Thursday, November 02, 2006

What is a "ClickTip"?

Journalist Stephen Dubner discusses the practice of clicking the ads on a page that is provided for free as a tip to the author of the webpage. Since many webpages make money based on how many people click the ads that are placed on the page, by clicking the ad, you are giving them a small tip.

Stephen references a commenter on his blog:
I think The N.Y. Times and Washington Post websites are great (although I don’t pay for “Times Select” but I do think that their site has the best presentation, appearance-wise). I always try and remember to click on the ad banners once in a while to try and keep the sites free or at least much of the content free. Opening the ads in another tab on Firefox is not so disruptive. Or click and minimize.
What do you think of this practice? Do you think it is (or would be) effective? Try to put in economic terms why people do this.

(Source: Freakonomics Blog)

Tuesday, October 31, 2006

Why Do New Yorkers Smoke So Much?

Economist Tyler Cowen posts an interesting question on his blog: why do New Yorkers seem to smoke so much more than people from other places/cities? Here are the possible reasons he offers:

1. Social networkers head to Manhattan, and social networkers smoke.
2. In Manhattan it is more important to signal you are cool.
3. Air pollution is higher, so the marginal health cost of smoking is less.
4. New York is colder, and that makes cigarettes more enjoyable.
5. The "artsy" variable is doing most of the work; of course this is related to #1 and #2.
6. NYC life is more stressful, and smoking calms some of these people down.
7. Many of them are poseurs, and these smokers don't have such valuable human capital.

I'd bet first on #2, and also on #7, but I don't have a good theory that will explain the rest of the cross-sectional evidence.

Which hypothesis do you find convincing? Any additional ones to add?

(Source: Marginal Revolution)

A Boom in Halloween Industries

In honor of Halloween, today's post is about the horror genre of movies is doing really well in recent years. And actually, the "Halloween industry" in general has been doing well, from costumes to decoration. Here is an article from USA Today discussing the boom in revenues from horror movies and a new venture planned by Comcast and Sony called FearNet.

Here are some questions from Sarah:
What has casued the rise in horror genre popularity over the past few years, especially given that most movies this year are sequels or part of a series?
Do you think this new horror web site will stay in business? Is there enough of a fan base?

(From: Sarah O.)

Monday, October 30, 2006

A Fat Tax

Economist Gary Becker considers a tax on foods with saturated fat as a solution to the problem of obesity in the United States.
One proposal receiving some attention is to impose a tax on foods that contain high quantities of saturated fat in the hope of cutting down consumption of these foods. The basic law of demand states that a tax on saturated fat would raise the price of fatty foods, and thereby would reduce their consumption. A good analogy is with other "sin"taxes, such as the very heavy tax in most countries on cigarettes, or the large tax in many countries on alcoholic beverages. These taxes have greatly raised the price of these goods and reduced their consumption. For example, it is estimated that every 10% increase in the retail price of cigarettes due to higher taxes cuts smoking by about 4% after the first year, and by a considerable 7% after a few years.

He ends up arguing against the use of a tax on foods with high levels of saturated fat due to the fact that there are other major causes of obesity, the likelihood of future medical advances, and a doubt of whether it would be an effective tax.

(Source: Becker-Posner Blog)

Reminiscing About Legos

The Economist has an article this week about Lego, the Danish toy firm, and how it has turned around its business in the last year or two. Apparently, they worried too much about diversifying their business into video games and clothing instead of sticking to what they know best, which I think is making people with cylindrical heads.

Either way, it is an interesting case study of how new management comes in and reworks a firm. Also, you get this interesting tidbit of information about Lego blocks:
everyone on earth has, on average, 52 of them.

Another Interesting Graphic on Gasoline Taxes

Economist Greg Mankiw has another interesting graphic up this week on gasoline taxes. It shows basically, the law of demand, showing that where gasoline taxes are higher (which results in higher prices), those nations consume considerably less gasoline.

(Source: Greg Mankiw's Blog)

Lucky Lottery Clerks

A statistician in Canada discovered that the clearks who sold lottery tickets were winning a whole lot of prizes in the Ontario lottery. That means that they were either really lucky or they were stealing lottery prizes from elderly customers. Not the most shocking crime, but it is an interesting application of statistics.

(Source: Freakonomics Blog)