Susan, we need to talk. I’ve been doing a lot of thinking lately. About us. I really like you, but ever since we met in that econ class in college I knew there was something missing from how I felt: quantitative reasoning. We can say we love each other all we want, but I just can’t trust it without the data. And after performing an in-depth cost-benefit analysis of our relationship, I just don’t think this is working out.
Please know that this decision was not rash. In fact, it was anything but—it was completely devoid of emotion. I just made a series of quantitative calculations, culled from available OECD data on comparable families and conservative estimates of future likelihoods. I then assigned weights to various “feelings” based on importance, as judged by the relevant scholarly literature. From this, it was easy to determine that given all of the options available, the winning decision on both cost-effectiveness and comparative-effectiveness grounds was to see other people.
It’s not you, it’s me. Well, it’s not me either: it’s just common sense, given the nature of my utility function.
LAST October, I won the Nobel Prize in economics for my work on unemployment and the labor market. But I am unqualified to serve on the board of the Federal Reserve — at least according to the Republican senators who have blocked my nomination. How can this be?
— PETER A. DIAMOND, When a Nobel Prize Isn’t Enough
Consider, though, that if the question of how to live a good life has challenged us since ancient times, and the unprecedented technologies of today have complicated that conundrum, the matter remains something of a luxury in a world where a billion or more people still live in the most extreme poverty despite endless labor. For the moment, the question of justice in global distribution remains at least as urgent as that of optimal production and consumption among the affluent.
— John Quiggin, The Economics of Unhappiness
If we drop change in a beggar’s hand without donating to a charity, we’re acting to relieve our guilt rather than underlying crisis of poverty. The same calculus applies to the beggar who relies on panhandling for a booze hit. In short, both sides fail each other by being lured into fleeting sense of relief rather than a lasting solution to the structural problem of homelessness.
— Derek Thompson (Should You Give Money to Homeless People?)
Go buy a box of Franzia Cabernet (not the Merlot or Chianti), which I consider a decent yardstick of value in a good cheap blend. The box costs $15 for five liters. A standard wine bottle has 750 ml, so the Franzia works out to about $2.25 a bottle—about what they pay in Europe for a bottle of good, cheap wine, usually blended. Do a taste test comparing that Franzia to any $15 bottle on the shelf. Unless you choose well or get lucky, the Franzia easily wins at least half the time. And even when it loses, ask yourself: Was the bottle seven times better than the box? That’s a personal question, of course, one that’s directly linked to your wallet.
Boxed wine has a bad rap largely because once upon a time notoriously bad wine was often sold that way. Sometimes it still is, but so what? That’s not a reflection on the packaging.
In fact, sealing wine inside a plastic bag inside a box is less expensive and more environmentally friendly than using a bottle, especially when it’s done with large quantities of wine. And unlike the contents of a bottle, which will go south soon after opening, boxed wine can easily last for weeks after opening, because the valve doesn’t allow air in.
When you take a sip of Cabernet, what are you tasting? The grape? The tannins? The oak barrel? Or the price?
Believe it or not, the most dominant flavor may be the dollars. Thanks to the work of some intrepid and wine-obsessed economists (yes, there is an American Association of Wine Economists), we are starting to gain a new understanding of the relationship between wine, critics and consumers.
One of these researchers is Robin Goldstein, whose paper detailing more than 6,000 blind tastings reaches the conclusion that “individuals who are unaware of the price do not derive more enjoyment from more expensive wine.”