Economics FTW Archives

February 23, 2006

Misleading: Average American Family Income Declines

Martin Crutsinger, the AP Economics Writer, has written an article that claims the average income of the American family has declined.

Oh, really?

The Federal Reserve reported Thursday that the drop in inflation-adjusted incomes left the average family income at $70,700 in 2004. The median, or point where half the families earned more and half less, did rise slightly in 2004 after adjusting for inflation to $43,200, up 1.6 percent from the 2001 level.
The median, or midpoint for net worth rose by 1.5 percent to $93,100 from 2001 to 2004. That growth was far below the 10.3 percent gain in median net worth from 1998 to 2001, a period when the stock market reached record highs before starting to decline in early 2000.

So it's true that the average family income has not kept up with inflation. It's not that people are being paid less... just that their money isn't worth what it was a few years ago.

But, the median value (which is a much better indicator) did not decrease. Why is the median value better? It eliminates the outliers that can make an average skewed. That average income includes your family, but it also includes Bill Gates' family.

But even if we do focus on the average income, let's remember that the period of 2001-2004 is one that includes a mild recession.

So wouldn't a better headline, and a more accurate one, be something like: "Despite recession, median income rose since 2001?"

Instead it just seems like the AP and/or Mr. Crutsinger (who is to blame is your guess) are trying to spin this report as bad news for the economy.

March 11, 2006

Hire me... I'm Beautiful

Given that society places such an important emphasis on looks, why isn't discrimination based on appearance illegal?

Given the enormous amount of discrimination that takes place as a direct consequence of personal appearance, it's noteworthy that a nation as legalistic as ours has passed almost no laws that attempt to regulate such matters. Outside of a handful of municipalities (San Francisco, Santa Cruz, Calif., Washington, D.C.) it is perfectly legal to discriminate against people because of their looks, even when their looks have nothing to do with their ability to do their jobs.
Perhaps this is an admission that appearance-based discrimination is so deeply rooted in our culture that no law could hope to do much about it. More disturbingly, perhaps it's a sign that at bottom we don't actually disapprove of giving all sorts of unearned social advantages to beautiful people simply because they're beautiful.

Or perhaps it's an admission that such a law would be completely unenforceable? In order to prove discrimination, you'd have to PROVE that the victim was less attractive. How do you do that? Comparison photos?!

Furthermore, appearance isn't solely based on genetics. Just about anybody can look good with enough time and money. When you go to a job interview, do you wear a suit? A nice shirt? A dress? A tie? Under appearance discrimination laws, you could wear whatever you wanted.

Hire me!

April 19, 2006

Taco Bell Wants You to Eat a "Fourth Meal"

Taco Bell appears to have a new advertising campaign suggesting their customers engage in a "fourth meal." It's described as "the meal between dinner and breakfast" and touts the fact that most Taco Bells are open pretty late.

Finding new avenues for profit must be hard in the fast food industry. After all, you can only raise prices so much, and it's hard to make a big impact on market share once you're an established leader like Taco Bell. Taco Bell isn't even open for breakfast, so they've only got the lunch and dinner crowd to cater to. Hey, wait! Why not just create a whole new meal!

This would have been marketing genius five years ago, but today fast food chains are under scrutiny for their contribution to our national obesity epidemic. I'm not saying they're to blame, but wouldn't you think trying to sell people on an additional, unnecessary meal might fuel the fire, so to speak?

April 21, 2006

Taco Bell Wants to Know Who's Interested in Their "Fourth Meal"

I mentioned a couple days ago that Taco Bell is advertising the idea of a "fourth meal" between dinner and breakfast. TB is perfectly suited to cater to those people who decide to grab some fast food between, say, 11PM and 2AM. Of course, if you want to eat between 3AM and 5AM or so, your only choices are McDonalds or Jack in the Box, at least in these circles. There used to be some 24HR Taco Bells around, but I haven't seen one in a long time.

Apparently iChameleon Group developed the "fourth meal" website, because they appeared to be checking their referral stats. Why they would even notice us is beyond me, other than the possibility that nobody else is paying attention to the "fourth meal" campaign. The only other blog entry I could find is in German (I think.) And even then I think they're talking about the technology, not the actual food. Like I'd know anything about that... we're just happy when our category images aren't broken.

April 27, 2006

Latinos to Shut Down McDonalds on Monday

Apparently Latinos all over the country are planning on leaving work just to show how important they are to our society. Get your Big Macs now if you want them. No... seriously.

Signs in front of some fast-food restaurants in the Seattle area already are warning customers that service on Monday might be curtailed or the businesses may be closed.

