Wednesday, July 1, 2015

Type 1, Year 1

Exactly one year ago, my older son was diagnosed with Type 1 Diabetes (T1D).  As with all such diseases, this one came completely out of nowhere.  It started typically, excessive thirst and frequent urination, and ended up with a four-day stay in the hospital.  He was healthy before and remains healthy to this day, in fact we caught it early enough that he was never sick with ketoacidosis, the potentially fatal complication from excessive sugar in the bloodstream.  We were lucky in that respect.

The reality of a life with T1D is difficult, it means a lifetime of careful management of blood sugars, of always thinking carefully about what you are eating and how to dose the appropriate amount of insulin, of carefully managing the carbohydrate demands of exercising muscle tissues when he plays soccer. But the emotional toll is far worse. A parent never, ever wants to hear that their child has a potentially fatal autoimmune disease and, as an adult you mind immediately wanders to the next 10, 20, 50 years of your child’s life and you feel overwhelmed and panicked.  I spent a week in tears, trying to me strong in front of my son, but feeling crushing panic, sadness and despair inside.  I would take bathroom breaks to go and cry.

Amazingly the center of strength in the family was my son himself.  Well, I imagine it is not amazing to anyone who has dealt with a similar issue – they know firsthand how amazingly resilient are kids.  He cried exactly once – when he was told the diagnosis – and has never felt sorry for himself save for a couple of moments here and there when the burden of having to deal with diabetes when his friends do not becomes too big a drag.  But from day one he took charge of his own care, began administering his own injections, calculating his carbs and testing his blood sugar.  He has risen to the challenge and his determination not to let it derail him has been an inspiration to us all.

 In the past year I have never stopped marveling at how well he has dealt with such a life-changing event.  Modern medicine and technology has helped.  He now has a sophisticated insulin pump that attaches directly to his body and allows him to be active and avoid needles, injections and having to carry around too much equipment.  He can even swim with it, which is good because he likes to swim more than anything.  We have, as a family, adjusted to the new reality and are now used to counting carbs, making sure he has his bag with supplies and emergency glucagon and helping with pump changes that occur every three days.

As an economist I marvel at how difficult this diagnosis must be for families without excellent insurance, stable jobs and local medical expertise.  We are incredibly fortunate to have the time, the resources and the help near at hand.  Something like this makes one appreciate the need for universal access to health insurance.  This is a disease that is unpreventable.  A bad RNG as my son calls it, referring to the random number generator code that determines the bonus prizes he gets in his favorite video game.  [This has led to the discussion of how it is not possible to program true randomness, and whether there is any such thing in the world anyway – but I digress]

I have learned to be patient with those who don’t know the difference between Type 1 and Type 2 Diabetes, as I was completely ignorant of it prior to my son’s diagnosis as well.  For the record, they are entirely different diseases common only in the fact that they both involve your body’s ability to deal with sugar.  T1D is an auto-immune disease where, for reasons still unknown, your body’s immune system decides to attack the cells in your pancreas that produce insulin – eventually destroying them all. Insulin is the hormone that allows your body to process the sugars in the bloodstream and move them to the cells where they are converted into energy.  The key with T1D is that the body processes the insulin just fine; it just doesn’t make any itself.  My understanding of T2D is that the body commonly does not process insulin effectively so even though the pancreas is making it, the body cannot metabolize the carbohydrates.  Thus, while people with T1D can essentially eat as they normally would, taking insulin injections to match the amount of carbs, people with T2D often have to heavily restrict carb intake.  So yes, my son can have the cake at the birthday party, but thanks for asking.

I write this all here because after a year of minimal blogging I felt I should explain the inactivity.  My inattention to the blog has a lot to do with time – management of my son’s diabetes at first was very time consuming.  It also has to do with energy, when my son switched to his pump I was waking up three times in the night to check his blood sugar for three months.  But largely it has to do with priorities.  I am chair of the OSU economics department, I am a full-time professor, I have numerous ongoing research projects, I am writing a textbook and I am, most importantly a dad who puts his kids ahead of anything else.  So the blog suffers and I regret it, but not that much.  I keep it alive because I do hope to return to regular blogging someday – it is something I enjoy a lot.

