Why Tacoma shuts down when it snows: A network optimization problem

(Picture from UPS Facebook Page) This storm seems to spark a lot of emotion. While watching Tacoma residents and California transplants loot Safeway for canned beans and Rainier, Minnesotans and Chicagoans laugh and jeer about how they walked to school in five feet of snow every winter without a jacket. Okay, maybe not quite so extreme, but how would I know – I haven’t left North Tacoma in five days because I, too, am a California transplant. This past week has made glaringly clear the difference in protocols and design between cities that brace for snow vigilantly every winter, and Continue reading Why Tacoma shuts down when it snows: A network optimization problem

The Utility of Schadenfreude

Recently, in one of my economics classes, the professor decided to have us play a game theory scenario. The first interesting factor to know for context, is that the class consists of a minority of economics majors. The second factor is that the class consists of over 20 students (decently sized for a Puget Sound econ course). The game we played was a basic variable contribution mechanism game, with the class splitting into groups of around 3 and given the opportunity to contribute ‘tokens’ to a group pot to get points for the entire class or keep the ‘tokens’ to Continue reading The Utility of Schadenfreude

Why You Should Be Less Excited About Snow Days

Snow is really really expensive. In 2015 the American Association of State Highway and Transportation Officials investigated the cost of snow removal in 23 states, and found that the overall cost was $1,131,651,978 (AASHTO). Simply put, snow is a financial burden on cities. But this is not the primary concern of students when it comes to cold weather. The only question that matters to a student, no matter how old, is whether or not there will be a snow day. The consensus among the student body here at UPS is that snow days are amazing, and that a break from Continue reading Why You Should Be Less Excited About Snow Days

What’s the Deal with the Green New Deal?

The Green New Deal has been the talk of the town this last week, with strong opinions from both democrats and republicans. The majority of democrats are in support of the Green New Deal, as it asks for a fight against climate change and social inequity, two priorities that democrats have. Meanwhile, republicans are in strong opposition as this is an extremely radical plan with little plan for an actual execution. Republicans also do not believe climate change is a priority and think the government should be spending money on other things. These opinions seem to be widely broadcasted at Continue reading What’s the Deal with the Green New Deal?

A Bottom-Up Perspective on Entrepreneurship

Small businesses[1] are frequently said to be the “backbone” of the American economy. The prevailing sentiment concerning regulation on businesses of all sizes is that less is more. Minimum wages, corporate taxes, benefit guarantees, and other worker protections are anathemas to growth and should thus be minimized. This logic gets extended to the assertion that a strong social safety net will harm business and entrepreneurship because of the higher taxes that would inevitably fund such social programs. It makes sense, right? The less businesses spend on employees and taxes, the more they can focus on improving and growing. Regardless of Continue reading A Bottom-Up Perspective on Entrepreneurship

The Price of Innovation: Medical Drugs

It’s no secret that the price of drugs in the United States is a touchy subject; wanting affordable drugs now versus the cost of developing presents a difficult dilemma. A lower price for drugs as soon as they’re developed could save lives, but money for expensive R&D also has to come from somewhere. Every year investors spend five times as much as government does on medical research (drugcostfacts.org, 2015), and they aren’t doing it out of the bottom of their heart. The assumption is that investors will only allocate capital to a biotech/pharmaceutical company if they believe they will be Continue reading The Price of Innovation: Medical Drugs

Guilty on One Count: Negligence (of Opportunity Cost)

The concept of opportunity cost is not foreign to most people who have taken an introductory economics class at some point, nor is it terribly complex to grasp if you don’t have that background. Basically, it is the value attributed to the next best thing that has been foregone in favor of something else. Many economic models take this principle into account when they are interpreted to describe consumer behavior. However, when it comes to application in the real world, Frederick et al. (2009) argue that this assumption that consumers evaluate their opportunity cost at every turn does not hold Continue reading Guilty on One Count: Negligence (of Opportunity Cost)

Super Low at the Super Bowl

It has now been five days since the Super Bowl. The New England Patriots, led by Bill Belichick and Tom Brady, went on to beat the Los Angeles Rams to win their sixth league championship. The game, held in Atlanta, Georgia, was the lowest scoring NFL championship in league history with both teams combining for a total of 16 points. The score was not the only low point at Mercedes Benz Stadium, however. This past season, the ownership of the Atlanta Falcons decided to slash concession prices during home football games. Fans could purchase a beer for $5 and a Continue reading Super Low at the Super Bowl

The Economic Moat, a New Application for an Old Concept

Maybe you’re a Game of Thrones enthusiast, maybe you’re not. Either way, you are most likely aware of what a moat is. You know, the classic pit filled with water which surrounds nearly every storybook castle… The concept of a moat is incredibly simple. If invaders are forced to deal with a challenging obstacle before they can attack the castle, the likelihood of a successful invasion is decreased. The concept is thousands of years old, but it has recently been given a new application in the world of security analysis and finance. The term economic moat was coined by none Continue reading The Economic Moat, a New Application for an Old Concept

Bad Classes Chase out Good Classes

Gresham’s Law is traditionally thought of when thinking about currencies.  The saying goes that “bad money chases out good money.” This phenomenon occurs when there are two forms of money with different values, but their face value is the same. While the money with lesser value will be used for transactions, the more valuable money is held onto until it disappears from circulation. Think of if the two options for money were plain old rocks or gold and both options were given the same face value. This means you could pay for ice cream with five rocks or five pieces Continue reading Bad Classes Chase out Good Classes