Oprah, one of the richest women in the world, was in Zurich, Switzerland, when an assistant at an upscale handbag shop told her the purse she was looking at (worth over $35,000) was “too expensive” for her. [Globe and Mail]
Winfrey - and just about every single media outlet in North America - interpreted the incident as evidence that racism exists:
“I could’ve had the whole blow-up thing and thrown down the black card, but why do that? But that clearly is, you know ... it [racism] still exists. Of course it does,” she said.
It seems unbelievable. Would a shop assistant really be so rude? Be so oblivious that she failed to notice the fact that Winfrey's "little Donna Karan skirt" and "little sandals" proclaimed serious money?
Smokers smoke. Gamblers gamble. Drinkers drink. Why should anyone else care?
Some non-economists believe that economics assumes selfishness. Each person is only concerned about themselves, and their material consumption. Selfishness can be represented formally like this:
A person's "utility", their well-being or happiness, is a function, u, of their consumption of goods and services, represented by the vector x.
An entirely selfish person doesn't care if others smoke or gamble or drink. Her well-being depends only on her own consumption. Live and let live (or, as the song goes...).
When I first joined Carleton, just three out of thirty professors in the economics department were female. Then one retired, one moved to Montreal, and I was the only female professor around on a regular basis.
For the most part, I didn't mind. If I was the kind of person who objected to being in a male-dominated profession, I wouldn't have gone into economics in the first place. But the absence of women meant I had to socialize with male colleagues, or not socialize at all. I had to work out what kinds of interactions with my male colleagues were socially or otherwise acceptable. It wasn't obvious, at first, where to draw the line.
My local mall does not provide short-term bicycle rentals. It also does not sell roast-lamb-and-mint flavour potato chips, or jeans in a size 32 inch waist/36 inch leg.
I would like to be able to purchase all three of these goods and services. For the last two items on the list, the intuition of the average person is the same as the intuition of the average professional economist: quit whining and deal with it. Most Canadian firms do not produce obscure potato chips flavours or clothes in unusual sizes because consumers aren't willing to pay enough for those items to cover the firms' costs. The benefits consumers enjoy from these goods and services are less than the costs of providing them, so it's not efficient to provide the good or service.
Yet when it comes to short-term bicycle rentals, people often reach a completely different conclusion: government should intervene to create a bike sharing program. All the world class cities have them: Washington, London, Paris, Beijing, New York, and Toronto.
As far as I know, Canada is the only country that divides its population into "visible minorities" and "non-visible minorities." In this post, I describe how, and why, Canada counts people this way.
A person's visible minority status is ascertained by asking:
"Is this person....White, South Asian (e.g., East Indian, Pakistani, Sri Lankan, etc.), Chinese, Black, Filipino, Latin American, Arab, Southeast Asian (e.g., Vietnamese, Cambodian, Malaysian, Laotian, etc.), West Asian (e.g., Iranian, Afghan, etc.), Korean, Japanese, Other - Specify" (Source: National Household Survey):
Respondents may choose more than one option, or provide a write-in answer. The responses are coded as follows:
Cars are boring; bikes are cooler. Here are the top 10 reasons why.
10. Cars are for stuff
People from the pre-computer era have books, DVDs, TVs, stereos, big photo albums, board games, and playing cards. They need cars to transport their stuff.
Cool people have digital stuff. They can fit their entire music collection in a bicycle pannier.
Take a look at the picture on the right. How much does one box of popcorn cost?
The correct answer, for this particular box, is $1.50. However it is not obvious that "two for $3" implies "one for $1.50". In other contexts, customers must make a minimum purchase to obtain a lower per-unit price. For example, if a shoe store has a "buy one pair, get a second pair free" sale, the customer who buys just one pair of shoes pays full price.
The actual per unit price of popcorn is not stated anywhere on the sign. Regular readers may recall a question from a financial literacy test used in a recent Statistics Canada Survey: True or false: By using unit pricing at the grocery store, you can easily compare the cost of any brand and any package size. In this case, the answer is false. The only unit price listed on the sign, 70.6 cents per 100 grams, corresponds to a price of $1.99 per 282 gram box, not the actual price of $1.50 per box.
A key insight of behavioural economics is that people don't always do what is in their own long term interests. Our inner planner sets goals - complete that paper, write that referee's report, floss. Our inner doer - who has all the perseverance of Homer Simpson - fails to follow through, and sabotages the planner's best intentions. As a review of Nudge by Tim Leonard puts it:
Too often, our impulsive, myopic, unreﬂective reptile half seizes the levers of choice from our resolute, farsighted, thoughtful human half. The upshot: we are more Homer Economicus than Homo Economicus.
Last fall I stopped talking about the economics of gender, and began talking about the economics of sex. It was wonderful.
So much can be discussed under the rubric of economics of sex. Take, for example, the pick-up artist phenomenon, described in books like The Game. It's like Cesar Millan's Dog Whisperer books, urging men to be alphas, take a leadership role, and ignore begging and requests for attention. The major difference as far as I can see is that pick-up artists aim to make women come to bed, rather than dogs come to heel.
Paul Krugman has recently taken aim at the rhetoric of the US right:
From the enthusiastic reception American conservatives gave Friedrich Hayek’s “Road to Serfdom,” to Reagan, to the governors now standing in the way of Medicaid expansion, the U.S. right has sought to portray its position not as a matter of comforting the comfortable while afflicting the afflicted, but as a courageous defense of freedom.
That got me to thinking. When I read or watch the US media, I hear lots of talk about freedom - much more than in Europe, say. But do Americans actually feel freer than people elsewhere?
In theory, it's safe. Everyone knows which side of the pathway they are supposed to be on. Having a yellow line in the middle of the pathway reduces the chances that cyclists will plow into each other, causing a nasty accident.
Statistics Canada has released its most recent report on police personnel and expenditures and notes that police strength measured as officers per capita declined in 2012 by 1 percent. Moreover, there has been a slight decline in police expenditures overall with spending in 2011 totaling 12.9 billion – a decline of 0.7 percent from the previous year. However, spending and officers per capita have generally grown over the last decade and police forces and police spending are higher than they used to be. What is of more interest to me are the numbers at the CMA level and their relationship with crime rates.
For complicated historical reasons, I hold $13,000 in a locked-in RRSP with Great West Life. A few days ago, I received a "Year-End Retirement Illustration", shown over the fold. I read it and thought "That's so bad, it's bloggable."
For centuries, elephants with large tusks have been targetted by hunters and poachers. The "unnatural selection" in favour of smaller-tusked elephants has resulted in a dramatic decrease in average tusk sizes right across Africa.
Smaller tusks increase an individual elephant's probability of survival, by making him or her a less attractive target for poachers. But what if all elephants' tusks decrease in size? Can evolution save the elephant?
I’ve been doing some data exploration on public sector spending and societal outcomes and have some preliminary results that have caused me to puzzle about what they might mean. I’ve been looking at annual data for OECD countries (33 countries) over the period 2000 to 2010 and the relationship between public sector size and crime rates. Public sector size is defined as total government expenditure as a share of GDP. The crime variables were the number of homicides per 100,000 of population and the number of burglaries per 100,000 of population. The data is from the OECD and is essentially unbalanced panel data. The results for homicides did not surprise me but that for burglaries did.