Stay tuned to find out.

The carbon costs of Chinese travel

2011-09-11T16:55:00.000-07:00

This past April and May, Patrick and I went on a wonder-filled trip to China. As usual for our travels, I'm reporting the breakdown of our journey's environmental impact below. As I contemplate the numbers, I can't help but think of them as a window into the broader phenomenon of Chinese travel. Our journey is no doubt replicated hundreds of thousands of times a year – by overseas Chinese returning home, by western tourists, and increasingly, by the hordes of Chinese tourists that now seem to outnumber those of any other nationality at popular spots like Las Vegas and Harvard.

As an economist and environmentalist, I cannot help but witness China's remarkable march forward with both horror and admiration. The first thing that strikes any visitor to China is the sheer force of the Chinese people. This vast sea of humanity, bursting with energy and optimism, is a wonder to behold. But what will happen to the world when the Chinese decide to use the fruits of their progress to buy and consume all of the things that Americans do? The image in my mind is that of the entire mass of the Chinese – with our world-famous and undiscriminating appetites – unleashing itself upon the land and devouring every fish in the ocean and every creature on the land with chopsticks in hand. The world's natural resources simply have no hope, faced with this onslaught.

Yet, I surely don't have the right to deny the Chinese of luxuries I myself consume. This is the deep challenge of development and environmentalism – of how to balance global equity with environmental sustainability. To me, it's clear that inequity in resources is already assured. There's simply no way for a billion Chinese to live like we do now. But maybe inequity in resources need not translate to inequity in quality of life.

To achieve both equity and sustainability we have to change. Not superficially – from gas to electric cars, from coal to wind power – we have to fundamentally change how we make decisions about our lives. To find a way to be resource-thrifty but rich in body and spirit. And change begins with knowledge about the way we live now.

China trip carbon summary
# days – 31

# passengers – 2

# of passenger-miles – 37,011

Carbon footprint – 13,827 Kg CO₂for both, 6,914 Kg CO₂per person

% of the annual carbon emissions of an average American – 37%

% of countries with lower annual emissions per capita than emissions from our trip - 72%

Travel summary

Car

Bus

Train

Plane

Hotel

Total

# of trips (one-way)

Passenger-miles

485

4,715

31,772

37,011

Cost

n/a

$59

$470

$2,319

$1,072

$2,848

Cost / p-mile

$0.12

$0.10

$0.07

$0.08

Kg CO2

817

12186

714

13,827

Kg CO2/mile

0.38

0.20

0.17

0.38

$0.37

# of nights

Kg CO2 / night

31.04

I'm Not a Conservative, I'm a Conservationist: What a True Blood vampire and a Rogue Economist Have in Common

2011-07-02T12:03:00.000-07:00

In anticipation of Season 4 which just began, I've just been rewatching the third season of the deliciously addictive HBO show True Blood. I've also been listening to Econtalk, a fascinating series of podcasts by Russ Roberts (econ professor at George Mason) interviewing the luminaries of the economics profession as well as authors and others.

I was struck by the similarity between True Blood's vampire King Russell Edgington (played with perfect hamminess by Denis O'Hare), and Nassim Taleb, a professor and financial provocateur, author of cult classic The Black Swan (it has nothing to do with Natalie Portman).

Needless to say, economics and finance professors can be a rather dry bunch, tending to drone on about macroprudential regulation with nary a nod toward anyone foolish enough to be listening. Taleb is a different creature altogether, a peacock prima donna among tweedy drabs. A lot of the things he says are wrong in their spirit and surety if not their content. But he's wrong so spectacularly and with such flair and bombast that it's hard not to be charmed. (Aside: what is it with overweight male intellectuals that causes them to create their own esoteric and slightly insane diet and exercise regimens?)

In his EconTalk interview Taleb pointedly and repeatedly uses the term "mother nature" to denote the holy grail of radical libertarianism, man's original and ideal state of nature before being corrupted by civilization. His philosophy appears to be a blend of naive Darwinism and new-age drivel, boiling down to the idea that everything natural is good and everything unnatural is bad. Where "natural," of course, is defined to serve Taleb's own ideological aims.

In Season 3, Episode 7 of True Blood, Russell Edgington delivers a stirring speech on mankind's destruction of nature and his ambitions to override the (vampire) government's coddling of the fangless heathens and rid them from the Earth:

"There is only one law, the law of nature. The survival of the fittest. And we need to take this world back from humans, not placate them with billboards and PR campaigns while they destroy it. That is not authority. That is ABDICATING authority."

What I love about the spewing outbursts of Taleb and Edington is their rightful rage that all of us in society must pay for the mistakes of the wasteful, stupid, and selfish. I try to curb my own diatribic tendencies because I'm not very effective at channeling outrage to effectively persuade. But I'm extremely glad others aren't so inhibited, giving voice to my silent resentments.

I'm also drawn to the idea of stripping down the diversions of modern civilization and finding simpler ways to live and be happy. The libertarian critique points out the hypocrisy of my fellow liberal environmentalists, who talk deeply about conservation yet cling ever more tightly to the most resource-expensive lifestyle on Earth.

But yet these radical libertarians have exactly the same problem. They talk about how important it is to let the market or "nature," in Taleb's words, discipline and cull the hubristic and destructive practices running rampant in society. Yet these libertarians are just as effete as the liberals, globetrotting and taping podcasts and enjoying all the fruits and freedoms of governance and civil society that they so vehemently decry.

I haven't met a single libertarian whom I surmise would even survive in the anarchistic Hobbesian world they advocate, much less thrive in it. Libertarian economists, moreover, have scarcely grappled with the lumbering contradiction at the heart of free-market-ism: survival of the fittest means that eventually the fittest capitalists will become fat, dominant monopolists, using their heft to undermine the market itself.

Man's pillaging of nature is in fact a prime example of survival of the fittest. The collapse of global fisheries and the subversion of the very climate on Earth are nothing if not forceful demonstrations of our evolutionary advantage.

So where does this argument leave us, in the end? I find back-to-nature libertarianism intriguing and appealing in some of its facets. But I'm not sure what it really contributes to our public discourse on the environment or financial regulation, beyond outrage. I've also never heard a cogent explanation of how man can be a product of nature yet not of nature. Individual proponents simply gerrymander the boundary between man and nature to serve their own rhetorical purposes.

If anyone has some thoughts or comments on this philosophy, I'd be interested in hearing them!

One good reason why trash matters

2011-06-16T16:13:00.000-07:00

Perhaps I'm too preoccupied with trash. By many measures, trash's aesthetic felonies and in-your-face visuals (and smellables) exaggerate its true environmental hazard.

But I just came across a series of photos that remind me why I care. They're photos of dead albatrosses from the Midway Atoll, a 2.4 square mile island northwest of Hawaii, with stomachs full of plastic debris. It's not the first time I've come across photos like these, but they remind me of how the insignificant detritus of our lives can have profound impacts.

I also came across this website, which lists a series of peer-reviewed articles about the effect of plastic pollution on the oceans.

My own efforts don't do much to dent the estimated 300 billion pounds of plastic debris in the ocean, along with untold masses in fresh waterways and on land. But what these reports agree on is that once plastic gets into the ocean and gets dispersed and degraded by the elements, it's all but impossible to remove without great cost and damage to the ocean ecosystem.

Perhaps the millions of small actions that have permeated the seas with plastic need millions of small actions to counteract.

A Year in Trash Collection

2011-04-19T15:20:00.000-07:00

For the last year, I've been collecting trash about once a week. I started doing it because during my regular jogs by the Charles River in Boston, I couldn't help but notice the huge deposits of trash built up on the riverbanks and along the trails. After several years of noticing and frowning at the trash, it finally dawned on me that I could do something about it. Not anything organized or time-consuming, just bringing a plastic bag with me and picking up a few bottles every time I jogged. I've kept a log of my collection efforts, and since March 30, 2009, I've collected a little over 1,000 bottles and saved almost 200kg of CO2 emissions by recycling them.

Eventually, I also started taking my habit with me during my trips around the country and noticed some differences and, mostly, similarities in roadside cruft across America. The first thing to note is that the vast majority of trash I see on the riverbanks, on lawns, and on sidewalks around the country consists of beverage containers, followed by junk food wrappers and fast food containers.

This observation strikes me as strange. We Americans are not short on the variety of trash we produce. Yet, we choose to throw only one kind out into the street. Why is it that we think it's ok to chuck beer bottles and chip bags into parks and yards, but not our old clothes, newspapers, or other debris? Something about the culture of convenient food seems to compel us to throw it onto the ground.

This phenomenon also reminds me of something Dan Ariely often talks about - people in general are often tempted to be bad, to be lazy and polluting. But we don't want to think of ourselves as bad, so we're particularly prone to cheat on the margins. What's another can or an insignificant Fritos bag on the side of the road, we reason? Abandoning larger, more unusual, or less psychologically disposable items, however, might give us a little more pause.

There's also the inescapable fact that trash is EVERYWHERE in America. Like the cosmic microwave background radiation. Like a fine layer of fuzz over the crust of civilization. Archaeologists in the year 4000 will excavate Budweiser cans all across the stratum that used to be America and wonder what mystical power they held.

A couple of other stray observations:

Boston has a lot more water bottles, while St. Louis has more styrofoam cups and cigarette boxes.
More bottles in Boston are unopened or half-full, while most in St Louis are empty.

What do these differences reveal vis-a-vis the higher socioeconomic status of Boston residents?

Places I've picked up trash while traveling, walking, and jogging:

View Places I've collected trash in a larger map

References:

My log of the bottles and cans I've picked up and recycled since 2010.
My previous posts about jogging and trash collection

http://nerdsiview.blogspot.com/search/label/carbon%20challenge

Freakonomics radio – The Economics of Trash
Garbageland, by Elizabeth Royte
Slate Green Lantern

Are we running out of landfills?

http://www.slate.com/id/2284361/

Trash vs. garbage disposal?

http://www.slate.com/id/2201176/

The Great Pacific Garbage Patch
The Economist's special report on waste

PS. I'd love to start a movement for Hollywood screenwriters to stop having characters throw shit into rivers and oceans to indicate world-weary frustration. It's a cheap and tedious trick, and it only encourages bad behavior.

The Environmental Impact of Finding a Job

2011-03-19T13:31:00.000-07:00

This time of year marks the tail end of the season known to economics PhD students as “the job market.” The season begins in early January at the AEA meetings (which this year were in Denver), where a large fraction of schools and non-academic employers interview candidates.

During most of grad school I monastically confined myself within a few square miles of Boston and Cambridge, but my careful conservation efforts were drastically upheaved last year when I went on the job market. After going to the AEA meetings in Atlanta, I traveled to ten employers for site visits (this is a typical number among my peers, but I realize ten is obscenely high for most fields).

So how much environmental damage did I do? *Note: the following calculations do NOT take into account the hot air emitted from my mouth during my seminar presentations.

I used three modes of transportation (car, train, and plane) during the 17 trips I took on the job market, not counting layovers. I used three different online calculators (Atmosfair, Terrapass, and Carbonfund) to compute the carbon emissions from each trip. All of the calculators compute emissions for air travel, but they vary on coverage of car and train travel (Carbonfund is Amtrak’s official calculator). I also tallied up all the nights I stayed in hotels using Carbonfund’s estimates of 29.55 Kg CO2 / night for regular hotels and 33.38 Kg CO2 / night for upscale hotels (the hotels I stayed at were likely fancier than average). I’ve never thought much about the energy use associated with hotel stays, so this was a good chance to get a benchmark on that.

In the end, I traveled 18,028 miles and consumed 5.37 metric tons of CO2. That’s about 28% of the average American’s total annual energy use, although it’s more than the per capita energy use of 65% of countries. The total costs of travel and lodging were $5,625. Are these numbers high or low? While I was on the job market, it felt like I was wasting huge amounts of resources with my jetsetting lifestyle. And by objectively reasonable measures, I still think that’s true. But the final numbers leave me on a note of optimism; they’re modest enough that my conservation efforts during the previous five years of grad school might have a chance of making up for them.

I think of my relationship to the environment like a savings account. If I withdraw resources (and do harm through pollution and climate change), then I should make sure to do something extra to replenish my account. By forgoing discretionary energy consumption when I can, I can bank conservation for times when resource use is necessary for things that are important to me, without becoming an energy hog.

One of the most regrettable things about the job market is that it finally gave me a legitimate reason to go to a lot of cool places, yet I had very little time to explore and learn from my travels. The timing of the market necessitates continent-crossing journeys from hotel room to seminar room to hotel room. But something is lost when we travel for only one narrow purpose that’s removed from the sense of place. The universality of academic exchange neutralizes place, yet at the same time, it’s a wonderful thing to behold in itself.

Details of the calculations:

Travel summary

Car

Train

Plane

Hotel

Total

# of trips (one-way)

Miles

1,079

991

15,958

18,028

Cost

$500

$441

$4,683

$3,063

$5,625

Cost / mile

$0.46

$0.45

$0.29

$0.31

Kg CO2

273

172

4925

409

5,370

Kg CO2/mile

0.25

0.17

0.31

$0.30

# of nights

Kg CO2

	Hotel
	Carbonfund
	Low	High
Kg CO2	384	434

	Car
	Terrapass	Carbonfund
Kg CO2	273	272

	Train
	Carbonfund
Kg CO2	172

Plane

Atmosfair

Terrapass

Carbonfund

w/o RF

w RF

Kg CO2

6,940

3,200

2,576

6,985

For the plane calculations, I include numbers both with and without radiative forcing.

Sidebar: Marginal vs. Average?

All the calculations are done assuming that my CO2 emissions are the average emissions per traveler, e.g. the total emissions of an airplane flying from Boston to Los Angeles divided by the number of travelers on the plane.

Another way to calculate my emissions is to assume that the plane would run anyway whether or not I am on it, so the only emissions I am personally responsible for come from the extra fuel it takes to carry me and my luggage. This marginal calculation would end up being much smaller than the average calculation. All of the carbon calculators I use and that know of use the average calculation, and I think that’s the correct way to think about it.

Slate gives a nice, simple explanation why. Each consumer contributes to the demand for that aircraft to be in the air, so it lets us off too easy to say that our travel contributes absolutely zero to additional flights being run. My guess is that airlines are quite sensitive to how many people book a particular flight. If no one booked it, it would be canceled. Thus, even if taking one trip contributes only a small amount to demand for flights, a person who travels a lot could eventually account for entire flights. And I know more than one economist in the “million miles” club. In this context, small but nonzero is a world away from precisely, absolutely zero.

Another way to think about it is that we don’t know who the marginal person is who causes an airline to add one additional flight. If we did know, the correct way to do the marginal calculation would be to place the burden of the entire fixed energy costs of flying the plane on the one marginal person, and let every subsequent passenger count only marginal fuel costs toward their energy usage. This doesn’t seem sensible, or fair to that poor marginal fellow. Thus, I think the reasonable way to account for energy use on airlines is the average method.

For car trips, the average method also makes sense unless you’re hitching a ride with someone who would be driving the same route anyway. Public transportation is slightly trickier. While airlines are probably quite sensitive to the number of people who book flights, subways and Amtrak trains are probably almost completely insensitive. Thus, as Slate argues, the marginal calculation makes sense in this context. One of the carbon calculators I used, Atmosfair, thus attributes no emissions to train travel. Just to be fair however, all of my calculations for trains use the average method.

