happy Thanksgiving!
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Being economics buffs we are here planetary wealth And indicatorThis Thanksgiving we want to give thanks for the economic insights that made our lives better, solved a problem, or just plain fascinated us.
So, take it, and Happy Thanksgiving!
NEW YORK – NOVEMBER 22: The Thanksgiving Türkiye makes its way during the 81st annual Macy’s Thanksgiving Day Parade on November 22, 2007 in New York City. (Photo by Hiroko Masuike/Getty Images)
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Nick Fountain is grateful for the economics paper titled “”Car seats as contraception, “I think about this paper all the time. My wife and I have two small children, and we don’t want any more. But, whenever this thought comes to my mind, I think about this paper, and how, because of car seat laws, we have to give up our teeny Prius and buy a much larger and more expensive minivan. Researchers found I’m not the only one facing this dilemma, and car-seat laws and three-row cars. The sky-high prices have resulted in 145,000 fewer births in the US since 1980. Plus, the headline of the paper makes me laugh every time.”
Waylin Wong, co-host indicatorWe are grateful for the recent revelations by Panera Bread’s new CEO, who recently admitted – and expressed regret – that his company, under different leadership, had originally resorted to covert forms of inflation, shrinkage and skimplation, and that strategy had backfired. Shrink inflation occurs when companies reduce the amount of goods they provide in packages or meals, effectively increasing the per-unit cost of what they are selling. Skimpflation – a term we coined in this newsletter – is when companies skimp on what they sell by reducing the quality of it. Recently, Panera’s new boss, Paul Carbone, admitted that his company had originally resorted to both shrinkage and simplification, as well as standard price increases. “In some cases, we have made the portions smaller, so guests will come to our cafes to purchase sandwiches in smaller sizes with lower quality ingredients, which has significantly increased the price,” Carbone told CNBC. “There are other examples of stinginess in this story,” says Wong. “He says he tried subbing in iceberg for romaine because it’s cheaper, but it turned out people hate iceberg. And he also stopped cutting the cherry tomatoes in half to save labor costs, but then people had to prod the tomatoes around their salad bowls with their forks and it was very annoying.” Carbone now wants Panera Bread to change its direction with a strategy he’s calling “Panera Rise.”
Jess Jiang “Grateful for the advice I once got when I was researching for an episode The birth and death of the price tag, I was talking to some people about airline ticket pricing. And an economist told me that if you’ve never missed a flight, it means you’re spending too much time in airports. I don’t remember who said it, but the advice always stuck with me and saved me the stress of reaching the airport early.”
Keith Roemer is grateful for the classic gambling adage “Don’t make money with scared money”: “As NPR’s self-appointed chief gambling correspondent, I’m bringing my economic lessons straight from the poker table. Poker, at its core, is a game about risk: Everything you bet is either money you won’t get back or an investment that will pay off at the end of the hand when you pull the entire pot. A lot of the game comes down to correctly evaluating the price you’re being offered for a particular risk (and setting tougher prices for your opponents with your own bets). But a big reason we’re bad at evaluating risk is that winning ten dollars seems to be the worst thing people can do, so to counter this bias, poker players have come up with the following saying: Money. To make investment decisions (be they financial… or just gambling), it is important to objectively and mathematically assess the risks and rewards, rather than fear and avoid losses.”
Derian Woods, co-host indicatorDiversified index funds are thankful for: “In a stock market that is increasingly looking like a casino, these funds will follow the overall market, with minimal management fees. Money managers, on average, rarely outperform the market, especially when you take into account the hefty fees. I learned about this by reading Burton Malkiel’s classic A Random Walk on Wall StreetI would also recommend listening planetary wealthEpisode of Brilliant Vs. boring.”
Greg Rosalski, your humble newsletter author, is grateful for the economic concept of “consumption smoothing”: “Sure, it’s good to be financially prudent and save, invest, and build a nest egg. Take advantage of the magic of compound interest, as they say! But there are certain times in life where saving is just too hard, and the temptation is to live an ascetic lifestyle, to skimp, and to deprive yourself of all the joys. Like when you’re in college, or when you have young children and you’re overburdened with child care. And at such moments, I like to think about it. The basic idea is that, really, if you are behaving rationally, it makes sense to live like a king during some periods and like a pauper in others. While delaying the fun is increasing and your costs are decreasing (like, for example, your child care costs), it may actually sometimes be worth saving a little less and spending more. At least, that’s what I tell myself (and my wife, haha) to justify the occasional splurge, thanks economics.
Mary Childs is grateful for the intellectual delights provided by the bond market (she is the author of a book titled the bond king, “I had the opportunity to go to a money management company’s ‘Investor Day’ in Dallas last week (when senior management presents to clients), and I talked about bonds to an audience of people with a keen interest in bonds – with a specific passion for mortgage-backed securities. So, during the Q&A portion, when I accidentally went into too much detail about a specific trade structure (this happens to me from time to time, I was working on I realized I was in the right place for this kind of digression, and the audience laughed because where else can we have fun with this thing? I thought about why it was so magical because I like to see the most concrete expression of our preferences in the bond structures we can say, but a prospectus or term sheet is where we find it. Proving in language, and it is not an entirely easy language to achieve, is part of our job. planetary wealth There’s a job to do as a translator, and I think it’s easier and more fun when you like the original text too.”
Alex Mayassi is grateful for the economic concept of expensive cues, which has helped him understand fashion. “For a long time, I avoided wearing white sneakers. I was afraid of puddles and didn’t want to waste a lot of time cleaning my shoes. Then economics taught me the value of white sneakers – they’re an expensive signal. An expensive signal is the opposite of cheap things. You can tell someone you love them, but an expensive engagement ring is an expensive signal of your love. You can tell a professor you really want to work in their lab, but Flying across the country to ask for a chance in person is an innocuous concept, but I’m grateful economics coined the term. Expensive cues (and how to avoid cheap ones) are everywhere, including your choice of sneakers and clothes. The fact that white sneakers, dresses, and shirts are clean is a rare thing, as are doctors’ white coats. I really appreciate that economics has helped me understand the basic language of fashion.”
Finally, we are all grateful to you, listeners of our podcast and readers of this newsletter. You give us purpose (and some of you support us financially by subscribing to PM+ – and, of course, we’re grateful for that, too). Thank you!
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