Tag: economics
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‘Locked’ Value, and Paying for Everything Twice
How to account for the true cost and value of our possessions? In the same vein as Thoreau, who wrote in Walden: “the cost of a thing is the amount of what I will call life which is required to be exchanged for it, immediately or in the long run”, David Cain suggests that everything…
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Congestion Tolling at the Supermarket
To help explain why toll lanes might not be the great solution to traffic congestion many believe them to be, Timothy Lee goes to an unexpected place to draw parallels: your local supermarket. Supermarkets are a good analogy, suggests Lee, because they operate in a free market, are ruthlessly efficient, intensely competitive, and employ ‘lanes’ (checkout…
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The Drinkers’ Bonus: Alcohol Intake and Increased Earnings
Drinking alcohol — and the increased social capital that it leads to — may not just be responsible for a possible increase in life span; it may increase your earnings, too. In an analysis of both the General Social Survey and the published literature, researchers for the Reason Foundation show that alcohol drinkers earn, on…
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Equal Societies Good for All
The more unequal a society’s income distribution, the more health and social problems ail both the rich and the poor. With this theory brought to his attention through the “quite fascinating book” The Spirit Level, Nicolas Baumard displays the evidence to support the theory that economic inequality is bad for all inhabitants of a country before…
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India and the Definition of Middle Class
A newly proposed international definition of the middle class for developing countries, produced by the Center for Global Development for the World Bank, has some surprising conclusions for India. The report, produced by the president of the Center for Global Development, Nancy Birdsall, suggests that “middle class” is defined as everyone with an income above…
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Abstraction to Increase Effort (and Spending)
When there is a medium placed between our effort and a desired outcome, we strive to maximise this medium regardless of whether or not it leads optimally to that outcome (think points or virtual currencies as a medium when attempting to obtain goods). That’s my attempt at a concise summary of the findings from a…
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Bonus Cultures and Ideal Banks, Schools, Hospitals
In light of the ongoing debate with regards to the financial sector’s so-called ‘bonus culture’, economist John Kay looks briefly at the history of the bonus and why the idea of a ‘bonus culture’ is a “poor joke” (using the example of teacher and doctor bonuses). At one time, the offer and receipt of a…
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The Economically-(Im)Perfect World of Online Games
Kristian Segerstrale–owner of online games company Playfish (acquired by Electronic Arts for $400m in November 2009)–discusses why online game environments are exciting places for economics research (and specifically: “how social factors influence economic decision making”): When economists try to model behavior in the real world, they’re always dealing with imperfect information. “The data is always…
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Licensing and Patents for Green Technology and Drugs
The Seed Magazine ‘panel’ (who?) was asked How can intellectual property be adapted to spread green tech? Their short answer starts by looking at drug licensing (the last sentence is quite shocking): By World Trade Organization law, if a patented drug can improve public health in a developing country, it’s available for compulsory licensing. That…
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Environmental Assumptions
Big business is environmentally destructive: a widespread and almost unquestioned assumption. A false assumption, according to Jared Diamond, noting that profits often arise from green initiatives and environmental concern is of inherent importance to many large corporations. The story is told through the lens of Wal-Mart’s transport and packaging initiatives, Coca-Cola’s concern “with problems of…