I'm back in India. Bet you didn't see that coming! It happened extremely quickly. I literally bought my flights two days before I took off. Highlights of flying Swiss Air through Zurich: free Swiss chocolate and amazing views of the Alps. Highlights of returning to Delhi: catching up with old friends and drinking mango shakes.
Two days ago, my first day back, I met with an agricultural economics researcher. He researches irrigation in Bihar and Gujarat, which is why I was meeting with him. He is interested in the groundwater economy and pumping behaviors. Like me, he finds irrigation fascinating because it lies at the energy-water-food-livelihood nexus.
I learned a lot from this meeting. For one, I learned that economics is really a study of human behavior. I guess that's obvious, but for some reason I never thought of economics that way. This makes econ a lot more interesting than what I had imagined it to be.
As I may or may not have explained before on this blog (I honestly don't remember), in eastern India where pumps are ~85% diesel- or kerosene-run rather than electric, pumps are not installed on a well. Instead, a handful of people own pumps and rent them out to their neighbors on an hourly basis, and pumps are transported on bicycles. These pump owners essentially run an oligopoly. They seem to agree on high rental rates. Interestingly, as more farmers purchase their own pumps and enter the rental business, increased competition has not driven down hourly rates, contrary to what one might expect. This researcher thinks he has learned why: the costs to the pump owner are so high he doesn't have any particular motivation to actually rent out the pump to more customers. He must deliver the pump to the well, which is a pain in the ass. A pump is a pretty heavy thing to strap to your bike. Then, the farmer who is renting the pump may or may not know how to operate the pump, so the owner has to start up the pump for him. Someone has to hang around near the pump to make sure operation is going smoothly and to add more fuel when necessary; sometimes, this someone is the pump owner and not the renter, if the renter is inexperienced with diesel engines. A pump is usually run for several hours at a time, and if the pump owner must babysit the pump for that time, he is losing out on hours that could be spent more productively (in most cases, the pump owner has his own farm to tend to). His time is pretty valuable, so he keeps rental costs high, and often he would rather have that time to do other work than rent out to another customer. Therefore more competition does not reduce prices.
Because of these high operation costs that do not even include fuel cost, according to this researcher, advances in efficiency of the pump would not make much difference to the pumping behaviors of farmers. I'm not taking into consideration all costs involved in operation. Yes, the farmers would spend less on fuel. But the time cost would remain high. Maybe if farmers are getting more water per liter of fuel or per hour, they would be able to irrigate more. But if the farmers want to translate the fuel savings into more hours of pumping, that puts a bigger burden on the pump owner. It is possible that the pump owner would raise hourly rates in response. So even if I make the most efficient pump ever, I might not have any impact on reducing operation costs. (But this doesn't mean a more efficient pump is a bad thing!) In that case, my hope should be that the farmers would get more water for the existing amount of time they irrigate. However, this increased efficiency in operation hardly matters if the pump has a higher capital cost than the cheapest pumps on the market (which, at least at this point, it certainly would). Capital cost reigns supreme over operation costs in financial decision-making. Though all the renters would benefit, the pump owner sees little advantage to his rental business to have a more efficient but more expensive pump--more demand for his pump means more work in renting out the pump, and the rental business is not his only source of income. So why bother spending money on a more expensive pump?
...I really need to learn more about economics.
In addition to enlightening me about pumping behavior and economics, the researcher confirmed something I already suspected: farmers lie about everything when surveyed. (Ok, "lie" might be too strong a word. Stretch the truth, maybe?) But I did not understand the whole picture. I had always thought that I couldn't fully trust people's answers to my survey questions because they were trying to give me the "right" answer. I thought they were trying to come up with the answer they thought I wanted to hear (for example, a woman might lie about keeping her child away from the stove while she's cooking, even if the kid sits right next to her, because she knows I would think the smoke is bad for her child's health). This is true in some cases. However, in many cases, especially when you ask about earnings and expenditures, people exaggerate to make themselves seem poorer. Says the researcher, "They see you, a white woman, or me, a city guy, and they think 'this person works for some NGO and is going to go back to Delhi and write up a report about how we need more subsidies or government assistance.' So they exaggerate how poor they are in order to get more money." Even if a fellow villager is taking the survey, the fact that the survey is taking place at all alters people's answers.
