Spousonomics Using Basic Economic Concepts to Improve Your Marriage

Everyone always asks how you got together but no one asks how you stay together

A friend posted the above recently, right as I was finally reading Spousonomics , which asks how couples stay together through the use of economics. I'm about 3/4 of the way through the book, but I like what I have read so far. I'll try to do a more indepth review later.
Of course the authors certainly got on the right foot with me by asking me my opinion about economics and love, which earned me major bonus point with my wife. (see the post here)

The first chapter has made me think the most. It deals with how to use comparative advantage to improve your marriage. In short Econ 101 theory would say who ever can do the dishes faster relative to cleaning the house should do dishes, and the other person should clean the house. The book uses three couples in each chapter to demonstrate a concept. The first couple we meet splits every task 50/50 doing half the cooking, cleaning, dog walking, ect. The authors show that the couple became much better off once they decided to let each other specialize.

But the next two couples look deeper into comparative advantage. With Econ 101 we can't figure who will do how much. There is no way to determine what trade will happen although we can figure out a set of potential trades. For example the couple that used to do 3 nights of dishes and 3 nights of house cleaning each. May decided one member does any number of combinations, the potential list of fair trade is anyone where a member doesn't do more of both tasks.

From here though Spousonomics shows Econ 101 breaks down. How unpleasant the chores are isn't taken into account in a basic analysis to figure out who will do chores just based on how long it takes. (See their discussion here)
The rest of the book goes on to discuss imperfect information, moral hazards, and principle agent issues. These are all situations which typically lead to market failure.

I think that is the overall point of the book. When things go well in marriage the invisible hand of the household market for a spousal exchange (ie chores and attention) is functioning well so no need to worry. However, like markets marriages run into problems. When this is the case the partners need to work together to find ways to change the incentives and market structure to improve marriage.

I would recommend you read Spousonomics. If you are an economist you will know the concepts, but learn a lot about how people might apply them to marriage. If you aren't an economist you can get yourself a new tool kit to help improve your marriage.

Plus the authors (from the Times and Journal) have a huge absolute and comparative advantage over economists in humorous writing.

Friday Food News

In Minnesota Chipotle has fired over 400 workers due to their workers inability to prove their legal status it sounds like DC and Virginia Chipotle audits are starting too. No word on if the have come to Silver Spring.

From an economics point of view. If the workers are immigrants be they legal or illegal they likely do hurt job opportunities for native born workers, particularly those without higher education. On the other hand with immigrants we get cheaper burritos, plus you could debate if the immigrants bring knowledge which improves the food (this argument is much easier to make at a non-fast food or chain place). As a burrito eater my thought is whatever it is that Chipotle does it should be legal because no chain impresses me more with their efficiency.

Unrelated, but since I'm doing something on food news. Guinness sales in Ireland are down with the recent economic crisis there. Typically beer consumption goes up during recessions, but Guinness may suffer because it is better on draft than in a bottle or can and during recessions people are more likely to drink at home.

Entrepreneurship at College Grinnell Needs a Dilbert

I wanted to look at something else besides cupcakes, coffee, and condoms from yesterday's post. Bob's the coffee shop at Grinnell is student managed and as long as I can recall has had financial difficulty. From the article it sounds like things haven't changed much. “Bob’s is 12,000 bucks in debt and basically every semester Grinnell talks about shutting us down, but they basically forgive the debt,”

Contrast this with Dilbert creator, Scott Adams's college experience, described here . It sounds like he turned businesses at his school to profitability. But it is worth noting before he started there was no system of accounting at his school's business.

Perhaps students should start with smaller businesses. Like selling pizza cupcakes. I'm not sure as Adam's suggests every B student would benefit from learning about entrepreneurship, but there is something about the experience that I think students learn a lot from that they can use in their own future employment.

It is also worth thinking about the potential positive externalities to the college like Grinnell from having a coffee shop. I know Bob's was one of the things that attracted me to Grinnell.

