Walk on! Walk off!

If you read Sunday’s opening day post, you know where I was last night, Nationals Opening Night. It almost seems like I wrote that after going to the game, but another magical moment by Nats favorite Ryan Zimmerman. Walk off home run two outs bottom of the ninth, it was awesome! Fans like winning and homeruns (see yesterday).
Some economic thoughts on going to the game. First, someone must not have calculated the opportunity costs of taking all the extra time to run people through metal detectors that were necessary for President Bush to throw out the first pitch. I waited 30 minutes to get into the stadium, probably so did thousands of other people.

Second, if run properly there are great economies of scale by taking public transportation. That is one more person on the metro or bus doesn’t really cost much more as opposed to one more car. The metro ride in worked pretty well, it was a little congested leaving the station to get to the game. We opted for the bus to another metro on the way home, which was pretty easy.

Finally, I was feeling some great DC pride yesterday even though like many here I’m a transplant. It’s hard to put a figure on it, but I wonder about the public good of civic pride that comes out of having. But of course some economists have tried (link, link2)

Happy opening day.

Life Begins on Opening Day: National Opening Day

Tonight I’ll be heading to the opening of the Washington Nationals new baseball park. I’ll leave aside my feelings for government funding of stadiums, and instead focus on some lessons learned from some of my favorite baseball games I have attended.

Best Game of All Time I have Attended: October 14, 2006 Tigers versus Oakland A’s ALCS Game Four

It was a magical season after years of futility the Tigers, my favorite team, had finally pulled it together, winning 95 games and making the playoffs for the first time in almost 20 years. Leading 3 games to none in a seven game series, barring Red Sox magic, the Tigers were going to the World Series, but I wanted to see it happen on that night when I had flown in from Wisconsin, my wife from DC, and my Dad driven from Columbus Ohio. It was one of those games, where after 2 innings the Tigers were down 3-0 and I felt like even after the Tigers tied it 3-3 they still were going to lose. I can’t do it justice with the 2 outs bottom of ninth type description, but when I realized Magglio’s fly ball had landed in the bullpen it was awesome.

Economic lesson learned fans like winning and homeruns. In a paper I’m writing with a Towson colleague, this appears to be true not just for major league teams, but also minor league teams. Watching a winning team is more fun and there is something about a homerun that brings such satisfaction.

June 24th, 2001 Baltimore Orioles and Chicago White Sox: First baseball game with my wife

Although my wife had been to a major league game before, she was really young and didn’t know much about the game. I taught her to keep score by recording plays, which she thought was like a lab notebook. Being a new baseball fan I told her a lot of stories that I had learned through my Dad or watching and listening to games growing up. For some reason I told her that it was traditional to get nachos in the sixth inning, I made this up but my wife likes nachos so she was willing to go along with the story. Now most sixth innings we get Nachos, they are a great complement to attending a baseball game.

Economic lessons: sometimes goods are complements eating nachos is a lot more fun watching a baseball game then when you are running a 5k race. Sometimes goods can substitute for each other instead of nachos you can have hotdogs, pretzels, or peanuts. The Nationals new ball park promises local food including Ben's Chilli Bowl half-smokes

At this point I’m not sure how many Major League Baseball games I have attended hopefully tonight will be up there with some of my other favorites (Cecil Fielder game tying roof shot, Prince Fielder’s first home run, a rainy day in Fenway watching 04 playoff highlights, Latin night at RFK). Each new year brings new possibilities and plenty of more games to attend.

Go Nationals!

Housing Bubble: (maybe?) bad for tax revnues, pollution, and employment

My friend Jenny asks how housing markets impact other aspects of other society. I have been reluctant to way into discussion of the housing crisis situation, since I don’t know a lot about it. But here are a few random thoughts.

First, as Jenny points out in her request local taxes and sometimes state taxes are tied to housing prices. Since taxes are usually put on the value of the house, if house prices go down so does revenue. This article in the Sacramento Bee, suggests that in California where only local areas collect property taxes the decline in the housing market will hurt revenues.


What other avenues are there? This is purely theoretical, but one problem with the current housing market is that people might be less willing to move if they have to sell their home at a loss. At the same time gas prices are going up. The increase in gas prices, which seems to be more permanent than temporary should encourage people to move closer to their jobs, but this may be prevented if people cannot sell their home. So the credit crunch could be increasing pollution if it prevents response to gas prices.

