Saturday, November 17, 2007

What Does Iraq Cost? Even More Than You Think. - washingtonpost.com

What Does Iraq Cost? Even More Than You Think. - washingtonpost.com: "You may recall that you got rid of your loyal White House economic adviser Lawrence B. Lindsey back in 2002 after, among other sins, he claimed that a war in Iraq might cost as much as $200 billion. At the time, White House staffers sneered that Lindsey was being alarmist. Hardly. One commonly cited estimate of Iraq's cost, based on an August analysis by the nonpartisan Congressional Budget Office, is $1 trillion, and that's probably on the low side. A report released last week by the Democratic staff of Congress's Joint Economic Committee put the war's 2002-08 tab at $1.3 trillion.

But all these figures don't quite get at Iraq's real cost. Indeed, we usually don't even frame the question the right way. We'd do better to recognize what we've lost, rather than focusing only on what we've paid.

We often think of cost simply in terms of dollars spent, but the real cost of a choice -- what economists call its 'opportunity cost' -- consists of the forgone alternatives, of the things we could have had instead. For instance, the cost of seeing a movie is not just the dollars you plunked down for the ticket, but also the subtler cost of missing a dinner at home or a cocktail party at work. This idea sounds simple, but if applied consistently, it requires us to rethink and, yes, raise the costs of the Iraq war."



(Via MR.)

Saturday, November 03, 2007

File Sharing Increases Sales P2P users buy more music -- Canadian govt study - Boing Boing



P2P users buy more music -- Canadian govt study

:


* When assessing the P2P downloading population, there was "a strong positive relationship between P2P file sharing and CD purchasing. That is, among Canadians actually engaged in it, P2P file sharing increases CD purchases." The study estimates that one additional P2P download per month increases music purchasing by 0.44 CDs per year.


* When viewed in the aggreggate (ie. the entire Canadian population), there is no direct relationship between P2P file sharing and CD purchases in Canada. According to the study authors, "the analysis of the entire Canadian population does not uncover either a positive or negative relationship between the number of files downloaded from P2P networks and CDs purchased. That is, we find no direct evidence to suggest that the net effect of P2P file sharing on CD purchasing is either positive or negative for Canada as a whole."
"



(Via BoingBoing.)

Thursday, November 01, 2007

The economics of Halloween

The economics of Halloween: "A reform proposal from Kevin Hassett: 'So let's do something to reform Halloween. The first step would be for Halloween donors to give kids money instead of candy. Kids could then go to the supermarket the next day and binge on the candies they really like. That solution would get an A-plus in economics.'

Linked here.  But alas, in-kind transfers are often more efficient than cash gifts, and that holds for public policy as well.  (Imagine giving 'money to buy kidney dialysis,' instead of 'kidney dialysis,' and see how many people fake kidney disease.)  The candy transfer insures that a) mostly young kids do the asking, and b) at some point everyone just stops and goes home.  I've long wanted to know how much movie attendance rises on Halloween evening, given that the real cost of going is suddenly and temporarily much lower."



(Via Marginal Revolution.)