Part 11 (1/2)
Chapter 2
I worked out the pre the Cafedirect website, cafedirectcouk/fairtrade/gold_pricesphp The exact premium depends on the type of beans and on the world price (Cafedirect guarantees a minimum price, so when the world price is particularly low the premium rises) For more discussion of the fair trade coffee market, see Tim Harford, ”Fair Trade Coffee has a Commercial Blend,” Financial Times, September 12, 2003, 15
Forthe customer satisfied,” The Econohtful on the subject of price targeting The h periodic sales is detailed in Hal R Varian, ”A Model of Sales,” American Economic Review 70, no 4 (September 1980): 65159 Varian's textbook, Intermediate Microeconomics, 4th ed (New York: W W Norton, 1997) covers the subject extensively, including the quotation about French railroads, which cohteenth-century French economist, translated by R B Ekelund, ”Price Discrimination and Product Differentiation in Economic Theory: An Early analysis,” Quarterly Journal of Econo stories of price discrioods are froe, MA: Harvard Business School Press, 1999), 59
I learned why popcorn costs so 's Armchair Economist (New York: Free Press, 1993), and ine costs so ue Bill Sjostroton DC's baseball stadiuton DC asks for private stadiu,” Sports Illustrated, December 23, 2004, sportsillustratedcnncom/2004/baseball/back to Washi+ngton,” Washi+ngton Post, Septetonpostcom/wp-dyn/ articles/A60095-2004Sep29html; and Dennis Coates, ”The DC Baseball Stadiuton Post, Nove/dailys/1112-04html
The Wilt Chamberlain example is from Robert Nozick's Anarchy, State and Utopia (Oxford: Basil Blackwell, 1974)
Other sources for statistics: Rockefeller being the only man to pay the top rate of tax, fro/pubs/pas/pa-192html
The nue Concern, press release, March 7, 2003
Chapter 4
Many of the statistics on the costs of congestion and pollution, especially in the United Kingdom, are David Maddison, David Pearce et al, Blueprint 5: The True Costs of Road Transport (London: Earthscan Publications, 1996)
The iroups in Britain, such as the poor or rural residents, is discussed in Blueprint 5 with figures from Johnson et al; ”The Distributional Consequences of Environmental Taxes,” Institute for Fiscal Studies Commentary 23 (1990): 55; and S Sy and the Carbon Content of Fuels,” European Economy Special Edition (1992) A separate, more recent, study focused on London is Ian Crawford's The Distributional Effects of the Proposed London Congestion Charging Sche note, no 11, Institute for Fiscal Studies, Oct 2000), ifsorguk/consulapdf Distributional consequences in the United States are explored by Howard Chernick and Andrew Reschovsky, ”Who Pays the Gasoline Tax,” in the National Tax Journal 50, no 2 (June 1997): 23359 More recent data, telling a similar story, are available for some states-for example, Texas, at statetxus/taxinfo/incidence/table33_66html
For a fairly technical review of estimates of the value people place on their own lives, see Kip Viscusi and Joseph Aldy, The Value of Statistical Life: A Critical Review of Market Estiulatory Studies, Related Publication 03-02, Jan 2003),aeibrookingsorg/publications/abstractphp?pid=305
I learned about the Camelback houses from David Friedman, Hidden Order (New York: HarperBusiness, 1997), 91; and thetax from David Smith, Free Lunch (London: Profile Books, 2003), 148
On tradable permits in the United States, see Paul L Joskow, Richard Schmalensee, and Elizabeth Bailey, ”The Market for Sulfur Dioxide Emissions,” American Econoram is explained in ”A Great Leap Forward,” The Econolobal level see Peter Cramton and Suzi Kerr, ”Tradeable Carbon Per paper, University of Maryland, 1998),ncom/files/98wp-tradeable-carbon-perner who features in chapter 7, helped to design an auction for the United Kingdorabeen in the forefront of analyzing environmental problems” will be surprised to hear that one of the first environmentalists was also one of the first and most famous economists, Thomas Malthus, whose study of overpopulation was published in 1798 (”An Essay on the Principle of Population” (London: Murray) Only slightly less faou, professor of econoe University, whose seminal book The Economics of Welfare (London: Macmillan, 1920) developed the theory of externalities and the solution of externality pricing Some readers may also doubt my claim that economists don't care much about GDP Consider then, this quotation fro's The Armchair Economist (New York: Free Press, 1995, 13536), which is a characteristically elegant explanation of what ross national product is the eneral econo As such, it has sooods and services produced in the econo on the beachAnother deficiency is that increased output of goods and services can be either a good or a bad thing A construction booood thing; a construction boom that replaces thousands of old houses destroyed by a hurricane consists of running as fast as possible just to stay in one place The GNP counts them equally
Other sources for statistics: Deaths in the United States caused by particulate matter, from EPA brochure, Diesel Exhaust in the United States, epagov/otaq/retrofit/documents/ 420f03022pdf
The tax bill paid by British drivers fro and the Finance of Roads” Proceedings of the Chartered Institute of Transport 7, no 3, 1998, cited in G Roth, ”Road Pricing in a Free Society,” Economic Affairs, December 1998 The tax bill paid by American drivers froov/ohie on traffic levels is described in ”Congestion Charging Six Months On,” Transport for London, October 2003