Miscellaneous details

Hotel stays do not count 8 nights spent staying with friends.
I also do not include costs and carbon emissions from within-city travel (e.g. from the airport to the hotel). Here are the cities where I used public transportation:

Boston (T)
New York (Metro)
Washington, DC (Metrorail)
Vancouver (Trans link)

References:

Carbon calculators:

David MacKay's free ebook Without Hot Air , which explains how estimate many environmental impacts
My previous posts calculating the carbon footprint of my road trip to this winter’s AEA

Number-crunching my holiday road trip, Part II

2011-02-05T19:09:00.000-08:00

I wrote in December about choosing transportation options for my winter road trip across contry and tallying the carbon footprint of my trip. I’m fairly confident that driving resulted in significantly lower emissions than flying would have, and we had an enormously good time sightseeing along the way, visiting friends and family, and enjoying the singular experience of being on the road.

We drove 361 more miles than estimated, but we also improved our fuel economy on the second leg of our trip. We went from 21.9 miles / gallon from St Louis to Las Vegas to 27.5 miles / gallon from Las Vegas to St Louis via Denver. Together, these two countervailing effects resulted in only slightly higher emissions and costs than expected.

Table 1: Estimated vs. actual stats of our road trip

	Driving
	Estimated	Actual
Gallons	141	146
Miles	3208	3569
kg CO₂ Emissions	1236	1279
Cost	$437	$458

One dimension in which driving is worse than flying is safety. I haven’t done a careful analysis myself, but a quick search (the sources vary in dubiousness) reveals estimates of the fatality rate per passenger mile on commercial airlines as either about the same as driving, or up to 160 times higher.

Table 2: Airline vs. passenger car safety

Deaths / billion km			Sources
Air	Car	Ratio

0.04	5.59	160	Consumer Warning Network NTSB - air NTSB - car
0.05	3.10	62	Informed Sources
0.18	6.21	34	Book: The Heart of Mathematics
9.76	9.13	0.94	Crash Stuff

The final bits of data I collected about energy usage on our trip were readings of our electricity meter when we left and when we returned. We unplugged everything in the house except the refrigerator, and set the water heater to its lowest level and the thermostat to 61 degrees. Over the course of 23 days, these basic appliances used 76.5 kWh of electricity, about 28% of the rate during the previous month when were were at home. According to the EPA calculator for our zip code, our normal usage from September to December was 30% of the average for our area of 900 kWh per month.

The EPA website also provides a cool tool to find out the composition of fuel sources used by local power companies by zip code. Dishearteningly, my power company Ameren Missouri gets 83% of its power from coal, compared with the national average of 50%. Our dirtier energy mix results in 38% more CO₂ emissions per unit of electricity: 0.83 kg CO₂/kWh in Missouri vs. 0.60 kg CO2/kWh nationwide.

Using these numbers, our empty house still generated 64 kg of CO₂emissions while we were gone. But we saved 162 kg of CO₂ compared to our normal usage by not turning the heat up to a comfortable level, not turning on the lights, etc., which ends up being 13% of the emissions used from all that driving during our road trip. Thus, the amount of energy we saved by staying with friends and family instead of in our own home is still vastly outweighed by the energy needed to transport us across the country.

Table 3: Household electricity use

	Empty house for 23 days	Average normal usage for 23 days
kWh	76.5	271.4
kg CO2	63.5	225.4

Although it feels exhilarating and carefree, the hard truth is that travel exacts tremendous costs on the environment. Yet working and living in our society often compels us to do so. There is no direct way we can compensate the people and ecosystems that are harmed by our travels, but the least we can do is learn as much as we can about the people and places we visit – and perhaps, to learn something about travel itself. Being nerdy by nature, I've really enjoyed crunching my road trip data. It's one of my ways to get the most out of traveling, so that all those carbon emissions can contribute to some enduring and shareable insights. I have a feeling that I’ll be benefiting from the experiences and encounters from this trip for a long time to come.

Gin and Economics: A visit to the Leopold Bros. distillery in Denver

2011-02-04T10:38:00.000-08:00

UPDATE, 3/3/2011: A shortened version of this article has been published by the Denver Post online.

This January, thousands of economists descended upon the city of Denver in what could be one of the greatest concentrations of power in the nation outside of Washington DC: the American Economics Association's annual meeting. The meeting's attendees have advised and educated a great many leaders of the world's most important nations, corporations, and financial institutions.

While throngs of economists sampled downtown's finest hotels and restaurants, I reckon that I was the only one who ventured to Stapleton - a grey industrial zone that's flanked by a SuperFund site to the north and the I-70 to the south. I went to Stapleton to understand the movement toward socially responsible and environmentally sustainable business, an economic phenomenon that has captivated popular attention but has yet to penetrate the consciousness of the economic thinkers who were about to convene at the downtown Sheraton.

I visited a local entrepreneur named Scott Leopold, who heads the Leopold Bros. distillery along with his brother Todd. With a background in both environmental engineering and business, Scott's vision for the distillery integrates environmental conservation into the most basic principles of doing business - minimizing costs and delivering a quality product to the consumer. At the company's earlier incarnation as a brewery in Ann Arbor, Michigan, Scott engineered a brewing process that brought the volume of waste water from ten glasses down to one glass per glass of beer. Improvements like this have myriad benefits to municipalities that have to pay for water treatment, to the quality of drinking water for residents, and to wildlife affected by water pollutants. But they are also just good business, an approach he calls "Grain to Glass."

Under a simplistic economic model, competition automatically drives firms to adopt all practices that maximize profits (and minimize costs). Under this view, the notion of a movement for environmental evangelism scarcely makes any sense. There would be no role for academics to meddle in the nitty gritty of business operations, and we would have nothing of value to tell managers that would help them run their companies.

But what if competition worked in an entirely different way? Not as a one-dimensional race between firms selling identical products at the lowest price possible, but one in which firms muddle their way toward scarce plateaus in an infinite-dimensional product landscape. In this world, even seemingly indistinguishable handles of $10 bottom-shelf vodka may mask vastly different production processes. In an economy where imperfect knowledge and imperfect leadership are pitched against continual changes in technology, competitors, and consumer tastes, there is room for firms to leave money on the table while still maintaining a niche in this fearsome ecosystem.

The latter view squares with a much-publicized 2008 analysis by McKinsey & Company stating that the United States could reduce its overall greenhouse gas emissions by 1-2 gigatons per year (up to 28% of 2005 levels) while saving money in the process. On a much smaller scale, I conducted studies of my university campus during graduate school demonstrating that five-figure reductions in annual energy costs could be achieved by simply turning off the lights at night in a single building. As it turns out, Scott Leopold himself tackled these very issues during his previous career as environmental engineer advising Fortune 500 firms how to save money and conserve resources at the same time. By all indications, the potential savings are real.

After hearing about the tenfold reduction in waste water at the brewery as a result of his engineering efforts, I asked him whether his innovations were being widely adopted throughout the industry and his views on the biggest barriers to such adoption. While he said that the Leopold Bros. has successfully passed on many of its sustainable practices to other brewers and distillers, the industry still has a long way to go, and many inefficiencies persist.

Implementing these practices requires the rare combination of environmental engineering expertise and master craftsmanship that are possessed in abundance by the brothers Leopold (Todd has a degree in brewing and apprenticed in Germany), but few other outfits in the alcoholic beverage industry. Knowledge, as economists say, is a public good - once an idea is created it can be used by everyone. But it takes time and effort to disseminate and a great deal of ingenuity to implement. In practice, lack of awareness and expertise can severely limit the pace of innovation adoption. Even socially-minded entrepreneurs like Scott Leopold who want others to follow in their footsteps are not nearly enough to bridge the knowledge gap.

So what can we do to hasten the marriage of environmental and economic efficiency?

Challenges for consumers
The best way for consumers to push for sustainable practices is to reward businesses that adopt them by purchasing their products. But given the scarce and often misleading information about corporate practices, figuring out how to vote our values with our wallets can be even harder than doing so with ballots.

From his experience both as an environmental engineer and with Leopold Bros., Scott Leopold warned that appearances can be deceiving. Many companies that use resource-efficient practices don't advertise them at all, and many that tout green credentials don't even take the most basic measures to back up their claims.

Thus, in my view, the most important thing consumers can do is to educate ourselves. I find a few trustworthy resources like GoodGuide.com and The Green Lantern and use them as starting points to cut through the misinformation morass.

Buy the best products you can based on the information you can find, and keep revising your purchasing behavior as you learn more.

Challenges for business
An alarming number of business leaders are still asleep when it comes to combining conservation with good business. Some may even find this concept ideologically repellent.

Using McKinsey's emissions report and experience from pioneering firms like Leopold Bros., it's not hard to identify broad categories of profit opportunities. But changing the nature of an organization so it can take full advantage of these opportunities may require sweeping and painful changes that cut across finance, operations, marketing, and corporate culture. Some businesses will no doubt find themselves incapable of such change, but those that do will be better positioned to succeed.

Challenges for academics
I think a big role for academics to play is to bridge the knowledge gap between the industry leaders who can identify and implement cost-cutting environmental practices, and those who lack the awareness and expertise to do so. After all, our own forte is to produce, codify, and disseminate knowledge.

On a purely academic level, the failure of economic efficiency when it comes to resource use presents many good research opportunities. What are the factors that mediate the spread of innovation? What frictions prevent inefficient firms from being driven out of the market? What frictions prevent profitable investments from being made inside firms? What is the role of individual managers in promoting efficient and inefficient corporate practices?

Perhaps future AEA meetings will show that studying conservation can make for good economics, just as practicing it makes for good business.

A response to Sheryl Sandberg's TED talk: why women should stop worrying and be the leaders they already are

2011-01-16T13:59:00.000-08:00

Several of my friends have now posted this TED video by Sheryl Sandberg, COO of Facebook, talking about how more women can become leaders in their careers. At this stage in my life, I've been giving a lot of thought to the topic of women and careers. So I feel compelled to comment on what I see as misguided advice that successful career women often give their younger counterparts.

I won't spend much time nitpicking at Sandberg's delivery, but I can't help but groan at her business-jargon-infested style, which reminds me of a verbal version of powerpoint. I think her main goal is to encourage women to be strong and believe in themselves, which I'm completely in favor of. And she does give many useful pieces of specific advice. But her broader message is garbled and ambiguous, and troublingly values-free.

She recounts a story of her brother boastfully predicting that he would ace an exam despite shirking in the class, while she and a female friend nervously fretted in self-doubt. Her lesson from this story is that women need to correct our under-confidence problem. But implicitly, she's also saying that we live in a world of over-confident men, and in order to succeed in that world we have to be more like them.

I don't like this implication. I value the fact that I don't think I'm right all the time, and don't boast about being the best at everything. I do ruefully acknowledge that overconfidence is often rewarded as much as substance. But I don't have any desire to be like her brother in the story, even if it would help me get ahead.

Sandberg's most compelling story involves giving her talk about women and leadership at Facebook. After her talk, she said she would take two more questions before concluding. While all the women put their hands down after she answered the last two questions, she continued taking questions from the men who kept their hands up. Her lesson for women is to "keep your hands up," and she views the men's behavior as "reaching for opportunity." I view it as being obnoxious, and I think Sandberg’s perspective disempowers the women who respected her own stated wishes by viewing them as timid and weak.

More emphatically than in the first story, Sandberg encourages women to elbow our way in, demand higher pay, and become more like men in order to beat them in the career rat race. I've heard the type of advice Sandberg gives all too often: "be selfish," "ask for more," "resist your maternal instinct." But I think what's really holding women back is not that we're not aggressive enough, or that we don't negotiate for higher pay. It's that we frame ourselves into a position of weakness instead of owning up to who we are and the choices we make.

The pay gap is a prime example of how a statistical fact can be viewed to either empower or disempower women. Under one view, women who are paid less are inferior and less worthy, because pay is the measure of one's worth in society. But Dutch women view it a different way. Instead of wasting our time in a pissing contest over who gets a higher bonus, women are focusing on whether our jobs lend meaning and fulfillment to our lives, and enable us to connect with and help others. Under this view, women who refuse to compromise their values to get higher pay are asserting their identities, not cowering in self-doubt.

If selfishness and arrogance are the main reasons for the male-female pay gap, as Sandberg implicitly suggests, we should start talking about another lurking inequality: the asshole pay gap. Perhaps the male-female pay gap has nothing to do with being a woman per se. Rather, climbing to the very top of any profession might simply require traits that are primarily expressed in a small subset of men: raging assholes. The studies Sandberg cites are consistent with this conclusion. Men tend to over-estimate their ability, they tend to negotiate harder for higher pay, and they tend to bulldoze social norms in order to grasp for their own gain. I haven't seen an econometric test of the asshole pay gap hypothesis, but if it were true we'd find that it's not just women who receive lower pay and are shut out of the top jobs, but a large subset of men as well. If men get paid more by being assholes, they can keep their pay gap, and I'll keep my dignity.

So if we stop looking to men as our role models for leadership, who can we look to? I think that feminist-y, career-oriented women like me could take a cue from conservative women like Sarah Palin and Christine O'Donnell. Not ideologically, but in the way they present themselves and the choices they've made. Politics aside, I find it incredibly refreshing to see these female leaders presenting public images that fully embrace their femininity and motherhood/singlehood instead of wringing their hands at all of the compromises they've made, talking about how hard it is to juggle all of their goals and responsibilities, and feeling guilty about their choices (notice how the words we use make us appear and feel weak?).

To take a broader view on women and careers, I’ll point to the growing evidence that women are better adapted to the demands of the modern workplace (see this much-discussed article entitled The End of Men, and this study of labor market trends by MIT economist David Autor). Women are better at staying in school, have higher social intelligence, and are better at communication, and part of these valuable skills may be attributable to the very traits that Sandberg portrays as weaknesses that women should overcome. In light of the unmistakable trends toward female economic domination, advice that women should adopt the behavioral tactics of men seems like a relic from an earlier feminist era. Leaders like Sandberg would do better to think more about how they can reward women for the talents they possess, rather than encouraging them to conform to a declining and mal-adaptive male archetype.

References

The End of Men – Hannah Rosin
http://www.theatlantic.com/magazine/archive/2010/07/the-end-of-men/8135/
Impending Labor Market Challenges: Males between the Blades of the Marshallian Scissors - David Autor’s talk at the 2011 AEA
http://econ-www.mit.edu/files/6347
Are Men More Competitive Than Women? - By Ray Fisman
http://www.slate.com/id/2234066/
Going Dutch: Women in the Netherlands work less, have lesser titles and a big gender pay gap, and they love it. - By Jessica Olien
http://www.slate.com/id/2274736/

Is Chinese parenting really superior? A case study

2011-01-13T20:06:00.000-08:00

A Wall St Journal article by Amy Chua has been circulating recently about the superiority of the Chinese parenting method at producing high-achieving kids.

I could critique the article (poorly-written and completely devoid of a logical argument, much less evidence) or submit my own speculations (the approach is very good at producing kids who succeed along certain dimensions, but it is far from a universally superior strategy that all parents should adopt). But perhaps it's more illuminating to offer some evidence based on my own childhood.

I grew up in a smallish town in Arkansas (i.e., it only had one Wal-Mart when I moved there in 1993). There were five Chinese families with kids within a year of my age - four boys and one girl. All of our parents utilized the traditional Chinese parenting method with a moderate degree of variation in strictness. A decade after we finished high school, how did we all turn out?

