Archive for April, 2004
Outsourcing: Do You Like My Sod House?
There is a lot of press coverage today given to outsourcing and the movement of jobs from the US to other countries. On John Kerry?s website there is even a section entitled ?Keep Jobs in America,? in which he outlines a plan to slow the shipment of jobs abroad (disclosure: I am a registered Democrat). [...]
April 13, 2004
Posted in: Policy 
No Comments
Adverse Selection: Why Malpractice Insurance Costs So Much
Today?s topic is adverse selection: an economic market failure in which a party gets exactly the wrong outcome as they intended to get. The reason they get the wrong outcome is because of the problem of asymmetric information, which you can read about here. Adverse selection has many important policy implications, and we are going [...]
April 11, 2004
Posted in: Economics One Comment
Asymmetric Information: I Can’t Afford Such Low Prices
Some time ago, my wife and I took a vacation to Greece. We spent a few days in Athens, took a bus tour of the Peloponnese, and visited the amazing monasteries suspended high on rock columns at Meteora. One experience that sticks out in my mind, however, was finding a hotel room on the island [...]
April 10, 2004
Posted in: Economics 2 Comments
Why We Buy Insurance
Riding on the subway the other day, I overheard a man exclaim to his friend that his car insurance rates were being increased just because he got one lousy ticket. “What a load of *@#!,” he said. “I don?t know why I even bother to buy insurance; I?ve never even gotten in an accident before.” [...]
April 9, 2004
Posted in: Economics One Comment
Some Basics on the Income and Substitution Effect
We all know that when the price of a good goes up we buy less of that good. This is the principle behind the downward sloping demand curve–as price increases, the quantity consumed goes down (or vice versa). It makes perfect sense, but where does it come from, and can we dive a little deeper [...]
April 8, 2004
Posted in: Economics No Comments
