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Economics - Vyoos

For travellers, the magic number is 8

August 23rd 2010 04:13

It is a fact of modern life that every person on board any given aeroplane paid a different price for their ticket.

This is a result of modern marketing practice which sees airlines offering discounts for advance bookings. The earlier you book, the cheaper the seat. Every nanosecond you hesitate, the price jumps. A family emergency necessitating a last-minute travel decision means a significant revision of the airline’s quarterly profit projection.

So it is with joy that we see that two Japan-based economists have studied this numbers game and have come up with a simple formula to help you choose the best time to book your plane ticket.

The formula is this: ?A = gUG min(k - g, (1 - g)(1 - r)), where ? is a variable which … okay, that is not so simple.

Breaking it down, the answer is eight – next time you wish to fly, book eight weeks before lift-off.

Also, do it later in the day rather than earlier.

The researchers, Makoto Watanabe and Marc Möller, said any earlier than eight weeks and the risk of needing to change your travel date outweighs the savings advantage. Any later than eight weeks, and watch the price rise quickly.

The discrepancy between times is probably due to business types preferring to book trips during work hours and budget holiday types preferring to book from home in the evenings, the researchers said.

The research has just been published in the Economic Journal.

news.com.au

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Posted By: Chris Champion - Category: Japan, Economics

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Do you buy Australian, or do you buy cheap?

August 16th 2009 03:19

Hannah Kovacs in her $18 wedding dress

In 1991, just before moving overseas to live, I decided to consolidate all my addresses and phone numbers in a new contact book. This item, basically a few blank sheets of paper stuck together with glue, cost me just under A$10. A similar item in an Australian newsagent today will cost a fraction of the price.

How is it that, over the past 20 years, so many things have become so much cheaper?

The reason is that far more consumer products are now imported from China, India, Indonesia and other countries where wages are much lower than Australian wages. The prices we pay for the items produced reflect the lower production costs.

Many argue that this is to the detriment of Australian business and Australian jobs. Others argue that that this is to the benefit of the consumer. Economists and regulators argue that this is about free and fair markets, and reasonable business practice.

Hannah Kovacs is a consumer who stands fairly in the free trade corner. An online poll conducted by Bride to Be magazine in early 2009 estimated the average bride spends A$2,200 on her wedding dress. Kovacs paid A$18.

She's a psychology student at the University of Queensland. The wedding dress industry, like the stationery industry used to be, is notorious for abusing the lack of a competitive market by ripping off consumers. Kovacs was quoted $4,000 for a dress in a Sydney shop. Asked if the dress was made in Australia, the store was at least honest: no, they said, it was made in China.

Kovacs, still paying for tertiary studies, could not afford $4,000 but she got an idea. She went online and researched Chinese garment makers — at the Chinese end. What she found is professionalism, service, quality — and an $18 price tag for the dress of her choice. Postage and insurance brought the total price to $185.

She found the same gown available in an Australia shop. It sells for $1,500.

So do you buy Australian, and get ripped off, or do you buy at fair market value?

news.com.au

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Posted By: Chris Champion - Category: China, Australia, Consumer fights back, Consumer opinion, Economics

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Opinions can not be trusted

August 14th 2009 04:28

Richard Smith, a British doctor and director of the Ovations program which fights chronic disease in the developing world, recently had breakfast in Bangladesh with an unnamed economics professor from Harvard University.

The conversation during the meal was hardly the mundane breakfast chat of the common man. What these two higher minds chose to discuss was the degree to which the findings of most scientific surveys around the world each year can be trusted.

The conversation started like this. "Economists pay no attention to what people say, only to what they do." It was the Harvard economics professor speaking, so he should know what he is talking about.

Dr Smith responded that he tended to agree. After all, he said, we all know that there is a big gap between what people say and what they do. "Consequently I’ve always been wary of surveys. The more I think about it, however, the more I think that we should ignore all surveys. Life is too short."

One can only wonder if these two venerable men had any idea what a dagger they were plunging into the heart of bloggers everywhere, for whom the results of surveys are a constant and rich source of material.

Whose opinion are we to trust now?
Source: BMJ Group Blogs

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Posted By: Chris Champion - Category: Consumer opinion, Economics, Human nature

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Changing Fortune 500

July 12th 2008 10:21

Goodbye Nike, hello China

Hello China indeed. Our heading summarises the 2008 Fortune 500 list, released last Thursday. The iconic sports shoe maker and eight other American companies fell off the list of the world's top 500 companies measured by revenue, cutting the American presence from 162 in 2007 to 153

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Posted By: Chris Champion - Category: Asia, China, Economics, Environment

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Celtic Tiger

July 8th 2008 10:23

Can someone tell me why European and other developed economies are not following the example of Ireland? I am no economic or political expert, but I don't understand how Ireland can transform itself, as it did, from a European backwater to one of the world's wealthiest nations, and no-one thought it worth emulating. If you do understand, and can shed any light on this, please, please, leave a comment below.

Meanwhile, if you are wondering just what this is all about, and just what Ireland did, let me try to explain

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Posted By: Chris Champion - Category: Economics, Europe, Ireland

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Consumer confidence

April 27th 1999 08:50

I lived in Hong Kong for 16 years until 2007. In 1998 and 1999 I wrote a series of political and social commentaries for a quirky institutional newsletter - quirky in that it was intended to be as much contentious, offbeat and humorous as it was informative. I was working as an editor, and I wrote the articles under the pseudonym Red Inque. I post them here for anyone interested in a look at life in Asia at the time, and in Hong Kong just after its return to Chinese sovereignty.

Tell me Dobkins: How long have you been with us – not counting today? -- David Frost (The Sack and How to Give It)

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Posted By: Chris Champion - Category: Asia, Hong Kong, Economics, History, Hong Kong 1998-99, Investment

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