While traveling through Istanbul, I noticed numerous free-standing kiosks with several (as many as six) A.T.M.’s — each from a different bank. This struck me as being bizarre. A Turkish economist said that some of the banks even let you withdraw from your account using a competitor’s A.T.M. at no extra charge. Why would these joint locations exist? Why advertise . . .
The average human being will be substantially richer in 50 years, just as the average American today has a real income three times what it was in 1955. But the average human being will not have much more time in 50 years than today; and life expectancy has increased by only 10 percent in the U.S. since 1955, so for . . .
I’m on our annual beach week with the extended family in New Jersey and the beach patrol comes by insisting I buy beach tags for everyone 12 and over. The prices are: $6 for one day, $12 for one week, or $24 for the season (but only $19 for the season if bought before Memorial Day). The price structure is . . .
Starbucks prides itself on how green it is. No negative externalities here — and it proudly advertises on its website its commitment to “Environmental Stewardship.” I wonder, though, about its total effect on the environment. On most mornings I stop by my own local coffee shop on the way to the office, park my car (Honda Civic or my wife’s . . .
When we choose a major in college we are to some extent choosing a series of future wage rates. The amount of human capital in which we invest is to some extent linked to our college major — different college majors generate different wages. Many of my students, and often unfortunately too their parents, believe that unless they major in . . .
A story on Yahoo news mentions that the Philadelphia newspapers are running advertisements for a fake airline, Derrie-Air (get it?). The airline advertises that it is carbon-neutral, and that it charges per passenger pound — $1.40 from Philadelphia to Chicago, $2.25 from Philadelphia to Los Angeles. Screen shot from flyderrie-air.com. While quite mythical, this pricing structure is not unreasonable: the . . .
My Dutch co-author and I biked to his office this morning, with very nice new bikes he owns. I remarked on them, and he said his university gives him the right to buy a bike out of pre-tax income every three years. Every Dutch employer can offer this triennial subsidy of $750. I thought that was quite interesting, and asked . . .
For a number of years I’ve been impressed with the wireless credit-card machines with which many European restaurants equip their wait-staff. This substitution saves workers time (and also that of their customers). This technology is now adopted more widely in the U.S. But on this trip I’ve noticed yet another innovation. In several restaurants wait-staff have wireless devices that also . . .
I’m trying to decide what to do about train travel during our 5-month sabbatical in Germany. For $55 I can buy a card that gives me a 25 percent discount on all train tickets I buy. So if I buy $220 worth of train tickets I break even — any more than that is a good deal. I have to . . .
A California state assemblyman has proposed dealing with the state’s huge budget shortfall by taxing pornography, including the production and sale of pornographic videos — by 25 percent. To an economist this initially sounds like a good idea: An ideal tax is one that doesn’t cause any change in behavior — doesn’t generate any excess burden on the economy. I . . .
An old adage is that a university is a happy place if the administration provides football for the alumni, parking for the faculty, and sex for the students. I assume that the free market is working well at my university for the students; and the university administration always works hard on football for the alumni: we’re now building a 15,000 . . .
Standard economic theory implies that we maximize our happiness if we have more choices. Yet we limit our choices — impose self-control mechanisms — voluntarily in order to improve our well-being. For example, I just signed a book contract with a small advance payment. I don’t need the extra money right now, but having taken the advance payment I know . . .
The average item bought by the average buyer has an income elasticity of nearly one: most people roughly double their spending when their income doubles. But everything we buy consists of both a quantity dimension and a quality dimension. What’s clear is that the income elasticity of demand for quantity is less than one: when our income doubles, we don’t . . .
The Society of Labor Economists, a professional organization, gives awards to worthy scholars. One is for lifetime achievement, the other to a scholar who finished his/her education within the past 12 years. The American Economic Association does the same thing. Because most scholars — in economics and most sciences — do their best work while young, all these awards are . . .
A recent article notes that attendance in Major League Baseball parks is actually above last year, despite, so the story says, the economic downturn (recession?). But despite is incorrect — it should be “because” of the economic downturn. The story notes that cheap seats at the Dodgers Stadium go for $8 to $13. Not bad for three plus hours of . . .
