Problem Set 1

3. Calories

For this question we will use data provided by the US Department of Agriculture (USDA). USDA is the U.S. federal executive department responsible for developing and executing federal laws related to farming, agriculture, forestry, and food. Approximately 80% of the USDA's $140 billion budget goes to the Food and Nutrition Service (FNS) program. The largest component of the FNS budget is the Supplemental Nutrition Assistance Program (formerly known as the Food Stamp program), which is the cornerstone of USDA's nutrition assistance.

In addition, the USDA's Economic Research Service provides, prepares, and updates incredible publicly available data related to farming, agriculture, forestry, and food.

In this questions, we will use USDA food availability data in order to study and analyze the changes in calorie consumption in the US from 1970-2010.

Directions:

• 1. Follow the link that will take you to the USDA food availability data: https://www.ers.usda.gov/data-products/food-availability-per-capita-data-system/

  2. Read the documentation on this page.

  3. Once there scroll down and under “Loss-Adjusted Food Availability” download the excel spreadsheet called “calories”.

  4. Prepare graphs that show what has been happening to the amount of calories consumed in the US between 1970 – 2010. Your graph(s) should include total calories, meat, eggs and nuts, dairy, fruits and vegetables, flour and cereals products, added fats, and added sugar.

  5. Describe the data and analyze your graphs.

  6. Have Americans changed the amount of calories they eat since 1970? How? What does this mean? How does this help explain the obesity epidemic in the US?

For additional help with this question, please watch this screencast.

5. Real Food Prices (Part I)

For this question we will use data provided by the Bureau of Labor Statistics. The Bureau of Labor Statistics (BLS) is a unit of the United States Department of Labor. The BLS is a governmental statistical agency that collects, processes, analyzes, and disseminates essential statistical data to the American public.

Directions:

• Part 1: Get Food Prices

  1. Go to bls.gov.

  2. Under “Subjects” select Consumer Price Index.

  3. Click on CPI Data - Databases

  4. Under Average Price Data click on “Multi-screen Data Search”

  5. Select “U.S. City Average”,

  6. Select a food category. For example, select "Eggs, grade A, large, per doz"

  7. Click on Retrieve Data

  8. Your data will show up in a new window. The first thing you should do is to select the beginning year to go as far back as possible under “From:” drop down menu and then press blue “Go” button.

  9. Your data is displayed below. Click on Download .xlsx link to open or save it in excel.

  10. Once you have your data in excel, calculate the average yearly price.

• Part 2: Get CPI

In order to calculate real prices you will need CPI for all items.

• 1. Go back to CPI Databases

  2. Under “All Urban Consumers (Current series)” select “Multi-screen data search”

  3. Select “Seasonally adjusted == > “U.S. city average” ==> Current ==> All items” ==> Monthly ==> Retrieve data.

  4. Your data will show up in a new window. The first thing you should do is to select the beginning year to go as far back as possible under “From:” drop down menu and then press blue “Go” button.

  5. Your data is displayed below. Click on Download .xlsx link to open or save it in excel.

  6. Calculate yearly average CPI.

  7. Once you have CPI calculated for your years add them to your food price Excel spreadsheet that you prepared in Part 1.

Make sure that the years for CPI match the food prices and that everything is properly aligned!

• Part 3: Convert Food Prices into 2017 (Constant Dollars) and plot your answers

"Current dollars" are what we usually mean when we refer to a currency in the current time period. The term "constant dollars" refers to dollars of several years expressed in terms of their value ("purchasing power") in a single year, called the base year. This type of adjustment is done to eliminate the impact of widespread price changes.

Current dollars are converted to constant dollars using an index of price movements. The most widely used index for household or family incomes, provided that no specific uses of the income are identified, is the Consumer Price Index (CPI), which reflects average spending patterns by consumers in Canada.

The following table shows the annual rates of the Consumer Price Index. To convert current dollars of any year to constant dollars, divide them by the index of that year and multiply them by the index of the base year you choose (remember that the numerator contains the index value of the year you want to move to). For example, suppose that the price in 1970 is $2.20 and you would like to convert it into 2017 dollars. You need CPI in 1970 and CPI in 2017, which are 38.84 and 245.14 respectively. Use the equation $2.20 x 245.14/38.84 = $13.89. This means that $2.20 in 1970 is equivalent (has the same purchasing power) as $13.89 in 2017.

• 1. Calculate “real” prices or price in 2017 dollars.

  2. Prepare a graph for those prices over time.

  3. Describe the data and describe the graph you created. What has happened to the price of your selected food item overtime?

You should get data for at least 5 food items and “Gasoline, unleaded regular, per gallon”.

Below is a graph for all Eggs, grade A, large, per dozen.

6. Real Food Prices (Part II)

The purpose of this exercise is to analyze the change in food prices relative to the increase in prices for all other items. Have the food prices been increasing faster than overall inflation? Or is food today relatively less expensive than in the past?

Directions:

• • Part 1: Get Food Prices

• 1. Go to bls.gov.

  2. Under “Subjects” select Consumer Price Index.

  3. Click on CPI Data - Databases

  4. Under “All Urban Consumers (Current series)” select “Multi-screen data search”

  5. Select “NOT Seasonally adjusted == > “U.S. city average” ==> Current ==> Select the following 8 series:

1. All items

2. Food and beverages

3. Food at home

4. Cereals and bakery products

5. Meats, poultry, fish, and eggs

6. Fruits and vegetables

7. Other food at home

8. Alcoholic beverages == > Monthly ==> Retrieve data

6. Your data will show up in a new window. The first thing you should do is to select the beginning year as 1967 under “From:” drop down menu, click on "Include annual averages", and then press blue “Go” button.

7. You can download the data by clicking on Download .xlsx link to open or save it in excel. Or you can simply calculate percentage changes by reading the numbers off the table.

• Part 2: Percentage Changes and Data Analysis

  1. Calculate percentage change in the index for CPI for all items and other food categories for the period of 46 years. For example, the percentage change for “All items” between 1967 and 2017 is (245.12-33.4)/33.4*100 = 633.89%

  2. Show you data in a bar graph. See an example that includes CPI for all items, food and beverages, and food at home. If the graph seems too crowded, you can present your data in several graphs.

  3. Describe the data and describe the graphs you created. What has happened to the prices of these food categories overtime? What would you expect Americans to buy more/less off as a result of these food price changes? WHY?