Three of the five achieved arguable academic superstardom. One attended college at age 16, later graduated from a top-five medical school, and is now a successful surgeon. Two of us attended top-ten private universities and recently received our PhDs from MIT. One of us achieved conventional career success, attending a midwestern public university and law school and now working as a successful attorney. But one of us struggled. He and I were both in the same class, and at age 16, we were academically identical. I remember him scoring one point higher than me on the ACT, only one point lower than perfect.

But he often went AWOL in college, disappearing for weeks at a time from classes and hopping from school to school for a number of years, finally graduating from university last year. And he certainly had the brains to achieve as much academic and career success as any of us. Would he have been better off with a more-forgiving parenting style that encouraged academic potential but gave him the autonomy to make his own choices in school and in life? I simply don't have deep enough insight into his personal feelings and family life to say. But from my interactions with the family, his parents seemed the most draconian of all five Chinese families, and once afforded the freedom of college he lacked the intrinsic desire to pursue the academic goals forced upon him for so many years.

So the results are, four out of five of us became conventionally successful. But one out of five - arguably the one with the most traditionally Chinese parents - seemed to be troubled and oppressed by the very parenting system that helped the rest of achieve academic success. This example attests to some of the highly successful aspects of the Chinese parenting method, but it also indicates its limitations. More isn't always better, and this method does not fit all kids in all circumstances.

Most importantly, I want to emphasize what outcomes like degrees obtained and salary earned do NOT capture. Are the children of Chinese child-rearing happier? Are they more likely to achieve their own goals and dreams? Do they do more to enrich the lives of those around them and contribute more to society?

I've always thought that the defining characteristic of Chinese culture is pragmatism, a trait that's reflected our parenting style. Chinese parenting produces kids who are extremely good at maximizing measurable outcomes, but who often fall short when it comes to deep and creative thinking. Think of the many Chinese applicants trying to get into American universities who can get a perfect score on the TOEFL but who can't speak English.

Critically, we need to ask whether we would really want more parents to adopt the Chinese approach. The Chinese method is very good at producing people who possess skills that are financially rewarded in society today. But skills and education are not enough to make a well-functioning society. My feeling is that there are many models of parenting which produce different types of people, and that is a very good thing for a country like ours.

Even the worst of the American style that sometimes encourages irresponsibility, overconfidence, impatience, and recklessness play a role in giving rise to the great art, music, and entrepreneurial ventures that make American culture great (if imperfect). This culture underlies the economic growth that caused so many of us to come to America in the first place and that has made China's rise possible. I, for one, would hate to live in a world where everyone in it were like me.

Wedding present for Jialing & Lenny, Part 2

2010-12-31T16:00:00.000-08:00

This is the second entry in our series of wedding gifts to Jialing and Lenny - one every two months until their one year anniversary in May 2011. Our second wedding gift to Jialing and Lenny (from July 2010) is about China.

Chinesepod

I first learned about Chinesepod about a year ago, and I've been regularly listening to their podcasts that seamlessly mix language lessons with discussions about modern Chinese culture. Patrick doesn't like the guy who does beginner lessons, but we think anyone who wants to learn contemporary, conversational Chinese would enjoy Chinesepod. Their lessons are like talking to a smart and lovable Chinese friend who also explains grammar and vocabulary. You can try it out for free, and there are hundreds of audio lessons and online learning tools.

Out of Mao's Shadow

It wasn't until my 20s that I realized how little I knew about the history of my own home country. When I was a kid, the Chinese adults couldn't stop talking about the "wenhua da geming", but they would never explain to me what that meant. A year or two ago, I finally asked my dad about what he remembered from the cultural revolution when he was growing up, and he told me stories about mobs rampaging through the streets of Changchun, hitching a train to Shanghai on his own, and how Jialing's dad almost got himself killed when playing with gunpowder.

A lot has been said about how our generation takes social activism as a given rather than following onto the acquisitive, self-involved tendencies of the baby boomers. Is this heightened social awareness also prevalent in China, the land of little emperors? I don't know the answer, but the least we can do to help shape the future of China is to educate ourselves. And then maybe, to find ways to support the people who are fighting for freedom and the empowerment (economic, intellectual, and otherwise) of the millions of marginalized people in China.

As a start, we both loved reading Out of Mao's China, which documents the history of China since the cultural revolution. It combines an astute perspective of the broad historical forces with deeply personal stories. It was especially poignant for me because I was reading it when I was visiting my parents last year right at the moment I heard about my uncle's death. It made me think of him, and how the history of our family, and everyone's family we know, is so tightly intertwined with the history of China.

Wild China

This BBC documentary series is available on DVD and can also be played instantly on Netflix. It's one of our all-time favorite programs, mixing the wonderful style of the BBC's nature documentaries with eye-opening glimpses of cultural life outside of China's big cities. We especially liked the segment about the cormorant fishermen pictured on the cover above.

Number-crunching my holiday road trip

2010-12-26T22:24:00.000-08:00

I'm traveling across country this winter from St. Louis to Las Vegas to Denver, and then back to St. Louis. It's been a fun opportunity to learn about the environmental impacts of driving and to visit some unique locations around the west and southwest (the photo above is from our hotel in Amarillo, TX).

Here's what I've discovered when researching and deciding between different travel options for our trip.

Driving vs. flying
The rule of thumb when traveling is that per passenger-mile, train is significantly better than either car or plane. Unfortunately, there's no way to get from St Louis to Las Vegas by train, so the most environmentally-friendly option was already out of the question. The choice between car and plane is generally more ambiguous, depending on models, occupancy, and calculation assumptions. But it turned out to be pretty clearly in favor of car for our trip.

For two people using our make and model of car, and taking into account radiative forcing for airline flights, airline travel would have generated 3.4 tonnes of CO2, 170% higher than the calculation for the road trip and about 7% of the average American's total annual CO2 emissions.

This exercise, along with the flexibility and fun of road trips, made hitting the road the obvious choice. For more info on choosing between transportation options, check out this article from Slate.
Which gas stations to use?
I read this great article a while back comparing the environmental records of different gas companies. Since then, I've been keeping a copy of the Better World Handbook gas station rankings in the glove compartment, and it's been a fun passenger-seat pastime to look for best-ranked Sunoco and Hess stations. Sadly, though, these smaller distributors seem extremely scarce west of the Mississippi.
Ridesharing

It just occurred to me that we could further increase passenger-mile efficiency and also help out a fellow traveler in need of a ride between the destinations on our trip. I found a couple of tips on the Sierra Club and Lifehacker, and I've posted ride offers on Craigslist and Erideshare for the next couple of legs. We'll see how this experiment pans out!

More details on the carbon comparisons between plane and car:
I used Terapass, Carbonfund, and Atmosfair to calculate the carbon emissions from flying the three-legged trip from STL->LAS->DEN->STL. Their estimates were 562Kg CO2, 2,780Kg CO2, and 1,690Kg CO2. Terrapass's estimate is far lower than the other two because it does not account for radiative forcing.

I calculated the actual fuel efficiency of the first leg of our trip by tallying the number of miles traveled and adding up all the gas we bought, accounting for gas in the tank initially and left in the tank when we got to Las Vegas, and got 21.9 MPG as the fuel efficiency. The dashboard computer calculated 23.8 MPG however (both are slightly lower than the 26MPG highway efficiency estimated by fueleconomy.gov), so I used both estimates to get a range.

I then multiplied by 8.788Kg CO2/gallon, the factor used by the EPA for the climate impact of gasoline. The result turns out to be very close to the less-precise method of multiplying the total distance by a factor of 0.4 KG CO2/vehicle-mile from David MacKay's book, but much lower than that using the factor of 0.77 KG CO2/vehicle-mile from Carbonfund's automobile calculation. The latter factors aggregate different car models as well as local and highway driving.

I estimated the costs of travel based on the cheapest available flights and gas at $3.11 per gallon. After taking into account wear and tear on the car and hotel stays during the drive, the costs of driving would probably be comparable or slightly higher than flying.

These were the final results:

	Flying
	Atmosfair	Terrapass	Carbonfund
Kg CO2	3380	1125	5560
Avg emissions	3355 Kg CO2
Lowest cost	$620

	Driving
	Low est.	High est.
Kg CO2	1185	1287
Avg emissions	1236 Kg CO2
Avg cost	$437

Exploring Europe through Nutella

2010-11-14T18:01:00.000-08:00

One of my favorite places in St Louis is the Global Foods Market, a grocery store that sells ethnic groceries from all over the world. I love the idea of travel and exploring other cultures, but concerns about the environmental impact of air travel make me reluctant to take trips. So in lieu of travel, I content myself with the more modest luxury of exploring the aisles of Global Foods.

One item that can be found at Global Foods in more than a dozen multicultural permutations is chocolate-hazelnut spread, best known as Nutella. Nutella is a form of gianduja, a mixture of hazelnuts and chocolate invented in Italy in the 19^th century. According to Mort Rosenblum in his book Chocolate: A Bittersweet Saga of Dark and Light, Nutella was invented after World War II to stretch out Italy’s thin supplies of cocoa. Nutella’s recent sales have totaled half a billion tons per year. Something about the mixture of chocolate and hazelnuts clearly has a universal appeal, judging by the enraptured look in people's eyes I've witnessed when discussing Nutella.

Out of curiosity, I bought 9 different types of hazelnut spread from all over Europe and conducted a comparison and taste test.

Map and boundary data are copyrighted by

FOTW- Flags Of The World

Information online about the lesser-known hazelnut spreads is sparse, and I’ve summarized what I could find below:

The Wikipedia entry for Eurocrem says that its trademark was originally registered in Italy in 1967, but since 1972 has been licensed the Serbian company Takovo. I've also seen various pastries and cookies marketed with Eurocrem fillings.
Duo Penotti : http://www.penotti.nl/
Linolada: Linolada is made by a large food processing company in Croatia called Padravka, founded in 1934. http://www.podravka.com/brands/brands/lino-lada
Nutella: www.nutellausa.com/
Bisella is made by Misbis, a chocolate company based in Istanbul. Bisella was introduced in 1998. Notably, Bisella is the only spread I tried that contains no actual hazelnuts, but it's Patrick's favorite. http://www.misbis.com.tr/eng/product_details.asp?ID=8&PID=609

I tasted each spread both by itself and with wheat crackers (which I found a nice complement to undercut the sweetness and bring out the nuttiness of the spreads) and rated them on texture, sweetness, overall taste and three flavor components (hazelnut, chocolate, and dairy). The results along with prices and countries of origin are below:

Brand	Price/oz	Country of manufacture	Overall score
Eurocrem	$0.36	Serbia	7.7
Landsberg	$0.30	Germany	8.5
Quino	$0.26	Holland	9.5
Spar	$0.30	Holland	9.7
Duo Penotti	$0.24	Holland	11.5
Bisella	$0.22	Turkey	12.0
Dobrova	$0.24	Belgium	12.5
Linolada	$0.42	Croatia	13.5
Nutella	$0.28	Canada	15.5

The best overall spread turns out to be the justly-famous Nutella. It has by far the best combination of a creamy texture (not waxy, oily, or canned-frosting-esque like some of the others) and the richest nutty flavor, without an artificial chemical aftertaste (like Eurocrem or Bisella) or a jarring sugariness (Quino, Spar, and Dobrova).

Still, several of the other spreads have their unique charms. Eurocrem has a strong orange flavor that while very artificial, also pleasantly reminds me of Creamsicles and Pac-man cookies. I also like the milder sweetness of Duo Penotti, and the waxy texture of Duo Penotti and Linolada are also appealing in an artificial-food kind of way. Made mostly of sugar and saturated fat/partially hydrogenated vegetable oil, hazelnut spread is clearly a product of the industrial food era.

A few other notable results of my taste test:

There is a -19% correlation between price / oz and my rating. Thus, transportation, import, and production costs might be bigger drivers of price than demand. Surprisingly, Linolada from Serbia was by far the most expensive, although I would have expected Serbia to be a lower-cost producer.
Four of the spreads (Eurocrem, Duo Penotti, Linolada, and Bisella) are swirls of chocolate and dairy components. The duos have a slightly higher average score of 14 compared with 13.3 for chocolate-only spreads.
Of the chocolate-only spreads, Spar and Quino contain no dairy ingredients, which make them vegan and also lower in their carbon footprints (see this study showing that the vast majority of the carbon footprint from chocolate candies comes from the milk in milk chocolate). The vegan spreads cost less - $0.28/oz compared with $0.31/oz, but sadly, they also taste worse, with average scores of 12.5 vs. 15.4.
Nutella has the highest percentage of actual hazelnuts (13%), tied with Landsberg. All spreads contain sugar and oil (mostly partially hydrogenated) as their first two ingredients, and the next three are hazelnuts, cocoa, and milk in various orders. My taste rating has a 24% correlation with the place of hazelnuts on the ingredients list, so more hazelnuts does translate to better taste. Notably, Bisella (excluded from the correlation above) contains no hazelnuts at all, but lists “natural identical flavors.”

Whole Foods Evil Watch: Whistleblower Suit in Brentwood, MO

2010-11-12T18:02:00.000-08:00

It's been over three years since I wrote my post about why I hate Whole Foods, which has since become the #1 Google search for the phrase and a repository for complaints and employee horror stories. To be fair, I doubt Whole Foods is nearly the worst in the food business when it comes to mistreating employees and sketchy food handling. But because it markets itself as a socially responsible company (and enjoys a 34% profit margin as a result), we should be all the more wary of systematic practices that undermine integrity in the name of profits.

So a story this week about a whistleblower suit against the Whole Foods not a mile from my house obviously piqued my interest:

Elisha Wellman, the plaintiff in the suit, worked for Whole Foods from 2001 until August 30 of this year, when she was terminated. The suit names Whole Foods Market Group, Inc. and Brian Gourley, the manager of the Brentwood store, as defendants.

The lawsuit contends that Wellman was wrongfully terminated because she was a whistleblower:

She observed "unsanitary" handling of produce, comingling of organic and conventional produce, improper sanitation, and the presence of mold
After having worked there since 2001, she was fired on August 30, two weeks after sending letters to Whole Foods executives detailing the violations.

Trick or Treat? Say ‘boo’ to chocolate made with exploitative child labor

2010-10-30T12:53:00.000-07:00

This post is an expanded version of an op-ed I wrote with Charita Castro in the St Louis Post-Dispatch.

An estimated 35 million children will participate in trick-or-treating festivities this Halloween[1]. Babies not even a year old will be squeezed into peas in a pod, little boys will transform into Ben 10, and tweens will prove that Hannah Montana is forever. Most parents will consider the security of the neighborhood and the safety of the candy received, but few of us will give any thought to how the 90 million pounds of chocolate candy given out this Halloween was made, who made it, and under what conditions. Indeed, few products are more evocative of the joy and innocence of American childhood than the iconic Hershey bar. On our recent visit to a neighborhood café, the proprietor expressed her homespun values by saying she didn’t use fancy foreign chocolate in her cookies – just good old American Hershey’s. But while the brand may be all-American, the humble Hershey bar begins its life as cocoa beans, the seeds of a tropical tree known as Theobroma Cacao.

