Remembering Yair Mundlak, scholar and leader

I have been on a search for leaders ever since I founded the Beahrs Environmental Leadership Program (ELP) in 2000. Presenting real-life examples of leaders and role models is among the most effective ways to train future leaders.

Last week in Israel, while participating in a workshop honoring the memory of Professor Yair Mundlak, who passed in 2015 at the age of 87, I realized that I had stumbled on a case of a great leader. Leadership can be manifested in all fields of life: business, family, politics and academia. In the case of Yair, his leadership built a world-class academic department and introduced new research methodologies.

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Yair’s family immigrated to Israel from Poland before the Second World War. He went to an agricultural high school, fought in the Israeli Independence War of 1948, and then joined an agricultural settlement. In 1952 he was sent to UC Davis to study agronomy – he did well and in 1954 he enrolled as a graduate student at UC Berkeley, where he earned a Masters in Statistics and a PhD in agricultural economics.

He returned to Israel in 1957 to form a department of agricultural economics at Hebrew University in Rehovot.

One of the first challenges of development is to establish academic excellence in applied disciplines – this was precisely what Yair was able to do, and in the 1970s his department in Rehovot was considered one of the best in the world. Much of the credit is owed to him as its founder and leader.

So…how did he do it?

First, he obtained the necessary funding to start a large research project on the economics of the Moshavim (collective farms) in Israel. This funding allowed him to recruit a team of young scholars with backgrounds in economics and agriculture to serve as research assistants and then as teaching assistants.

The first of these assistants was my mentor and friend Eithan Hochman. Prior to this, formal economic research of farms in Israel did not exist.

The research showed to policy makers that economic considerations matter and that economic tools are useful for decision making. This insight provided the base for future study and funding. So by launching a strong research program, he was able to build a team, and create a reputation for excellence and stir demand for future studies.

Second, he established a formal sequence in economics and econometrics at the School of Agriculture in Rehovot. Israel of the 1950s was a growing country with an emerging agricultural sector and there was implicit demand for education in the economics and management of agriculture, which his new department aimed to meet.

Third, he realized that he could not maintain the program by himself, so he encouraged several of his students to get PhDs abroad, mostly at UC Berkeley and the University of Chicago[1]. These individuals have become leading scholars in their own right, expanded the range of issues addressed by the department, and provided the capacity to meet growing demand.

During my conversations with him, he emphasized that one needs to invest directly in people to augment leadership in order to build a successful program. It is not enough to be “the best” yourself; you need to have other people to build the scale and reach that result in an effective organization. And helping other people reach their potential is more challenging than reaching your own.

Fourth, while working with the government and banks he established a research center to pursue funding and finance future research effort of the department.

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Yair’s ability to establish an excellent academic organization benefited from his prominence as one of the best agricultural economists and econometricians of the 20th century[2]. Agricultural economics was established as a distinct discipline early in 1920s.

The first generation of scholars, the founding fathers[3], identified the major question it was suppose to answer, basic models and approach and stylized facts about the features of agricultural systems.

The second generation[4] included the quantifiers, who developed quantitative models of agricultural and natural resource systems, estimated key parameters and showed empirically that economic considerations and processes have significant impact that must be considered in policymaking.

The third generation were the expanders, who enlarged the range of techniques and consideration and issues considered by agricultural economists to include dynamics, risk and uncertainty, finance, environmental and development issues.

Yair was a prominent member of both the second and third generations of agricultural economists. He was a major quantifier of economic relationships in his work on the Moshavim where he improved methodologies to estimate production functions – for instance, the mathematical relationships between input and output that allow us to predict the increase in output of, say apples, from a 1% increase in fertilizers or some other input.

Many earlier studies assumed that production functions of various crops were identical; Mundlak’s data revealed variability across location and over time, and he developed a method called “fixed effect estimation procedure” to identify how yield varies among different farmers, villages and over different seasons.

One particular achievement of Mundlak was the introduction of a methodology to estimate differences in ability among farmers or regions. Theodore Schultz introduced the notion of human capital and argued that differences in managerial capacity affect productivity – Mundlak’s work allows us to estimate the impact of management in an agricultural setting.

