Archive for the 'economics' Category

Behavioral targeted unemployment

Published
by
Donkey
on January 27, 2009
in digital and economics
. 0 Comments

People behave as their life is. Following a purchase decision of a random consumer in a convinient store might be fascinating waste of time. But getting a population and their stats for a study turns the deal a step easier to generalize.

Google.org, the charity organization or division of the Google, claims that they can predict the flu activity across the States. Online behavior connected with the large scale statistics turns out to be actually an accurate indicator what is happening over the world. The Boxlife made a small investigation into Insights and confirmed, that the economical crisis went as the media described. Or was it the media, who affected the search behavior of consumers - that will be left open to be discussed in several upcoming articles.

unemployment search query usa

The graph above shows how the queries for “unemployment” and related keywords started to slowly increase during the late summer 2008 in the United States. So far the peak was reached in early January 2009. An interesting decrease for the unemployment searches can be seen roughly at times when President Obama was elected, however soon after the search queries continued to increase.

unemployment search query uk

From the European point of view the same graph for “unemployment” query is different. Whether the queries began to increase later is difficult to say from the graphs. However, the behavior is more unstable compared to the American counterparts. Interestingly enough, it seems that Europeans enjoy more peaceful Christmas holidays than Americans: besides UK queries, the significant drop occurs in other European countries as well.

unemployment search query germany

When bringing the German graph, the line begins to change. However, the German equivalent gives the depth for this analysis. As the unemployment has been a severe problem in of the German economy for long, the financal crisis didn’t introduce significant change in the unemployment search pattern.

(Graphs sources: Google Insights for Search)

Water brands: The future of the North

Published
by
Donkey
on June 16, 2008
in economics and marketing
. 0 Comments

Water is running low. Whether it derives from the climate change or something else, about one-sixth of the world’s population lack access to safe drinking water. Moreover, the scarcity of freshwater is no longer a problem restricted to poor countries.

The Wired Magazine wrote recently that about 50 percent of the world’s freshwater lies in a half-dozen lucky countries. People are thirsty - and the soda won’t make it easier. Bottled water is an old story, but its future might be enormous. Currently Wikipedia recognises 78 different water brands, the real world might hide hundreds of more bottled water brands. As with all products, some of them represent cheap and everyday, some exclusive and top quality brands. Water might be a supplement, where the brand matters most: HO2 is same in every bottle.

But what happens, when the shortage makes today’s wealthy countries thirsty? Water is expensive to transport, even without mentioning all-time-rising oil price. Despite Wired stating that economically advanced regions face unavoidable pressures on their industrial output, the agriculture spends the most. So thirsty and hungry with decreasing industries.

As the industrial trend has shifted from the local outsourcing to “made in Asia”, the agricultural and industrial future might shift back to the north in long term. Agricultural and industrial society - here we come. With a punch of Bottled Water Brands.

Theater tickets

Published
by
Monkey
on June 1, 2008
in economics
. 0 Comments

I was reading a really interesting book about the economics of arts and culture. The authors (Baumol and Bowen, 1966) have noted that live shows are fairly insensitive to the technological progress and to the resulting increase in productivity. Performing a play nowadays requires approximately the same inputs that were necessary at Shakespeare’s times: a theater, scenography, technical staff and actors.

If the wage of the artists was calculated on the basis of the average wage that other workers earn in other sectors, the price of the theater tickets would increase much more than the price of other goods or services that benefit from increasing productivity, with the associated risk that the demand would decline dramatically. If instead the artists were paid on the basis of their productivity, today they would earn the same wage that they would have earned at Shakespeare’s times, becoming one of the poorest social classes. This dilemma is avoided because usually governments could pay part of the costs. 

However, the public intervention could create distortions in the natural evolution of the supply of cultural and art goods. In fact it might happen that, to obtain funding, the artists would tend to produce something than the politicians, rather than the public, would like.

 

 

Chinese products: are they really cheap?

Published
by
Monkey
on May 24, 2008
in economics
. 0 Comments

Producing in China is extremely cheap. At least, that’s the appearance, especially when we hear that western production units have been transferred in China. However, appearance is often misleading.

Manufacturing in China is cheap to the detriment of workers. Holidays, social security contributions, unemployment insurance and safety on the job are expensive. Since China is on his way towards development, it is hard to imagine that there could be any job protection or whatsoever insurance or social security.

If Chinese workers are hard-hitting machines, the machinery used substantially lag behind the international standards of efficiency and pollute more than plants situated in other countries. The laws to protect the water, air and soil exist, but the real problem is the enforcement of environmental regulations. Very often, the production objectives established by the local factories in an area have to be pursued at any cost and the environment has to pay the expenses. It has been estimated that 60 % of the precipitations are constituted of acid rains for more than 1/4 of the Chinese territory (World Bank, 1997). As a matter of fact, China is the world leader in production of SO2 and NOx. Taking a look at the lakes, we see that 75% of them are considered to be polluted. The drinking water available to each inhabitant is estimated to be just a quarter of the world average. The machinery and plants used in China use more energy and produce more waste and pollution.

Most worryingly, the products made in China are made with materials that are not in conformity with western standards of safety because toxic. Very often, the products are of such a lousy quality that you have to throw them away after two usages, thus augmenting the amount of waste existing on our planet.

Is it worth to produce such expensive and often useless goods that require a huge amount of labour and raw materials? Besides everything, China is very thirsty of raw materials, such as oil or steel. The boosting demand of raw materials from China is driving up the world prices. If prices increase, and firms want to keep margins, manufacturing becomes more expensive and many firms have to close down or to move their production units where something else (the labour- the environment) is cheaper. More and more people will lose manual skills and craftsmanship, thus production could be nowhere else than in China.

World eats from the same pie: if someone gets a bigger slice, then someone else has to grab smaller slices. A price is not just a tag that have influence on your wallet. If decisions are price oriented, they should take into account the costs of environment and labor rights.