Market design can feed the poor
13 hours ago
- #nonprofit innovation
- #market design
- #food distribution
- Feeding America's old system distributed food based on a 'goal factor' metric, ignoring nutritional value, local stocks, and demand, leading to waste.
- The new 'Choice System' introduced a market-driven approach using a specialized currency called 'shares' in an auction format, increasing efficiency and supply.
- Food banks could bid on food items using shares, with the system designed to ensure equitable distribution and support for smaller food banks.
- The system led to a 35% increase in food supply (100 million pounds annually) and allowed food banks to prioritize higher-quality food.
- Donors contributed more due to efficient allocation, and food banks could trade surplus, adding 12 million pounds annually to the system.
- The success of the Choice System was evident as safeguards for smaller food banks were rarely used, and even initially skeptical members became strong advocates.