Mundlak was an important expander of the agricultural economic research agenda. Later in his career, when he joined the University of Chicago after retiring from the Hebrew University, he developed a method to understand technological change in developing countries like Argentina, Chile and Indonesia.

His work showed how technologies evolve over time in various locations, and he was among the first to measure efficiency of input use among farmers and within regions as well as to estimate the evolution of agricultural supply and input demand in developing countries.

Domingo Cavalo a former Argentine minister of economy and a distinguished economist, suggested that Yair’s work demonstrated how higher earnings by Argentinian farmers led to increased supply, which in turn became influential in developing less restrictive taxation and pricing policies in Argentina around the beginning of the millennium. These changes contributed to the substantial growth in productivity and supply of agriculture in that country.

As a researcher and scholar, Yair had an incredible eye for important issues and always sought simple solutions to difficult problems. He preferred to be original and blaze his own path rather than take the safer approach by building on established routes.

Yair’s personality and humanity were essential to his success as a leader. He was an excellent listener and very empathetic person, encouraging his students and collaborators to present new ideas and be critical of his own ideas.

Yet he maintained high standards and provided tough, constructive criticisms in evaluating the work of students and collaborators. He demanded much from himself and from those around him, yet he recognized and rewarded effort. He helped his students in furthering their career and gaining the recognition they deserve.[5]

Yair’s leadership qualities were manifested as he established a new world-class department by commitment to excellence, building a diverse team, and empowering those around him. His leadership and research were a result of his unique talent and his commitment to Melville’s advice that “[i]t is better to fail in originality than to succeed in imitation.”

We are fortunate to have known Yair and to be able to build on his legacy. He will be missed by all of us.

[1] These students include his friend, the late  Pinhas Zusman, Eithan  Hochman, Uri Regev, and later Yacoc Tsur, Haim Shalit, Amos Golan, Isreal Finkelstine and Ziv Bar Shira who all went to Berkeley, as well as Yoav Kislev, Assaf Razin, and later Ayal Kimhi who went to Chicago.

[2] This was evident by the presentations of Nobel laureate James Heckman and Professors Gordon Rausser, Alain deJanvry and Yacov Tsur who reviewed his achievements in the workshop.

[3] Including Theodor Schultz, Willard Cochrane, John Kenneth Galbraith , John Black, Fredrich Waugh, Mordechai Ezekiel

[4] Including Zvi Griliches, Vernon Ruttan, Earl Heady, Marc Nerlove, Yujiro Hayami

[5] A few years ago, he made a significant effort to initiate a drive to make Yacov a Fellow of the AAEA.

Witness to the History of Agricultural and Resource Economics at Berkeley

Forty-three years ago I arrived to Berkeley to begin my PhD in agricultural and resource economics [ARE], and without realizing it, I witnessed the evolution of this great department. As the department faces new challenges, I realized that the evolution of ARE has important lessons for its future and for university departments in general.

One important lesson from history tells us that the research agenda and teaching emphasis of a department is in constant motion. When ARE was founded after the Giannini gift in 1928, the emphasis was on farm management to help farmers make better decisions. Speaking withHarry Wellman, the former Chair of ARE, Dean of the College of Agriculture, and eventual President of UC system (he has two buildings named after him), I learned that in the 1930s the department
introduced research in agricultural markets and policy.

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John Kenneth Galbraith, one of the first graduates of the department, was an outstanding scholar of both areas. Agricultural policy mixed institutional and analytical approaches, but Wellman added the third dimension of quantitative analysis. In the 1940s, he brought on George Kuznets, a psychologist at Stanford, to introduce statistics into the study of agricultural economics. As we know, Kuznets is a legend; he significantly influenced the career of Zvi Griliches, Yair Mundlak, and Arnold Zellner. With Kuznets, and later with Ivan Lee, econometrics became a mainstay of the department. After WWII, the department brought on Ray Bressler and Sidney Hoos to study marketing, cooperatives, and industrial organizations in agriculture. In the 1960s, the department realized the importance of the environmental movement and hired Ciriacy-Wantrup, who became a leading thinker of environmental economics and started this area of emphasis in the department. In the late 1960s, the department hired Alain de Janvry, anddejanvryunintentionally provided the foray to a world-class development economics program (especially once Irma Adelman joined the department). The department also started the area of research in international economics with the hiring of Andy Schmitz. While Kuznets, Lee, and Boles (and later George Judge) emphasized quantitative tools, deJanvry, Schmitz, and Adelman also emphasized contributions to economic theory. The department has also made important hires in labor and nutrition. We have seen how, during the 2nd half of the 20th century, the department moved from farm management to issues of environment, development, trade, and agricultural markets.

