The Undercover Economist

roll of cash in the false heel

The answer is that improved public transportation increases the alternatives to renting a place in the city. When a two-hour commute becomes a one-hour commute, and people are able to get a seat on the train instead of standing, some decide they’d rather save money and move out of Manhattan. Vacant apartments then appear on the market. Scarcity lessens, and rents fall. Improving commuter services wouldn’t just affect commuters; it would affect everyone involved in New York’s property market.

The answer is that improved public transportation increases the alternatives to renting a place in the city. When a two-hour commute becomes a one-hour commute, and people are able to get a seat on the train instead of standing, some decide they’d rather save money and move out of Manhattan. Vacant apartments then appear on the market. Scarcity lessens, and rents fall. Improving commuter services wouldn’t just affect commuters; it would affect everyone involved in New York’s property market.

The nice margin that Starbucks makes on their cappuccinos is due neither to the quality of the coffee nor to the staff: it’s location, location, location.

ugly packaging of “value” products is designed to make sure that snooty customers self-target price increases on themselves.

Some people call it “social capital,” or maybe “trust.” Others call it “the rule of law,” or “institutions.”

The rot starts with government but it afflicts the entire society.

One simple reform is to cut red tape, allowing small businesses to be legally established,

China’s “one child family” policy has created a society where women have time to work and where the bulk of people are neither old nor young but in middle age, saving for the future.

Start with the obvious insight that any project is most likely to be successful if the people who benefit from its success are the same people who make it possible.