In the meantime, I hope you can all enjoy the podcast Jeff Alworth and I have begun.  This allows me to take a two-hour lunch break and record a conversation primarily about beer but also about the business and economics of brewing.  Please check it out.

I thank you all for your support of this blog.

-Patrick Emerson

Thursday, June 25, 2015

Beervana Podcast #4: Session IPAs

The Economics of Scarcity

Today I was on Vermont Public Radio's "Vermont Edition" talking about the economics of craft beer.  [Here is the link to the audio - my bit starts at 32:10] All good fun and thanks to the good folks at VPR for having me as a guest.  They did throw me a curve ball, however, as they had told me to expect for the conversation to be focused on the Heady Topper phenomenon. The Alchemist's Heady Topper, as you may know, is one of those 'it' beers in the craft beer enthusiast world - you simply have to try it if you are a self-respecting enthusiast.  And so the buzz is created and people do crazy things to get their hands on some.

Another similar beer for left-coast folks is Pliny the Elder, the Russian River creation that is similarly a buzz beer and has been for a remarkably long time.  Both beers are big double IPAs, both are very good (though I can only vouch for Pliny the Elder personally - but I have it on good authority that Heady Topper is similarly wonderful), and both are extremely scarce.

So how does the fact that it is scarce contribute to the popularity and demand for the beer?  Well there are a number of economic factors that come in to play. The first is that since beer is an experience good (a good you cannot put a value on without actually trying it) you have to look for signals of its quality.  I have talked before about how price can be a signal of quality, and so can visible excess demand.  If people are willing to drive hundreds of miles and wait for hours, it must be an exceptional beer.  So scarcity can actually drive up demand.

Psychology also plays a factor as well: it turns out that scarcity/excess demand can actually cause you to enjoy the good more.  If you believe the good is exceptional it actually changes the way you perceive it and you are more likely to think it is excellent.  In economics terms, you get more utility from drinking Heady Topper simply because it is scarce!

Finally, buzz is still a mysterious and perplexing thing to economists (despite lots of fancy modelling with information trees, information cascades and the like) but it is elusive and when you have it it is hard to maintain it.  One way to maintain it is to keep the good scarce and so scarcity has another benefit it that it can sustain the demand for a good. 

Having said all of that, I don't think in either The Alchemist or the Russian River Brewing case there is a master play to maintain scarcity.  In many cases, the allure of making a profession in craft beer is the ability to be a small businessperson doing something you enjoy and can share with others while feeding your family.  They are not out to maximize profits but their own utility. But if they were crass capitalists, either one could have the beer contract brewed in mass quantities and flood the market for a quick payout (or more likely these days - sell the brewery to a big conglomerate or venture capitalist firm). However, this would likely be self-defeating in that the scarcity would be gone, the mystique of the beer shattered (let's face it, we are spoiled for choice with exceptional big IPAs these days) and the buzz that surrounds the brewery name lost.  

Friday, May 22, 2015

Beer Taxes by State

The Tax Foundation has produced another Beer Tax Map to show taxes on beer per state. 

Oregon ranks quite low and has a big industry (by number of businesses at least) so I imagine that the causality runs both ways.  I enjoy looking at the South and wondering if the high taxes on alcohol were fundamental in creating the black market that led to the moonshiners (my knowledge of whom is largely from the "Dukes of Hazard") .

Friday, May 15, 2015


Jeff Alworth and I have decided to have a little go at podcasting.  Might not last long, but as I am interested in the economics of the brewing industry and he has loads of knowledge about beer and brewing we decided to collaborate on a blog wherein he and I discuss brewing, the economics of beer and beer itself.

We are rank amateurs but we gave it a go.  Let us know what you think.

The first episode is on parti-gyle brewing.