What people will give up for one year to keep Internet access
15 Feb 2015 Leave a comment
in economics of information, economics of media and culture Tags: Digital economy, digital goods, Internet access, willingness to pay
Useful advice for pet owners
15 Feb 2015 Leave a comment
in economics of information, economics of media and culture, economics of regulation Tags: warning labels
HT: https://twitter.com/KMartUK/status/540218954988679168/photo/1
Useful information for coffee drinkers
13 Feb 2015 Leave a comment
in economics of information, economics of media and culture, economics of regulation, law and economics Tags: vexatious litigation, warning labels
HT: overlawyered.com
Wacky warning labels finalists
12 Feb 2015 Leave a comment
in economics of information, economics of media and culture, economics of regulation, law and economics
When divorce lawyers can advertise
07 Feb 2015 Leave a comment
in economics of information, economics of love and marriage, entrepreneurship, law and economics Tags: advertising, entrepreneurial alertness, family law
Name recognition and your chances of winning the presidential nomination
06 Feb 2015 Leave a comment
in economics of information, economics of media and culture, politics - USA Tags: 2016 presidential election, name recognition
Why popularist politics work: People Are Terrible at Estimating Income Inequality
05 Feb 2015 Leave a comment
in economics of information, politics - Australia, politics - New Zealand, politics - USA, Public Choice Tags: expressive voting, poverty and inequality, rational ignorance, rational irrationality, the top 1%, urban myths
Does global warming denial and the anti-vaccination movement march to the same anti-science step?
03 Feb 2015 Leave a comment
in climate change, economics of information, economics of media and culture, environmental economics, global warming, health economics, politics - Australia, politics - New Zealand, politics - USA, Public Choice Tags: anti-vaccination movement, climate alarmists, expressive politics, expressive voting, psychology of persuasion
In the last post, I presented evidence, collected as part of the CCP Vaccine Risk Perception study, that showed that the trope has no meaningful connection to fact.
Those who accept and reject human evolution, those who believe in and those who are skeptical about climate change, all overwhelmingly agree that vaccine risks are low and vaccine benefits high.
The idea that either climate change skepticism or disbelief in evolution denotes hostility to science or lack of comprehension of science is false, too. That’s something that a large number of social science studies show. The CCP Vaccine Risk study doesn’t add anything to that body of evidence.
Vaccination rates are a serious issue. Do those that are trying to lift vaccination rates think they going to get anywhere by calling people stupid, corrupt and in the pay of a multinational.
Of course not. This matter is serious. It’s a real public health risk.
People are persuaded to vaccinate through gentle messages providing facts in a way they can understand that also respects their knowledge, their intellect, and their concerns for the safety of the children. You don’t win people over by insulting them.
The climate alarmists are so insulting because they have no interest in persuading the people that are actually talking to. They are reaching out to members on the audience were are on the margin, and appealing to their political base, including the fundraising base by showing how staunch they are in slaying the Dragon.
Why do economic consulting firms exist?
02 Feb 2015 1 Comment
in applied price theory, economics of bureaucracy, economics of information, financial economics, law and economics, managerial economics, organisational economics, survivor principle Tags: advice giving industries, corporate law, Deirdre McCloskey, directors duties, economic consultants
Directors’ duties are the reason why the companies hire economic consultants. What consultants say isn’t important; the fact that simply the directors of a company sought advice is what matters. Same goes for the public sector: you must know what you’re doing, you took advice from outside experts.
Central to avoiding being sued if the company goes broke, or otherwise gets into a spot of bother, is the directors show that they acted responsibly.
Central to this is they can show they took advice from esteemed advisers: an accountant, a lawyer and an economist. If they did so, they must be responsible prudent directors because they took advice.
Deirdre McCloskey argued that the advising industry lives off 19th century case law on directors’ and trustees’ duties.
If you take advice – from an accountant, a lawyer or an economist – and the business or investment still fails, it can’t be your fault that you lost the widow’s and orphans’s inheritance.
You took advice. That is what that 19th-century court held with regard to what directors do and do not have to do given the fact that are not involved in the business on a day to day basis.
James Burk, a sociologist and former stockbroker… found that the advice giving industry sprang from legal decisions in the early 19th century.
The courts began to decide that the trustee of the pension fund or a child’s inheritance could be held liable for bad investing if they did not take advice. The effect would have been the same had the court decided that prudent man should consult a Ouija boards or the flight of birds…
America decided through its courts than an industry giving advice on the stock market should come into existence, whether or not it was worthless.
Therefore, it doesn’t matter what you say as a consultant economist to a company, the fact you’ve said something to them is more important to them than what you are saying. Seeking and receiving your advice excused them from being sued for breach of their directors duties for a couple of days.
Profits Are So High, Why Don’t More Farmers Switch To Organic?
02 Feb 2015 Leave a comment
in economics of information, economics of religion, health economics, occupational regulation Tags: compensating differentials, consumer fraud, entrepreneurial alertness, expressive voting, food snobs, organic farming, reputational capital, social norms
HT: Yet Again, Organic Ag Proves Just as Productive as Chemical Ag | Mother Jones.
The increase is partly because more farmers are taking advantage of the healthier profit margins and partly because organic marketing groups sell a health food mythology where cost is not a factor, so costs can rise along with more product. It is a miracle of capitalism.
But given a consumer-base that is wealthy and that is educated by advertising so completely, why don’t all farmers switch?It just takes paying for a sticker and promising to use an organic toxic chemical rather than a synthetic one, there is no testing of organic food, so it would be easy to just make more money.
The reason more don’t move to organic, according to a paper in the Journal of Marketing, is because conventional farmers know in their hearts and minds they are deceiving the public if they switch – making that change is like switching belief systems.
via “Chemical Farmers”: Profits Are So High, Why Don’t More Farmers Switch To Organic?.
Adam Smith wrote about religion in the Wealth of Nations in part because how it infused moral fibre into market dealings. Smith offered a theory explaining the participation of individuals in religion based on his theory of human capital.
In particular, businessmen want to signal to customers that they were moral upstanding people who will not cheat them because that would be against their own moral code and sense of self-respect.
For this reason, Adam Smith suggested that religious sects proliferating in cities because people wanted to join them as a way of signalling they were morally upstanding people. These sects were demanding and rigourously policed the morals of their membership and expelled those who fell in any way short.
A reputation for honesty is both an entrepreneurial investment as well as a way of living a decent life.
People value their reputations and self-respect for being a good and decent man or woman, but some do so more than others. This is why the wage premium under the theory of compensating differentials is large enough only for the trailing edge of the business community. What is that premium?
In 2011, [the] organic premium for a bushel of wheat was 52.2% after factoring in reduced yield per acre of organic production versus total [chemical] average yield per acre. In other terms, [chemical] wheat would have had to have yielded over 53 bushels [a two-thirds increase] per acre to match organic return per acre. (Ted Craig, Wyoming Department of Agriculture, personal communication)
Being an organic farmer is somewhat trendy these days and raises you in the eyes of many but not all. As such, self-respect rather than reputation would be the bigger driver of how large the compensating differential must be before more move to organic farming.
Utopia, you are standing in it! 
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