Sunday, April 26, 2009

Economics of Everything

If you haven't noticed, I think economics can help explain a lot about the world. A mistake many people make is that economics is the study of money or business, but that's finance, not economics. Economics, like all social sciences, is the study of people (we talk money a lot because it's easy to measure). I've tried to show this with previous posts like Economics of Relationships, Economics of Late Night Television, Economics of Debate, Economics of the First Thanksgiving, Economics of Gainful Unemployment, and the Economics of Religion. I recently came across a book, The Economic Naturalist, that's a collection of short papers using economics to answer everyday questions. The Freakonomics Blog has listed a couple from the book, here's one of my favorites:

Why do fast food places promise a free meal if you aren’t given a receipt at the time of purchase?

To deter theft, owners of restaurants and other retail establishments require cashiers to reconcile the total amount of cash collected during their shift with the total volume of sales rung up at their register … One way cashiers can circumvent this control is by neglecting to ring up a proportion of their transactions … Thus if a cashier failed to ring up a customer’s $20 meal, he or she could pocket the $20 without creating an accounting discrepancy … By offering a complimentary meal to anyone who fails to receive a receipt, owners provide an economic incentive for customers to monitor cashiers for free.
I've ordered my own copy of the book, I'll keep you updated.


  1. Carla Jaynes12:27 AM

    Hi Harrison,

    I love your blog! I particularly like this reminds me of what I liked about being an econ major.

  2. Thanks Carla. I know what you mean, sometimes I really miss class. I think I've replaced college classes with blogs. You go when you want and there's no homework!


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