Why Burger King Should Not Pay More For Tomatoes

Eric Scholosser, the author of Fast Food Nation, penned an OP ED piece in the New York Times yesterday (link) about how Burger King should pay more for its Florida tomatoes. He argues that paying a penny more a pound for tomatoes could be directed right to the migrant workers, making their lives better.

Funny enough as he points out in the column that these farms in Florida are having a hard time keeping wages up as they have to compete with MEXICAN farms. So the impact of the extra penny would make it harder for Mexican farms to compete, thereby encouraging more migration to the United States, where being a day laborer may be more difficult.

Is this the best way to improve the lives of these workers?

Is that your bag?

The NY Police department is leaving purses around the city with a little bit of cash, a couple of credit cards, and an ID to have it returned (link). Don’t return the bag, and you get arrested. Although laws state people have 10 days to return lost property, it seems the NYPD are being a little bit over zealous in their prosecution of those who pick up the bags.

The idea behind the operation is that criminals are more likely to pick up bags and not return them, so this “sting” helps flush them out of public areas.

As the article discusses though, about ½ of those who pick them up and do not return them had no prior criminal record. More importantly what is the opportunity cost of this sting?

Solar Google

Yesterday Google announced it would work on increasing the amount alternative energy it would use (link). The company is investing “hundreds of millions” of dollars in working on technologies, particularly solar, that will be more cost effective than coal. Google will work on the project mainly in California, which is the place for solar technology as it is sunny and offers tax rebates to those who install solar.

This raises some interesting questions, is this something smart for Google, can an internet company branch out into energy technology?

Should the government offer incentives or help for such a bold initiative? If Google can find technologies that work for its business, then those technologies could be implemented throughout the grid.

What next for the World Bank?

The news might be a few months old, but today in class I will be discussing the role of the World Bank in the future of economic development. With the transition of leadership this summer how best should the World Bank move forward. Yesterday I was reviewing the opinions of Jeffery Sachs and William Easterly, two well known development economists, on the future of the World Bank. I found it funny while the two men disagree on many points their main recommendation was for more oversight and evaluation of the World Bank.

I’m still not sure exactly how this would function. Could it be done internally or should an external review board be created? Who would chose such a review board?

After a short term consultancy at the World Bank, it seems there is a lot of evaluation being performed on the programs implemented. Due to the nature of development economics it is sometimes difficult to enact change once problem areas are identified.

More on Free Wireless

Hope everyone had a Happy Thanksgiving. To pick through some leftovers of what is in my head a couple of thoughts.

One of my readers asked two questions that might be of interest. First how many oysters did my wife and I eat at the Oyster Riot. My guess is about 50 each, somewhere toward the end of the evening we reached diminishing returns.

The same reader would like to know as another blogger pointed out that some hotels charge $10 or more for wireless, while it is free at others. Steve Landsburg at slate provides a great explanation of the economics behind this pricing. Basically it depends on the makeup of your customers. It is best to charge for wireless if you have some that will pay for wireless and some that won’t (like a fancy hotel with business travelers (will) and leisure travels (won’t)). However, if you are a typical road side motel fewer people will pay for it. So it might not be worth setting up the system to charge customers.

Paying for Wireless

Thanks to my buddies at Comcast, I now have the internet in my apartment. Silver Spring does provide free wireless, but it only works if we go outside or rarely inside into our apartment. Sick of sitting in the rain to send an important e-mail or look up directions, we are finally paying for internet.

Another option when you live in a big apartment is to use someone else’s wireless network. A nytimes article from last year suggests that in some cases using others network, will slow down their internet speed. In 2004 an editor of a technological website found that 30% of networks in LA had no security so anyone could go on them. In my building a sample of 10 wireless networks shows all have been password protected, although leaving wireless networks open still seems to be common place (in Tallahasse, New Orleans, Washington DC). I just wonder why those people could not live in my building (not that I would free ride).

Also thanks to Annapolispolitics for answer my questions about bar closing time in the comments.

Closing Time in Annapolis

Someone in Annapolis, Maryland reads this blog just about every day. Thanks Annapolis. So in honor of them, I would like to take on an economic issue that concerns Annapolis, bar closing time. According to this article, about ½ of the bars in Annapolis can stay open until 2am, the other ½ need to close at Midnight. A few interesting questions, perhaps my friend in Annapolis can help.

1. Does the midnight rule for some actually, reduce the number of people making a lot of noise leaving bars at 2am, if people can just go to another bar then leave again at 2am. If anything I would thinking herding people into fewer bars would make more problems
2. Economic theory would suggest that if fixed cost can be spread out over more hours, then drinks should be cheaper at 2am bars (adjusting for other factors). This could really hurt the midnight bars.
3. Are there any midnight to 2am drink specials?

To follow a play by play of the exciting city council meeting debating this very issue, from a blog that has previously linked here, check out Annapolis Politics.

I’m likely going to Annapolis this weekend with my in-laws, we will probably be eating crab and not drinking past midnight, but I’m always willing to help research.

Oyster Riot!