Some 70% of all cocoa in the world is produced in the West African nations of Ghana and Ivory Coast, where children are more likely to face hunger and malnutrition than to ever enjoy the taste of a chocolate bar. In 2001, journalists uncovered extensive child labor and trafficking in the Ivory Coast’s cocoa plantations, leading to a public outcry that prompted Hershey, Mars, and other major companies to sign the Harkin-Engel protocol. Championed by Senator Tom Harkin (IA), and Representative Elliot Engel (NY), the voluntary agreement stated that 100% of West African cocoa would be certified as child labor free by 2010.

This September, independent researchers from Tulane University report that after years of delays, the industry is far from eradicating the worst forms of child labor on cocoa plantations. At least 2 million children are currently involved in the production of cocoa. These children are unable to go to school. Instead, they engage in harsh labor handling dangerous agrochemicals, wielding machetes to harvest and hack open cocoa pods, and carrying heavy loads. Even worse, the US Department of Labor finds sufficient reason to believe that children from Mali and Togo are trafficked into forced labor to work on the cocoa farms of the Ivory Coast[2].

This wouldn’t be the first time that candy has consumed children instead of the other way around. Jane Addams established Hull House in Chicago in the late 19^th century and helped little girls who were exploited and fatigued from working 6 weeks straight for 14-hour days in a candy factory. When finally given a chance to taste the hard-won products of their labors, the girls couldn't bear the sight of the candy they were offered. Times have changed in the U.S., yet children across the globe still work under unconscionable conditions to satisfy our sweet tooth. So what is a consumer to do? Stop eating chocolate altogether? Lobby your congressmen to ban imports of Ivorian cocoa? The answers are not that simple. Child labor exists because of deep underlying economic conditions and complicated development challenges. Boycotting or banning chocolate would do little to help child laborers, but the marketplace offers several ways for consumers to make a difference.

Since most West African cocoa is grown on some 1.5 million family farms, individual farmers have virtually no bargaining power to earn higher prices from cocoa middlemen, who in turn sell cocoa to international exporters like Cargill, Archer Daniels Midland, Barry Callebaut, and Saf-Cacao. The result is that nearly all of the profits from the global cocoa trade accrue to exporters and candymakers, and not to the farmers. This need not be so. Thus far, Big Chocolate has been able to drag its feet on commitments to end child labor only because consumers have not made it in their business interests to comply. The many links in the cocoa supply chain make it easy for firms to avoid responsibility for conditions on cocoa plantations, but if their profits depend on it, you can bet they’ll find a way to meet even the most stringent standards.

Our dollars are our voice in the global marketplace, and we can use it to voice our demand for ethical standards. A first step is to buy Fair Trade Certified chocolate bars, including Equal Exchange, Theo Chocolate, Divine Chocolate, and the Conacado Bar from Hershey’s Dagoba brand. Fair Trade guarantees farmers a minimum price for their output, enforces fair labor conditions (prohibiting forced child labor), and encourages environmental sustainability. While critics of Fair Trade point to costly investments in labeling and product certification, shortfalls in investigating compliance with labor standards, and imperfect financial transfers to farmers, these efforts are better than nothing at all.

You can also purchase chocolate from companies owned by cocoa farmers themselves, so they reap more of the benefits of their labors. The Ghanain farmers of the Kuapa Kokoo Cooperative own 45% of Divine Chocolate company. In addition, many smaller producers such as Theo Chocolate and Askinosie source their beans directly from farmers, compared with larger companies that source from middlemen with fuzzy supply lines. Askinosie, based in Springfield, Missouri, prominently displays photos of its cocoa farmers on its chocolate bars and allows consumers to enter a number on its website that tracks the supply chain of each bar. While some smaller producers like Askinosie are uncertified, consumers can take some comfort in the personal accountability of proprietors whose reputations are at greater stake than the established brands of Big Chocolate.

A virtue of consumer-driven movements is that they are voluntary expressions of consumer demand, allowing the efficiency and ingenuity of business to meet that demand instead of using their resources to circumvent mandatory regulation. But only continued public vigilance can make a real and lasting impact on the lives of cocoa farmers. Labeling and corporate social responsibility are only effective to the extent that consumers hold firms responsible for the standards they advertise.

So in the end, the best thing you can do as a consumer is to educate yourself. Understand how the products you buy are made, act to ensure your purchases match your values, and continue to monitor companies to make sure their practices fulfill their promises. Write a letter to your favorite chocolatemaker expressing your demand for responsible cocoa, and write Senator Harkin and Congressman Engel voicing your support for their initiative. Ultimately, you may find that you get more pleasure out of eating that sweet dark bar, knowing that it comes from a wonderous tropical tree grown by farmers who were fairly compensated for their labors. You may find delight in joining a worldwide movement to end the worst forms of child labor. Learning and understanding the lifecycle of products is an educational experience that allows us to get more out of what we buy than just a sugar high. We can also become just a little bit more connected in a globalized world.

Quick Facts:

70% of cocoa produced in Ghana and Côte d’Ivoire
2 million children involved in the production of cocoa worldwide
Price of a 1.5oz Hershey Bar: $1. Hershey’s corporate profits for the past year: $1.18 billion.
Market price for 1 oz of cocoa beans: 8.3 cents. Fair trade premium for 1 oz of cocoa beans: 0.425 cents.
Per-capita income in Ghana and Côte d’Ivoire: $700 and $1,060 (World Bank)

References:

For a detailed history of slavery and labor issues in the chocolate industry, including an investigation of present-day child labor and the Harkin-Engel protocol, check out Carol Off’s book Bittersweet Chocolate
For a critical report of Hershey’s lack of transparency and accountability on child labor written by several NGOs, check out “Time to Raise the Bar: The Real Corporate Social Responsibility Report for the Hershey Company.”
For Tulane University’s study on child labor commissioned by Congress as a part of the Harkin-Engel Protocol, check out “Oversight of Public and Private Initiatives to Eliminate the Worst Forms of Child Labor in the Cocoa Sector in Côte d’Ivoire and Ghana.”
For information on the industry initiatives, check out the industry trade group the World Cocoa Foundation

[1] The United States Census Bureau: http://www.census.gov/newsroom/releases/archives/facts_for_features_special_editions/cb10ff19.html

[2] The 2010 update to the US Department of Labor’s Executive Order 13126 list on the “Prohibition of Acquisition of Products Produced by Forced or Indentured Child Labor”

Wedding present for Jialing & Lenny

2010-07-28T17:50:00.000-07:00

Ok, it’s true. I’ve long harbored a suspicion of the modern wedding-industrial complex. So when my cousin Jialing got married earlier this summer, it was hard to think of a present that would be meaningful, useful, and worthy of a life-changing event. The idea came to me to give them a gift-of-the-month club, but somehow cheese or steaks in the mail just didn’t seem to fit the bill. So Patrick and I decided to create our own gift club, to share with them our favorite things. And here, we share them with you too.

Sprinkles and cookie cutters from Surfas
We discovered Surfas back in 2002, after Patrick took me to the Olympic Bakery furniture mall in his neighborhood of Beverlywood. Since then, we've purchased an entire stock of delicious spices, other foodstuffs, and countless kitchen gadgets. We make an online order about once a year, and we plan to visit their sister store The Culinary District in Hot Springs, Arkansas in the near future.

Haribo gummy candies

I first discovered Haribo when I went on a trip to Hong Kong and China for the Dragon 100 in 2005. I met a Chinese-French student on the trip who introduced me to Haribo World Mix, an assortment of delicious and unique Haribo candies from around the world which sadly I have not been able to find since. Since then, however, we have sought out Haribo during all of our travels, including Barcelona and Las Vegas. We’ve also been known to purchase 5-pound bags of these candies from Amazon.com.

Cabot cheddar shake

Patrick introduced me to Cabot Cheese when we first moved to Boston, although I've since seen it in stores from California to Arkansas. In 2006, we visited the Cabot Cheese factory in Cabot, Vermont and got to witness the aging of real Cabot curds. In Boston we almost exclusively relied on Cabot for sour cream, cottage cheese, and cheddar, making an annual trek to the Quechee Cabot store in Vermont to stock up on their delicious dried cheddar shake. We love to use it on salads and in mashed potatoes.

Eaton Maple Syrup

Patrick used to visit the Eaton sugarhouse during his Dartmouth days to eat greasy breakfasts and pancakes with their home-made maple syrup. We typically stop by the sugarhouse every year on our New England food tour to stock up on their delicious syrup.

Organic Turkish apricots
Yet another favorite New England food destination is the Lebanon Food Co-op, the best grocery store either of us has been to. Patrick used to go to the Co-op in Lebanon, New Hampshire as an undergrad at Dartmouth, and he first took me there in 2004. The store’s copious bulk bins, abundant cheese counter, and carefully-curated isles can be hours of fun to explore. We are also shareholders in the Co-op and look forward to their insightful newsletter that demonstrates that earnest, cheery people who care about their food and their communities still exist. Organic Turkish apricots are one of my favorite items from the bulk bin and have a unique caramelized-fruit flavor.

Coconut powder
I first discovered coconut powder at the Super 88 Chinese market in Boston, which was right underneath the apartment where we lived for three years.

Chocolate-covered marshmallows from Russia

Last year, we walked 8 miles round trip from our home in Cambridge, MA to the Bazaar Russian Supermarket in Allston. We were rewarded with an entire row of bins full of gleaming Russian candies, in which discovered these unique and delicious candies made in Moscow. We also found the same candies at the Jones supermarket in Las Vegas.

A Letter to Trader Joe's

2010-04-21T06:34:00.000-07:00

Update 5-7-10 :

I got a response back from Trader Joe's (see below). I understand the vague and ultimately meaningless response in light of the vast number of letters they must get, the legality of covering their asses and not maligning any of their suppliers, etc.. Perhaps this is the only practical response they could have given.

However, I must say that my confidence is decidedly NOT inspired, and that I have a little less trust in Trader Joe's as a result of their response to my letter. It seemed more like a relic of a past in which we could expect no better than vacuous legalese.

But things are different now - consumers are demanding greater transparency throughout the supply chain and a much higher level of responsiveness as well as social and environmental responsibility. A lot of people share my belief that our dollars represent perhaps our loudest voice and most powerful vote in this society, and we want to spend our money to support companies that provide a good while also doing good (and especially for me, avoiding those tempting shortcuts that generate profits but ultimately harm others).

To win my wholehearted support, Trader Joe's has got to do better.

------------
from    Web Customer Relations
date    Fri, Apr 23, 2010 at 1:52 PM
subject    RE: Trader Joe's General Feedback Form

Hello JialanW,

Thank you for providing us with your very valuable feedback regarding our Trader Joe's products. We assure you that at Trader Joe's we have a lot of years dealing with our very reputable vendors and we hear your concerns and take them very seriously, indeed. We also love to hear what types of products our customers want to see in our stores. Our Buying Department works really hard to source a wide variety of unique, high quality, affordable products that will appeal to our very broad customer base, and we are certainly open to suggestions from our loyal customers, like you. So, we will be sure to pass on your comments and request for this product to our Buying Department, and this will be taken into future consideration.

We appreciate your feedback, and we thank you for shopping with us at Trader Joe's.

Sincerely,

Hazel
Trader Joe's
Customer Relations
--------------------------
Here's a letter I just sent to Trader Joe's that I've been meaning to send for a while.

Feel free to use any part of this letter in sending your own comments to Trader Joes about their ethical and environmental standards.   Also check out their recent news release about sustainable seafood.

------------

Dear Trader Joe's representative,

I have been a loyal customer for 10 years and across two coasts, often touting TJs and TJs products on my website and to all who will listen.

I am dismayed by the practice of offering brand-name products such as Cabot and King Arthur Flour, only to switch to the Trader Joe's brand and phase out the brand name. While I do have trust in Trader Joe's, I value the knowledge of where my food comes from and where it's produced, and switching to the store brand eliminates all of the trust I have gained from learning about these products over time, with little information on the TJs brand to replace that trust. I am willing to pay more for products whose production methods I have confidence in.

What shakes my confidence in TJs even more is the dismaying array of organic meat and sustainable seafood that has is offered. For a company who caters to an often socially-minded audience, Trader Joe's is lagging sorely behind on these dimensions.

I am very disappointed that all of your seafood choices that I have looked up rank abysmally on the Monterey Bay's Seafood Watch list. If you offer better choices, I for one would be more likely to buy, and I think many other customers feel the same way. More importantly, I would not feel that Trader Joe's is contributing to ethically and environmentally unsound practices by allowing busy and uninformed customers to purchase these products. With that said, I greatly applaud the recent news that Trader Joe's is shifting toward sustainable seafoods in the coming years.

And while Trader Joe's offers its share of organic and ethically and sustainably-produced products, my observation of your offerings makes me uncertain whether the company really prioritizes these values as much as I do, making it even more difficult for me to choose the store brand with confidence. While branding and organic labeling are not the end-all of these concerns, it is a critical starting point from which to build.

Sincerely,

Jialan W.
Cambridge, MA

Does chocolate improve work performance?

2009-08-16T07:14:00.000-07:00

For some time now, I’ve had a fascination with chocolate. It all started six years ago when I spotted a 10-pound bar of semi-sweet Ghirardelli chocolate on sale at Trader Joe’s in South Pasadena, California. As soon as I laid eyes on it, I knew I had to buy it. But how would I possibly consume such a large quantity of chocolate?

Ok, it wasn't that hard - I started off making chocolate truffles, learning the ins and outs of tempering, and discovering that basically any dessert can be coated with chocolate and turned into tasty bite-sized candies which I foisted upon friends and co-workers. I went through about three 10-lb bars in this fashion.

The next step came when I organized a chocolate tasting for MIT graduate students and postdocs in 2007. As with many of my endeavors, I went a little overboard with the concept. In my quest to find all of the best chocolates to offer tasters, I read several books on chocolate, visited every shop that sold chocolate in the Boston area as well as the major online retailers, and created a 40-page guidebook detailing the chocolates for the event.

In the ensuing period since that first fateful 10-pound bar, I’ve gained a serious chocolate habit. Although I’m not someone who takes a daily coffee or tea, I started eating dark chocolate on a semi-regular basis on presumptions of “researching” new varieties. I started noticing that I felt more focused and more productive on days when I ate chocolate, and at times turned to chocolate as a mental aid when I needed to pound out some thesis work.

According to recent reports from Slate and Nature (here and here), I’m not alone in using drugs to increase my mental capacity. According to an informal poll by Nature, one in five respondents admitted to using prescription drugs such as Ritalin for mental enhancement purposes, signs of a growing trend toward “brain doping” by students, academics, and other nerds.

At present, chocolate is about as far as I’ll go to increase my research productivity, and although its effects are mild, chocolate does contain a variety of pharmacologically active substances. But was the boost in mental ability real, or was I just imagining the effect to justify my growing chocoholism? In order to find out, I conducted a semi-scientific trial last winter. It wasn’t hard to recruit volunteers (two words: free chocolate), and I ended up finding 12 people for the two-week experiment. I monitored their work habits and randomly assigned them to either eat or not eat chocolate on a daily basis for a two-week period.

Unfortunately, the results show that if anything, chocolate has a negative effect on productivity - doh! Here are the full details.

