Marijuana legalization is a shift variable in the demand for snacks foods.
I can’t speak to the completeness of the research, but the raw growth rates for both sweets, and for total snacks, are higher in the states where marijuana is legal for recreation:
I am not sure why they chose to present their results this way. In other parts of the article they note that total snack spending is $29.9B with confections being $6.5B of that. The pair on the right and the pair on the left apply to those numbers. I don’t have the breakdown of shares between the columns. In any event, it’s a certainty that the growth rate of non-confectionary snacks (like Fritos) would be higher than the rates shown on the right. Unless there’s some other category of snacks I’m not aware of.
Last time I checked, the major weakness of decision making based on data was … making up the data you don’t know, and then not doing sensitivity analysis of those assumptions:
Wait … what? Don’t I know and love a certain university whose Provost did this with a policy change about increasing online enrollments?
I’m not too concerned about the particular case, but there’s some good economics here:
This is a lawsuit …
… it claims that CollegeAmerica’s tuition is much higher than at community colleges. But since it takes far less time to obtain a degree at CollegeAmerica, the cost to graduate is actually lower there. And if one counts as a cost the income that students must forgo while attending college and being out of the workforce, the shorter graduation time makes the total cost of a degree substantially lower—$92,000 at CollegeAmerica Denver vs. $125,000 at Community College Denver for an associate’s degree.
The lawsuit was brought by the State of Colorado against CollegeAmerica. That’s a non-traditional school, or “career college”. These are currently out of political favor generally, but mostly because of the specific actions of some. Whatever.
The case argues that tuition is too high at CollegeAmerica. But that’s an accounting cost. Economics costs include the opportunity costs of foregone income, and they show that CollegeAmerica is a pretty good deal.
Prices communicate scarcity not value. Professional athletes don't earn more because they're more valuable to society they earn more because their skills are more scarce.
When politicians say they want to encourage home prices to rise what they're saying is they want to make housing more scarce and harder to obtain.
When unions say they want to keep wages high they mean they want to keep the supply of labor low. This is why health care is expensive is because barriers to entry prevent an adequate supply of something.
When government says it'll protect farmers from the price of crops from falling they're saying they want to make food harder to obtain.
A lot of scarcity is artificially created by government to street [sic] and control prices. The abundance we could have is often intentionally destroyed.
The poster is Bryce Carmony. Nothing here I don’t know, but I’ve never said it so clearly.
The great thing about this presentation is that if you get this out first, it will make getting across more subtle points that much easier.
Take mark-ups for example. Most students have trouble with this because they start with the idea that “businesses mark up prices”. If you ask them “How?”, not only do they not know, but they’ll often shift into nonsense “Because they can.”, “Because that’s what business-people do.”, “Because they only care about themselves.”, “Greed”. Things will work better if we teach scarcity first.
Reinhard Selten passed away last week. He shared the 1994 Nobel Prize for developing the idea of subgame perfect equilibrium.
As a professor, I am always on the lookout for good examples of subgame perfect equilibrium, because it’s a fairly hard idea to teach. The obituary got me off looking at Wikipedia, and I found an example of a game that is both good and accessible there.
I won’t copy it over here, but the game is a two stepper: one player chooses their strategy, followed by the other. Each has 2 choices, so there are 4 possible outcomes.
The cool thing about the example is that it has 2 Nash equilibria, but only 1 of them is subgame perfect. Further, the explanation sets out the extensive form, but then also shows the outcomes in a matrix (which in my experience is easier for students to use to find Nash equilibria).
A knowledge spillover is when someone thinks up a new idea, that might be more valuable privately if it didn’t spillover into public use.
If the alphabet had been copyrighted, would it be used as much? Probably not, and that would be a bad thing. The thing is, someone is less likely to invent something in the first place if they can’t prevent or control those spillovers.
Good answers — about whether we’re better off protecting the rights of inventors to profit from their inventions, or better off letting society get stuff for free — are hard to come by. Macroeconomists do make primitive measures of this sort of thing, which tend to suggest that we protect inventors too much.