Class today is about bequests — wealth left over to one’s heirs. There are many interesting economic questions about bequests, including whether they are planned (partly yes, but partly no, because wealth is left over when people die that they had planned to spend in their very old age) and what bequests do to economic inequality (they raise it). Another . . .
The actor Ed Begley Jr. has a widely-circulated OpEd piece touting his eco-friendly activities, featuring a proud announcement that his exercise on his stationary bicycle generates the electricity he uses to toast two pieces of bread. Now those two pieces give him 200 calories, but he burns at least 100 calories on the bike. So half of his eco-friendly exercise . . .
A recent N.P.R. report about housing prices in D.C. shows the close link between driving costs and the housing market. According to the report, home prices in the suburbs have fallen 18 percent while those in the District have risen 11 percent. No doubt some of this difference is due to a change in demand toward the District resulting from . . .
Imperial College, the science-oriented school in London, recently pulled out from the umbrella organization, the University of London. Imperial graduates will no longer have University of London diplomas, but will now have diplomas issued by Imperial. The reason for the pull-out is that the college administration apparently felt that the Imperial cachet was more valuable than the broader London label. . . .
I had my students present and discuss a study of the market for organ donations. The study points out that prices are not used to elicit supply of live organs or to ration demand, and that the shortage (waiting list) of kidneys and livers has been increasing. The authors propose using prices to reduce the shortage of both live donations . . .
News of the Weird has a depressing economics story this week about food prices in the poorer sections of Port-au-Prince, Haiti, which is perhaps the poorest country in the Western Hemisphere. The price of rice, the staple product, has doubled in the last year. This increase naturally has residents looking for substitutes for rice. Apparently in the past they have . . .
This morning I downloaded an update on the software for my iPhone. As so often happens with software updates, it completely screwed up the device, requiring me to spend an hour with tech support trying to get things fixed. One frequently faces the choice of whether to update software or not. The gains are some extra features. The out-of-pocket cost . . .
Nancy and Harry Chapin’s song, “Cat’s in the Cradle,” is one of my favorites, partly because of the beat, and partly because it illustrates one of the essential trade-offs in life. For those who don’t remember the lyrics, it sings of the life of a busy man who isn’t there when his son grows up and who, in old age, . . .
Germany is considering a new government-imposed minimum wage — a price floor in the labor market — to apply to postal carriers and related workers. One of the major proponents of the plan has been one of Germany’s biggest employers — its privatized postal service, Deutsche Post. One might wonder why a big employer is pushing a plan that might . . .
Divorce can be very good for (some) children. A Spanish colleague was discussing the effects of the 2004 changes in Spanish divorce law — which require only a six-month waiting period in uncontested cases and no separation of living arrangements before the divorce becomes final. In many Spanish cities there is substantial excess demand for places in some public elementary . . .
A story on the Internet noted that New Zealand is banning the so-called party pill, a stimulant that is already illegal in the U.S. The ban goes into effect April 1. Sales after that date are outlawed, and possession will be illegal after October 1. The fines on sellers after April 1 will no doubt cause a decrease in supply, . . .
We just returned from four days of hiking in Big Bend National Park, and today we drove 500 miles in Texas along I-10. A number of oil wells were pumping vigorously along the highway. When we took the same road 6 years ago, the wells were there, but they were not pumping. This is no surprise: in 2002 the price . . .
Lecturing on divorce today, I was reminded of the refrain in Clay Walker‘s song, Then What: “Then what, what you gonna do, when the new wears off and the old shines through, and it ain’t really love and it ain’t really lust, and you ain’t anybody anyone’s gonna trust. … When you can’t turn back for the bridges you burn….” . . .
Please welcome our newest guest blogger, the University of Texas economist Daniel Hamermesh. In a long and distinguished career, Dan has written about everything from the economics of suicide to the impact of the “beauty premium.” Because he kept turning up on our blog, including just last week, we thought we’d invite him to come on over and stay awhile. . . .
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