Methods

In November of 2008, I recruited 12 volunteers, mostly among MIT students and staff. The sample was composed of six women and six men, ages 21-29. I conducted a pre-experiment survey to gauge their pre-existing habits and attitudes toward chocolate and caffeine. In the survey, 2 subjects reported eating chocolate on a daily basis, 9 reported eating it at least once per week, while one reported eating it only rarely (see figure). On a scale from 1 to 5, all participants rated their enjoyment of chocolate consumption at either 4 or 5.

Each subject was assigned one of three types of chocolate: dark, bittersweet, and peanut butter cups (all purchased at Trader Joe’s). Five people were assigned to bittersweet, five to dark, and five to peanut butter cups. The different types of chocolate were meant to both validate that the observed effects were due to chocolate and to differentiate the effect of simply eating a sweet candy from the ingredients particular to cocoa. As previous studies have shown, chocolate contains many active ingredients such as caffeine and theobromine which can actively affect mood and mental concentration, and these compounds are present in higher concentrations in darker, higher-cacao-content chocolate. While the peanut butter cups contain some milk chocolate, the quantity of cocoa is much lower than that of the dark chocolates while mimicking their sugar and fat contents, so the peanut butter cup subjects essentially acted as controls.

Before the experiment began, I gave each subject a zipper bag with 5-7 servings of their assigned chocolate. Each serving contained three squares / cups, equal to approximately 1.4 ounces, the recommended serving size. In addition, they installed the software program RescueTime, which monitors the amount of time they spend working on the computer and the applications they were using. On each day they were assigned to eat chocolate, they received an email around 10am informing them to consume a serving of chocolate between 10am and 2pm. Another email was sent at the end of the day to verify that they ate the chocolate.

The subjects failed to comply during 6% of the trial days, and I drop the days in which total computer use was less than 2 hours. I use two measures of productivity: the total number of hours worked at the computer during the day, and the percentage of each day spent on work-related applications (i.e. not counting email, news sites, etc.).

Results

In nearly all of the comparisons, the days which were treated had lower productivity than the days that weren’t, although there were not enough observations for statistical significance.

Despite this initial null / negative result, I’m still convinced there’s something to the idea that chocolate can enhance mental performance. Maybe with a more clever setup, next time I’ll come up with some the evidence. But in the meantime, I’m still conducting unscientific research on myself.

Previous research

Chocolate contains several hundred active chemicals including caffeine, theobromine, anandamide, phenylethylamine, and others. Here is the previous work I have found looking into its effects

Chocolate Consumption in Pregnancy and Reduced Likelihood of Preeclampsia
Triche, Elizabeth W.; Grosso, Laura M.; Belanger, Kathleen; Darefsky, Amy S.; Benowitz, Neal L.; Bracken, Michael B.
Epidemiology:
May 2008 - Volume 19 - Issue 3 - pp 459-464
Intake of Flavonoid-Rich Wine, Tea, and Chocolate by Elderly Men and Women Is Associated with Better Cognitive Test Performance
Eha Nurk, Helga Refsum, Christian A. Drevon, Grethe S. Tell, Harald A. Nygaard, Knut Engedal and A. David Smith,
Journal of Nutrition, Vol. 139, No. 1, 120-127, January 2009
Brain cannabinoids in chocolate
E. di Tomaso, M. Beltramo, D. Piomelli, Nature, 382, 677-8 (1996).

Boston Markets Update: Bazaar Russian Market

2009-07-19T14:19:00.000-07:00

Patrick and I must be getting in good shape, because in the past few weeks we've walked all the way from our home in Cambridge to Allston and Watertown in search of grocery adventure. Having lived in Boston for five years, I thought I've become pretty familiar with the ethnic food landscape, so I was eager to try out some new places.

On our way to Bazaar Russian market, I was astounded at the number and variety of shops and restaurants around Brighton Ave. in the Allston Village area. On the Saturday evening we went, the streets were buzzing with cheery crowds. We passed by a few intriguing places on our way including a couple of generic-looking Korean bakeries. On our way through Allston we also passed the Super 88 that used to be the flagship store for the local Chinese grocery chain. The food court was full, but as typical in the past year or so, the store was sadly empty with widely-spaced aisles lined by empty shelves. I couldn't even find canned coconut cream and water chestnuts. It looks like Super 88 is on its way out - perhaps through overexpansion or competition from C Mart?

In any case, our real destination was Bazaar, a Russian / Eastern European market inside what looks to be an old car repair shop - if you're not looking for it, it's easy to miss from the outside. Inside however, is a clean and spacious shop filled with exotic goodies. The shop is stocked with what I imagine to be the stables of the eastern bloc, cheeses from Ukraine, Bulgaria, and beyond, a huge selection of pickles and smoked fish products, grains, spices, honey, syrups, and jams. It also features fresh-looking produce, and bakery, deli, and prepared foods counter.

I agonized over getting some Ukrainian Linden honey which looked delicious, but balked since I already have about five different honeys going. We did purchase some Russian-style pickles, which turned out to be crisp, flavorful, and spicy. But what I really swooned over were the bulk candy bins. At the far corner of the store, there are a couple of displays with brimming bins of sweets emblazoned with images of birds, babies, and squirrels. You just have to love a store that sells candy by the pound, and I didn't hesitate to grab a few handfuls despite having no idea what lay within those gleaming wrappers. They turned out to be Ruzanna "soufflé" bars, dark chocolate wrapped around delicate marshmallow fillings with fruit, cream, and jelly flavors. The fillings are only lightly sweet with a wonderful pillowly texture and unique flavors - absolutely delicious and more than enough reason to visit Bazaar again in the near future.

I also purchased three Russian dark chocolate bars, which from some Internet research came from Babaev and Red October, two of the small handful of Moscow confectionary concerns. Although Russia isn't known to be a chocolatemaking capital, there's something about Russian chocolate I enjoy, a particular bitter kick, and I liked the 80% bar from Red October the best for having a distinct peanut butter note. Flavorwise, the bars were just ok, but fun to try.

Bazaar on Cambridge
Neighborhood: Allston/Brighton
424 Cambridge St
(between Denby Rd & Rugg Rd)
Allston, MA 02134
(617) 787-1511

The quandary of ethical and sustainable seafood

2009-05-30T20:04:00.000-07:00

I've been reconnecting with my longtime love of all things ocean lately, which I detailed recently in an extensive post on my other blog. But I wanted to reprint some of the material here because even for a self-purported ocean-lover like me, most of the time I have thought about the sea, it's been followed by the word food. I'm sure this is true for many of us. But my biggest revelation from reading a series of books and articles about the sea lately is how ignorant most of us are about the oceans from a scientific perspective and as consumers. It amazes me that when it comes to mapping the ocean depths, the age of exploration is far from over - only a tiny percentage of the ocean floor has been surveyed in detail by geographers or sampled by biologists.

Another shocker was how weakly regulated the seafood industry is. While there have been a number of exposés about the evils of factory farming, seafood typically comes off with a healthy patina. But because fishing occurs even further from our daily consciousness (as well as the prying eyes of regulators) than farming, and even more because the most waters fall under international jurisdiction, creating incentives for every fisherman to maximize his haul at the expense of the long-term sustainability of fisheries. Thus, the continuing abundance of inexpensive fish at our local supermarkets belies the imminent collapse of many important populations as well as the greed and wastefulness of an industry at sea.

With all the reading I’ve been doing, perhaps the biggest thing that has changed is my view of seafood. Although I’ve been quasi-vegetarian for nearly fifteen years now, a big fraction of that time I’ve felt fine about indulging in the occasional seafood meal. One thing that has always struck me as funny about the vegetarian movement is the inconsistency of the distinction between animal flesh and foods derived from animals, namely milk and eggs. Although most vegetarians consider seafood verboten, eggs and dairy are staples of the standard (ovo-lacto-)vegetarian diet as most people understand it. But does the distinction make sense on a moral or ecological level? It doesn’t seem obvious that chickens and dairy cows suffer any less than fish or shellfish. Furthermore, the negative impact of large-scale farming on the environment has been well-documented. In fact, many farm animals living in industrial farms seem to suffer more cruelty and contribute even more to environmental degradation than wild seafood. I don't know the answer to the question of whether seafood or dairy exacts a hire price on animals or the environment, but I do think that consciencious omnivores should push for greater understanding of the true impacts of our food instead of sticking with traditional categories.

In any case, although I have largely avoided milk and egg products, until recently I’ve been more accepting of eating seafood because of my perception that that fish suffer less pain than livestock and that livestock practices were particularly cruel and polluting. But that view has gradually changed over the years. First of all, the characterization of sea life as cold and unfeeling is clearly incorrect, especially for two particular species I used to enjoy: squid and octopus. Although much is still unknown about the intellectual capacities of these mollusks, what is clear is that they are far from the mindless blobs that we typically think of invertebrates as. Scientists estimate that octopuses might be more intelligent than dogs, and recent reports of octopuses who escape from their cages and taunt their caretakers hint at a mischievous intellect beneath those alien-looking eyes. When I think about a dish of squid or octopus, I no longer imagine the briny sweetness and delicate texture of their flesh, but picture sensitive, intelligent creatures jetting about in the twilight depths, whose mysteries we have barely begun to fathom.

The second reason I’m much more hesitant about purchasing seafood is that fishing is vastly under-regulated, with destructive and inhumane practices still rampant (see this damning report by the Economist). The seas still represent the most devastating tragedy of the commons on the planet, and it breaks my heart to learn of how little respect for life is reflected in our fishing practices. Trawlers bulldoze whole ecosystems before they are even described by science. Many common food fishes can live for decades – orange roughy up to a century or more, and as this Nature paper documents, stocks of large predatory fish have already declined 90% relative to pre-industrial levels. We have but the faintest idea of what kind of awareness and memories that these fish have, yet we thoughtlessly plunder them – along with thousands of tons of “bycatch”, which are dumped back dead into the ocean or used for low-grade fish meal or fertilizer. In general, I try not to be a bleeding heart when it comes to animal rights, but something about our callousness toward sea creatures truly stokes my ire. Perhaps humans, after all, are the most cold-blooded creatures to roam the sea.

Ranting aside, sustainable fishing does exist, but it’s incredibly hard to find trustworthy indicators of such practices when making purchases. The Monterey Bay Aquarium produces an excellent guide to sustainable seafood, but even as a knowledgeable consumer who has spent quite a bit of time doing research and examining labels, I find it nearly impossible to find seafood I can feel good about purchasing. Although I’ve been encouraged by the trend toward consumer awareness of food systems and practices, it seems that labeling and regulation of seafood has fallen far behind that of landfood, and the clean image of seafood among conscientious consumers seems to make it a particularly worrisome blind spot.

Adventures in whole grain baking: taro coffee bread

2009-04-08T05:47:00.000-07:00

Mix the pre-ferment ingredients in the same bowl you'll use for mixing the bread dough (the bowl for your electric mixer, if you're using one), and let it rest at room temperature overnight
Combine the pre-ferment and the dough ingredients. Mix with an electric mixer until the dough is very soft and smooth. Cover and allow the dough to rise until nearly doubled in bulk.
Lightly grease a large bundt pan with oil
Divide the dough in half, gently deflating, and shape the first half into a ring, placing it into the pan. Spread the taro filling over the dough, and place the second half of the dough on top in a ring.
Cover the pan with a large lid or plastic wrap, and allow it to rise until it reaches the top of the pan, 1-2 hours.
Bake at 350F for about 35 minutes
Let it cool in the pan for about 10 minutes before gently turning it out to cool completely.

To make the taro paste:
Cook the unpeeled taro in boiling water for about 20 minutes or until completely tender. Remove the peels and mash with the sugar and liquid until smooth and the paste reaches about the consistency of peanut butter

Eating Las Vegas

2009-03-06T07:23:00.000-08:00

I recently, went on a trip to Las Vegas to visit family, and in addition to providing a welcome dose of southwestern sunshine, it was a great way to further hone our frugal travel technique:

Do your research

Much of the fun of travel lies in the anticipation - imagining and planning all the fun things you're going to do. I try to take a balanced approach to pre-travel research - I don't want to have every second planned out, but I do quite a bit of scouting beforehand so I have a sense of the major things I want to do, where they are, and what the constraints are (hours, costs, transportation, etc). That way, I don't overlook things and am not taken by surprise on the last day of my trip when I discover my number one destination is closed on Sundays. When I'm there, I plan my days around the big destinations I definitely don't want to miss, and then use my research to guide me toward other interesting places along the way. Nowadays I also always take my laptop with me to do more detailed research as my plans unfold.

My favorite way to do research is through blogs. City commerce sites are ok for getting a general sense of where things are, but they're not good for evaluating what's actually worth visiting and what's a mediocre tourist trap. It's local blogs that help you find the hidden gems and remove the chaff. Sites like Yelp and Chowhound are also helpful, but the detailed posts and pictures on blogs both provide tips and context for deciding whether a particular suggestion matches with your own preferences. Also helpful is checking out local independent newspapers for views and reviews - in this case the Las Vegas Weekly.

The best blogs I found for Las Vegas are:

Living Las Vegas
This blog from several different contributors contains a wealth of information on the fun and interesting things locals do in Las Vegas.
Vegas Musings
Lots of restaurant and bakery reviews with plenty of pictures
One frugal foodie
This is mainly a cooking-oriented site with a frugal / vegan sensibility much like this blog. So there aren't a lot of Vegas-specific material, but it contains a few good local tips.
Eating Las Vegas
Another restaurant blog with detailed posts and lots of pictures.

Travel out of season

The end of January (when we went) is a great time to visit Vegas. The crush of drunken Midwesterners was much less severe than the last time I was there - although there was a noticeable glut of well-heeled Chinese, perhaps in town for the New Year. Furthermore, the hotels and restaurants were offering great deals to lure in the off-season crowd. Although the flight to Vegas was quite cramped, the red-eye back to Boston on Friday night was comfortably roomy.
Grocery tourism

One of my favorite things to do while traveling is to visit local grocery stores. They contain very few tourists, they give you a taste of local cuisine at very low costs, and you never know when you'll find an exciting new food or an obscure old favorite.

Overall, I was duly impressed by the Vegas grocery scene. I have no idea why, but I found both ethnic and conventional grocery stores there to be a step above those in Boston and even LA in terms of cleanliness, product quality, and selection. Folks in Vegas just do good retail. As was quickly apparent from my aforementioned food blog search, THE grocery destination in town was the International Marketplace.

I will have to write an entire post about it later - suffice to say that if I could only visit one place in Vegas, this would be it. International Marketplace is essentially 20 different ethnic groceries stores under one roof (except with even better stuff at equal or lower prices), in the space of a large warehouse store. Yes, it IS as good as it sounds, even for a jaded ethnic-grocery goer like me.

Other nice shops I visited were:
- Ethnic markets
  - Mariana's market
  - Jones Market
  - 168 Supermarket (FKA Diho)
- Conventional grocery chains:
  - Sunflower market
    Your average neighborhood "healthy-food" grocery store.
  - Fresh n Easy
    A branch of the British retail company Tesco, Fresh n Easy's dot the Las Vegas landscape. It's a little bit like a mix between Trader Joe's and a conventional grocery store, but without TJs' unique items. If you haven't been to one before, stop in to check out the cheery design and the well-priced goods.
  - Rainbow market
  - Trader Joe's
Eat out off the Strip
Vegas is famously home to outposts of many international restaurant empires, but also has a burgeoning local food culture. We opted to bypass fancy restaurants to visit a few moderately-priced local spots.
- Merkato Ethiopian Cafe
- Sushi Loca
  
  We hadn't eaten sushi in several years, and we were looking for a special restaurant to indulge our dormant cravings. Sushi Loca is quite a ways from the Strip on the outskirts of town (about 20-30 minutes by car), but it is very much worth seeking out. It reminded us of our favorite local sushi place Z Sushi in Pasadena, although not quite as good. However, their large menu of unorthodox rolls (with wacky names) definitely hit the spot.
  
