Food waste in the sharing economy

• Published in: Food policy 2018-02, Vol.75, p.109-123
• Main Authors: Richards, Timothy J., Hamilton, Stephen F.
• Format: Article
• Language: English
• ISSN: 0306-9192; 1873-5657
• DOI: 10.1016/j.foodpol.2018.01.008

•Food waste represents a substantial economic loss.•Sharing-economy firms can successfully allocate underutilized resources.•We characterize sharing-economy firms as platforms in two-sided markets.•We estimate a model of two-sided demand, and pricing, for surplus food.•We find that policies can be effective in reducing surplus harvest. Wasting food is one of the rare problems that affects our ability to achieve economic goals in terms of food security, environmental sustainability, and farm-financial security. Most of the ideas proposed to this point involve either behavioral nudges or administrative regulations that are either too paternalistic or piecemeal to represent viable solutions. In this study, we investigate the potential for commercial peer-to-peer mutualization systems (CPMSs), or sharing-economy firms, to emerge as market platforms for the exchange of surplus food. If a system of CPMSs is able to develop in a self-sustaining way, then the market prices they create will generate sufficient incentives for all actors to manage surplus food more efficiently. We develop an empirical model of a CPMS operating as a platform in a two-sided market, and examine its viability using data from one of the first CPMS firms in the surplus-harvest industry, Imperfect Produce, Inc. Empirical estimates of a two-sided network-demand model show that user-demand rises in the number of growers shipping to the platform, and grower demand for distribution rises in the number of users. Our findings indicate that secondary markets have the key elements needed for CPMS success, and that policy tools designed to facilitate transactions in secondary markets can be highly effective in reducing food waste.