Cupcake, Coffee and a Condom for $4

Bob's the coffee shop at Grinnell College has a new offer a cupcake, coffee and a condom for $4. Sometimes goods are bundled so that people will buy more. For example suppose half of people at Grinnell will pay $2 for a cupcake and $1 for coffee and the other half will pay $1 for a cupcake and $2 for a coffee. If Bob's sells coffee or cupcakes for $2 a piece it will only sell each to half the students. If it bundles a coffee and a cupcake in a single value meal for $3 then everyone will buy it.

Now back to offering condoms as part of a bundle. Freakonomics has talked about a store that offers free condoms to anyone buying diapers. I also remember in the late 80s or early 90s a brand of hats that included a condom tucked in a pocket.

Now the problem at Grinnell is that we all learned in first orientation that condoms are free at the health center. However, Bob's is open hours the health center is not so willingness to pay goes up. If I recall though there are condom vending machines in the laundry rooms, so there is competition.

Of course the best part of crazy bundles is the press you get. Although I'm not if my post will increase sales at Bob's.

Pizza Production Possibilities Frontier in Madison

The protest against changes in union bargaining rules in Wisconsin are getting a lot of press. Since, the issue is complex and I don't have a lot of time today. I thought I would instead focus on Ian's Pizza. Ian's is the closest pizza place to the capital where the protests are going down and people from around the country and globe are calling in orders to feed the masses of protesters. In fact the orders have gotten so numerous that Ian's has closed to the public and is now exclusively making pizzas for those camped out at the capital (link).

From their Facebook page it looks like Ian's it at its pizza production frontier. They said they have not set up a Paypal account and are only taking orders one at a time so they don't get more orders than they can fill.

It's also a good example of comparative advantage, and trust me Ian has a comparative advantage in making pizza. Next time you are in Madison grab a slice, I recommend the Mac & Cheese pizza or Buffalo Chicken.

Full Service Includes Birth Place of a President

The Daily Show - Pump and Circumstance
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In honor of Presidents Day, I thought I would put up a post on Rutherford B. Hayes, the 19th President. Hayes and I were born in the same town Delaware, Ohio. As the above Daily Show video shows his birth place, is not exactly a historical museum, but the plaque out front is pretty nice. Growing up I often dreamed I would become President. Of course my childhood bedroom would become a museum with a velvet rope.
I can't find much info on why the Hayes birth place was demolished, but it looks like it happen in 1926 and confirms the story I heard in school that it was during the depression and the building owners needed money.

I guess it would be nicer in general if the house Hayes was born in was still standing. Previously I had written about valuing monuments, but my guess is few tourists would visit Hayes's memorial. So perhaps tearing it down was the best economic decision. Although if you do come to Delaware, I recommend you go around the corner for a milkshake at the Hamburger Inn.

Colleges Violate the Law of Demand

Yet the same strategy proved disastrous for North Carolina Wesleyan College. Ten years ago that college cut tuition and fees by 22 percent, to $7,150. But it attracted fewer wealthy applicants and more poor ones, who needed more aid even as the revenue generated from tuition declined.

“It didn’t work out the way it had been hoped,” said Ian David Campbell Newbould, the college’s president. “People don’t want cheap.”

The law of demand in short as prices go down people want more. For some reason that might not always be true with colleges. I remember when Muskighum College in Ohio cut tuition by about 1/3 and I thought I recall hearing it didn't go so well. The above quote is from a 4 year old New York Times article shows it didn't go well for NC Wesleyan, although suggests Muskighum did OK.

Recently Sewanee College agreed to cut their tuition by 10% as described by this Times article.

I think times are different. Small liberal arts schools are fighting economic trends that would lead people to state schools (even though I'm economist I won't call state schools an inferior good).

I also wonder as a generation of parents who had sizable student loans comes of age, if the willingness to borrow of their children will fall. This assume children actually listen to their parents.

Still 4 years of Towson is about the price of one year 1 year of Sewanee College