Friday, September 28, 2007

10 businesses facing extinction in 10 years

MSNBC lists down 10 businesses that might go extinct during the next decade. Lets examine each of them

1) Record stores
Online music stores are slaughtering record stores. Could this phenomenon be carried over to other kinds of stores as well? There is hardly anything that can not be purchased online.

2) Camera film manufacturing
Photoprinting is also reducing, but might not go extinct. I recently bought a photoprinter myself.

3) Crop dusters
Sorry what?

4) Gay Bars
Yeah right !!

5) Newspapers
Even though I like my epaper, the touch, the smell, the feel of newspaper and its ink is irreplaceable.

6) Pay phones
Imagine this for the next decade- WiFi everywhere, WiFi enabled PDA. Now connect to Google Talk over the WiFi Internet and speak to any one across the globe. All that you have to imagine is that every person on this earth has a Google account and is always logged on :-)

7) Used bookstore
What did I tell you in my point about Record stores

8) Piggy Banks
We won't have Piggy Banks anymore. In fact, we would be seeing fewer real banks (branches) too.

9) Telemarketing
Go back to point 6. As long as Google is being used, marketing is covered

10) Coin operated arcades
Sorry I am lost.

Wednesday, September 26, 2007

Pizza Wars

One of the trade-offs common to economic decisions is between Efficiency and Equity. While Efficiency refers to the size of the economic pizza, Equity refers to the slice of the economic pizza.
On a different note, Pizza companies seem to be working on increasing both efficiency and equity in the Indian market. Link here

Wednesday, September 19, 2007

Updated Knowledge Links

Found some online material for learning economics. Most of them are webcasts of college courses. Please see the updated Knowledge Links ====>

Coffee and Fries


The world ruled by Coffee and Fries.

Any takers for Latte Index to Big Mac Index

Thursday, September 13, 2007

Economic Growth Vs Economic Freedom

What is more important to a country (and its people) - Economic Growth or Economic Freedom?
Economic freedom is an index composed of the following factors
  • Business Freedom
  • Trade Freedom
  • Monetary Freedom
  • Freedom from Government
  • Fiscal Freedom
  • Property Rights
  • Investment Freedom
  • Financial Freedom
  • Freedom from Corruption
  • Labor Freedom

whereas Economic growth is measured in terms of rise in GDP.

India ranked 121 during 2006, well behind its neighbors Pakistan and Sri Lanka but India ranks 4th in terms of economic growth for the same time period.

The term "freedom" is wide open to interpretation but India definitely needs to address its freedom to corruption !!!

Sunday, September 9, 2007

Two CIAs

Economics teaches us that competition is good. No system of resource allocation is more efficient than pure competition. Going by this analogy, Michael Higgins asks an interesting question - Why not two CIAs?
In the free market, if I don’t like the information the Washington Post provides, I can always buy the New York Times. However, if I don’t like the information the CIA provides (and who does?), then I cannot opt to spend my taxes on CIA2. We can hope the government reforms CIA1, but CIA1 is the only choice we have, except for not having a CIA altogether.
The obvious problems here
1) CIA does not follow the free market principles in a true sense. More to do with political economics.
2) Cost of maintaining additional CIA.
3) Risk involved. Two CIAs = Double the blunder.

Michael also suggests extending the idea of "Dueling" other govt. agencies besides CIA. Getting into the organizational structure of "Dueling" would imply that for every employee E1 of the organization, there would be another employee E2 who is assigned the same job and we expect at least one of them to perform. Does not seem to be an economically viable decision.

Trendalyzer

I have no words to describe this tool. Simple yet so powerful. A break from the regular pdf and xls. I am yet to analyze and observe the trends thoroughly. Will have more posts about the trends soon.

Monday, September 3, 2007

Why Your Boss Is Overpaid ?

Does the following line strike any resemblance to your life? "My boss and I work almost the same number of hours. In fact, I have done 'his/her' work most of the time and he/she takes credit for it. Not only credit, he/she also takes a fat pay check".
An economist's answer to the above (fat pay check) is called Tournament Theory. An article in Forbes concurs the same.
The ugly truth is that your boss is probably overpaid--and it's for your benefit, not his. Why? It might be because he isn't being paid for the work he does but, rather, to inspire you. In other words, we work our socks off in underpaying jobs in the hope that one day we'll win the rat race and become overpaid fat cats ourselves.