Re: Siberia and Canada
In a message dated 4/8/2004 3:34:39 PM Central Daylight Time, [EMAIL PROTECTED] writes: Question: If there were free migration between the U.S. and Canada,would Canada lose a lot of population to California, Florida, and othermore desirable locations?In fact we might expand the rationale to something I once asked: in theevent totally free economy ever came about, and transportation continuedto get cheaper, would the total populus of the Earth eventually live ina narrow band centered on the equator? Alternatively, if the center ofthis band was too hot or the tilt of the Earth with respect to its orbitaround the Sun required some correction, would we witness some othercircular concentration of population, or perhaps two separate bandscentered on a great (perhaps tilted) circle around the planet? It doesn't seem likely. Even if people's preferences were uniform with respect to climate (which I doubt they are; I have a perverse friend who simply revels in Chicago winter), they would not be uniform with respect to population density. I'm a Florida native,so I like warm weather as much as the next man; but if you crowded six billion people into a narrow band around the globe, then I (and like-minded others) would say "enough of this, I'm going somewhere where there's enough space for me toown a house." In the world of uniform climate preferences and perfect mobility, I suspect people would quickly distributethemselves across the globe according to willingness to put up with population density. My two cents. --Brian Economics Undergraduate, University of Chicago
Re: financial leverage
The standard economic response to your argument, I believe, would be that if this were a good idea, so many people would already have borrowedand investedthat the lending rates would rise until it was no longer profitable to do what you suggest. The implication is that at the moment, the market predicts that you will at best break even, unless you have some special insight that the market at large does not have. --Brian -- tyl24 wrote: Short-term I would lose about 1-2% percent on theborrowed fund but in the long-term I would gain 1-2%when I lock in a long-term bond that has a coupon ratethat is above the borrowed rate. I don't see how bondwould be a loser if interest rates goes higher since Iwill locking in a bond that yield a higher coupon ratethen the borrowed rate. I don't think you undertsandmuch about what I said before and I don't think youunderstand about bonds very much.
Re: Skeptical Inquirer-article address
It might be worth adding to this discussion that Skeptical Inquirer's objective is to call attention to claims of dubious scientific merit so that they can be given further scrutiny. My reading of the article in question is not that it is attacking the methods of econometrics, but rather noting the frequently inconsistent conclusions researchers can reach due to disagreement on what data should be used and when -- they're acknowledging the diamond but making clear its flaws. As such it performs a valuable function; it reminds us that econometrics must be cautiously applied. This is Armchair Economists; Landsburg himself chuckles about how econometrics can be used to show that capital punishment either deters 13 murders per execution or causes 3. I think the SI article makes substantially the same point. --Brian [EMAIL PROTECTED]
Re: drink prices
People often make impulse purchases at the supermarket as they proceed through checkout without knowing the price. Indeed, the price is usually not even marked. I suspect, however, that the explanation is different from the one I'd employ to explain the phenomenon you describe. Impulse buys are quite inexpensive, almost by definition, and hence price sensitivity tends to be lower than it would be for a potenially expensive glass of alcohol. --Brian Auriti [EMAIL PROTECTED]
Re: Disaster Raises Happiness, Trust
With regard to Mr. Dickens' comment regarding whether stress should cause sexual arousal, I am tempted to think that evolutionary psychology can certainly explain this phenomenon. Early societies, according to most models of human development, used the males as hunters and warriors; females were gatherers. With this division of labor, males certainly incurred the more perilous part of the community's job. Before an important hunt or major battle, it is manifestly in the male's evolutionary favor to become sexually aroused; after all, this may be his genome's last chance to reproduce itself! Even if he dies in battle, his sex partners -- still safely at home -- will be able to bear his young. From an economic perspective, a man who expects to die tomorrow discounts the future at a rate of infinity and thus strives to consume as much product as possible immediately. Some variant of this story is likely true for women as well; if virtually the entire male contingent of the tribe (and probably the fittest contingent at that) is going off to war, women must be impregnated immediately if they are to bear fit offspring. Hence they, too, increase the rate at which they discount the future. I would suppose that this increased rate is the cause of increased happiness in the public. If people discount the future at a high rate, they are likely to indulge in instant gratification, intensifying their spending and reaping the short-term utility of their action. This boosts their level of happiness, causing the poll results. (This might also suggest that the oft-noted increase in wartime GDP stems in part from the private sector.) Any thoughts? --Brian Auriti
Re: Excessive drinking
My understanding of economic rationality is that people act rationally to maximize what they perceive to be their utility. Thus a forbidden fruit hypothesis makes sense if and only if people believe they derive utility from doing something which society at large finds unacceptable, by virtue of its being unacceptable. To state the obvious, this might occur if a potential drinker's peer group looked favorably upon such behavior, since acceptance by one's peers is clearly a form of utility. Since some groups of young adults do indeed view rebellious behavior this way, I see no inconsistency between economic rationality and forbidden fruit. I would even go so far as to say that putting forth the appearance of being rebellious is the primary purpose of a large portion of underage drinkers. Because of laws against underage consumption, overall consumption might well decrease in all classes of society, but those who maintained easy access to alcohol would be more likely to binge drink -- after all, if drinking one bottle of beer is rebellious, drinking two bottles is even more so. Thus proportionally more underage drinkers binge drink. I also liked Mr. Parich's argument that underage drinkers do not drink publicly and thus are less likely to know when to quit. Hopefully, these observations help explain why binge drinking has increased even as overall consumption has decreased. --Brian Auriti
