AlexSchell comments on How much does consumption affect production? - Less Wrong

4 Post author: erratim 05 January 2015 03:51PM

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Comment author: AlexSchell 06 January 2015 07:11:54AM 3 points [-]

To get the retailer to buy less chicken, you'd have to cut consumption enough to exceed their threshold for allowable waste.

This strikes me as compatible with what gjm said in the sentence before the one you quoted. Some chicken-buying decisions will make no difference, and others are going to have a disproportionate effect by hitting some threshold. In aggregate, chicken purchases by a supermarket have to equal their chicken sales (plus inventory breakage), so a pretty good guess for the expected impact of buying one less chicken is that one less chicken is going to be produced. Richard Chappell discusses a very simple model here. I haven't seen believable models where in the long run there is substantial deviation from one-for-one.

Comment author: erratim 06 January 2015 02:43:55PM *  1 point [-]

Yes; another way to think of this is, "How do you model waste?"

  • If you think waste is best modeled by a fixed percentage of all production, then our best guess about the waste is that it changes proportionally with consumption. We don't get to magically assign our consumption to the 'waste' category without highly specific information (such as, "I found it in a dumpster").
  • If you expect the percentage of waste to grow/shrink with industry size, that could be an argument for slightly less/more than 1:1 effect (I'd put it in the "Gains to scale" category, even if it were negative). But I've never seen someone make that argument or attempt to model it.

Richard Chappell discusses a very simple model here.

Thanks for sending this; the 'chunky fallacy' comes up frequently when discussing this issue. Unfortunately, he explicitly endorses using short term elasticities at the end of his article.

Comment author: gjm 06 January 2015 10:47:25AM 1 point [-]

a disproportionate effect by hitting some threshold.

Exactly.

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