I'm not sure what to think of this. On one hand, actually being able to understand the person taking your order will be a relief. On the other hand, unlike the white people that work fast food, the Latinos aren't psychotic morons. (And I mean moron in the most literal of senses.)

In other news, I go to court on Monday as well. Unfortunately, the cop that pulled me over was not a Latino, so he could potentially show up, provided he can read the letter asking him to show up to court. Which, frankly, he probably can't. Because he was stupid. He was dumb. Get it? I'm mad at the cops. Can you tell?

Maybe if the guy had pulled me over for actually committing some sort of violation, instead of just making up stuff.

June 26, 2006

Should we buy a condo?

Rents are going up. Demand for housing has trickled down to demand for condos, and that's finally increasing demand for apartments. I imagine supply is going down too, as apartments are being converted over. By the time our lease is up, we'll probably be looking at $850+ a month for a one bedroom apartment behind a bar where men expose themselves to my wife.

Condos, meanwhile, are selling in the area for about $200,000, which with enough creative financing could end up being around the same price. Provided condo prices don't go down, a condo purchase is a no-lose situation, since at worst you could sell it and pay off the loan. (You might even make money!)

The key question is where are prices headed? If they're going to stabilize, we're okay. If they head down, not so much. It would be nice to have a place of our where we had a little more room and could have a dog, maybe even a little garden. I'd rather have a house, but that's not going to happen anytime soon, if ever. Prices are too expensive. But we can find some nice places for $200,000, or even lower if you're willing to move a little further out.

July 11, 2006

Why is Movie Popcorn So Expensive?

So when you go to the movies, most of the money from your ticket does NOT go to the movie theater. Most of it goes to the people who produced the movie, leaving the theater with a specific cut... somewhere between 25 to 50 percent. It varies depending on the movie. So given that, movie theaters aren't really in the business of selling movies, but rather they are in the business of acquiring customers who may potentially purchase popcorn, candy, soda, etc. Then they try to charge you an arm and a leg. These places will charge you $4.50 for a soda. Their cost? Almost nothing. It's pure profit. Popcorn and candy are mostly profit too. The cost of showing movies, etc, should be offset by the minimal percentage of box office revenues, so movie theaters are making almost all of their money selling popcorn, etc.

Which begs the question... is $4.50 for a soda really the optimal price? I mean, it just seems kind of high. Surely they've done the numbers... so they must have determined that these sky high soda prices make them the most profit. I wonder if they take other factors into consideration though. Taking your spouse and two children to the movies can run you upward of $60-80 these days! Even for a matinee, you're still paying $20 just for tickets, and at least $10-15 for popcorn, etc. I guess it depends on how big a pushover you are when your kids ask for a gigantic bag of Skittles.

Regardless, how many people are just giving up and waiting to rent, where they can spend $2.50 to get a movie, and buy popcorn and soda at Safeway where they might spend $5-10 at most? Granted, people are still going to movie theaters, and movies are making more money than ever! In 2004, Shrek 2 made $441 million, making it the third highest grossing movie ever! But ticket prices are higher too. Adjusted for inflation, Shrek 2 comes in at #29. Number one is still Gone with the Wind, which made $1.3 billion domestically. Star Wars comes close with $1.1 billion.

I know it's hard to get me into a movie theater these days. We saw Superman Returns a couple weekends ago, but that's a big event movie, and I would probably have watched it consisted of Superman mowing the lawn for two and a half hours.

Furthermore, movie theaters haven't done anything to make the experience better in the last ten years. Stadium seating and digital sound were great improvements a decade ago. What's happened since then? A lot of theaters are adding digital projection for the twenty minutes of advertising that precedes the show. Strangely, very few theaters are also including digital projection of the features. So the movie chains are investing in the one area that most ticket buyers hate the most!

Seems like the movie business is putting itself OUT of business. What do you think?

June 10, 2007

One of These Things is Not Like the Other

Can you guess which thing is not like the other?


July 4, 2007

Supply ♥ Demand: Why Aren't Christian Movies Successful at the Box Office?

Over at my new Supply ♥ Demand blog, I ask why Christian movies aren't successful even though there's a pretty large base.

Take the example of Left Behind. The book series has been a massive success, selling 65 million books. By comparison, The Lord of the Rings sold approximately 100 million books, and the theatrical trilogy grossed over $2,900 million worldwide (with a little over $1 billion of that from U.S. theaters.) Left Behind? An astounding $4.2 million! The two sequels were released direct-to-DVD.

Keep reading over at my new blog, Supply ♥ Demand!

About Economics FTW

This page contains an archive of all entries posted to marchdecember in the Economics FTW category. They are listed from oldest to newest.

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