Rethinking the Poverty Trap: A Multidimensional Approach

The discussion of the presence of poverty traps in certain impoverished areas has been a very important and somewhat controversial developmental economic idea for decades. It is most frequently described as a self-reinforcing mechanism that causes poverty to persist. As further explained in Poor Economics by Abhijit Banerjee and Esther Duflo, your income today influences what your income will be in the future. The amount of money you have today determines what you eat, how much money spent on health, education, ways to improve your work, etc., which in turn influences your income in the future. The poverty trap is seen Continue reading

Procrastination

With fall break in front of us and midterms almost behind us, perhaps one of the last things that any student is thinking of right now is the work due after break. You know, that paper that was assigned weeks ago to be turned in the day classes resume? Procrastination is real and we can use economic theory to prove that the phenomenon is a result of rational thinking contrary to the many perceptions of laziness and lack of time management which surround the act of doing work later, rather than sooner. The theory comes from microeconomics and it goes like this. Continue reading

Americans Underestimate Economic Inequality and the Pay Gap

Despite the vilification of the “1%”, occupation of financial centers like Wall Street and the visibly widening income gap, many Americans don’t actually know how severe the United States’ economic inequality is. In fact, those surveyed for Michael Norton’s (Harvard Business School) new study on public opinion of executive pay grossly underestimated the pay gap between the average worker and CEOs. According to the AFL-CIO, the average American worker makes about $34,000 a year, while the average CEO earns more than $12 million. For a better understanding of such a disparity, the average American worker makes about .28% of what the average Continue reading

ASK Night: Words of Wisdom from Former Econ Majors

Last Thursday, Career and Employment Services hosted an event called ASK Night, where Puget Sound alumni generously volunteer their time to talk to students about what career-related endeavors they’ve been up to since graduation. I thought this would be a great opportunity to chat with some former Economics majors, see how they’ve been doing, and how their studies helped them with their careers. I was disappointed to discover online that out of the 50 or so alumni that attended, only three majored in Economics (and a very small handful minored in it). Out of the three Economics majors, I had the time Continue reading

Don’t be fooled, Loggers.

Kal Draws is a video series put on by The Economist. Each of these cartoons takes a basic economic concept and attempts to illustrate it in a minute or two. Here is their cartoon on trade, take a look for yourself. Not everyone needs to master economics to have a meaningful opinion about economics. So when a popular economic news source tries to pass off extremely biased and uninformative media as accurate information on basic econ terminology, it’s embarrassing. There is some good information here. It’s true, trade does benefit countries. Theory and practice tells us that by specializing in the production of Continue reading

Theaters, Asymmetrical Information, and Star Wars 7 (Part II)            

Last week I talked about how movie studios make their money, why the constant price of theater tickets is a very bizarre phenomenon and then I told everyone I’d explain why, a year before its currently scheduled release, JJ Abrams has been ‘leaking’ information to the media about the upcoming release of Star Wars 7. I promise this is all related somewhere down the line. Theaters charge the same price for a ticket, regardless of movie, and movies can vary both in quality and cost to produce. Let’s imagine for a minute that you show up to the movie theater, Continue reading

New T.V. Deal = More $

The NBA just signed a new T.V. deal with ESPN and TNT over the next 9 years for over $24 Billion… What this means, besides more money for everyone, is that the salary cap is expected to rise again. This will cause all sorts of excitement as new free agents will start to look for larger contracts, and teams will have the cap space to provide these contracts. The next few free agency periods are set up to be extremely exiting, with a lot of player movement, and outrageously large contracts. What I find really interesting are the contracts that Continue reading

Ebola: Why is it so bad? (Part 3)

This post continues the discussion from my last post, which raised the question: why has the Ebola crisis become so severe? Another contributing factor: the “dismal” response of the World Health Organization (WHO), a United Nations auxiliary organization. As an international public health crisis, this crisis falls squarely in the sphere of the WHO. To be clear, response to Ebola is not the sole responsibility of the WHO. In the words of the director general of WHO, “And we are not the first responder. You know, the government has first priority to take care of their people and provide health care. W.H.O. is a Continue reading

Increase in Cyber Attacks will Disrupt Global Economy

As people, businesses, and governments approach a more digitally dependent way of life, the risk of breached technological security becomes much larger of an issue. Cyber attacks are rapidly increasing in frequency, targeting celebrities, large businesses, and financial institutions. In mid June of this year, hackers gained access to JPMorgan’s internet servers that contained user information of current and former customers who accessed the bank’s websites. The bank didn’t discover the attack until about two months later, but they promptly found and closed all access paths to the vulnerable servers. A few days ago, JP Morgan stated that contact information for 76 million households and 7 million Continue reading

Fitness Apartheid? A moral look at price discrimination

Fitness Apartheid. That’s right, apartheid. That’s one way the housing market in New York City has been described recently by a tenant. An inflammatory word? Absolutely. Comparing exclusive fitness centers to an entire history of racially based and politically enforced segregation is entirely inappropriate and I don’t support it in the least. However, the housing market in New York is a battle ground and the actions that landlords are taking have become downright offensive. This episode of Freakonomics explores the idea of price discrimination through first class airplane seats, “the poor door”, and yes, an exclusive fitness center. To listen to the episode, Continue reading