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Archive for January, 2010

Opportunity costs

Posted by Eliot Weinstein on January 26, 2010

From Reuters:

Bill Gates worries climate money robs health aid

Discussing the money pledged at the Copenhagen climate change summit last month, Gates wrote,

“I am concerned that some of this money will come from reducing other categories of foreign aid, especially health…If just 1 percent of the $100 billion goal came from vaccine funding, then 700,000 more children could die from preventable diseases.”

Also,

Taking the focus away from health aid could be bad for the environment in the long run, said Gates, “because improvements in health, including voluntary family planning, lead people to have smaller families, which in turn reduces the strain on the environment.”

Another discussion of Gates’ letter can be found here.

For more information about the trade-offs inherent in trying to solve global problems, read How to Spend $50 Billion to Make the World a Better Place, edited by Bjorn Lomborg.

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Anecdote of the week

Posted by Eliot Weinstein on January 24, 2010

Earlier this month, economist Steven Horwitz and his wife went shopping for new cell phones. Here is an amusing (to me, at least) anecdote taken from Horwitz’s blog post about the cell-phone-buying experience:

We were talking with the salesman (from whom we have bought every cellphone we’ve ever owned) about the pricing of Blackberrys and he pointed out that Jody’s Storm was half the price of my Tour, even though the Storm is the fancier model with a touch screen and the whole iPhone feel to it.  He said “it might seem strange that the newer, fancier phone is cheaper” but before he could say anything, I quickly said “well I’m sure the Tour is in demand from business users who don’t want to learn the touch screen and want the latest of the more ‘traditional’ BB, while the Storm is for people like Jody who might get an iPhone or Droid instead.”  He said “yup.”

I quickly replied:  “it’s just like staying over a Saturday night for plane tickets – segmenting your market by price elasticity.”  He gave me that sad, shake of the head that economists often get from people when we go geek.

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