Saturday, November 22, 2008

Label Wars

Over at Reason they took a look at the issues with using Food Miles as a way to determine the carbon footprint or the environmental impact of the food you are eating.

I found this passage particularly amusing:

Nevertheless, organic food activists in Britain's Soil Association argued for lifting the organic certification from Kenyan food exports because they are brought into Britain on airplanes. Some high-end British retailers have begun slapping a label featuring an airplane on various food products to indicate that they have been air freighted. Kenyan growers cannily responded by launching their own "Grown Under the Sun" label, pointing out that their agricultural production methods emit far less greenhouse gases than many crops grown in Britain do.
Personally, I would go with the Kenyan growers.

9 comments:

Laurent GUERBY said...

Random thought: there's no real difference between "food miles" and "unemployment as defined by economists", both measures just omit an important part of the issue with no good reason at all: energy other than transportation for "food miles" and "considered inactive" for "unemployment".

At least "food miles" is a correct label whereas "unemployment" as defined by economists is vastly misleading.

Fat Knowledge said...

Laurent,

Interesting connection.

Did you know that the US actually measures 6 different types of unemployment based on different definitions? I actually didn't know about these other types of unemployment measurements until recently.

U4-U6 actually do include many "considered inactive" individuals and I think might alleviate some of your concerns. But, I still don't think any of them take account of the 1.5(?) million people that currently are in jail.

I also don't know how well they correlate with each other? Do they always move in lock step or do they go in different directions at different times?

Laurent GUERBY said...

Thanks for your reply. Yes I knew about "degree of unemployment" in various national statistics (at least USA and France). Headline "unemployment" numbers cited by the press are not "normalized", OECD publishes unemployment numbers that are supposed to be normalized.

What led me to study "unemployment" in details is the following fact:

"""For the fourth quarter of 2004, according to OECD, (source Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the USA and 7.4% in France. At the same time and for the same population the employment rate (number of workers divided by population) was 86.3% in the U.S. and 86.7% in France.

This example shows that the unemployment rate is 60% higher in France than in the USA, yet more people in this demographic are working in France than in the USA, which is counterintuitive if it is expected that the unemployment rate reflects the health of the labor market"""

I added it to wikipedia EN and FR, but someone removed the data in june 2008, I added it back:

http://en.wikipedia.org/wiki/Unemployment

Also, within the same country at different point in history with the same employment rate the unemployment rate can be very different: with unemployment measure at same 4%, you have 12% of the USA 25-54 men population not working in 2008 whereas it was 9% in 1980: a one third difference (source: a NYT graph with unemployment and employment but I don't find the URL anymore).

Some links:

http://www.ritholtz.com/blog/2008/11/discussing-unemployment-rate-and-job-loss-on-npr/

http://www.ritholtz.com/blog/2008/11/two-little-noted-features-of-the-markets-and-the-economy/

http://www.ritholtz.com/blog/2008/06/unemployment-reporting-a-modest-proposal-u3-u6/

Fat Knowledge said...

Laurent,

For the fourth quarter of 2004, according to OECD, (source Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the USA and 7.4% in France. At the same time and for the same population the employment rate (number of workers divided by population) was 86.3% in the U.S. and 86.7% in France.

Interesting, what accounts for the difference?

Comparing between countries, it appears that the normalized versions (that I look at in The Economist) aren't an apples for apples comparison.

Thanks for the links.

I thought this graph of the various U levels shows that for the most part they move in lock step: http://www.ritholtz.com/blog/wp-content/uploads/2008/11/u1-7.png

So, just looking at the US, if you know what one level of unemployment is, you can make a good guess as to the other ones.

But, you do raise a good point that for different sub groups (such as men 25-54) their rate of unemployment might differ. I think I remember that in earlier in this decade that the unemployment rate for those with college degrees had spiked up, which hadn't happened in a long time. Some additional numbers broken out by different demographics would be useful as well to have a greater understanding of where unemployment is occurring and how best to address it.