So tonight my wife and I will be going to the Oyster Riot at Old Ebbitt Grill. The Riot feature 20 varieties of oyster paired with wines. Being a Riot, it is all the oysters you can eat. A couple of economics lessons along the way.

1. The Oyster riot is a popular event, so popular tickets sold out in about 45 minutes. I purchased tickets on Craigslist for substantially more than the face value. I'm sure my wife values the tickets more than we paid, and since I offered more then other bidders through Craigslist I (we) value it more. I'm therefore still in favor of ticket reselling.

2. When purchasing through Craigslist, it helps to have idea of who you are buying from. The person who sold it to me sent the e-mail from her work e-mail. Checking the website it turned out she was a CEO and had a background with a well known company.

3. At some point eating oysters will reach diminishing returns, I will be curious to see when that happens for my oyster loving wife.

RIOT!

Monopoly… BOO!

So I’m about ready to give an exam and question #5 deals with monopolies and cable companies. After calling several companies I’m pretty sure Comcast is the only internet service provider for my building. Comcast’s internet service is priced at over $50 a month, which is about twice as much as two other local area companies. However, they start you with a teaser rate of $22 for the first six months. There is no long term contract. I’m not sure I will pay $50 a month for internet, but $25 a month is fine. I’m wondering if in six months I can threaten to cancel my contract and get 6 more months of the teaser rate. For a couple hundred dollars I’m willing to try. It seems others have had luck with the same strategy (link).

I wonder if this is a backward form of price discrimination, where people less willing to bargain for a buck wind up paying more.

Hanging with Ben

At the Monetary Policy confrence I attended today, Federal Reserve Chairman Ben Bernanke, announced the Federal Reserve would reveal more about the economic forecasts they make (see NY Times Article). Given that the object of the Fed is to get people to react to their policy, seems like a good move to me (although I know little about monetary policy).

I did like his answer to a question about whether the American public should know more about how the Fed works. He discussed some programs the Fed has such as a model UN type program, where students pretend to be members of the FOMC. However, he said it is more important for Americans to understand their mortgage and how to balance their checkbook.

Breakfast with Ben

Tomorrow I will be attending the International Monetary Conference hosted at the Cato Institute. The conference is organized by my colleague Jim Dorn, and features a talk by Ben Bernanke current chairman of the Federal Reserve. With high oil prices, the sub prime market, the low dollar, it appears the task of sailing the economy through will be a difficult one. Is the economy deader than a five month old bed-bug or will this be our winter of discontent. Only time will tell.

If I knew what was going to happen to the economy I would be a lot richer man. Perhaps I can ask Dr. Benanke some advice.

Honoring our Veterans

In honor of Veterans Day, I thought I would post something about the economics of Veterans. The Washington Post had an article on how Veterans are going back to using programs designed to help them purchase houses. During the loose credit days of a few years ago fewer Veterans were taking advantage of loan programs that couldn’t match what was out on the market, but now as credit tightens it is not as easy to gain loans.

If the government wants to maintain military recruitment, perhaps expansion of programs like these and the GI bill, could help maintain the strength of our all volunteer force.

The Economics of Dating Part V

This summary in slate of some research done on speed dating by economists and psychologists, shows once again some on clichés hold. Men like attractive women, although not mentioned in the article women like men who grew up in affluent neighborhoods. There was surprisingly little racial bias. Women preferred their own race and white men preferred Asian women.

My favorite line from the article: “We also found that women got more dates when they won high marks for looks from research assistants who were hired for the much sought-after position of hanging out in a bar to rate the dater's level of attractiveness on a scale of one to 10.”

Why again did work on dairy farmer surveys again for my RA?

h/t to Greg Mankiw

Why are Mexicans living in Beloit?

Why are there Mexicans in Beloit?

One of the interesting things about running a blog is you can see how people arrived there. A few weeks ago someone from Janesville, Wisconsin googled “Why do Mexicans live in Beloit” and they wound up on my blog. This is likely because I talk about Beloit College in Beloit, Wisconsin, where I taught last year, and Mexico. I have not talked about Mexicans living in Beloit until now.

There are definitely Mexicans living in Beloit, I know since I have sampled some of the great taquerias around the city (ones with Spanish jukeboxes and majority Latino clientele). A look at the 2000 Census data shows that Latinos make up around 10% of the Beloit population (almost as much as African Americans, 12%). Obviously, not all Latinos are Mexican, but in Beloit I’m pretty sure most are. Using Census data we can also examine specific characteristics for Latinos. According to the census about half of the Latinos (1,800 out of the 3,500) were born outside of the United States. Another interesting statistics about 2/3 household speak a language other then English at home.

One reason Latinos might decide to live in Beloit is they seem to be making about the same amount of money as the average non Latino, and much more than they would have in Mexico. For those of you who are not familiar with Janesville and Beloit the two cities are about 20 minutes apart, but Beloit has for a long time had more racial diversity, while Janesville continues to be 95% white. So perhaps there is another reason Latinos live in Beloit.

One final note even in DC I cannot find Mexican food as good as Beloit.

