Chicago economist Steven Levitt recently conducted a blog-based experiment to test how people from different academic backgrounds explain economic phenomena. Levitt posed the question, "Why are we eating more shrimp?" (warning: due to the number of comments, this link may crash your browser). He then asked readers of his Freaokonomics Blog to post their answers and academic backgrounds in his comments section. No cheating allowed.
I thought the likely answer was rather obvious—the rise of shrimp farming has pushed down global prices for shrimp—but perhaps that's because I once did some research into the environmental problems associated with global aquaculture. In any case, the results of Levitt's little experiment are fascinating, and they offer some support for the theories of Shane Frederick, the MIT marketing professor whose inquiry sparked Levitt's interest:
As Shane conjectured, non-economists (i.e., anyone who didn’t major in economics) mostly thought that we are eating more shrimp because of demand-based reasons (e.g. the movie Forrest Gump, a rise in the number of vegetarians who will eat shrimp, etc). Fifty-seven percent of non-econ majors gave only demand stories, versus 24 percent who gave only supply stories. The rest had a mix of supply and demand explanations.
As for the real world consequences of shrimp farming, here's something to think about. Shrimp farming is one of the major reasons why mangrove forests around the world are dying out, particularly in Asia. So what? Well, mangroves, which are concentrated in tropical and subtropical latitudes between 32º N and 38º S, offer protection from extreme weather events such as the tsunami that did so much damage in Southeast Asia back in 2004.
What's more, mangroves are a prime link in the ocean's food chain, and they can filter pollution from land-based agriculture. But shrimp farms, if they aren't properly designed and sited, tend to destroy mangrove habitat. And as delicious as those bargain prawns might be, they won't do you much good when the next tsunami hits. When you think about it, maybe farm-raised shrimp isn't so cheap after all.
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