Laurent GUERBY said...

My main issue is that I've found zero economists working on this discrepancy (no paper, no nothing). All the economists I asked said at first the data was wrong, then they checked then ... nothing, and they keep using unemployment rates...

One possibility is that there is less ghettoisation in France than in the USA, that is less people are totally excluded from "society" so overall more are still hoping to get jobs. But I really don't know and I would expect economists to be on it...

The economists shows non normalized version ("national statistical offices"), only OECD data is normalized

About the U1/2/... graph it doesn't have the employment rate.

Hopefully I found out that I had kept a copy of the graph with unemployment and employment, see here:

http://guerby.org/images/jobless_vs_unemployed.png

For subgroups, I used men 25-54 because it is the part of population where they have to work in all cultures:

- Younger might depend on preferences/public funding for long studies,
- older may depend on retirement rules and health care,
- women employment rate has a big historical trend with various delay between countries.

BTW, the NBER explicitely says it does not use unemployment numbers and prefers various employment rates to date recessions:

http://wwwdev.nber.org/cycles/dec2008.html

"""Q: What about the unemployment rate?

A: Unemployment is generally a lagging indicator, particularly after the trough in economic activity determined by the NBER. For instance, the unemployment rate peaked 15 months after the NBER trough month in the 1990-91 recession and 19 months after the NBER trough month in the 2001 recession. The unemployment rate (which the committee does not use) tends to lag behind employment (which the committee does use) on account of variations in labor-force participation."""

Fat Knowledge said...

Interesting, thanks.

I would think that some economist would want to look into the discrepancy between US and French employment and unemployment rates. I would definitely want to read about it.

On the men 25-54 numbers, does the fact that the participation of women has been increasing correlate at all with the decrease of men? Is it possible that men are staying home with the kids, or being supported by women?

Laurent GUERBY said...

That might be a possibility, but as I said I know of no economist looking into this statistical discrepancy in the most cited measure in economics ...

Laurent GUERBY said...

Some data sources on this topic.

For 2007 for male aged 25-54 according to

ftp://ftp.bls.gov/pub/special.requests/lf/aat3.txt

(annual average in thousands)
Civilian noninstitutional population (1): 62,081
Employed: 54,328
=> Direct jobless rate 12.5%
For fun, the "unemployment" total joke statistic: 3.7%

For the same period and population group according to:

ftp://ftp.bls.gov/pub/special.requests/lf/aat8.txt

Full time (>= 35 hours per week) employed: 46,879
=> Direct jobless + part time (< 35 hours per week): 24.5%

And this was an average over 2007. Not far from 25% isn't it?

For 2007 to 2008 According to:

ftp://ftp.bls.gov/pub/suppl/empsit.cpseea3.txt

For men 20 years and older (unfortunately I couldn't find 25-54
statistic, anyone?) "unemployment" total joke statistics went from 4.4%
to 7.2% from december 2007 to december 2008. Population gained 886,
number of employed went down 2,211 so 3,097 more out of job starting
with 104,197 population in december 2007. Since detailed data
is not available I won't do funky projections but at least the direction
is clear...

(1) According to
http://www.census.gov/popest/topics/terms/national.html

Civilian Noninstitutionalized Population - The civilian population
excluding persons residing in institutions. Such institutions consist
primarily of nursing homes, prisons, jails, mental hospitals, and
juvenile correctional facilities.

According to
http://www.ojp.usdoj.gov/bjs/prisons.htm
2,293 US adults were in jail or prison in 2007

According to
http://www.ojp.usdoj.gov/bjs/pub/ascii/csfcf05.txt
More than 90% of prison population was male in 2005

So yet more statistics manipulation.

Fat Knowledge said...

Good stuff man.

I came across this article as well that you might like.

I want to blog about the point you bring up and some stuff on education and unemployment as well.

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