More importantly as Tim Harford, the undercover economist, explains in a slate article, home ownership can lead to more unemployment. He makes this assment based on an

"An English economist Andrew Oswald has shown that across European countries, and across U.S. states, high levels of home ownership are correlated with high levels of unemployment.”

In short the theory goes, people with houses can’t move to where the jobs are as easly. Similarly I would assume that people who can’t afford to sell their house, can’t move to where the good jobs are.. possibly increasing the recession.

I don’t know enough to say if a bailout is a good idea or not, but there are some possible other fallout from the housing market.

Bargaining

Around 10 years ago, while I was visiting family friends in Canada I heard this story of a Canadian official. In response to complaints that welfare recipients were not getting enough money to eat the official said that people should go to the grocery store and bargain for lower prices. This seemed rather silly to me as teenager, you can’t bargain with a grocery store. It also seemed silly to my father’s Canadian Economist friend who told the story, so it isn’t some difference between the US and Canada.

The New York Times had an article about bargaining for Electronics with megastores like Best Buy, Circuit City:

It appears that you can bargain at these types of places.
So why is bargaining out of fashion at a North American grocery store, but acceptable on a car lot or perhaps an electronic store?

If I hazard a guess it would be that bargaining makes more sense on big ticket items. Imagine how long it would take if I bargained on everything in my grocery cart. This is because there are fixed cost to bargaining. Second a company needs to empower employees to make deals. This works well for cars, since negotiations can be made at the reduction of the salesperson’s commission.

Microcredit

Over break I was speaking with one of my wife’s relatives and she asked me about my opinion on micro-credit programs like the Grameen Bank. For my next week’s class I’m having my student read an essay Karol Bourdeaux and Tyler Cowen.
If you want a great overview, I suggest you read it. If you want the key point here it is:

“Bang¬la¬desh, where Gram¬een Bank was born, is still a desperately poor country. The more modest truth is that microcredit may help some people, perhaps earning $2 a day, to earn something like $2.50 a day. That may not sound dramatic, but when you are earning $2 a day it is a big step forward. And progress is not the natural state of humankind; microcredit is important even when it does nothing more than stave off ¬decline.”

Development economics is difficult there is no easy answer, but yes microcredit is helping, but it is just one of many things that needs to be done.

World Water Day

Well, I didn’t have the best of luck out on the water over the weekend (0 fish caught). While I was out on the water it turns out the Saturday was International Water Day (as declared by the UN). It has also been declared by the UN and World Health Organization as the year of sanitation. While, building latrines and water pumps might not be some of the most glamorous work, there is plenty to be done. As the WHO points out

2.4 BILLION people (about 40% of the World’s population) live without access to proper sanitation.

From what I gathered from the few history classes I have taken, from Rome to London to New York great economic powers have been built on their ability to provide clean water to their citizens. Clean water to drink and wash is key to keeping people healthy, and a workforce or population needs to be healthy before economic development can take place.

This 10 things you should know about sanitation from the WHO provides a good overview or this website on world water day.

Now the tough question, how do you get clean water to 2.4 billion people?

Gone Fishing!

I’m leaving for a trip with my wife and in-laws in Oklahoma, which will include some bass fishing!

I thought I would post some bass fishing related economics analysis.
Just like other sports there are pro-bass fishers. In fact by 2007, 17 anglers had career earning of over 1 million dollars. However, unlike major team sports salary as I understand it these pro fisherman have to pay their own way to tournaments and buy their own equipment or get sponsorships.

One pro-angler (and University of Oklahoma Economics Graduate), Jeff Kriet, who was fifth in the Bassmaster 2007 angler-of-the-year points list. Discussed the difficulties of making a living as a pro-bass fisherman in this article (here).

"The past four years, Kriet said, he earned $200,000-$300,000 a year from winnings and sponsorships. “You need to win $150,000 to put money away,” he said. “This sport is expensive.”

Or as Skeet Reese one of pro bass fishing legends describes bass fishing:
“It’s no different than wanting to become a neurosurgeon. It takes a lot of time and schooling, time on the water, to become proficient”

So what have we learned? When considering wages or profits you cannot just take into account earnings you also have to look at costs. When there are a limited number of jobs and that job is also reasonably enjoyable people will work hard to get those jobs making the competition tougher.

As I have only fished a handful of times, I’ll stick to the pro-economics circuit, where I have a better chance at $1 million dollars in career earnings. If you are thinking of going pro, here’s what it takes.