  My favorite was the "No pain no gain", a roll with spicy soft-shell crab and cucumber on the inside with tuna and baked scallop on the outside, all smothered in a sweet, mayonnaisey sauce.
- L'elysee Bakery
  We visited every single Asian bakery in town, including Diamond, Sunville, and Provence. L'elysee was by far the best, with superb Chinese-style buns, cakes, and breads with a touch of French influence. And having checked - their prices aren't any higher than any of the lesser bakeries. It's also in the same shopping center as the 168 market and Jones market.

During the trip we also found ourselves in need of chocolate molds, and so we took a trip out to Henderson to a little shop called Tempting Treasures. It's a very well-stocked shop for serious bakers and candymakers, and the selection of plastic chocolate/candy molds was stupendous. I picked up several candy-bar-shaped ones for myself, and I could definitely imagine visiting the store regularly if I lived in Vegas.

Better than Bouillon

2008-12-29T09:15:00.000-08:00

Like salt, pepper, and soy sauce, stock is a general-purpose flavoring that brings savor and depth to a wide variety of dishes. Risotto, stuffed peppers, tofu dishes, vegetable stir-frys, and of course most soups all rely on stock as a basic flavoring. While most recipes call for chicken stock, you can usually substitute mushroom or vegetable instead with good results. Stronger-flavored stocks such as seafood and beef, however, should be used with caution.

But the need for stock is a non-trivial problem. From-scratch stocks don't keep for long in the fridge, and seasoning and simmering meat or veggies for the long hours it takes to make good stock is a tall order even for avid home cooks (especially on top of making the original recipe which may only call for a cup or two of stock). Furthermore, stocks take up a lot of room in the freezer and don't always taste fresh once their defrosted. Packaged solutions are usually not much better. Canned and packaged soups are bulky and often either low-quality or expensive, and standard bouillon cubes are highly-processed chemical concoctions which take effort to properly dissolve.

But now I rely on Better than Bouillon, which resolves all of my stock dilemmas in its line of stock bases which come in compact 8-oz jars and can now be found in most supermarkets. It's concentrated, keeps indefinitely, and can be used in any quantity. Most importantly, it's made with natural ingredients and yields high-quality, full-bodied flavor.

For a few years now BtB's organic vegetable base has been my go-to stock of choice, and I steadily go through a whole jar every 1-2 months. But recently, Better than Bouillon has also come out with "no-chicken" and "no-beef" bases, which mimic the flavors of chicken and beef stock with combinations of vegetables and natural flavors that contain no animal products. Intrigued, I tried them both over the last few months. Although I'm not a huge fan of beef flavor, the beef stock works very well in a broccoli stir-fry or other dishes you would put meat in. The no-chicken stock has largely supplanted the vegetable base as my stock of choice. Its light and mildly sweet flavor is perfect with a little miso and some napa cabbage for a delicious winter soup - and yes, it does actually taste like chicken.

The organic mushroom base is the one BtB base which needs tweaking - it has a strange garlicy flavor that lacks the woodsy goodness of mushrooms, and unless they change the recipe I wouldn't buy it again. However, it's serviceable in a well-seasoned dish with other ingredients. Strangely enough, their non-organic mushroom base does not seem to suffer from the same flaws.

All-in-all, Better than Bouillon has earned a permanent place in my pantry. I have yet to try their more exotic flavors like ham, lobster, and chilli and can only assume their regular beef and chicken are as good as the "no-beef" and "no-chicken", but I'm confident in saying that Better than Bouillon's full line should well satisfy any stock needs you'll ever have.

Boston markets update

2008-11-30T10:37:00.000-08:00

Now that I don't live in Chinatown anymore, I'm not as in tune with the detailed goings-on at the Chinatown markets. But I do still make it up there once every couple of weeks to buy my favorite products: Vitasoy silken tofu, coconut cream, and lotus root starch.

Lotus root starch is little known to non-Chinese people, but it is a Chinese supermarket staple in Boston, even at smaller markets like Sun Sun. However, I seem to remember it being hard to find in markets in LA. It is just the dried starch made from lotus roots, and when mixed with some water or milk and heated to boiling either in the stove or in the microwave, it makes a deliciously sticky porridge which is perfect with a little brown sugar for breakfast in the winter. It's the northern Chinese equivalent of oatmeal or cream of wheat, I suppose. In any case, buy West Lake brand - other brands just aren't as good.

The Super 88 on Essex street is currently closed for renovation (see my two reviews here and here). Will it ever reopen?
Perhaps as a result of the Super 88 closure, the C Mart on Washington Street where I usually get groceries has been packed all the time lately, even in the middle of the day when I usually go.
As a result, I've been going to the C Mart on Lincoln street by the freeway. It's very close to the other Chinatown markets, but the lines are much shorter and the selection is a bit better too. Today, I spotted one of my favorite snacks there - vegetarian mushroom strips! In the past the only place I had seen them was Kam Man way out in Quincy, but now I can get them close to home. If you're interested - they're on the tall rack next to the tofu.

New England's foodie paradise

2008-11-14T08:13:00.000-08:00

Two of my favorite food shops of all time are located very close to each other in Norwich, VT and Lebanon, NH, and I got to visit both of them on my recent New England food-shopping spree.

I'm somewhat ambivalent about brand names. Quality and consistency are important, but often I find that brand cache is not a reliably good indicator of the underlying value of a product and takes on a life of its own due to rampant advertising. But in cooking, the brands I trust and always use are Trader Joe's (for most everyday items), Cabot dairy, and King Arthur Flour.

On my recent trip, I got the incredible opportunity to personally tour the King Arthur Flour headquarters thanks to Allison Furbish, KAF's media relations manager. Full disclosure - I got the opportunity because of this very blog!

First and foremost, what I love about KAF is the flour. If you normally bake with standard (Pillsbury, etc) or generic brands, you will notice an immediate difference in taste, texture, and overall quality if you switch to KAF. Their standard white flour is my all-purpose flour of choice, and I haven't used any other kind for years now even when the alternatives are substantially cheaper. Other flours from KAF I like are the Queen Guinevere cake flour, which produces cakes as fine and light as the softest down pillow; their Whole Wheat flour which delivers nuanced, whole-grain nutty flavor without being gritty; and their White Whole Wheat, which combines some of the flavor and nutrition of whole wheat with the texture and structural integrity provided by white flour. And yes, every baked good I've posted on this site was made with King Arthur Flour.

Although I realized when I came home that it's written right on the package, I didn't notice before that KAF is a fully employee-owned business. After walking through and meeting many of the employees who run the website, package the mail orders, and manage the enterprise, I can safely say that indeed, the employees do appear to be as chipper, dedicated, and genuinely nice as you can imagine. No kidding.

Another thing that you may not know is that KAF does not own any wheat farms or processing facilities. But it does impose strict quality standards on all of its flour (all of which is grown in the US) by protein content and other metrics - and clearly, they are doing something right because their quality is simply superb.

But now on to the two other things I love about KAF - its baking blog and its cookbooks. I came home from my tour with two enormous gifts, KAF's Cookie Companion and Whole Grain Baking cookbooks - an embarrassment of riches. The cookie companion has been my bedtime reading for several weeks now, and it's chock-full of unique recipes based around variations on the classics - the chocolate chip cookie, the sugar cookie, the oatmeal cookie, and so on. It gives detailed instructions on how to achieve the precise texture and flavor you want in a cookie, an approach which ensures satisfying results. I've owned the KAF 200th anniversary cookbook for some time now, and its bread and pie crust recipes are standouts (my favorite is its buttermilk pie crust). With the proliferation of baking cookbooks out there from 1001-recipe lists to celebrity-chef hard-core, KAFs baking books truly distinguish themselves through the quality of their recipes and the meticulous detail of their instructions and advice.

Similarly, although I hardly even make time to read the news anymore, much less food blogs, I have found myself drawn time and again to KAF's Bakers' Banter. Creative recipes, insightful writing, incredibly detailed instructions with photos, even cost breakdowns for every recipe. Just overwhelming quality that no other baking blog that I know of can match. 'Nuff said.

What I'm left wondering about though, is that for all of the virtues of KAF as a firm, its challenges going forward are far from trivial. The employees do clearly feel the tension between corporate growth and loyalty to its small-firm ideals. But if small firms like KAF self-impose limits to their growth, how can we translate these great ideals to the broader economy? Furthermore, most of KAF's employee's actually work in their catalog business which sells quality baking equipment, ingredients, and custom baking mixes via their website. I can only guess that much of the revenues from its catalog business comes through markups on resale products and the value-added of its processed mixes. I've never been one for baking mixes, and although the catalog's product mix is dependable and hand-selected, it's hard for me to imagine the growth potential of KAF's catalog business with the high labor costs from employee-oriented policies admist cutthroat internet retail competition. And to be honest, I see KAF's real value as a firm as coming from the unparalleled quality of its flours, cookbooks, and baking advice.

Another stakeholder-owned business (an organizational form which seems to flourish in this corner of the country) that also happens to be my favorite grocery store of all time is the Lebanon Co-op. Full disclosure - I do own a share of the Co-op. But alas, this post is already far too long, so I'll have to share the hidden treasurers of the Co-op next time.

As evidenced by KAF and the Lebanon Co-op, there clearly is room for wholesomeness in the business world. But the Lebanon Co-op and King Arthur Flour are far from naive hippie enterprises. They are run by smart, sophisticated people who deeply understand the virtues and benefits of naked capitalism - but choose a different road nonetheless because they also understand its flaws and are dedicated to proving that principled business can be good business. I can only hope that these working examples of the possible balance (and even synergy) between profits and principles are recognized by more firms in the global economy.

New England in Autumn

2008-10-29T21:38:00.001-07:00

Ever since we moved to Boston, Patrick and I have taken at least one trip every autumn to visit our favorite places in Vermont and New Hampshire, and it's always one of my most-anticipated events of the year. This year, our whirlwind tour included a visit to Gould Hill Orchards for apple-picking, the Cabot cheese store in Quechee Village, the Lebanon Co-op (my favorite grocery store of all time), and as an extra-special treat, the King Arthur Flour headquarters for a personal guided tour.

Crisp, juicy, and refreshingly tart, apples may be my favorite fruit. And I have never, ever tasted apples as good as the Northern Spies at Gould Hill Orchards in Contoocook, New Hampshire. But with that said, this year was a pretty big disappointment. We went to Gould Hill the Friday after Columbus day, and by that time there were slim pickings. Red, plump fruits taunted us from the tops of the trees, but alas, they were unreachable even on the pick-your-own pygmy trees bred for family day trips. Moreover, even the apples which were within reach were largely mottled and grainy, although the golden delicious' were quite good. I'm not sure whether we went too late in the season, there was a blight, or it just wasn't a good year at the orchard.

But we haven't given up on Gould Hill yet. Although the PYO apples were not so impressive, this year we got a variety peck of the wide array of unique varieties offered at the orchard store. Although I enjoyed the Ozark Golds and Winter Bananas, the Blue Pearmans with their firm flesh and assertive tart flavor were my favorite of all of the specialty varieties.

Next, the Cabot Cheese store. The great thing about the store in Quechee Village is that not only does it offer the full array of Cabot products, but you can also taste most of their flavored cheeses and assorted other products, even local wine. One of my favorite products of all time is Cabot's cheddar shake, basically powdered sharp cheddar cheese. This is not your ordinary pale and sawdust-like popcorn cheese. It truly embodies the pure, complex flavor of Cabot's aged cheddar in dry form. And it has that delightful super-concentrated kick of good mac and cheese mixes (don't you ever lick the seasoning packet?). Cheddar shake is absolutely wonderful in salad, where regular cheese gets soggy, and it's very good in mashed potatoes, on popcorn, and homemade mac and cheese mix.

Of course, their regular products are great too. Although Cabot is not labeled organic, the company is a cooperative owned by dairy farmers that maintains very high quality standards. Their products are hormone-free, and they use antibiotics only to treat ill animals, a practice the farmers believe is best for the health of the animals and the quality of the dairy. I toured their factory two years ago (another fun trip!), and although I was impressed by the high-tech equipment and scientific testing methods, the real trick is that it ages its cheese much longer than traditional "factory" cheeses to bring out the complex and nuanced flavor of true cheddar. Their extra-sharp is aged for more than a year, and the best batches are hand-selected for their premium labels.

My favorite is the Hunter's Sharp, the sharpest of all of their regular line. At this point, I only buy Cabot butter and cheese because not only does it taste good, but I trust in Cabot's quality and well-treatment of animals. Another thing I have noticed is that Cabot cheese never goes bad. Often, while other cheeses start to go moldy after a week left in the fridge after opening, there have only been a small handful of times I have ever seen mold on Cabot cheddar. I'm almost sure it's not just because we eat it so quickly.

Next time, I'll tell you all about the rest of my trip to King Arthur and the Lebanon Co-op.

Good Eats, Princeton

2008-10-14T05:16:00.001-07:00

I went to my good friend Virgi's wedding last month in Princeton, NJ, and while I was visiting I found some delicious eats in the quiet college town.

My first meal there was at the Nassau Street Seafood & Produce company right across from campus. This tiny market boasts dewy-fresh fruit, vegetables, and seafood at extremely reasonable prices. They even carried one of my favorite fruits of all time, muscadine grapes, for only $4 a pound! For lunch they serve seafood sandwiches made fresh to order with fries and slaw for less than $10. The deal is only slightly less generous than what we found in New Orleans, and in some respects even tastier. We ended up with a fried shrimp po-boy and a crawfish sandwich, which were both delicious with house-made sauce and soft, yeasty buns. After we refueled, there was more than enough left over for a late-night snack later that day, which we packed into those quintessential travel companions, plastic sour cream containers. All in all, The Nassau Street Seafood & Produce Company tops my list of good eats in Princeton.

Before heading to dinner at the Main Street Bistro, I couldn't resist stopping by Bon Appetit, a gourmet food shop in the same shopping center. It is a fairly spacious shop with a fine array of cheeses, meat and fish, dried fruits and nuts, chocolate, baking ingredients, and oils and vinegars. I picked up some chestnut flour for only about $4 / lb, and I can't wait to make some chestnut cake. The next day we stopped at Zen Palate for some tasty vegetarian mock-meat wraps.

Alas, one place I really wanted to go but couldn't find time to was Terhune Orchards, an orchard in the town of Princeton with many different kinds of fruits and vegetables for picking and purchasing. After an enjoyable wedding and a brief survey of the Princeton foodscape, I've surmised that Princeton is kind of like a miniature version of Boston, except everything is about 40% cheaper. It's a nice place to visit, and judging by the food, I wouldn't mind living there either.

The Heifer Project

2008-08-26T20:55:00.000-07:00

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It's been 10 years since I first volunteered for the Heifer Project, a nonprofit based in Arkansas which provides livestock and teaches sustainable farming methods to needy communities around the world. This year when I went back to Arkansas to visit my parents, I visited the Heifer Ranch for the first time in many years. The Heifer Project has grown a great deal since I first volunteered there, and I was pleased to see that it is still true to its principles of sustainbility and passing on the gift.