This is a very cynical point of view, and I assume this isn't true for every single person interviewed, but I can believe this does happen sometimes. Probably this behavior stems from a history of NGOs advocating for more government assistance based on field surveys. Like how kids in Kerala constantly ask white tourists for pens because about a decade ago an American group donated supplies to local schools there. (This researcher does not deny that these people are indeed very poor or in need of assistance, by the way.)
So how does this researcher deal with the untrustworthiness of survey responses? "Just add error bars. Uncertainty is part of the fun of social science! See, you want accurate numbers. That's why you're an engineer. You like precision. You don't get the same precision in social science, and you have to be willing to work with that." Well, we use our fair share of error bars in engineering, too. But I guess I see his point.
(To be fair, his research is not all wishy-washy. He gets real numbers when he can: he acquires irrigation data from electricity meters, flow meters, pressure gauges, etc. like an engineer would. But questions of income and costs are a lot trickier to answer in a village where people don't have good records. No receipts, bills, paychecks, etc. Without any paper trail, you have to take people at their word.)
I have been thinking recently about switching into the social sciences (maybe economics or public policy) (this is a topic for another post). But as someone who has training in engineering, will I find the fuzziness frustrating? Or will I find it to be an exciting puzzle to be deciphered, the way this researcher does? I have a lot to think about re: my future.
(As a side note, this researcher got his master's at Princeton and his PhD at Harvard. To those of you interested in studying public policy with a focus in international development, he recommended Harvard over Princeton.)
In other news, I noticed in my blog stats that I get a lot of traffic from a seemingly random blog out there in cyberspace. Apparently, a blogger named Vikram Garg called my blog "the best American in India blog." Thanks for the shoutout, Vikram. Shouting right back at ya! Check out his blog at http://vikramvgarg.wordpress.com/.
Two days ago, my first day back, I met with an agricultural economics researcher. He researches irrigation in Bihar and Gujarat, which is why I was meeting with him. He is interested in the groundwater economy and pumping behaviors. Like me, he finds irrigation fascinating because it lies at the energy-water-food-livelihood nexus.
I learned a lot from this meeting. For one, I learned that economics is really a study of human behavior. I guess that's obvious, but for some reason I never thought of economics that way. This makes econ a lot more interesting than what I had imagined it to be.
As I may or may not have explained before on this blog (I honestly don't remember), in eastern India where pumps are ~85% diesel- or kerosene-run rather than electric, pumps are not installed on a well. Instead, a handful of people own pumps and rent them out to their neighbors on an hourly basis, and pumps are transported on bicycles. These pump owners essentially run an oligopoly. They seem to agree on high rental rates. Interestingly, as more farmers purchase their own pumps and enter the rental business, increased competition has not driven down hourly rates, contrary to what one might expect. This researcher thinks he has learned why: the costs to the pump owner are so high he doesn't have any particular motivation to actually rent out the pump to more customers. He must deliver the pump to the well, which is a pain in the ass. A pump is a pretty heavy thing to strap to your bike. Then, the farmer who is renting the pump may or may not know how to operate the pump, so the owner has to start up the pump for him. Someone has to hang around near the pump to make sure operation is going smoothly and to add more fuel when necessary; sometimes, this someone is the pump owner and not the renter, if the renter is inexperienced with diesel engines. A pump is usually run for several hours at a time, and if the pump owner must babysit the pump for that time, he is losing out on hours that could be spent more productively (in most cases, the pump owner has his own farm to tend to). His time is pretty valuable, so he keeps rental costs high, and often he would rather have that time to do other work than rent out to another customer. Therefore more competition does not reduce prices.
