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Posts Tagged ‘Beer’

College Campus Beer Pricing

There are three convenience stores in the student area west of the University of Texas campus.  Store A sells the most beer, and barely looks at student IDs; but it also charges the highest price of the three.  Store B is a bit stricter on fake IDs, refuses some underage students, and charges a lower price.  Store C has the best prices, but its clerks inspect IDs thoroughly. My student reports that nobody makes it through with a fake ID.  This near-campus oligopoly defines a new pricing strategy: lenience on IDs that is unsurprisingly related to the stores’ pricing policies. I wonder about differences in the characteristics of the patrons of the different stores.

(HT: JZ)



Don't You Wish You Thought of This? Econ Professor Focuses on Beer

From the (Saskatoon) Star-Phoenix:

When Jason Childs and his colleagues went about devising a new course in economics at the University of Regina, they wanted to find a focus that didn’t involve the overused and fictitious widget.

What they arrived at was a product that was historic and central to people’s lives – and something most undergraduate students are familiar with: beer.

Childs, an associate professor of economics, said the Economics of Beer course had 80 seats, and they were filled in about two weeks. The course began in early May and finishes near the end of June.

“Basically, it’s an exploration of some economics concepts, in particular microeconomic concepts, and the brewing industry,” he said. “Beer is a really neat example because it allows you to talk about just about every fundamental concept in economics.”



The 1907 Bavarian Beer War

Touring Bamberg, northern Bavaria, our tour leader mentions the local 1907 Beer War.  The town’s three brewers announced that they were joining to raise suggested retail prices from 10 to 12 pfennigs and charge retailers commensurately more. The pub owners felt the public would be angry and refused to buy from the cartel.  After one dry day they instead began “importing” beer from nearby towns. The public’s thirst was slaked — still at 10 pfennigs a glass.  After a week of no beer sales, the local brewers caved in and cut their asking price to 10 pfennigs a glass.   Moral of the story: even with just three players, it’s hard to maintain a cartel if there are ready substitutes for the product. (HT to MP)



Pricing in the Land of Beers

Belgium prides itself on being “The Land of Beers.”  A Belgian student tells me that this pride leads to some unusual pricing policies among the less well-known breweries.  Apparently, many charge a higher price for their products when they are sold within the local area around the brewery, since people are proud of their local brand.  This is a clear example of demand-based price discrimination.  The average cost of selling locally is probably below that of selling elsewhere (lower transportation costs); but locals’ pride in the native tipple gives the brewers some monopoly power, which they are happy to exploit.  The brewers are made better off (higher profits) by the locals’ behavior; and the local people must be better off, otherwise they would choose different brews.




The Statistical Significance of Beer

According to a new paper by Stephen T. Ziliak, it was a brewer at the famed Guinness beer company, William Sealy Gosset, who first began to explore the concept of statistical significance:

Gosset (1876–1937) aka “Student” – he of Student’s t-table and test of statistical significance – rejected artificial rules about sample size, experimental design, and the level of significance, and took instead an economic approach to the logic of decisions made under uncertainty. In his job as Apprentice Brewer, Head Experimental Brewer, and finally Head Brewer of Guinness, Student produced small samples of experimental barley, malt, and hops, seeking guidance for industrial quality control and maximum expected profit at the large-scale brewery. In the process Student invented or inspired half of modern statistics.



Buying A Growler of Craft Beer … at the Pharmacy?

At one Manhattan pharmacy, you can buy more than just cold medicine. DNAinfo reports that at one Upper West Side Duane Reade, “[y]ou can also replenish your beer supply at the pharmacy’s Brew York City, a service counter that pours out ‘growlers’ of beer, 64-ounce screw-top glass jugs.”




Keeping Your Pints Honest

Oregon’s House recently passed the “Honest Pint Act,” which would allow drinking establishments to display state-issued stickers certifying that their pint glasses actually hold 16 ounces, as opposed to the 13- and 14-ounce glasses that some bars try to pass off as pints.



Which Is Worse: Fewer Pubs or More Unhealthy Citizens?

Patrons at Cecil’s Jazz Club in West Orange, N.J., savored one of the last nights for smoking in bars and restaurants. (Photo: Marko Georgiev/The New York Times) A journalist writing for the Financial Times complains that Britain’s indoor smoking ban has resulted in more pubs closing and a decline in beer sales of 10 percent. I believe that smoking and . . .



FREAK Shots: Is Beer Bad for Science?

The more beer scientists drink, the less likely they are to have a paper published or cited, according to a new study by Thomas Grim, an ornithologist at Palacky University, Czech Republic. Grim surveyed the behavior of Czech scientists and found a correlation between amount of beer consumed and papers published. But the Czech Republic may just be an strange . . .



The Rich Drink Better Beer, Not More

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 . . .



When Bad Laws Create Good Outcomes: Prohibition Edition

A couple of months ago, Dubner and Levitt wrote about how poorly constructed laws can lead to some unintended consequences. Let me add one more example to their list, albeit one that I’m enjoying. The Pennsylvania Liquor Control Board was set up in the wake of the 21st Amendment, and the end of Prohibition. A direct (and presumably intended) result . . .



What’s That Have to Do With the Price of Beer in Germany?

Dan Hamermesh, on his Economic Thought of the Day blog — it is excellent, and always fun — wrote this recently: A disaster has occurred in Germany: The staple drink – beer – is rising in price. The reason is that there is a worldwide shortage of barley, a major ingredient in the brew. This has pushed up the price . . .