Plain cigarette packaging: healthier citizens, sicker state finances?

Over the last few years, a new idea for improving public health has been slowly spreading across the world: a ban on selling cigarettes in packages with custom brand designs. Instead of selling branded tobacco, all cigarettes are sold in either plain packages or packages with grotesque pictures showing the health consequences of smoking.

The obvious question is: is it effective at reducing smoking rates? The less obvious one: what are the economic consequences of a healthier population? Continue reading

The tale of Uber and a 19th-century French economist

The French government and French taxi drivers are furious with Uber, the US car-hailing company.  At the end of June, the government arrested two top executives of the French division of Uber and is planning to bring them to trial. That came a few days after taxi drivers staged violent protests in Paris, burning cars and attacking other drivers who they thought worked for Uber. Continue reading

Why do stocks fall when the Fed considers raising interest rates?

A top-level committee of the Federal Reserve, the US’ central bank, is meeting this week to discuss when it should begin raising interest rates.  Why do stock prices fall when a country’s central bank boosts interest rates?

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Are we overscheduling our children even from the moment of their birth?

Are we overscheduling our children even from the moment of their birth?

We live in an on-demand world. Movies are shown on request, food is delivered on call and drivers arrive when beckoned. As an economist, not a medical doctor, I was surprised to find new data that suggest more babies are showing up when scheduled rather than on their own time frame.

Numerous writers have suggested that parents, teenagers and children are all overscheduled. Should birth be scheduled too? Continue reading

Why Are Martha’s Vineyard and Other Island Getaways So Expensive?

President Barack Obama is currently taking a two week vacation on Martha’s Vineyard, a small island off the coast of New England. My wife and I took a short vacation on the same island and left a few days before the President and his entourage landed. The island has lovely scenery, warm water and many quiet places to relax. The island also is very expensive. While I didn’t do a professional survey since I was on vacation it seemed that almost all prices I paid were about 50% higher than what exists 45 minutes away on the mainland. On the ferry back to the mainland I came up with three reasons why Martha’s Vineyard and other island getaways like Nantucket are so expensive. Continue reading

What do zombies, pandemics and the price of eggs have in common?

What would you do if a Zombie Apocalypse occurred? I recommend going to the Centers for Disease Control’s (CDC) Zombie website for information. It is incredible (see it here). While the Zombie website is real, the CDC is not actually concerned about an outbreak of the undead walking around the country. Instead, it uses the website to help create awareness for what to do in pandemics and other emergencies. Continue reading

Is it time to ban all individuals from shooting off fireworks?

Another Fourth of July is here, the time for backyard barbecues, picnics, cookouts, parades, swimming and fireworks.  One of those Independence Day pastimes, however, stands apart: fireworks. They’re a somewhat controversial topic in the US and are covered by a patchwork of different laws.
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Is LA’s $15 per Hour Minimum Wage Unprecedented?

The Los Angeles City Council recently passed a law increasing the minimum wage to US$15 per hour by 2020. The city joins the ranks of San Francisco and Seattle in boosting the wage to this level.  Currently, Los Angeles’ (LA) minimum wage is $9 per hour, which means at least a few low-wage workers in this city are going to receive a $6 (66%) increase over the next five years.  Is there any precedent for a minimum wage jump this large? Continue reading

OMG! Proms are actually getting cheaper compared with the price of everything else

Prom season is now upon us, the key social event of most people’s high school experience. My youngest child is preparing to attend her first senior prom and a steady supply of fancy dresses has begun to appear in our house. As my credit card bills climbed ever higher, I began to wonder, how has the price of the prom changed over time? Continue reading

Is a $15 per Hour Minimum Wage An Insane Increase?

