“A metric ton of logic doesn’t offset that feeling of loss.”
Boy does that sum up what the economists call displacement; a kinder gentler word for refugee.
Of course there is also: “”The teeth of the sheep shall lay the useless plough up on the shelf.”
The 13th century prophesy that correctly foretold how landowners would displace the tenant farmers of Scotland with sheep.
Sometimes though you can find a few pounds of very insightful logic.
In a follow up to the last posting on trying to figure out the lowest price for phone service in Chicago and other wonders of differencial pricing… Today’s New York Times happens to have an article about using expensive software systems to decide how to price products at department stores. Playing that game, the article reports, can raise gross margins 10%. Clearly you’ll be run out of buisiness if you don’t play the differencial pricing game and your competitors do.
There are numerous down sides of these kinds of games. Buyers percieve them as unfair. They causes customers to delay their purchase decisions, convinced that if they play the shopping game longer they will get a better price. It tends to make the sales process lousy: vendors that bundle a lot of service into the sale get punished. Shoppers go to them first. Collect the high quality pre-sale service, and then leave and buy someplace else. Sometimes this can lead to an industry working to get the practice regulated – some people call that price-fixing.
The software that is trying to figure out what to charge you for the hotel room, airline ticket, or college education are all looking for signals from the buyer that can be used to estimate what you are willing to pay. Private schools, public housing, etc. just go ahead and have you hand over your tax returns. Other merchants may poll your credit rating. The hotel booking software takes note of the time of day when you call. Department stores, about a decade ago, started adjusting prices thru-out the day so that I can get a shirt cheap if either I drop in at 8am on a tuesday or I’m willing to drive to an ‘outlet mall’ in a neighboring state on a saturday.
This search for signals from the buyer about his ‘hidden price’ leads to this kind profiling being called prejudicial pricing.
See also via google:
Differential pricing is the art of charging customers not what it cost you to make the product but rather the maximum amout that reflects the value the buyer thinks he will extract from using that product. Sellers sometimes call this “value pricing.” This black art requires – if your the seller – getting the buyer to reveal his perception of how much use he will get from the product.
The term ground cover has a surprising range of usages. This noun phrase is used for the class of things that cover your real estate in a cheap convenient way. A good ground cover is reasonably inoffensive, self-maintaining, and with luck attractive. The term is used in different ways in gardening, farming, but it’s most amusing usage is in real estate.
In horticulture the term is used to describe a range of plants that once established require little work and can be used in places where you don’t want the bother with the labor of a garden or lawn but your not willing to return to the wild. Pachysandra is very popular in residential settings and shrub roses and daylillys are popular in traffic islands.
In more industrial settings the mulch is very popular. Below the mulch is usually a layer of plastic tarp. Such plastic tarps are widely used in green houses, garden centers, vegetable gardens, and farms. Where they are called alternately a ground cover or a weed control barrier.
You can even find the term used for the asphalt like materials used to seal dumps, industrial wastelands and abandoned property.
The term ground cover is also used in the real estate industry to refer to ways of employing your real estate holdings while you wait for a more lucrative opportunity to arise. The developer looks for certain features in a good ground cover. It must pay the taxes, and not be too tiresome to manage. U-Storage facilities are a good example of this usage.
It must not be too attractive lest the neighbors are tempted to object latter when you want to build your office park. The real estate speculator would be making a big mistake to leave the land idle while he waits for the chance to build his office park or apartment complex. Imagine his disappointment when he finally decides to build and the neighbors decide to complain about the loss of open space. Better to put in something a little unattractive. A used car lot is a good choice.
Real estate ground cover can be seen everywhere. The long strips of little one story shops along main streets in old suburbs were built as ground cover by speculators. They used to be called “rent stores”. The speculators expected to build apartment buildings later when the density could support them.
Real estate ground cover is common around the margins of cities. It creates a band of ugly low sprawl occupied by marginal businesses like used car lots, exercise gyms, and storage facilities.
I don’t see any reason to believe you wouldn’t get a similar ground cover in any and all property rights systems.
I am in Vancouver this week. The plane from Boston to Montreal smelled of forests burning. Vancouver is an amazingly beautiful city. There is extremely good food. My first night I ate at a highly rated French resturant. The appetizer – a lite broth of wild mushrooms and fava beans – is wonderful.
The resturant was in a very elegant hotel. They put me back in a corner of the room. The young man who seated me offered me a paper. Forty minutes later he reappeared. He’d forgotten there was a newspaper strike. So he’d gone out to get a paper, he apologized for the delay.
Two young Hispanic men sat along the back wall near me. They were having a quiet conversation in Spanish. It’s tone seemed a little sober.
After the soup a tall muscular very young black man dressed in ill fitting jeans, basket ball shoes, gold chains, and a huge basket ball jersey was shown to a seat along the same back wall two tables from the other two. All three immediately launched into a more animated conversation still in Spanish.
Ten minutes later a handsome Japanese looking man in his late 20s is shown to a table on the other side of the Hispanic men. He is dressed in a very nice suit. He has a camera, with a large lens, hanging from his neck. He nods at the two gentlemen. Everything is quiet for a while.
Then the conversation continues with all four now chatting. The conversation is slow, quiet. After a period they switch to English. I assume the Japanese gentlemen’s Spanish is poor.
The elder of the two Hispanic gentlemen enquires of the Japanese man “what do you do?” “I am a butler” he replies. This confounds the other three. He explains that he works on “that floor” in the hotel where every guest gets his own butler.
They are all guest workers, all from different countries Central America, the Philippines, etc. They discuss what they are paid. Less than the American minimum wage. They disucss various jobs they have had. Cruise ships off the coast of South America; 50$ a week plus tips – very hard for women. Europe, the Middle East.
The elder Hispanic man is going home, vacation. Others are jelous. They discuss of where to buy gifts, and how short 2 weeks is. How hard it is to be away from one’s family.
I eat a peice of salmon. It rests on small pastries filled with a very spicy curry of some kind, the plate is decorated with excellent relishes and mustards. The wine, from Chile, is nice. The meal is $40 dollars. I am on expense account.
This chart shows the incomes of various segments of the American population for the eighteen years from 1979 thru 1997. The top 1% is the top line. They saw a increase of 220% in their incomes. The bottom line is the income of households in the bottom 20%. They saw a 4% decline during this period. The bottom five lines display income trends for each 20% of the population; only the top 20% saw their income increase.
This data is taken from a report of the congressional budget office
Effective Federal Tax Rates, 1979-1997 see page page 147. Of course these are all adjusted for inflation, and are reported in 1997 dollars.
There are about 100 million households in the US, so there are about 1 Million households in the top 1%. I suspect the comparative advantage of the top tenth of a percent is better yet again, etc. etc.