When I arrived in 1973, the existence of the department was in doubt, several faculty members were denied tenure, and the morale was quite low. In retrospect, one of the main reasons for the decline of the department during the period before I arrived was that there was under-emphasis on publishing in referee journals and faculty were hired to maintain existing lines of research (especially in marketing) rather than break new ground. On the positive side, there was awareness of the problems and debate of where to go. Students and faculty were meeting daily in the coffee room[1]. Professor Andy Schmitz, who was an original thinker as well as eccentric and charming farm boy from Canada, suggested a change in direction of the department, with an emphasis on research. He claimed that agricultural economists are economists first and that they must publish in mainstream economics journals. Indeed, several of us mostly emphasized publication in economics journals, were hardly involved in any activities of agricultural economics department, and mostly used some agricultural applications to emphasize basic economic principles. This strategy was very useful for Andy Schmitz and Richard Just, and some of the students like myself, but not for the long-term survival of the department. The Chair of the department at the time was Jim Boles, who was a computer wiz and avid sailor and an unsung hero in my eyes. One reason is that under his leadership the department received five new faculty positions, and the other is that he appreciated that I published papers in mainstream economic journals on the economics of manure and encouraged me to apply to a Position in ARE.

Dr. Boles was excited about the hiring of Gordon Rausser as the Chair of the
department in 1978. Gordon got his PhD at UC Davis, was a professor at Harvard Business School, and had his feet both in reality of agriculture and the frontier of economics. Gordon and the emerging leadership of the department (Just, Schmitz, Adelmen, and deJanvry) realized that to survive, we must maintain excellence in terms of rausserpublication in top journals, faculty selection and promotion. In particular, the department must avoid tenure recommendations that then get denied by the University due to insufficient quality. But Rausser also realized that being another economics department in Berkeley (after the department of economics and the business school) was not in the interest of anyone. While we must continue to publish in top journals, to excel we needed to emphasize agricultural and resource topics in our research and to be actively involved in the agricultural and resource economics communities. When Rausser learned that Richard Just and I had a fun project estimating demand for basketball tickets, he told us that the department wouldn’t fund it. He invited the leaders of the agricultural profession to Berkeley and demanded us to present papers at agricultural economics meetings. Rausser and the Chairs that followed him also emphasized transparency in discussion, including having longer retreats where we could build camaraderie and think collectively of our direction and future. This focus on openness and collaboration allowed us to overcome significant changes in the financial situation of the department and a smooth transition from the punchcard era to the internet era. The strategy really worked – and the department has since become the top ranked agricultural and resource economicsdepartment by the 2010 Natural Research Council report.

As a faculty member, I was asked to teach agricultural policy at the department, and to excel I would need to incorporate the unique features of agricultural systems within advanced economic decision-making. Once in a while, I could publish in top-notch, mainstream journals, but my main impact would come from agricultural and environmental economics journals – with an occasional homerun in Science. This was a shared experience of our leading environmental economists. Together, agricultural economists developed concepts that also enriched the general field of economics. For example, agricultural economists were at the frontier of the study of technology adoption, the application of cost-benefit analysis, the applied study of risk, and the economic valuation of non-market goods (e.g. environmental quality). Our research also touches on controversial issues, like GMOs, design of water systems, and climate change policies. Agricultural economics, like business administration and engineering, places much emphasis on operational outcomes. Compared to mainstream economics, there is more focus on methods for planning and prediction.

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Towards the end the millennium, the University put pressure on departments to improve utilization of resources. One positive outcome was the creation of cross-listed classes and areas of study. Today, at the graduate level, we have a strong program with the business school on energy economics and a joint field of development economics with the department of economics. Many of our undergraduate classes are cross-listed with the department of economics. We contribute to multi-disciplinary programs like the MDP and teach at the School of Public Policy. At the same time, we continue to be part of the Giannini Foundation for agricultural economics together with our peers at UC Davis and Riverside, and we have a popular publication “ARE Update”. One hallmark of ARE since I have been here is the collaboration between students and faculty resulting in joint papers and obtaining significant grants. While some departments have a philosophy of throwing their students to the water and see who can swim, in ARE we teach them how to swim and the result is that we were able to outperform departments with two or three times our faculty. And, many of our students start their career with a rich resume and much more than a job market paper.