Recently, The New York Times ran a front page story highlighting demonstrations that are being held for an increase in the minimum wage to $15 per hour. Currently, the Federal minimum wage is $7.25 per hour, which means more than doubling the pay of low-wage workers. Is there any precedent for a $7.75 absolute increase, which is a 107% relative increase? Continue reading

Why most of us procrastinate in filing our taxes – and why it doesn’t makes any sense

April 15th is tax day, a day many people dread. Economists believe most people are rational calculating machines, but many of us don’t behave rationally about filing our taxes. Instead, most of us wait until the very last minute. Figures from the end of March suggest roughly 50 million or 1/3 of all this year’s individual tax returns in the US will be filed between the end of March and the middle of April. This is NOT a good idea for most of us. Continue reading

Cops May Feel the Biggest Impact from Driverless Car Revolution

Recently, the McKinsey Global Institute published an article that predicted self-driving cars will disrupt major parts of the economy. Positive numbers from the article, such as 90% of all accidents would be prevented and commuters would gain 50 minutes a day of free time were trumpeted in the news. The press also focused on industries that would be harmed by self-driving cars. The two largest industries McKinsey pointed out that would be hurt are auto insurers and auto repair shops. McKinsey, however, missed one of the key impacts of self-driving cars in their study. Self-driving cars will have a tremendous impact on police forces around the world. Continue reading

Will Flipped Classes Become Widespread In Colleges?

Recently I went to a conference that explored new ideas in teaching.  A very interesting seminar discussed “Flipped Classrooms.”  In a traditional classroom the teacher first presents the material in class.  Then students go home, review the material, and do problems and other homework that reinforce the concepts.  A flipped classrooms is the exact opposite.  Students first learn the material at home before coming to the class that present the materials.  In class the students do problems to reinforce what was learned before class time.  Continue reading

What is Really So Amazing About “The Dress” is Not The Color!

This week a huge debate has sprung up over the color of “The Dress.”  The item in question is a two-toned sleeveless dress sold by an English clothing chain called Roman Originals.  Over the last few days many people have had furious debates over whether the dress is gold and white OR black and blue.  Even the Wall Street Journal, a staid conservative publication devoted primarily to business, devoted more than a half-page to the debate over “The Dress’s” color this weekend.  For an economist, however, “The Dress” is really amazing because of its price.

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Whose College Football Team is More Profitable: OSU’s or Oregon’s?

Wow, on January 1st in New Orleans the Buckeyes toppled the number one ranked team, Alabama, in the Sugar Bowl.  This is great news since Ohio State’s team is going to play in the first national championship on January 12th against the University of Oregon’s “Mighty Ducks.”  This will clearly boost applications, increase local pride and help with donations.  Sports writers and bloggers around the country have begun comparing the two teams’ offenses, defenses and famous supporters.  As an economist my thoughts naturally wandered towards money.  I wondered which football team is more “profitable?” Continue reading

Did You Know You Can Purchase Part of A Major Central Bank?

Every day the business press is filled with stories about what key central banks like the Federal Reserve, the Bank of England or the Bundesbank are  doing to influence global economic affairs.  For most of us these banks are relatively abstract institutions that control our lives but over which we have no control.  However, there is one central bank that is unique.  The Bank of Japan, which controls the money supply of the 3rd largest economy in the world, has shares traded on one of the Japanese stock markets.  This means you can buy and sell parts of this central bank just like buying and selling shares of a major corporation like Google or Toyota.  Not many people know about this and even fewer trade the stock.  The day this was written just 5 trades happened. Continue reading

Did You Know the NFL is a Non-Profit That Pays No Taxes?

Earlier this semester I gave a lecture on the economics of non-profit organizations.  Non-profits are given their status because the government wants to provide extra incentives for organizations to tackle problems and for individuals to donate money to solve these problems.  In my lecture I discuss some standard examples like hospitals, symphonies and colleges.  Then I take students to GuideStar, which reports on the finances of non-profits.  GuideStar allows you to see the actual forms, called the 990, that almost all non-profits file each year with the IRS.  Some students are then assigned the tasks of creating homework problems based on the lecture.  Jerry Lavoie, one of my students, sent in an amazing homework that showed the NFL is a non-profit organization that pays no taxes.  I was shocked to read this, but after double checking his work, it is true. Continue reading

Why Do Restaurants Encourage People To BYOB?

This past weekend I went to New Jersey for a reunion with three friends from high school.  We had a great time talking about the past, present and future.  For breakfast we went out to eat at PJ’s Pancake House.  PJ’s is located across the street from Princeton University and is very busy serving food from 7am to midnight on weekends.  I was surprised while sliding into the booth to see a large sign attached to the wall that said patrons were encouraged to BYOB (Bring Your Own Bottle/Booze/Beverage/Beer).  The sign even gave three Italian sayings on why drinking and eating go together.  Why would a restaurant encourage patrons to bring alcohol, especially in a college town? Continue reading