I just attended an interesting NBER conference on organizational economics.  I discussed a very nice paper by Giacomo Calzolari of the University of Bologna, Italy’s best public university.  Bologna is in Emilia Romagna which has given the world Parma ham, Parmesan cheese, mortadella, prosciutto and, of course, tortellini.  Food generates much happiness for consumers and high income for producers.  It even greases the wheels of the finance:

The vaults of the regional bank Credito Emiliano hold a pungent gold prized by gourmands around the world — 17,000 tons of parmesan cheese.  The bank accepts parmesan as collateral for loans, helping it to keep financing cheese makers in northern Italy even during the worst recession since World War II. Credito Emiliano’s two climate-controlled warehouses hold about 440,000 wheels worth €132 million, or $187.5 million.

Alas, like gold, Parmesan attracts thieves:

Thieves tunneled into one warehouse in February and made off with 570 pieces before they were apprehended by the police.  “Thank heavens we caught the robbers before they grated it,” said William Bizzarri, who manages the warehouses.

Little wonder then that food is a local obsession.   Giacomo told me that he himself organized a tortellini tasting competition.  He and his friends purchased tortellini from around thirty shops that sell handmade pasta in Bologna.  Just imagine living in a city where there are that many places specializing in one artisanal culinary product!

As all economists would know, to truly study which store makes the best products, you have to control all other variables apart from the store-induced variation.  As far as I understood from Giacomo, they did this by buying the same kind of classic tortellini from all the stores.  The story is that a chef from Bologna peeked through a keyhole to see the naked Venus but all he could glimpse was her navel.  His view is immortalized in the shape of the tortellini.  There is only one way to improve on Venus – by adding a lot of components of the noble pig: the filling is pork loin, mortadella, parma ham and of course parmesan cheese in just the right proportions.  The recipe is registered by the Chamber of Commerce in Bologna.   (Even a baconatarian (i.e vegetarian except for cured pork products) might be put off by the meatiness but I’m willing to give it a shot.)  To control for any bias of the people sampling the tortellini, Giacomo had a blind tasting.

The winner: Boutique de Tortellini.

They did not publish the results but word-of-mouth alone helped to increase sales at the Boutique.

Of course, there are many great food regions in Italy.  Giacomo himself actually prefers Sicilian cuisine because of its great variety and incorporation of ingredients from all across the Mediterranean.