At 10:47 AM 11/27/2000 -0500, you wrote:
>RE: http://slate.msn.com/economics/00-02-09/economics.asp
>... I haven't read the original study .... Given that, Landsburg's account
>of the idea seems totally nutz to me. Why would we assume that the
>relative price of quality vs quantity should remain the same over time
>(that has to be the underlying assumption that makes sense of the analysis
>that is being done). ...
That assumption didn't bother me as much as positional goods
concerns and other ways that rich and poor differences at the
same time differ from differences across time.
The study assumes that if the value that rich people get from
spending more on something is the same value that poor people
will get when they spend more on such things as a nation gets
richer.
However, rich people save more than poor people, but savings
don't seem to rise as we all get richer together. Rich
people spend a smaller fraction of their income on health
care, but nations spend a larger fraction as they get richer.
Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323
