Category Everyday economics
University crashes
The optimal size of a university is always a little bit bigger than its actual size. More precisely, the size of a university doesn't really matter. What does matter is whether it's growing or shrinking. A growing university is easy to manage. If you need to grow one department relative to another, you hire people […]
Inequality and debt: the soft bigotry of low expectations
"The poor don't have enough income to save, and can't help going into debt to the rich. Debt is caused by inequality". That statement is wrong on many levels. It's wrong theoretically. It's wrong empirically. But most of all, it's wrong because it might make inequality worse. It's the soft bigotry of low expectations. Providence […]
The generosity collapse
People give when they're asked. Jim Andreoni and Justin Rao have proved it. They ran the following experiment: one person, the allocator, was given 100 'money units', worth $10 in real money. She was free to choose how much to keep for herself and how much to give to another person, the recipient. The recipient, […]
Stand up against the penny
At this year's American Economics Association humour session, stand-up economist Yoram Bauman launched a new campaign: to end the penny – a subject discussed on this blog before. Bauman has a novel suggestion on how to eliminate the penny: promote it. Make each penny worth five cents. Allow people to trade in 20 pennies for […]
Conspicuous Production
Holiday parties are a time for conspicuous production: "Would you like some bread with sun-dried tomatoes – I just baked it this afternoon? The tomatoes? Oh, they're nothing – I had stacks of them in my garden this year, so I dried them in the solar-powered food drier that I built last summer." It wasn't […]
Random Sales, and the elasticity of supply for the option of doing nothing
This post is not about Boxing Day sales. It's about those seemingly random sales, where a good is heavily discounted for no obvious reason. A couple of years ago I went to Canadian Tire planning to buy a $200 socket set. And was surprised to find the one I wanted on special that day at […]
Holiday pictures
Some images to capture the holiday spirit…
Starbucks Bucks
What do you do when you're stuck in an airport with 15 pounds or 20 euros of local currency? It's not worth paying foreign exchange fees on such a small sum. It's not enough money to buy whisky at Heathrow. So I generally take it home and put it aside for the next journey – […]
Over-selling soap
The news item dominated the New York Time's "Most Popular" list for weeks: For your dishwasher's sake – go easy on the detergent. According to the authoritative appliance repairman cited by the Times, “Most people use 10 to 15 times the amount of soap they need, and they’re pouring money down the drain." Wait a […]
Does monitoring charities make a difference?
The website charitynavigator.org rates US charities. Although it's now changing its rating system, a charity that spends a low percentage of its budget on fundraising and administration will usually get a high rating. It's not clear how much influence sites like charitynavigator have. A recent article reported that only 10 percent of Americans consulted a […]
Worthwhile Canadian Initiative 
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