If you drink you die...

a little earlier that is...

According to life expectancy 1.0 calculators, a person who never drinks (that is never, ever), will life about 5 years longer than a person who drinks 3 or so drinks a day.

Why is investing in education important?

Economics Wednesday

A: The returns from investing in education are better most financial investments that is why...

According to " Estimating Returns to Schooling from State-Level Data: A Macro-Mincerian Approach" by Steven J. Yamarik, California State University at Long Beach, the social return to investing in education can be as high as 16%.

Abstract (from The B.E. Journal of Macroeconomics.)

In this paper, we use information from U.S. states to determine the social return to schooling. We estimate a macro-Mincerian model where aggregate earnings (or income) depend upon physical capital, labor, average years of schooling and average labor force experience. We find that the social return to U.S. schooling is 9 to 16 percent, which matches estimates of the private return found in the labor literature. Our results therefore provide evidence that U.S. schooling is indeed productive, but generates no positive externalities.

All boats rose in 2006

According to an article by DAVID CAY JOHNSTON of the New York Times, Americans enjoyed higher average income in 2006 for the first time since 2000, when the last economic expansion ended, the latest tax data show.

Adjusted gross income reported on tax returns in 2006 averaged $58,029. In 2006 dollars that was an increase of $739, or 1.2 percent, from the $57,289 average in 2000, analysis of Internal Revenue Service data showed.

In 2006, the median annual household income was $48,201.00 according to the Census Bureau.[3] ... there were approximately 116,011,000 households in the United States. 19.26% of all households had annual incomes exceeding $100,000,[5] 12.3% fell below the federal poverty threshold[6] and the bottom 20% earned less than $19,178.

Income increases did not occur uniformly across the different income strata. Overall, there are 1,699,000 (1.50%) households in the U.S. who earn $250,000 or more while there are 2,566,00 households that earn less than $2,500 per year.

Value of housework by gender, income, and race

In injury and death cases, the value of lost household work that would have been performed by the injuried or deceased is frequently an issue. In these cases, the value of the lost household work is determined by first calculating how many hours the person would have normally performed. Second, the market value of the lost household services experienced by the person is calculated. The market value of the household services is determined by the average hourly wage of individuals who perform similar services in the labor market. The total value is found by multiplying the value and number of hours performed.

The question is does the person's gender, income level, and race matter in the calculation?

The answer is yes, yes, yes.


In a Princenton working paper titled: Does Household Work Matter Anymore?
Comparisons of Household Production and the Distribution of Income in the United States
in 1965-66 and 2003' the authors, Cathleen D. Zick, Ph.D., W. Keith Bryant, Ph.D., and Sivithee Srisukhumbowornchai, M.S. provide some insights.

They find that the value of household production is:

* higher for women
* decreases as income goes up (less hours worked)
* African-American and Hispanic males have fewer household production hours
* Hispanic females work more household production hours

See also:


Bryant, W.K., C.D. Zick, and H. Kim. 1992. The dollar value of household work. Ithaca, NY:
Conrell University, College of Human Ecology.

Real games use real economists

Eveonline, a online space simulation, uses actual economist to develop realistic economy aspects into the game.

An economist, Dr. Guðmundsson, is responsible for compiling quarterly economic reports for the eve community and providing ongoing analysis of the economic facets of Eve, along with coordinating research with other interested parties.[28][29]


For more on the economy, go to:

A few snippets about the economy side:

There is a single currency unit in Eve Online, the Inter Stellar Kredit (ISK), which takes its name from the Icelandic króna, whose ISO code is ISK.

Players can barter between themselves for items, use the in-game market system for ISK-based transactions, place and accept contracts between players for assets and services or use a Loyalty Points store.[24]

A large proportion of the in-game economy is player driven; Non-player character merchants supply some basic blueprints, items and trade goods.

Pricing and availability of goods varies from region to region within the Eve universe. These aspects contribute to an economic environment influenced by factors like scarcity of resources, specialization of labor and supply/demand dynamics.[25]

The economy is closely tied with the (also player driven) political aspect of the game. Player corporations (the Eve equivalent of guilds) rise and fall as they struggle for market dominance as well as territorial control.

From a technical point of view, the economy in Eve is known as an open economy, that is there is no fixed amount of money or materials in the universe. CCP did attempt to implement a closed economy (that is an economy where there is a fixed amount of currency and therefore materials) early on in the game's existence; however, it proved too difficult to balance the effects of new players entering the game with the capabilities of older players able to earn more ISK or obtain more materials.

The current Open economy is automatically balanced by introducing extra materials in underpopulated areas to encourage an even spread of players.[26]
Eve's End User Licence Agreement forbids the exchange of ISK for real currency; however there is a secure in-game system for trading "Game Time Codes" (GTC) in exchange for in game currency. In a similar way selling and buying characters for in game currency is allowed.

Economics Wednesday

Economics Blogs

One 'angry economist', sums up his view on global warming...

Looking for a way to understand global warming in just one sentence? Try this one on for size:

I find no value in any mention of human-caused CO2 global warming when there is no corresponding mention of the 2-3 degree 1500 year +-500 warming / cooling cycle.

Or, its more succinct version:

A fart on a farm isn't noticable

The principles of economics in 5 minutes

Economics in action

Need a refresher on the principles of economics This short entertaining clip provides a 'translation' of the popular Mankiw principle of economics textbook.

The clip: "Mankiw's 10 principles of economics, translated for the uninitiated", by Yoram Bauman, http://www.standupeconomist.com/ .

Dr. Bauman is the workds first and only stand up economist. The video is a hoot.

Sports attendence soars in uncertain economic times

Economics In Action

....Gas prices are up. Food prices are up. So, oddly enough, is attendance at Major League Baseball games....MLB officials say attendance is 2.6 percent ahead of record-breaking figures from last season

“People seek the comfort of their sports addiction when there’s bad economic times,” said Andrew Zimbalist, a sports economist. “There’s something very deeply rooted about our sports attachments. People tend to give that up last.”

"Not everybody’s income falls during a recession,” said John Solow, an economics professor at the University of Iowa. “In total, people are getting poorer or it wouldn’t be considered a recession. But there are some people whose income continues to rise.
“What fraction of those tickets are sold to Joe Six-Pack and his family as opposed to corporations?”