Although I kind of lost touch with the Heifer Project in my college years, I'm newly impressed with its simple yet powerful approach to economic development which emphasizes teaching long-term skills and requiring recipients to give the first-born offspring of their Heifer animals to other needy families. While a lot of nonprofits have good intentions, lifting people out of poverty is not as easy as just giving away aid, and Heifer is a stellar example of what works. For my birthday this year I set up an online gift registry through the Heifer website, and being able to donate two pigs and a tree to Heifer was incredibly invigorating.

As Heifer now sources gift animals locally, the Ranch in Perryville currently serves mainly as a learning center for youth groups and other visitors. In addition to camels, goats, horses, and other animals which represent those it sends to poor families, the ranch is home to several global village sites with working models of gardens, animal shelters, and homes which show how people live and survive around the world. The ranch is about 45 miles outside of Little Rock, so if you're in town I definitely recommend a visit. In addition, their new headquarters in Little Rock right next to the Clinton Foundation headquarters is housed in a sleek green building which also hosts tours for visitors.

I couldn't come home without getting some souvenirs, and of course I opted for edible goodies from the gift shop. I couldn't resist the cookie cutter in the shape of Heifer's jumping cow logo, and when I got home I made delicious vegan gingerbread cookies. In addition, I got mango and marula preserves from Swaziland and Divine Chocolate from the Kuapa Kokoo cooperative in Ghana. The preserves were an exotic treat - simple, honest, and not too sweet. Marula is a fruit native to Africa that has served as an ancient source of nutrition to humans dating back tens of thousands of years. Its flavor reminds me most of lingonberries from Sweden with almost malty overtones. Divine chocolate is clean and smooth with an excellent flavor for a mid-afternoon chocolate fix (or for breakfast, as I often take my chocolate!).

Frugal shopping tips

2008-08-13T12:39:00.000-07:00

After a few years living in Boston, I have honed my weekly shopping technique to a fine art in order to maximize the value of my dollars. The Haymarket is by far my most important source of deals, and I get at least 15lbs of fresh produce there every Saturday. For meat and most processed food items like (soy milk, frozen burritos, cheese), I go to Trader Joe's which offers consistently high-quality goods at no-hassle low prices. But for a few items like flour and cereal, Trader Joe's cannot match the sale prices at regular grocery stores like Shaw's because these stores take profit cuts on these items in order to lure customers to their stores. For these few items which go on sale regularly (my list includes King Arthur flour, Cabot butter and cheese, and Wolfgang Puck soup), I use the Shaw's searchable online circular to stock up when the sales are on.

Legal Test Kitchen

2008-08-09T08:09:00.000-07:00

Among the major cities I've been to in America, Boston may have the weakest restaurant scene of all. The prices can easily be twice what they would be for comparable places in L.A., and for reasons I'm not able to fathom, the quality is typically disappointing for a given price and style of restaurant. Tragically, the one true hidden gem I've found with amazing food at low prices was a placed called Noodle Alcove in Chinatown which served glutinously springy, slurpingly delicious handmade noodles. Within two months of my initial discovery, it went out of business. In any case, to stay within my $300 / month food budget, I eat out only a few times a year.

But when friends come to visit, I almost always take them to the Legal Test Kitchen in the waterfront district, close to the Silver line and the Institute of Contemporary Art. After Noodle Alcove's demise, it's by far the best deal in the city and serves some of my favorite dishes. As the name suggests, LTK is a testing ground for the Legal Seafoods chain, and although I find the regular Legal restaurants quite average with a penchant for serving dry, tasteless seafood, LTK seems to employ much more capable cooks, and the textures and flavors of the delicate seafood dishes are always on par. Best of all, the prices are at least 25% lower than what you would pay for the same dishes at another Boston restaurant (which would likely not taste as good either). The portions are generous (the large plate of mussels above was only $10), and the decor is sleek and stylish (another contrast with the stodginess of the regular Legals).

A favorite which seems to always be on the menu is the Niman Ranch burger (above) made with naturally-raised beef from the famous Niman Ranch. So far it's the best burger we've found in Boston, and it's served on wonderfully chewy bun with crunchy slaw and freshly-fried potato chips. It's a steal for $10.

Last time I went we splurged on the lobster pad thai. Although it's the most expensive thing on the menu, at less than $30 it's a pretty good deal for lobster in this town. The dish contained sweet, briny chunks of the meat from an entire lobster, and the pad thai was well-made with nuanced flavor.

I really haven't gone wrong with anything I've ordered at LTK, and paying for the check is a cinch with their self-check gadgets with which you can slide your own credit card and split checks with ease. When you're done with dinner, take a walk by the waterfront and catch some stunning views of the city. In this city, dining out doesn't get much better than this.

In defense of the word "food"

2008-07-10T08:30:00.000-07:00

I was listening to one of my favorite food podcasts, Good Food, this morning, and I had to turn it off because I couldn't stand listening to Michael Pollan describe his definition of food, which excludes anything "your grand mother wouldn't recognize as food" and all products containing unfamiliar ingredients. Now, there are many critiques one could justifiably lob at processed food, but making up a glib, common-sensical yet non-sensical definition of "food" is condescending, unscientific, and unnecessary.

By redefining the word "food" (which in my book, still means a non-poisonous organic substance that contains energy and nutrients) in over-simplified terms, he is sidestepping the real mechanisms which make some foods harmful. Needless to say, the level of recognition by one's grandmother has little relationship to a food's true nutritional value. Pollan seems to operate under the old truism "you are what you eat", so by syllogism, what is he implying about those of us who eat the foods he deems "food-like substances"? Are we human-like organisms? It's helpful to raise awareness about the delicious flavors of fresh produce and the techniques food manufacturers use exploit our natural tastes for fat and sugar in products that really don't taste that good. But playing word games only muddies the waters for the complex science of nutrition.

Pollan is a prime example of someone whose beliefs I fundamentally agree with and applaud, yet who just rankles me every time he opens his mouth or inscribes his words. Although Pollan is a fantastic writer and his hallmark book The Omnivore's Dilemma is both important and well-researched, he goes astray whenever he lets romanticized notions of rustic food get in the way of straightforward analysis, as in the last chapter of his book. I haven't read his latest, pompously titled In Defense of Food: an Eater's Manifesto, but judging by his accompanying New York Times Magazine article, it contains even more self-important effluvium. For a more balanced and less pendantic approach to navigating the food isles, check out less-flashy but more-grounded Marion Nestle instead.

High-magnitude brownies

2008-07-05T13:18:00.000-07:00

Since creating my piece de resistance, Belgian brownies with cappuccino ganache and caramelized cacao nibs, last year for the Battle of the Brownies (which I lost!) , I've been a little disappointed with the brownies I've made. Although airy, cake-like brownies are delicious, I was longing for a more sophisticated version of gooey, fudgey classic brownies.

So I went back to one of the contenders in my brownie bake-off from one of my favorite cookbooks, the Moosewood Restaurant Book of Desserts, but instead of using regular unsweetened chocolate I used Domori's Rio Caribe 100% bar. I love Domori chocolates for their unabashedly bold flavors. And although baking usually dulls the flavors of premium ingredients, the sheer magnitude of the chocolate flavor forcefully announces its provenance. The brownies really taste more like premium truffles than bake sale staples, and half of a regular-sized portion is more than enough for a substantial hit of sweet gooey fudginess. Yes, a batch of brownies will set you back $10 for the chocolate alone. But if you're going all out in search of a cure for the brownie blahs, these will definitely do the trick.

Moosewood Fudge Brownies
3 ounces unsweetened chocolate
1/2 cup butter (I prefer cabot)
2 eggs
1 tsp vanilla
1 cup brown sugar
1/2 cup pastry flour

1. Heat the chocolate and butter in a double boiler, whisking continuously until melted.

2. Cool the chocolate mixture to body temperature and whisk in the eggs.

3. Whisk in the flour, sugar, and other ingredients until blended thoroughly, but do not overmix.

4. Baked in a 350 degree oven for about 20 minutes until set.

Green tea fortune cookies

2008-06-21T09:19:00.001-07:00

I posted before about making Pichet Ong's delicious and delightful chocolate fortune cookies. Recently I tried the same recipe with green tea powder instead, and they turned out really well. It turned out that green tea powder has a stronger flavor and more pronounced astringency than cocoa powder, so I reduced the amount of powder used, but otherwise the recipe translated just fine.

I've also discovered that people love these fortune cookies. It seems that lately, just plain cookies just don't bring joy to people as much as they should because we're all so inundated with rich foods. But fortune cookies are both light and fun, and they allow you to put your own humor and creativity into the messages, so for the forseeable future fortune cookies are going to be my go-to cookie for gift-giving and dinner party purposes.

Green tea fortune cookies

Recipe Notes:
I made my own cookie stencil out of a yogurt lid (you want one at least the size of a cool-whip container), and even though I didn't manage to cut a perfectly round stencil it worked just fine.

Also, I found that three cookies per pan gave me just enough time to shape all the cookies before they cooled too much. Ideally, you would want two baking sheets (each with a silicone mat) so you can prepare the batter for one sheet while the other is baking. Before baking the cookies I folded all of the fortunes so they made slight "V" shapes, fitting the shape of the cookies, which made them easier to fold into the cookies. It takes a few tries to get the hang of folding the cookies into shape, but it's surprisingly easy once you get the hang of it.

These cookies keep very well and can be stored for over a month in an airtight container.

Special equipment:

Silicone baking mat
Offset spatula
Tuile stencil or large plastic yogurt container lid with 4in round hole cut in the center (do not cut through to the edge)
36 fortunes written on 3.25in strips of paper
Empty egg carton

Ingredients:

3/4 cup (115 g) all-purpose flour (I prefer King Arthur)
3/4 cup (90 g) confectioner's sugar (I used Trader Joe's brand organic sugar)
1/4 cup unsweetened green tea powder (I used the )
1/2 cup butter, at room temperature (I prefer salted, for extra kick)
3 tbs corn syrup
1/8 tsp salt
4 large egg whites

Sift together flour, confectioner's sugar, and cocoa powder in a medium bowl.
In another bowl, beat together butter, corn syrup, and salt until combined. With the spped on low, add the flour mixture and then the egg whites until the dough is evenly mixed.
Preheat oven to 350F. Set out an empty egg carton to use as a cooling rack for the cookies
Place the baking mat on the cookie sheet, and set the cookie stencil on the mat. Place about 1tsp of batter in the stencil, and spread evenly into a very thin, smooth circle using the offset spatula. Place about two more cookie circles on the baking sheet.
Bake until the tops of the cookies are just dry, about 5 minutes. Remove the pan from the oven, and working as quickly as possible, place a folded fortune in the center of each cookie. To shape a fortune cookie, gently release from the pan using an offset spatula and fold in half (with the "V" of the fortune pointing toward the open edge), holding the cookie with the folded edge facing up. Quickly fold again so the pointed ends meet, making the classic fortune cookie shape. Once formed, gently place each cookie into the empty egg carton to cool. If you work too slowly the cookies will become brittle as they cool. You can try reheating them in the oven for about 30 seconds to make them pliable again, but you can also just eat them and start over with a new batch ;-).
Repeat step 5 with the remaining batter. Once completely cooled (it only takes a few minutes), transfer cookies to an airtight container.

Chocolate tasting 2008

2008-06-14T08:04:00.000-07:00

This April, for the second year in a row, I organized a chocolate tasting for MIT graduate students, families, and postdocs (click here for the complete guide). I had planned to forgo the event this year to focus on my research, but a little prodding and imagining all of the new and exciting chocolates I would find was all I needed to give it another go. Here's a summary of my discoveries.

The price of chocolate is way up. While I had more than 90 types of chocolate at last year's tasting, there were only about 30 this year and lower quantities. Shipping seems to cost about double what it did last year.
Online Shopping

While last year I trolled the web and visited every single chocolate shop in the city of Boston, this year I kept things simple and purchased all of the chocolate from three online shops: Surfas, chocosphere.com, and Lake Champlain Chocolates.

Surfas, my favorite food store both online and offline, has started offering a wide array of premium chocolates from Cacao Barry, Felchlin, and Valrhona in two-pound packages at the best prices on the web.
This year I also shelled out 3 bucks at Surfas for a tool everyone who works with bulk chocolate should have: a chocolate chipper. For home use I typically buy chocolate in 10lb blocks, and in the past I spent hours chopping chocolate, dulling my knives and fatiguing my hands. But with this simple and sturdy device, I can chop an entire 10lb block in a matter of minutes into manageable chunks for melting or eating.
Chocosphere is to my knowledge the most extensive chocolate shop on the web, and their prices are among the best as well. If there's any one-stop-shop for chocolate, Chocosphere is it. Their orders have always arrived promptly and in good shape. I especially like their Bargain Basement, where you can get discontinued and expired (but still good!) chocolates at steep discounts.
Lake Champlain of Vermont has been one of my favorite chocolate shops, and this year I ordered some of their select origin squares for the chocolate tasting.

Chocolates

This year's selection was almost completely different from last year's, and the new brands I tried were Felchlin, Claudio Corallo, and Cacao Barry
The awe-inspiring story of Claudio Corallo is detailed on his website and in books such as Bittersweet by Mark Rosenbaum and The Chocolate Connoissuer by Chloe Doutre-Roussel. And his chocolate is one of my all-time favorites. It contains no lecithin or vanilla, highlighting the clean, powerful flavor that is characteristic of all chocolates from Sao Thome. I particularly like the 80% bar with crystallized sugar that crunches and crackles in your mouth, but those who prefer the smoothness of traditional chocolate may choose the 75% bar instead.
I also really enjoyed Felchlin chocolates. I never had them before the chocolate tasting this year, and now they are probably my favorite bulk chocolate. They are incredibly smooth and masterfully balanced, and I enjoyed the Cru Savage from Bolivia most of all with its deep, dark flavor yet delicate finish. I also really liked the Arriba variety.
In contrast, Valrhona has been a big disappointment both this year and last year. Widely touted by chocolate snobs as the world's best premium chocolate, Valrhona costs 50% more than Callebaut and about the same amount as Felchlin, which is far superior. Valrhona's Feves have a characteristic waxy texture and flavor, and their flavors are simply lackluster. For my bulk chocolate needs, I still rely on Callebaut, which for some reason is routinely snubbed by the same chocolate critics which adore its French rival. Callebaut's standard bittersweet chocolate is crisp and flavorful and stands up to all but the most exacting recipes. I only wish I could find Callebaut's special origin chocolates in the US - the Kumabo African blend I bought in Barcelona was amazing. I've scoured the web for them and even emailed the Callebaut salespeople, but they're just not available!
Cacao Barry, which is owned by the same firm as Callebaut, drives a middle road between standard Callebaut and Felchlin. They're not as smooth or well-balanced as the Felchlin ones and can have a bit of a chalky and bitter undertone, but they're also not as expensive. I liked their St. Dominique the best, but the Concorde and Ghana are good as well.
I also tried Callebaut's strawberry-flavored white chocolate chips. They're cute, but the flavor tastes artificial. Go with their creamy and delectable cappuccino or caramel milk chocolate chips instead if you're looking for flavored chocolate chips.