Chapter 5
The classic article on lee Akerlof, ”The Market for 'Lemons': Quality Uncertainty and the Market Mechanisust 1970) Akerlof 's book An Econoe University Press, 1984) containspapers up to that date-not only the lemons paper but, for instance, economic theories of the caste system
In conversation, John Kay has made me realize that the explanation of bad restaurants in tourist traps is more subtle than it appears Tourists can, of course, tell the difference between an upscale and a downscale restaurant, just as in the market for cars, buyers can tell a Ferrari froood froer joints and bad ones, and even Ferraris, when secondhand, are likely to be le in different countries is from David M Cutler, ”A Guide to Health Care Reform,” Journal of Economic Perspectives 8, no 3 (1994): 1329; Cutler also reports on the survey of satisfaction with health-care systems carried out by Karen Donelan, Robert Blendon, Cathy Schoen, Karen David, and Katherine Binns: ”The Cost of Health Systee: Public Discontent in Five Nations,” Health Affairs 18, no 3: 20616 The responses are: ”On the whole, the health systees are necessary to make it work better” (these are the respondents I described as ”content”); ”There are sos in our health-care systees are needed to make it work better”; ”Our health-care syste with it that we need to coanization website provides a rich resource on European health systems, eurowhoint/observatory/hits/20020525_1, while the WTO's World Health Report 2000 provides detailed statistics on the cost of public and private health care across the world
The cost of the American health-care system to taxpayers is analyzed by S Woolhandler and D Hietting it,” Health Affairs 21 (August 2002): 8898, and administrative costs are froland Journal of Medicine Study Shows US Health Care Paperwork Cost 2943 Billion in 1999 Far More Than in Canada,” August 20, 2003, hmsharvardedu/news/releases/ 0820woolhie of the Aov/Press-Release//2003/cb03154hteneration, see the RNIB's views at rniborguk/caenhtuk/articleasp?a=37590 In September 2003, NICE eventually recommended the use of the treatovern, the treatment is still not widely available My point is not to attack a specific ruling of NICE but to show that their y will inevitably produce results that make patients very unhappy
The Leksell Gamma Knife is discussed in Honolulu Star Bulletin, May 25, 2001 starbulletincoo Gamma Knife Center, oetschhtmlhtm; Hawaii Business, aiibusinesscc/hb72001/ defaultcfm?articleid=26; and BBC Online News, September 8, 1998,newsbbccouk/1/hi/health/166993stm The Gamma Knife is aporean health systes Accounts: The Singapore Experience, National Centre for Policy analysis report, no 203 (April 1996), ncpaorg/studies/s203/ s203htapore's Innovative Approach” rruworldbankorg/PublicPolicyJournal/ Summaryaspx?id=261
Chapter 6
The analysis of the balance between efficientand inefficient ones that do is by S J Grosslitz, ”On the Impossibility of Informationally Efficient Markets,” American Econo cart analogy is David Friedman's idea, from his book Hidden Order (New York: HarperBusiness, 1996), 9
Keynes's characterization of the stock market as a beauty contest is in J M Keynes, General Theory of Employment, Interest and Money (London: Mac Fisher's misplaced optimism was recorded in The Stock Market Crash-and After (New York: Macmillan, 1930)
The sad story of Tony Dye is told by the Tiy remains,” March 3, 2000, and The Guardian, ”Vindication for Dye as P&D fund wins top spot,” July 20, 2000
The most famous bullish book was James Glassy for Profiting fro Rise in the Stock Market (New York: Times Books, 1999); the authors defend it in the Wall Street Journal, August 1, 2002, ”Dow 36,000 revisited,” available at aeiorg/news/ filter,newsID14128/news_detailasp) and techcentralstationcom/ 120504Ahtml The prediction that the Doill hit 36,000 in 3 to 5 years isis extrenet/movable_type/2005_archives/000025html
How transforiven the definitive skeptical statement in ”Does the 'New Economy' Measure up to the Great Inventions of the Past?” Journal of Econouy takes time to have a real economic impact is most famously expounded in ”The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox,” The As, May 1990, 35561 The results of my lost bet with John Kay are in the Financial Times, October 29, 1999, or atjohnkaycom/articles/searchphp?action=view&doc_id=127&date=&title=&topic=
Although I aenerally dismissive of the idea that Internet coe, I think there is at least one important exception Online auction sites, which inable product, do have such an edge The sellers want to go where the buyers are, and the buyers want to go where the sellers are The first site to do a decent job of bringing thee, even if a coy The auction site eBay has a dominant position in the United States for just this reason; but in japan, they moved too late and were beaten out by Yahoo's auction service (See the intervieith eBay's Meg Whitman in Business Week, October 2, 2002) Other sources for statistics: Amazoncom stock price data comes from the Amazoncom investor relations website and other information comes from Amazoncom's 2003 Annual Report
Losses due to internet ie blues,” May 2, 2004, BBC Online News, newsbbccouk/1/hi/business/ 3622285stm
Data froe,aidaeconyaleedu/~shi+ller/
Chapter 7