Sound Economics

Music platforms are evolving at breakneck speed, but is the increasing consumer utility destroying artist profit? CDs replaced records, digital downloads replaced CDs, and now streaming services like Spotify and Apple Music thrust the purchased digital copies of iTunes onto the edge of obsolescence. Spotify’s 2011 debut in America offered music fans a new way to listen to their favorite artists. Instead of purchasing individual songs or albums, users can stream music from a phone or laptop. Spotify offers multiple options: a free version where music is interrupted by advertisements and a premium version where users pay a monthly subscription Continue reading Spotify: the Economics of Streaming→

Most students could recall the original thirteen colonies or recite the Declaration of Independence. However, few know what economic factors in colonial America led slavery to ultimately replace indentured servitude. I enrolled in Econ 218, American Economic History this semester with Professor Lisa Nunn. This course uses economic models and theories to understand the path of economic development in the U.S. starting with colonization. Models are important in economics because they can be used to make assumptions or predictions. Models allow us to isolate certain parts of the economy and manipulate variables to see their outcomes. In introductory economics, markets Continue reading American History Through A New Lens→

Subway’s five-dollar foot-long deal is no more. But when and why did this renowned campaign end? Simple economics can shed light into this decision: it was no longer profitable for Subway to continue to offer a sandwich for such a low price. In fact, in some locations it never was profitable, and many individual store owners have been contesting it since the beginning. Unlike many fast food chains in the United States, it is up to each Subway store owner to set the prices for their location that maximizes their individual profits. However, in 2004, Stuart Frankel had an idea Continue reading $5 Foot-gone→

The United States, Canada, and Mexico finalized a new trade agreement on Sunday that could overhaul the North American Free Trade Agreement (NAFTA); but, let’s back up a little bit. In introductory economics, we learn that trade increases efficiency and thus benefits all parties involved. Different countries produce the goods for which they have the lowest opportunity cost; in other words, those countries have a comparative advantage. The maximum amount of stuff gets made and the economy is productive. This is a tight deductive argument that economists have broadly agreed on and taught since David Ricardo wrote about it in Continue reading The World vs. The Classroom: Does Trade Make Everyone Better Off?→

People, especially economists, love incentives.  Incentives motivate people to do things. Even when one may feel like they have no control over those around them, they can create incentives in hopes of changing others’ behaviors.  The other day UPS incentivized seniors to attend the “Senior Class Gift Kickoff” by serving every attendee two beers and it worked. Not only did I see many classmates there but I even heard them say they would not have attended if they had not received free alcohol.  Further, if you actually donate to the senior class gift you get a special pin to wear Continue reading The Cobra Effect Strikes Again→

       In a recent podcast on The Indicator from Planet Money, producers Darius Rafieyan and Constanza Gallardo talk about a unique encounter on the dating app Tinder. Here’s the story: Darius matched with a woman named Natasha on the app. The two chatted and got along well so they decided to meet in person at a concert that Natasha was attending. When Darius arrived, he noticed the crowd was mostly young guys that seemed of the same stature and look. About 10 minutes after arriving into this crowd of about 100-150 people, Natasha appeared on stage. She announced Continue reading The Economics Of Tinder: An Asymmetric Information Problem→

Turn on the news and chances are there will be mention of gun control, gun violence, or something of the like. It’s not too surprising either. Relative to our OECD peers, the U.S. has the highest firearm death rate (10.2 per 100,000 people). These staggering numbers force us to ask the question, why do we still have firearms? Some people will blame government inefficiency, others will blame a strong gun lobby, or the outright failure of democracy. Well, in a way, all three can be blamed. But a more nuanced understanding of the gun control problem can only be explained Continue reading An economic answer to America’s gun control question→

Megan Waldo is one of three women graduating with an economics degree this year, 2018. Megan decided to conduct an empirical thesis using econometric methods. Her thesis was centered around analyzing the equity and accessibility of New York City’s bike share Citi Bike through an econometric regression that looked at the relationship between socio-economic characteristics of zip code tabulation areas and the density of bike share stations within them for 2016-2017. She used income, educational attainment levels, age, gender, and race compositions of each ZCTA to analyze the demographics and then a GIS system, carto, to count the number of Continue reading Thesis Corner: Megan Waldo→

Economists David Ricardo and John Stuart Mill dedicated their lives to economic writing that analyzed the dynamics of capitalist economies. Specifically, they investigated sources of economic growth and development. Principles of Political Economy and Taxation was David Ricardo’s contribution to this economic growth and development literature. Within this economic literature, Ricardo built a complex model through the theory of value and rent that attempted to thoroughly address topics of rent, profit, and wages. “To Ricardo, the economic world was constantly tending to expand.”[1] To Ricardo, continuous expansion by capitalist would cause a chain reaction that would affect prices of commodities, Continue reading Millian vs. Ricardian Stationary State→