Peanut Butter, Pasta, and Relative Prices
By Amy Willis
EconTalk host Russ Roberts once again delved into the world of charity, chatting with the University of Chicago’s Canice Prendergrast about an innovative allocation scheme he and a group of economists developed for Feeding America.
1. Several times Prendergrast notes how the Feeding America served to educate all those involved. Speaking of the food bank managers, he says it was “not hard to educate them on the benefits of choice.” At the same time, some managers were uneasy with using prices and an auction to determine the allocation of food. How did the structure of the system implemented by Prendergast and his team resolve this tension?2. One of the benefits of the program that Prendergast notes is the newfound ability of local food banks to customize their requests for donations. Did you hear anything about the various foodstuffs discussed that surprised you (perhaps as Roberts was surprised by peanut butter)?
3. Roberts and Prendergast discuss the idea of cash transfers to the needy in lieu of goods. Revisit this episode with Chris Blattman. How do you think Blattman would assess the efficacy of the Feeding America program? Would poor people be better off if Feeding America scrapped the trucks altogether and focused on cash? Would such a substitution be possible?
4. Prendergast notes that one of the most important things he learned from his experience with this project was “learning how to listen.” Have you had a similar such experience? What happened, and what lessons did you draw from it?