Why the Australian’s peculiar love of beetroot is more than just a cultural curiosity.
Never underestimate the importance of small differences. Australians and Americans eat much the same kinds of things. But while beet is not very popular stateside, it’s huge in Oz, where it’s known as beetroot. A reputable consumer survey showed that Australians buy almost a kilogram of the vegetable three times a month. Even kids love it, and a burger isn’t a burger unless the bun is stained purple by a big slice. Brits find this as puzzling as Americans, since they find getting a child to eat beetroot is harder than getting a Frenchman to eat Cornish Brie.
Economist Justin Wolfers callee this the Beet Paradox: Australians and Americans have similar diets, but only Aussies love beetroot. How can human beings who are otherwise so much alike differ so much when it comes to one particular foodstuff? This might seem trivial but it’s just one example of how some fundamental assumptions in economics are just wrong.
How can human beings who are otherwise so much alike differ so much when it comes to one particular foodstuff?
Start by thinking abut the two most fundamental concepts in economics: supply and demand. This looks quite straightforward. Supply is what is available and demand is what people need or want. Demand for housing, for example, is determined in part by need — we all need a roof over our heads — and partly by preference: size, style, location and so on.
It begins to get more complicated on the demand side when we distinguish between what economists call “exogenous” and “endogenous” variables. When building economic models, some variables are exogenous, meaning that they are not affected by other variables within the model and so can be taken as givens. For example, whether you like beets or not would seem to be a brute fact about your tastes, so you can assume your economic model won’t make any difference to it. Endogenous variables are affected by other variables in the model. For example, the economic value of a university degree depend on how many are awarded, so any economic model which assumes their value will be stable independent of availability will be flawed.
Economists have tended to assume our preferences as both exogenous and stable. Whatever else is going on in the market, our desires are our desires and that’s it. The Beet Paradox suggests this is far too simplistic.
First and foremost, it shows that whether or not preferences are affected by economic factors, they are far from just given. Cultural factors play a big part. You might think this is a quibble: doesn’t the paradox itself suggest that the preferences of Australians and Americans are stable? But we know that even basic dietary preferences can change, sometimes rapidly. In 1980, most Brits had never even tasted Kiwi fruit; by the end of that deacde it was ubiquitous. Only five years ago, for most people vegan food was a joke. Now every major restaurant chain has a vegan menu.
No one thought they needed what looked like a very big phone when Steve Jobs revealed the iPad in 2010
In the UK, the ability of celebrity chef Delia Smith to launch a food craze led to the “Delia Effect” entering the Oxford English Dictionary in 2001. Sales of cranberries rose by 200 per cent after she used them on one TV programme, while sales of the humble egg rose by 54 million after she showed the nation how to cook them properly. But economic models do not factor in the possibility of out-of-the blue celebrity endorsement.
It gets more complicated still because the borders between what an economic model captures and the rest of life is distinctly fuzzy. Advertising and marketing, for example, are activities that take place within the economy, but without any immediate economic drivers. No one thought they needed what looked like a very big phone when Steve Jobs revealed the iPad in 2010, but the tablet computer has gone on to become a huge seller. Apple had not so much found a gap in the market as carved one out.
Indeed, it isn’t even necessarily true that, as I casually said earlier, whether you like beets or not does not depend on market forces. Scarcity value does affect the desirability of foodstuffs. Salmon used to be so plentiful on the Thames that labourers in London got sick of it. At the time of American Revolution, oysters were considered only fir for slaves. I’m sure that if caviar were plentiful, most people would be indifferent to it, while if potatoes were rare, French fries would be a prized delicacy.
You can see how this all makes economics much messier than modellers would like. It is very hard to know what people might want, if it is made available to them, or how much sheer habit and familiarity keeps them attached to things they would otherwise value little. In an economy where basic needs are met, and so demand is more a matter of desire than need, this makes anticipating demand a modeller’s nightmare.
The economist’s headache might be insoluble but the paradox itself isn’t. There is only a puzzle if you assume that people’s preferences are consistent and rational. Assume they are only human, however, and it’s obvious why people who are otherwise alike might be divided by a purple plant.
Julian Baggini is a writer and philosopher. His latest book is The Godless Gospel: Was Jesus a Great Moral Teacher? (Affiliate link)