As we grow through intergenerational change, the big challenge is how to maintain the delicate balance between becoming mainstream economists and emphasizing the growing need of the environment and agriculture. While publishing in the major economics journals is perceived as the only avenue to stardom, we need to emphasize and recognize that there are many ways to reach it. The history of the department shows us that there are great rewards in solving real-world problems of agriculture and natural resource management and being recognized as a leading expert in a specific field. Fortunately, real contributions are easily found through Google Scholar and Web of Science even when published in specialty journals. Employment opportunities are diverse and recognize excellence in creatively addressing major problems using multiple methods, including theory, econometrics, simulation, and historical analysis. As we look forward, we need to encourage young faculty to seek opportunities presented by real-world challenges and reward them for creative solutions that contribute to change. We also have to emphasize that maintaining quality, transparency, and collaboration are paramount for success. We are fortunate to have the opportunity to pursue solutions to major societal problems and we should embrace it as the next chapter of our department’s history unfolds.

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[1] The famous coffee room in 325 Giannini where faculty and students played bridge and discussed economics, was deemed by the administration as an inefficient use of space and was converted. The communication and camaraderie between faculty and students suffered.

My Annual Review 2015

This year was a bittersweet year for us. The health of my mother-in-law, Hannah, hasn’t improved and Leorah is dedicated to helping her be as peaceful and pleasant as possible. I admire Leorah’s strength and love for her mother. We all remember her dynamic and creative personality while facing the current reality of old age and realize that this is the cycle of life.

At the same time, we enjoy seeing our grandchildren bloom into little people with personalities and opinions (in their own right)! We enjoy playing with Arlo (son of Eyal and Beth), Adelaide (daughter of Aytan and Davina), and Geo (son of Shie and Leigh) and appreciate the smile and laughter of baby Nava, Geo’s sister. There is nothing more gratifying than having successful, and self-reliant, adult children with wonderful families of their own. Another gratifying event was that the Warriors won the championship after 30 years of waiting.

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Both the Beahrs ELP and the MDP while going through transitional phases continue to grow and prosper. Anita Ponce, the former anchor of the Beahrs ELP, decided to pursue new opportunities leaving it in the good hands of Mio Owens. Mio is also in charge of the Berkeley International & Executive Program, and this coming year, we will host a major executive training workshop on supply chain and innovation, which will be a first for Berkeley. Eunice Kim, who brought energy, elegance and wisdom to the MDP from its inception, also left to take on new challenges. We are really excited about her new family, congratulations Eunice and David! Fortunately, George continues to be the pillar of strength and innovation for our program and we were fortunate enough to hire Lauren Krupa as our career and admissions sage. Both programs are in good hands and deserve your support!

MDP Class of 2015

Research-wise, this year was very productive. I continued my work showing the more enlightened policies on both biofuels and biotech and towards an economy transitioning from one relying on non-renewable resources to a more sustainable one relying on renewable resources.

This coming year we are looking forward to another bioeconomy conference at Berkeley and the 20th anniversary of the ICABR at Ravello. I have new studies on the economics of water conservation and water and climate change. I coauthored a study surveying alternative perspectives to food and agriculture by non-economists. After many decades, I was able to publish the final chapter of my dissertation.

My newest initiative is to understand how new innovations create supply chains. I have always been fortunate to work with wonderful collaborators and students along with excellent support (thanks Angie, Scott, Hillary, and Ben!). This year I also started an exciting collaboration with Tom Reardon, who will also teach at the MDP.

ELP graduation

As usual, this year was one of travel. I was fortunate to visit my family in Israel and to have my sister, Dina, and her family visit us in Berkeley. My travels brought me to Slovakia, three times to Italy, to Germany and to Nepal. All rewarding experiences that showed me that while people may look and behave differently, we are all quite similar.

Happy 2016, a year of happiness and peace.

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