Thursday, June 25, 2009

A Few Extra Pounds Might Bring Extra Years

In my face-to-face class we read a chapter about obesity in the book The Economics of Public Issues. But the article titled A Few Extra Pounds Might Bring Extra Years discusses some research that says that being underweight might be worse than being overweight. Here is an exerpt from the article:

"Compared to normal-weight people, those who were underweight were 70 percent more likely to die and those who were extremely obese were 36 percent more likely to die..."

But "that doesn't mean that people in the normal weight range should try to put on a few pounds," according to one of the researchers. Being obese means your body mass index (BMI) was 30 and above. Here is a Body Mass Index Chart based on height and weight

Tuesday, June 23, 2009

People Are Saving More Out Of Fear

This may be more of a macro issue, but the Wall Street Journal reported that "personal saving as a percentage of after-tax income rose to 5.7% in April, the Commerce Department said Monday, up from 4.5% in March and well above the zero savings rate reported a year earlier." The article is called Americans Get Even Thriftier as Fears Persist. People are fearful of losing their jobs, so they are saving more than they used to. Here is another exerpt from the article:

"The shift toward a higher saving rate is likely to persist even after the economy recovers, said Christopher Carroll, an economist at Johns Hopkins University who studies consumer behavior.

The low saving rate that persisted until last year was due in large part to an expansion in the availability of credit. On the heels of the financial crisis, credit availability has gone into reverse, making it more difficult for consumers to spend beyond their income.

Just as the Great Depression ushered in a shift in behavior that affected an entire generation, Mr. Carroll said this financial crisis will shock consumers into behaving differently. "People had got the sense that the world was very stable and everything was very predictable and reliable," he said. "That's a hard view to hold onto now.""

Monday, June 22, 2009

Tiger Woods Is Still The Greatest Golfer In History

Okay, he did not win the Masters or the U. S. Open this year. But what is the ultimate yardstick for measuring golfers? It is money won. Woods has been the leading money winner on the PGA tour 8 years. The only other golfer to lead for 8 different years was Jack Nicklaus. Woods's 8th year came when he was 31 years old. When Nicklaus did it for the 8th time, he was 36. So Woods beat him by five years. The next two highest totals for years leading the tour in money are Tom Watson and Ben Hogan, both tied at 5. So it really just comes down to Nicklaus and Woods. Nicklaus was the leading winner 8 times from 1964 through 1977 or 8 out of 13 years. Woods led 8 years from 1997-2007 or 8 years out of 11. So with Woods taking fewer years to do it and doing it at a much younger age, it shows he clearly has the edge. Even if he retired now, it would be a no brainer that he is the greatest.

Source: The ESPN Sports Almanac

Thursday, June 18, 2009

Quirky Economic Indicators

You probably know that our economy is going through a recession. Some of my students might recall that one definition of a recession is 2 straight quarters of falling gross domestic product. A quarter is a three-month period. The definition actually uses "real" GDP, which is GDP adjusted for changing prices and is often on a per capita basis (per person). But some other things show that we are in a recession and that is where 10 Quirky Economic Indicators comes in. These other factors, like falling GDP, show that the economy is having problems. For example,

"The National Gardening Association finds that the number of households who will grow their own fruits, berries, vegetables and herbs this year is 19% higher than in 2008.

That makes 43 million gardeners in the United States this year. It's fun and relaxing, no doubt, but 54% of the respondents say the prospect of saving money on groceries motivates them to till the soil."

Other indicators are related to movies, dating and mosquito bites.

Tuesday, June 16, 2009

Wedding Scams Are On The Rise In China

And it's because of simple economics. Family planning policies which limited couples to one child along with a preference for boys has left a surplus of 32 million marriage aged men. So it is easier for a woman to pretend to want to marry a man. Once she receives a dowry, the scam artist can split. Men are so happy to have found a wife that they are not as careful as they should be. The price of brides has gone up and the savings rate of young men has gone up as they try to have enough money to get married. You can read all about it at It's Cold Cash, Not Cold Feet, Motivating Runaway Brides in China.

This is not a spam blog. I teach economics at San Antonio College in San Antonio, Texas. Click here to see my home page from by school.

Monday, June 15, 2009

Miley Cyrus vs. The Ticket Scalpers

You can read about it at Going 'Paperless' to Thwart Scalpers.

Here is how it works:

"The technology, which Ticketmaster tested last year, is meant to make seats impossible to sell or transfer because they can be redeemed only at the concert, using the credit card with which they were bought. The plan has scalpers and resale sites crying foul.

Tickets for the concerts by Ms. Cyrus, the star of Walt Disney Co.'s popular "Hannah Montana" TV series, will cost $39.50 to $79.50, plus fees. When purchasers arrive at the concert, their credit card will be swiped with a handheld scanner that will print out a "seat locator.""

I guess a scalper could simply walk outside with the seat locator and sell them. But then it makes the scalper's job pretty hard. Maybe for some reason this is not possible anyway.

I never had a problem with scalpers. They would wait in line to buy tickets and then sell them to the highest bidder. You don't have to buy them from scalpers if you don't want to. They perform a service by waiting in the ticket line so you don't have to. Of course, these days computers are used to buy the tickets and scalpers might have automated programs to buy them. But that still saves you the time and trouble of trying to be first in line on the computer.

I don't understand why performers just don't charge a higher price to begin with. Then scalpers would not be an issue. With higher prices you would not have to have people waiting in line to buy tickets or trying to be the first online. People only turn to scalpers because they did not want to wait in line or waited and still did not get tickets (or tried to buy them online when they first came available and still did not get them). If you charge a price that is below equilibrium you create a shortage and shortages cause lines.

Tuesday, June 02, 2009

Another Journalist Misunderstands Supply And Demand

The article is Oil Is Plentiful, Demand Weak. Why Are Gas Prices Going Up? by VIVIENNE WALT. Here is the opening paragraph which illustrates the problem:

"Storage tankers across the globe may be brimming with oil that no one is buying because of the global economic downturn, but the traditional laws of supply and demand don't always apply to oil prices. Drivers have faced rising prices at the gas pump in recent months, as investors and oil-producing countries hoard supplies in anticipation of a global economic recovery later this year."

Actually, the "traditional laws of supply and demand" do apply. Price is determined by the intersection of supply and demand curves (or lines). But those curves can shift to the right (an increase) or to the left (decrease). One factor that causes a shift is "expectation of future price." Most, if not all, introductory textbooks have this factor. If sellers expect the price of their good will go up in the future (like if there is going to be an economic recovery), then they reduce the amount they offer for sale today. So the supply curve moves to the left and price rises. This is exactly what we teach in principles of economics courses. The graph below illustrates this:

Now the article does discuss the role that OPEC plays. Certainly when cartels are present, and they act like a monopoly, price will be higher. But the basic textbooks predict that, too.