Because of these high operation costs that do not even include fuel cost, according to this researcher, advances in efficiency of the pump would not make much difference to the pumping behaviors of farmers. I'm not taking into consideration all costs involved in operation. Yes, the farmers would spend less on fuel. But the time cost would remain high. Maybe if farmers are getting more water per liter of fuel or per hour, they would be able to irrigate more. But if the farmers want to translate the fuel savings into more hours of pumping, that puts a bigger burden on the pump owner. It is possible that the pump owner would raise hourly rates in response. So even if I make the most efficient pump ever, I might not have any impact on reducing operation costs. (But this doesn't mean a more efficient pump is a bad thing!) In that case, my hope should be that the farmers would get more water for the existing amount of time they irrigate. However, this increased efficiency in operation hardly matters if the pump has a higher capital cost than the cheapest pumps on the market (which, at least at this point, it certainly would). Capital cost reigns supreme over operation costs in financial decision-making. Though all the renters would benefit, the pump owner sees little advantage to his rental business to have a more efficient but more expensive pump--more demand for his pump means more work in renting out the pump, and the rental business is not his only source of income. So why bother spending money on a more expensive pump?
...I really need to learn more about economics.
In addition to enlightening me about pumping behavior and economics, the researcher confirmed something I already suspected: farmers lie about everything when surveyed. (Ok, "lie" might be too strong a word. Stretch the truth, maybe?) But I did not understand the whole picture. I had always thought that I couldn't fully trust people's answers to my survey questions because they were trying to give me the "right" answer. I thought they were trying to come up with the answer they thought I wanted to hear (for example, a woman might lie about keeping her child away from the stove while she's cooking, even if the kid sits right next to her, because she knows I would think the smoke is bad for her child's health). This is true in some cases. However, in many cases, especially when you ask about earnings and expenditures, people exaggerate to make themselves seem poorer. Says the researcher, "They see you, a white woman, or me, a city guy, and they think 'this person works for some NGO and is going to go back to Delhi and write up a report about how we need more subsidies or government assistance.' So they exaggerate how poor they are in order to get more money." Even if a fellow villager is taking the survey, the fact that the survey is taking place at all alters people's answers.
This is a very cynical point of view, and I assume this isn't true for every single person interviewed, but I can believe this does happen sometimes. Probably this behavior stems from a history of NGOs advocating for more government assistance based on field surveys. Like how kids in Kerala constantly ask white tourists for pens because about a decade ago an American group donated supplies to local schools there. (This researcher does not deny that these people are indeed very poor or in need of assistance, by the way.)
So how does this researcher deal with the untrustworthiness of survey responses? "Just add error bars. Uncertainty is part of the fun of social science! See, you want accurate numbers. That's why you're an engineer. You like precision. You don't get the same precision in social science, and you have to be willing to work with that." Well, we use our fair share of error bars in engineering, too. But I guess I see his point.
(To be fair, his research is not all wishy-washy. He gets real numbers when he can: he acquires irrigation data from electricity meters, flow meters, pressure gauges, etc. like an engineer would. But questions of income and costs are a lot trickier to answer in a village where people don't have good records. No receipts, bills, paychecks, etc. Without any paper trail, you have to take people at their word.)
I have been thinking recently about switching into the social sciences (maybe economics or public policy) (this is a topic for another post). But as someone who has training in engineering, will I find the fuzziness frustrating? Or will I find it to be an exciting puzzle to be deciphered, the way this researcher does? I have a lot to think about re: my future.
(As a side note, this researcher got his master's at Princeton and his PhD at Harvard. To those of you interested in studying public policy with a focus in international development, he recommended Harvard over Princeton.)
In other news, I noticed in my blog stats that I get a lot of traffic from a seemingly random blog out there in cyberspace. Apparently, a blogger named Vikram Garg called my blog "the best American in India blog." Thanks for the shoutout, Vikram. Shouting right back at ya! Check out his blog at http://vikramvgarg.wordpress.com/.
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