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Witness to the history of agricultural and resource economics at Berkeley

David Zilberman, professor, agriculture and resource economics | March 8, 2016

Forty-three years ago I arrived to Berkeley to begin my PhD in agricultural and resource economics (ARE), and without realizing it, I witnessed the evolution of this great department. As the department faces new challenges, I realized that the evolution of ARE has important lessons for its future and for university departments in general.

One important lesson from history tells us that the research agenda and teaching emphasis of a department is in constant motion. When ARE was founded after the Giannini gift in 1928, the emphasis was on farm management to help farmers make better decisions. Speaking with Harry Wellman, the former chair of ARE, dean of the College of Agriculture, and eventual president of UC system (he has two buildings named after him), I learned that in the 1930s the department introduced research in agricultural markets and policy.

adelman

galbraith John Kenneth Galbraith


John Kenneth Galbraith, one of the first graduates of the department, was an outstanding scholar of both areas. Agricultural policy mixed institutional and analytical approaches, but Wellman added the third dimension of quantitative analysis.

In the 1940s, he brought on George Kuznets, a psychologist at Stanford, to introduce statistics into the study of agricultural economics. As we know, Kuznets is a legend; he significantly influenced the career of Zvi Griliches, Yair Mundlak, and Arnold Zellner. With Kuznets, and later with Ivan Lee, econometrics became a mainstay of the department.

After WWII, the department brought on Ray Bressler and Sidney Hoos to study marketing, cooperatives, and industrial organizations in agriculture. In the 1960s, the department realized the importance of the environmental movement and hired Ciriacy-Wantrup, who became a leading thinker of environmental economics and started this area of emphasis in the department. In the late 1960s, the department hired Alain de Janvry, and unintentionally provided the foray to a world-class development economics program (especially once Irma Adelman joined the department).

The department also started the area of research in international economics with the hiring of Andy Schmitz. While Kuznets, Lee, and Boles (and later George Judge) emphasized quantitative tools, deJanvry, Schmitz, and Adelman also emphasized contributions to economic theory.

dejanvry

Alain de Janvry

The department has also made important hires in labor and nutrition. We have seen how, during the 2nd half of the 20th century, the department moved from farm management to issues of environment, development, trade, and agricultural markets.

When I arrived in 1973, the existence of the department was in doubt, several faculty members were denied tenure, and the morale was quite low. In retrospect, one of the main reasons for the decline of the department during the period before I arrived was that there was under-emphasis on publishing in referee journals and faculty were hired to maintain existing lines of research (especially in marketing) rather than break new ground.

On the positive side, there was awareness of the problems and debate of where to go. Students and faculty were meeting daily in the coffee room[1]. Professor Andy Schmitz, who was an original thinker as well as eccentric and charming farm boy from Canada, suggested a change in direction of the department, with an emphasis on research. He claimed that agricultural economists are economists first and that they must publish in mainstream economics journals. Indeed, several of us mostly emphasized publication in economics journals, were hardly involved in any activities of agricultural economics department, and mostly used some agricultural applications to emphasize basic economic principles.

This strategy was very useful for Andy Schmitz and Richard Just, and some of the students like myself, but not for the long-term survival of the department. The chair of the department at the time was Jim Boles, who was a computer wiz and avid sailor and an unsung hero in my eyes. One reason is that under his leadership the department received five new faculty positions, and the other is that he appreciated that I published papers in mainstream economic journals on the economics of manure and encouraged me to apply to a position in ARE.

Dr. Boles was excited about the hiring of Gordon Rausser as the chair of the
department in 1978. Gordon got his PhD at UC Davis, was a professor at Harvard Business School, and had his feet both in reality of agriculture and the frontier of economics. Gordon and the emerging leadership of the department (Just, Schmitz, Adelmen, and deJanvry) realized that to survive, we must maintain excellence in terms of rausserpublication in top journals, faculty selection and promotion. In particular, the department must avoid tenure recommendations that then get denied by the University due to insufficient quality.

But Rausser also realized that being another economics department in Berkeley (after the department of economics and the business school) was not in the interest of anyone. While we must continue to publish in top journals, to excel we needed to emphasize agricultural and resource topics in our research and to be actively involved in the agricultural and resource economics communities. When Rausser learned that Richard Just and I had a fun project estimating demand for basketball tickets, he told us that the department wouldn’t fund it. He invited the leaders of the agricultural profession to Berkeley and demanded us to present papers at agricultural economics meetings.

Rausser and the chairs who followed him also emphasized transparency in discussion, including having longer retreats where we could build camaraderie and think collectively of our direction and future. This focus on openness and collaboration allowed us to overcome significant changes in the financial situation of the department and a smooth transition from the punchcard era to the internet era. The strategy really worked – and the department has since become the top ranked agricultural and resource economics department by the 2010 Natural Research Council report.