I ask my students this all the time … and I get ridiculously large answers. And these are business students, and I don’t teach 1000-level courses. I think the public is probably much further off.
Think about that for a minute. Profits, by construction, are measured after corporate taxes are removed. So the government’s already gotten a share through the price you paid. Reasonable people can quibble about whether the amount they’ve gotten at this stage is too big or too small.
But then, at this juncture where the firm’s profit might become your cash the government imposes a tax on corporate profits. So the government is taking a share, and then asking for another share on top of that.
An analogy might help: this is like a bully that takes part of your money, and then when you go to buy lunch wants you to buy him lunch too.
But maybe that analogy is too harsh. Perhaps you like government. Well then, here’s another: government is like a dog that you give a treat to, so that they’re happier and perhaps bug you less, that turns around and begs for part of your dinner. I know lots of people that object to their dogs behaving that way. You should object when your government behaves that way too.
An expense is an expense: a minimum wage increase just gets taken out at the top of the income statement and a tax gets taken out … well … sometimes at the top of the income statement, and sometimes a few lines lower down.
The big implication of Modigliani-Miller for finance was the recognition that in many cases it didn’t matter how you financed a project.
That insight is used a lot by economists. We use it so much because lots of people outside of economics insist that, say, taking $12K away from a business one way is not as harmful as taking $12K away from them some other way. Yeah … right.
I like this video, although it could be done with lots of products other than wine.
There’s actually some hugely complex microeconomics going on in the background, which you can peruse after you watch this video entitled “Expensive Wine Is for Suckers” from Vox.
The way that we normally think about supply and demand is that quality is a shift variable for demand: perceived higher quality shifts demand to the right, increasing prices and quantity.
What they’re discussing in this video isn’t contradictory to that, but it’s not simple to see that.
If you’ve ever had me for a face-to-face class, this is an example of what I’m getting at when I bring the clear piece of polycarbonate plastic to class and have two students hold it up in front of the projector so that we can see it’s shadow on the board.
What they’re arguing instead is that price is a shift variable for quality, in a graph with quantity and quality on the axes instead of quantity and price. That’s weird, right? What would demand look like in the graph if we change the vertical axis from price to quality? It would be upward sloping.
Why is that so?
Go back to the case of the typical demand and supply with quantity and price on the axes. When we figure out the slope of demand, we hold quality constant (holding other stuff constant is what ceterus paribus means). So, for something of constant quality, when the price is higher, we buy less. That makes demand slope down (when going from left to right). Quality is then a shift variable in that framework because if we held quality constant to trace out that demand, then if we allow quality to change we must be going to a different demand.
Now, do the same thing, except let’s label the axes as quantity and quality, and hold prices constant. What will demand look like as quality improves but price stays constant? Well, you’ll buy more, right? That means that in a graph with these axes demand slopes upwards (going from left to right): higher quality is associated with higher quantity bought.
What they’re saying in the video is that higher price is a signal of higher quality. This means that it’s a shift variable. Now this is a bit weird, but hold actual quality constant on that upward sloping demand in quantity-quality space. A higher price is a signal of higher quality, meaning you’ll buy more, and that demand will shift to the right at that particular quality you’ve been holding constant. This is complex, but it works because “signal of higher quality” and “particular quality” are not the same thing: the first is an expectation, while the second is a fact.
The bottom line is that the people in the video aren’t irrational for thinking that the high priced wine tastes better only when they’ve been told it’s price is higher. All they’re doing is using the signal they were given the same way they always do.
What’s irrational is that we do stuff like this all the time, and we don’t realize that it’s the behavior that’s weird, not the decisions based on it.
Unfortunately, the takeaway from this may be that the best thing is to let other people buy expensive stuff and serve it to you as their guest.
With the development of internet technology, work at home jobs are increasing in the market. Also setting up small business online with ones own bank savings can provide excellent work at home opportunities. Apart from savings, banks offer0 credit card to cater to short term finance needs. Partial tax payments like tax credits are also available to promote online businesses. Market now offers several alternatives to traditional credit card debt which are helpful to work at home businesses.
Newsback News discussion community. The forum and news website made especially so that users can comment about current events and talk about the news with other people.