Urban Poverty Part II

Yesterday, I discussed how Economists at the World Bank are trying to track poverty numbers in urban areas. Poverty in the developing world is increasing in urban areas, but what can be done about it. This report on urban poverty put together by the UN Economic and Social Commission of Asia and The South Pacific provides an excellent framework for the discussion. As they point out much of the poor in urban areas are involved with informal sector work. In order to move them out of poverty the country must work to provide access to credit so that small informal sector businesses can grow. There needs to be well distributed information on how to do this along with a well functioning system of property rights. All of these changes are not easy (if they were wouldn’t have a problem).

These last two updates were geared toward my Economic Development students to help them write papers on key problems with urbanization in a country of their choice.

The Changing Face of the World’s Poor

Back when development economics was in its infancy, the first economists to study development were agricultural economist back in the 1950s. In part because a large portion of the developing world lived in rural areas and participated in agriculture, however development is increasingly including issues that surround urban areas. Over the summer I was lucky enough to attend a seminar on the relationship between urbanization and poverty in the developing world presented by Martin Ravallion who along with (Shaohua Chen and Prem Sangraula). In the accompanying paper (linked here) the authors find a few key results:

1. “Poverty is clearly becoming more urban, although our results suggest that it will be many decades before a majority of the developing world’s poor live in urban areas.

2. “The poor are urbanizing faster than the population as a whole, reflecting a lower-than average pace of urban poverty reduction.”

The second key result suggests that there may be a greater incentive for the poor to migrate to cities, then the non-poor. If result 2 is true then as the authors suggest we might see an increase in the percentage of the population who is poor in urban areas, as the authors show on pg 5. This might not mean that urbanization is causing poverty, but instead the poor are causing urbanization. Although separating cause and effect is difficult.

With the growth in urban population perhaps it is time for urban economists who specialize in public works, public safety, and large education systems to be like the agricultural economist of the 1950s.

Hot Stove League

As I sit in a coffee shop next to a fire place my mind turns to hot stove league baseball. One favorite topic of the hot stove league is how best to insure that teams like Kansas City, Oakland, and Minnesota can compete with New York, Boston, and Chicago. Currently those teams with larger revenues make payments to teams with smaller revenues to insure a more even playing field. However, those teams do not always spend those extra payments on getting more players. A recent NY Times column suggests that those payments should be tied to attendance, specifically the percentage of seats sold by a given club. A few problems arise with this suggestion, not all stadiums are the same size. For example the Pittsburg Pirates’ PNC park sits 38,000 compared to 50,000 at the Colorado Rockies Coors field. In other words the Rockies could be at 80% capacity and sell more tickets than a 100% Pittsburg.
Instead of linking the payments to percent of capacity filled, perhaps linking them to attendance. One way would be to predict what expected attendance should be in a given city compared to similar cities. Although, I’m not sure that is the answer either. Teams might want to give experience to rookies, who in the short term might not play as well as experienced players, but might lead to better outcomes in a few years. Baseball Prospectus has done some great work modeling, when teams might want to make these tradeoffs.

Finally, on the day after two juggernaut NFL teams face each other (the Colts and Patriots being the Yankees and Red Soxs of the NFL even under the salary cap), we might wonder if imbalance is such a bad thing. One recent paper has suggested that lack of balance does not impact attendance.

Although I’m not opposed to anything that hurts the Yankees.


hat tip to Sports Guy Talking Crazy for the Article

Strike One, Strike Two

In DC if you want to take a cab the price is currently determined by zones, which seems to confuse even long time DC residents so it always seem the cab drivers is making the price up on the spot. The DC mayor is trying to implement moving to a meter system, where cab fares will be based on distance. Cab drivers in response went on strike Wednesday (Halloween), it appears the strike had only a small impact (story). Another interesting (although colorful take) comes from a DC cabbie blogger. The blogger claims that unless you are cheating people the meter fairs shouldn’t make a difference. Although, given the payments the cabbie accepts I’m not sure how the switch from zone to meter will impact the cabby’s business.

In strike 2, the Writer Guild of America is about ready to strike (see this NY times article). It is likely this strike has a better chance of working as the writers are probably harder to replace than the cabbies. Also it appears the writers have the support of other unions, while the cabbies were not helped out by limo or bus drivers.

What to pay the babysitter?

If you are in college or high school, perhaps you should consider babysitting as a lucrative opportunity. As the wages of teenage babysitters has outstripped inflation 3 to 1 over the last 5 years (See Wall Street Article). It also appears there is a growing number of college or post college older babysitters, who are paid much more. Not surprisingly, the wage depends on the babysitter’s age, experience, and the difficulty of the job. Prices also vary a lot by region.

Although, the article does not mention it I wonder if babysitter wages differ by the sitter’s gender. Even though mannies (male nannies) are apparently all the rage, I still think (and I probably most people) think of babysitter as being mostly female, although I had a couple of cool male babysitters growing up. Checking out a few babysitting website I do not see any male babysitters.

Now to answer that final question what to pay, it seems the going rate for a babysitter is now around $7-10 an hour and close to $15 an hour for a college educated babysitter in her mid 20s.