All-in-all, the chocolate tasting was great fun, and it brought lots people together in a stimulating and satisfying experience.

Vegan ice cream

2008-05-20T17:35:00.000-07:00

I've been trying out recipes for vegan ice cream for a while, and I've finally come up with a foolproof recipe that makes a rich, creamy ice cream with wonderful texture and flavor. The recipe uses my current favorite dessert ingredient: coconut cream. Coconut cream is basically the dense, semi-solid layer that sits atop cans of coconut milk when you first open them, and it is a very good substitute for heavy cream (although the one thing you can't do with it is make whipped cream). I purchase 13.5oz cans of Wonderfarm brand coconut cream at C Mart in Boston for $1.09 each.

Below is the recipe for basic vanilla ice cream. The main steps are simply heating up the ice cream base to dissolve the sugar and incorporate the flavor, chilling the base in the refrigerator to cure the texture and meld the flavors, and freezing the mixture in the ice cream maker. One extra step I added in this recipe is stirring in a small amount of liqueur right before putting the semi-frozen ice cream in the freezer. Because the vegan ice cream has a high water content and no eggs, the alcohol helps prevent it from freezing too hard. Rum works well for vanilla ice creams, and for chocolate ice cream amaretto and Frangelico are quite good.

Once you get the hang of the basic recipe, you can build on it to add whatever flavors you can think of. To make chocolate ice cream, stir in 1/3 cup cocoa powder into the ice cream base. One of my favorite flavor combinations lately is chocolate and banana, so I also included instructions on making chocolate-banana swirl ice cream. To swirl in ingredients, make the base as usual and swirl in the additional toppings at the very end so they don't interfere with the freezing process. If possible, just fold them in by hand.

My ice cream maker is the Cuisinart ICE, and I am very happy with it. The model is simple and easy to clean, and it has worked well every time. Priced at $50 (although you can often find barely-used ones on Craigslist), I think it's the best ice cream maker on the market right now. One thing to watch out for is that if you keep your freezer temperature fairly high like I do, you may want to turn it down a bit lower while you're chilling the ice cream bowl. The main thing which can go wrong when you're making ice cream is that your bowl isn't cold enough so not enough ice crystals are able to form.

This recipe really couldn't be simpler, and it offers many advantages to dairy ice creams: you don't have to purchase and refrigerate the cream, it's cholesterol free, and I think the texture is actually better than dairy ice creams. Something in coconut cream just creates this rich, mouth-filling texture that's just what you want in a premium ice cream. While you're enjoying the wonders of vegan ice cream, check out this cool introduction to the science of ice cream.

Ingredients
3 cups coconut cream (two 13.5oz cans works fine)
1 scant cup sugar
1 vanilla bean, split and scraped OR 2 tsp vanilla extract
2 tsp liqueur or rum (your favorite variety)

One day ahead of time, put the bowl of your ice cream maker into the freezer to chill.

Combine all ingredients except the liqueur in a large saucepan and place over medium heat. Stir occasionally and watch carefully to make sure the mixture does not boil over. Remove from heat and allow to cool slightly. Remove the hull of the vanilla bean, pour mixture into lidded container and cool to room temperature. Reserve the vanilla bean for another use. Refrigerate mixture overnight to mellow flavors and texture. Freeze mixture in ice cream freezer according to unit's instructions. The mixture will not freeze hard in the machine. Once the volume has increased by 1/2 to 3/4 times and reached a soft serve consistency (about 25 minutes), spoon the mixture back into an airtight container.

Gently stir the liqueur into the semi-frozen ice cream. Freeze at least 1 hour before serving.

Variations
For chocolate ice cream, add 1/3 cup high-quality cocoa powder (I prefer Valrhona) to the base and stir in while the mixture is being heated

For chocolate-banana swirl ice cream, add two mashed ripe bananas and 1/4 cup melted chocolate (cooled to room temperature) just before the ice cream is done churning.

My love affair with boba

2008-05-07T08:17:00.001-07:00

There are few pleasures quite as childishly delightful as drinking boba tea. The slight astringency of the tea, the milky sweetness of the flavoring (be it taro, lychee, or simple milk tea), and of course, the slippery, chewy balls of boba themselves.

Although it's called tapioca, boba is actually made of sweet potato starch, and its long chain carbohydrates give boba its unique sticky texture that Asians crave. I recently made my first visit to a boba shop in Cambridge at Boston Tea Stop in Harvard Square. The boba there was ok. At least the boba wasn't limp or slimey as truly bad boba can be, but it was nothing special. My favorite boba shop is still Boba World in Alhambra, California, which I lived within walking distance of for a whole year. Boba world's high turnover meant that the boba were always fresh and cooked to perfection, and it offered a mind-boggling variety of fresh and delicious flavors. Although some of their flavors were from powder, they were high-quality powders and they added touches like fresh fruit, fresh whipped cream, and authentic oreo cookies. At one point I probably spent $15 a week on boba alone. Boba World also adjoins Noodle World, my favorite late-night Asian diner offering comfort-food noodles and other dishes from around the continent.

But the best boba I've had probably comes from Tea Station, also in Alhambra. Tea station uses tea from TenRen, one of the better tea purveyers available in the US (available at Ming's and the larger Super 88's in Boston). Although Tea Station charges about a dollar more for boba tea than Boba World. You can really taste the quality of the tea, and they offer several kinds of tea along with your milk and flavoring. My favorite was the sweet and herbal chrysanthemum.

But alas, heart-achingly good boba just cannot be found in Boston. But the good news is that you can have fun and save money by making boba yourself.

You can find dried boba at most larger Asian supermarkets, including Ming's and the Super 88's in Dorchester, Allston, and on Harold St. in Boston (see my markets page for store info). I got this 2.2lb package of dried boba at Ming's for $2.99! While you're at Ming's pick up some green tea or Thai tea powder for your drinks. While Ming's has the best tea selection in Boston, the Super 88 in Dorchester has by far the best selection of boba tea flavoring powders. These supermarkets also usually carry the jumbo straws needed to drink boba tea (these can also be found on the internet). Flavored syrups such as those made by Torani and Monin also work well with boba tea.

Making boba is also incredibly easy, and I usually make a pretty big batch at a time to satisfy my boba fix for a week at a time.

Take a few cups of dried boba, cover it generously with water in a large pot, and soak for about three hours.
Turn on the heat and bring the boba and water to a boil
Boil for about 10-15 minutes, testing every five minutes for doneness. The boba should not be dry or crumbly in the center, and it should be chewy without being slimy.
If you're not using all of it immediately, you need to store the boba in a refrigerator with some sugar syrup. The sugar will help the boba keep its shape and prevent it from forming a gigantic sticky mass. Use about 1/4 cup sugar (or green tea / thai tea powder containing sugar!) mixed with 1/2 cup water for each cup of cooked boba. You can substitute honey, maple syrup, or flavored syrup for the sugar syrup. Cool completely before storing in the refrigerator

The boba can become a little hard in the fridge, so simply heat it gently on the stove or in the microwave with a little milk or water to enjoy it in its full glory. I actually also love to eat boba on its own without the tea as a jumbo version of tapioca pudding.

Super 88 - Dorchester (South Bay Center)
(617) 541 2288
101 Allstate Rd.
Dorchester, MA 02125
Monday - Sunday 8:30am - 11:00pm
Map

Ming's Supermarket
(617) 338-1588
1102 Washington St
Roxbury, MA 02118

Whole Foods Evil Watch: Pasadena edition

2008-04-26T16:53:00.000-07:00

Frankly, I have better things to do than rail against Whole Foods. I haven't stepped foot inside a Whole Foods since the chocolate incident last year, and I have happily gone about my life ignoring its very existence. However, a hatred of Whole Foods really seems to strike a chord with many people, and I owe many of my readers to this sentiment.

An excellent article in the LA Times just confirms my intuition and the numerous comments I've gotten about the hypocrisy and cynical subversiveness of Whole Foods's marketing strategy. While Whole Foods has made much of the "sustainable" building design of its new store in Pasadena, California, the Times's architectural critic astutely points out the obvious: much like a hybrid SUV, a mammoth 76,700 new building with 280 subterranean parking spots is decidedly NOT green, with or without Neopolitan bamboo.

I would like to draw a contrast again between Whole Foods and Wal-Mart. While the anti-Whole-Foods movement is still somewhat limited, Wal-Mart is still nearly universally portrayed as the epitome of big, evil business. However, I would argue that Wal-Mart is actually a more honest firm that contributes more to society despite its substantial shortcomings on labor conditions and in squeezing its suppliers. While Whole Foods generates "value" from marketing, Wal-Mart generates value through dramatic (if mundane) improvements in supply-chain efficiency.

What I like about Wal-Mart is that it's transparent about its environmental intentions. In fact, recently, CEO Lee Scott, Jr. flatly declared that “We are not green.” But what Wal-Mart does care about is cost, and to the extent that it contributes to increased costs, environmental waste. By framing Wal-Mart's green objectives in the context of its broader corporate mission - to lower costs and attract customers seeking deals - Wal-Mart is being more honest and transparent about its goals. The alignment of environmental and business goals shows in the results - although Wal-Mart may fall short of its mission "to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain our resources and the environment," it has made huge strides such as improving fuel efficiency by 25% and reducing cardboard and packaging waste (according to this article in Alternet, hardly the most likely proponent of Wal-Mart).

So anyway, it's yet another strike against Whole Foods. I just hope more of the liberal, well-educated, otherwise caring and sophisticated individuals who frequent Whole Foods see past its greenish veneer and realize what a high price they're paying to simulate environmental sustainability.

Frugal eating

2008-04-16T21:23:00.000-07:00

I just read a very well-reasoned article in Slate asking the question of why, in the face of staggering recent rises in food prices, contemporary food journalists remain silent on the costs of the meals and ingredients they review.

An excellent recent book which puts our food spending into perspective is Hungry planet, a photobook which profiles 30 families from around the world and displays photos of the food they eat during the course of a week. That book, along with a rather extravagant culinary journey to New Orleans in January, inspired me to set a goal for myself: to spend only $300 per month on food for my two-person household over the course of 2008. It isn't too much more than I normally spend, but setting this goal has made me much more aware of my discretionary food spending and really makes me think about what real poverty must mean - $150 per month is five times the $1 per day "poverty line" that the World Bank uses to identify the billion people on Earth who live in direst poverty.

As a longtime proponent of frugal eating, I have come up with a number of techniques over the years to stretch my budget in Boston while still eating interesting and delicious foods.

Shop at the Haymarket. I purchase about 15-20 lbs of produce there every Saturday, and it never costs me more than $10. The regular prices are already extremely low. A dollar can buy five pounds of potatoes, four bell peppers, or a quart of strawberries on any normal day. But every week, you'll see that certain varieties of produce are abnormally abundant and therefore selling at reduced prices, so go there with an open mind about what to cook in the next week. Every week, you'll also find a few vendors selling organic products at the same low prices as conventional produce.

If you are really looking for deals, go there around 4pm on Saturdays - that's when the vendors liquidate their stocks and when 10lb boxes of produce for $1 can be found. I often take advantage of these windfall deals and freeze the excess fruit. Furthermore, I'm fairly sure that the vendors at the Haymarket purchase excess produce that supermarkets and other shops can't sell, so you're also helping reduce waste of good food that would be fed to pigs or trashed.
Find exotic ingredients at ethnic markets instead of gourmet food shops. I'm always finding new and interesting new foods at Chinese, Indian, Middle Eastern, and other ethnic markets around town. Oftentimes, the same ingredients (e.g. spices, grains, and seasonings) that sell at extravagant prices at an American grocery store can be had for a few dollars at an ethnic shop. In my book, shopping for exotic groceries and then looking up recipes for them beats shoe shopping any day.
Shop at Trader Joe's. They sell a well-edited and ever-changing supply of upscale groceries, and I find that their prices *and* quality beats out Whole Foods by a wide margin. However, I wouldn't buy any fresh produce there. I dislike the plastic wrapping that surrounds every piece of fruit and vegetable, and much better prices can be found at the Haymarket.
Check the Shaw's online circular for deals. While Trader Joe's has most things I buy at better prices than Shaw's, when things go on deep discount they can be cheaper at Shaw's / Star Market. I keep a list of the things I like to buy from Shaw's and every Friday I check the online circular to see if any of them are on sale.
Of course, trying to eat on $150 a month means that eating out has to be limited. But I make up for it by inviting friends over for frugal vegetarian dinner parties. Deep-friend cauliflower parmesan and baked macaroni and cheese, homemade dumplings made in bulk and frozen, and of course vegan cake make are always crowd-pleasers.

Frugal eating can also save energy, but convenience foods don't necessarily use more energy, as this article about the energy trade-offs of cooking from scratch versus cooking with ready-made foods shows. The main findings are that while home cooking uses less energy in processing, it uses more energy at the store and generates more waste. Thus, there is not a large difference between the energy it takes to bring a from-scratch meal to the table versus a ready-made one. As an added note which came out of the Swedish study - eat your potato skins!

Here is another nice article about food and sustainability.

Pascale's Manale

2008-04-04T18:40:00.000-07:00

I've always found it tricky to find good places to eat while traveling. The problem is that I have different preferences than most travelers and diners, so site's like Frommers, Yelp, and even Chowhound are of little use. Most cities have a handful of famous restaurants that cater to the tourist crowd, and these are sometimes justifiably known for their specialties. However, if tourists do one thing well, it's herding, so these famous spots rarely live up to their hype, long lines, and price premiums. When I go to a new city, I have no desire to go to a restaurant that everyone has heard of just to say that I went there, and if the best restaurant happens NOT to be filled with camera-toting shorts-wearers (or in the case of my New Orleans trip, economists), all the better.

Luckily, my uncle has been living in New Orleans for more than a decade, so he told me exactly where I should eat during my trip there this January. One of my all-time favorite dining experiences was at Pascal's Manale, a nondescript little joint in a quiet stretch of uptown New Orleans. I was hankering to try Pascal's Manale my entire trip because my uncle told me it was famous for BBQ shrimp. I imagined a plateful of grill-charred local shrimp slathered in smoky-sweet sauce.

But what I got was something completely different, and much, much better than any BBQ shrimp I could have imagined. The sauce is an elegant mixture of butter and spice which is uniquely New Orleans and difficult to identify with any other barbecue sauce I've ever had. The shrimp are more like giant prawns, grilled with their shells and heads on to best preserve their sweet and intense flavor. The shells are edible from the high heat, and to fully appreciate the shrimp you really should eat the shells - and the heads. The shrimp shells are like thin, impossibly concentrated versions of the shrimp crackers you can get at Asian grocery stores, and the heads - they hold a complex and intoxicating stew of rich fat and briny flavor. Once you go head, you'll never go back. But even aside from the heads, the standard parts of the shrimp are probably the most outrageously delicious you'll ever eat. The tails are lobster-like with thick chunks of meat that are perfectly chewy yet yielding. We also got the Drum Manale special, a fillet of local drum with the same barbecue sauce and topped with some smaller barbecue shrimp tails. The drum special was also incredibly delicious and unique, and the two entrees made for a meal we will never forget. Better entrees simply cannot be found in this country at $20 and change.

Pascal's Manale
1838 Napoleon Avenue
New Orleans, LA 70115
pascal@neworleansrestaurants.com