Photographer: Daniel Acker/Bloomberg

Even Health-Conscious Millennials Have Their Limits: Eco Pulse

America’s younger consumers spend more on pasta, sugar and sweets
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So much for those kale-chomping, kombucha-chugging, gluten-free and organic 20-somethings. 

Millennials spend more of their grocery money on prepared foods, pasta, sugar and sweets than other generations, a U.S. Department of Agriculture analysis found. That trend is actually pretty explainable when one digs into age-group economics, and it’s the lead item in this week’s economic research roundup. We sum up studies that show how to make a San Francisco rent check look cheap and focus on one area where skills aren’t paying off the way they once did. To be forward-looking, we've also included a piece about the economics of a robot takeover. Check this post each Tuesday for new, pertinent studies from around the world. 

Weekly Demo(graphic)

Millennials Devote Larger Shares of Their Grocery Spending to Prepared Foods, Pasta, and Sugar and Sweets Than Other Generations
Published Dec. 29, 2017
Available on the USDA website

The health-obsessed millennial isn’t a myth, but it also isn’t the norm. In fact, millennials spend more of their budgets on foods generally viewed as unhealthy than older generations. 

USDA ERS analysis

To be fair, consumption of nutritious goodies like fresh vegetables goes up with income, and money is in comparatively short supply for people who are just starting off in the labor market. Millennials who make more – $50,000 to $99,000 – actually spend a bigger share of their budgets on veggies than their older fellow shoppers. Still, across income brackets, young people spend more on prepared food than older generations. That trend might be the result of lifestyle: millennials are spending a lot less time cooking. If household formation picks up and the generation starts families, consumption choices could shift. 

How to prep for the robot takeover

Artificial Intelligence and Its Implications for Income Distribution and Unemployment
Published December 2017
Available on the NBER website

In a wide-ranging paper on how robots might reshape the economic future, Nobel Prize-winning economist Joseph Stiglitz and his co-author lay out a clear reason to worry about their distributional implications. It’s possible the already privileged could use artificial intelligence to enhance their own capabilities, catapulting their skill far above people at the bottom of the ladder.

“Those who cannot afford the latest technology will have to rely on what is in the public domain, and if the pace of innovation increases, the gap between the best technology and what is publicly available will increase,” according to the research. While humanity might be able to adjust to slow changes efficiently, AI may happen quickly – so society may need to be ready to ensure that the benefits are widely shared.

How do you make Silicon Valley rent look cheap? 

Focus: Searching for Yield in Residential Real Estate
Published Dec. 29
Available to JPMorgan subscribers 


High-price markets like New York and California have low rents relative to the price to buy a home with similar characteristics. By contrast, buy-versus-rent tradeoffs look “quite high” in places like Detroit and Cleveland when compared to the yields on other financial assets, economist JPMorgan economist Jesse Edgerton concludes by analyzing Zillow data.

Zillow calculates the implied sale value and rental value of properties, taking into account their characteristics and geographies. That makes it possible to come up with a price-to-rent ratio for each unit. Those ratios range from numbers less than 10 in Detroit and Cleveland to more than 25 in New York and California. 

When skills don’t pay off

Wage Dynamics and Returns to Unobserved Skill
Published November 2017
Available on the Bank of Canada website 


As inequality in the U.S. rises, the skills divide gets a lot of the blame. But it may be more complicated than it seems, as the gap between people with similar levels of education has expanded. Some say increasing returns for unobserved skills – a worker’s adeptness at making widgets, for instance – is at least partially behind the divide.

But new Bank of Canada research finds that the returns to so-called “unobserved” skills have declined by 50 percent  since the mid-1980’s – as jobs got automated, it pays less to be good at them. What’s causing the pay gap is skills dispersion. Some people are getting on the ladder and growing their skills dramatically over their lifetimes, while others are stagnating.

“This may simply reflect a different type of technological change – one characterized by the frequent introduction of new tasks that makes others obsolete,” the authors write. “Alternatively, more able workers may simply be more capable of learning and adapting to new tasks.”

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