As a faculty member, I was asked to teach agricultural policy at the department, and to excel I would need to incorporate the unique features of agricultural systems within advanced economic decision-making. Once in a while, I could publish in top-notch, mainstream journals, but my main impact would come from agricultural and environmental economics journals – with an occasional homerun in Science. This was a shared experience of our leading environmental economists.

Together, agricultural economists developed concepts that also enriched the general field of economics. For example, agricultural economists were at the frontier of the study of technology adoption, the application of cost-benefit analysis, the applied study of risk, and the economic valuation of non-market goods (e.g. environmental quality). Our research also touches on controversial issues, like GMOs, design of water systems, and climate change policies. Agricultural economics, like business administration and engineering, places much emphasis on operational outcomes. Compared to mainstream economics, there is more focus on methods for planning and prediction.

ARE group 2

Towards the end the millennium, the University put pressure on departments to improve utilization of resources. One positive outcome was the creation of cross-listed classes and areas of study.

Today, at the graduate level, we have a strong program with the business school on energy economics and a joint field of development economics with the department of economics. Many of our undergraduate classes are cross-listed with the department of economics. We contribute to multi-disciplinary programs like the MDP and teach at the School of Public Policy.

At the same time, we continue to be part of the Giannini Foundation for agricultural economics together with our peers at UC Davis and Riverside, and we have a popular publication “ARE Update”. One hallmark of ARE since I have been here is the collaboration between students and faculty resulting in joint papers and obtaining significant grants. While some departments have a philosophy of throwing their students to the water and see who can swim, in ARE we teach them how to swim and the result is that we were able to outperform departments with two or three times our faculty. And, many of our students start their career with a rich resume and much more than a job market paper.

As we grow through intergenerational change, the big challenge is how to maintain the delicate balance between becoming mainstream economists and emphasizing the growing need of the environment and agriculture. While publishing in the major economics journals is perceived as the only avenue to stardom, we need to emphasize and recognize that there are many ways to reach it.

The history of the department shows us that there are great rewards in solving real-world problems of agriculture and natural resource management and being recognized as a leading expert in a specific field. Fortunately, real contributions are easily found through Google Scholar and Web of Science, even when published in specialty journals. Employment opportunities are diverse and recognize excellence in creatively addressing major problems using multiple methods, including theory, econometrics, simulation, and historical analysis.

As we look forward, we need to encourage young faculty to seek opportunities presented by real-world challenges and reward them for creative solutions that contribute to change. We also have to emphasize that maintaining quality, transparency, and collaboration are paramount for success. We are fortunate to have the opportunity to pursue solutions to major societal problems and we should embrace it as the next chapter of our department’s history unfolds.

ARE group

[1] The famous coffee room in 325 Giannini, where faculty and students played bridge and discussed economics, was deemed by the administration as an inefficient use of space and was converted. The communication and camaraderie between faculty and students suffered.

Comment to “Witness to the history of agricultural and resource economics at Berkeley

  1. Siegfried von Ciriacy-Wantrup came to us in 1938. Despite being von Wantrup, nobility, he fled Hitler’s Germany. When the U.S. joined the war, his loyalty was questioned, but the faculty prevailed and he spent the war with us at Berkeley. Wantrup is generally recognized as a founder of the contingent valuation method, and W.M. Hanneman, hired along with me in ’76, was a chief developer and proponent of these types of methods.

    Alas, Wantrup did not get along well with people, particularly statisticians, whom he decried as the world’s worst liars. I challenged him with Hitler and Stalin as worse liars, and he begrudgingly backed down only a little.

    Larry Klein came to Berkeley to learn econometrics from Kuznets and wrote a paper on the demand for lemons (1943). Kuznets was no fan of 2sls, believing that in small samples it had an upward bias in the coefficients.

    Galbraith wanted to stay at Berkeley, but Dean Hutchinson simply congratulated him on his offer at Harvard and didn’t budge on salary, so off he went. He had a nicer office at Harvard. I know, he lent it to me for my sabbatical year.

    When I came in ’76, the Richard Just-Andy Schmitz show was in full swing. I had a nice MIT middlebrow theory education and a Berkeley highbrow theory education. Andy and Richard then patiently taught me economics, which was something very different from both of these.

    The coffee-room bridge game that David writes about had devolved to a filthy table with coffee stains and a grubby deck of cards, but no players. Andy and I went for coffee with the plant pathologists. There was no loss by the time we converted it to a graduate student holding cell. Although we did have one last coffee and donuts with Galbraith (who visited pretty often) before we did.

    There is much more history there and an awful lot of students had their careers launched by us, particularly by Andy’s napkin drawings around closing time at the It club….

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