This is an entry from Thomas Durrant (University of Porsmouth) for our Student Challenge. Although he did not win the prize, his humour was very well appreciated, and I thought you would enjoy it too. Economics of Alcohol Consumption
In this fun video, chocolate enthusiast James Ward describes how he visited more than 140 locations in London checking the price and sale condition of Cadbury’s Twirl chocolate bars. One of his slides includes the economist Adam Smith, and Ward sees his Twirl project as providing consumers with the information they need for the market to function smoothly. With his Google Map, you can save yourself as much as 10p by locating the cheapest Twirl on your street.
Ward even generated some statistics from his data, although he admits his correlation of shop name and Twirl availability is “worthless”. No one can accuse him of taking himself too seriously.
Photo by Bayat on Flickr
Two odd pieces of economic research have been highlighted in the Ig Nobel Prizes, awarded each year by the magazine the Annals of Improbable Research.
The first study examined tips given to lap dancers. Unfamiliar with lap-dancing, Geoffrey Miller and colleagues read up on the relevant sociological and feminist literature before getting eighteen dancers to record their earnings for two months. They found that earnings were greater when the dancers were ovulating: the male patrons expressed a preference for dancers who were currently fertile, even if not consciously aware of the difference.
The other study was by behavioural economist Dan Ariely and colleagues, who found that the placebo effect of a pill was weakened when the pills were discounted in price. In other words, some medicines are more powerful in virtue of being more expensive.
The full references are Geoffrey Miller, Joshua M. Tybur, Brent D. Jordan (2007) “Ovulatory Cycle Effects on Tip Earnings by Lap Dancers: Economic Evidence for Human Estrus?” Evolution and Human Behavior, vol. 28, 2007, pp. 375-81; and Rebecca L. Waber, Baba Shiv, Ziv Carmon, Dan Ariely (2008) “Commercial Features of Placebo and Therapeutic Efficacy” Journal of the American Medical Association, March 5, 2008; 299: 1016-1017.
Alcohol and marijuana are related by what’s called the substitution effect: make it harder to get one, and consumers will turn to the other.
A classic report by economists John DiNardo and Thomas Lemieux studied teenagers from 43 states of the USA over the course of a decade. It showed that when the legal drinking age is raised, more teenagers smoke marijuana.
Look it up: DiNardo, John E. and Lemieux, Thomas, “Alcohol, Marijuana, and American Youth: The Unintended Effects of Government Regulation” (November 1992). National Bureau of Economic Research Working Paper No. W4212. Available online at Social Science Research Network.