econlife - How Garlic Relates to Coronavirus by Elaine Schwartz

If you’ve traveled to China during the two weeks before boarding, a cruise ship will send you home. For a similar reason, Apple’s revenue will be less than projected and Hong Kong’s restaurant traffic is down.

But garlic?

The Coronavirus Impact on Garlic

It is likely that the two pounds of garlic you ate this year were from China. The source of as much as 80 percent of the world’s garlic supply, China provides much of our garlic. It is also possible that when you visited Gilroy, California, you smelled garlic, an aroma said “to engulf” the city. As garlic growers, China and Gilroy have had a very different reaction to the U.S. China trade war and the coronavirus.

California’s garlic farmers were delighted when a 10 percent tariff on garlic went to 25 percent because of the trade war. Now, China’s response to the coronavirus has locked down transport arteries. Agricultural workers and processors have not been at work. The result has been a continued march upward of the price of garlic. During the first two weeks in February, it ascended by 13 percent.

We’ve been eating Chinese garlic for awhile. Below is a sign in a NY gourmet supermarket during 2013:

Our Bottom Line: Externalities

An externality refers to the impact of an activity or a contract or a decision on an uninvolved third party. Good and bad, externalities can be positive and negative. A vaccine is a typical example of a positive externality while water pollution creates the negative ripple.

You can see with garlic that the Chinese are experiencing negative externalities as are consumers who are paying more. Meanwhile, Gilroy’s garlic farmers are benefiting.

My sources and more: Thanks to Tracy for alerting me to the garlic update. That took me to the LA Times for the cruise ship ban and to CNBC for its Apple news. Unexpectedly, it also relates to the trade war now and in the past. And here are the USDA stats and facts about Gilroy, California, the garlic capital of the U.S.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - The Hidden Side of Amazon Prime by Elaine Schwartz

Last week I realized that I immediately needed a tiny stapler. So, like you probably would have done, at my kitchen table, I spent $5.95. Two days later, Amazon Prime deposited the stapler (with 100 staples) on my doorstep.

My decision involved so much more than instant gratification.

Amazon Prime Problems

With the average Prime member placing two orders a week, Amazon wouldn’t want to curtail our impulsive shopping. Instead, almost 1.25 million U.S, shipments (2017) directed their attention to packaging and transport:

Packaging

Because of multiple Prime orders, Amazon has had to think more about packaging. Recognizing some customers’ “wrap rage,” they are using more bubble envelopes. Aware that the excessive space occupied by smaller inexpensive items increases transport costs, they’ve been developing algorithms that match box size to contents to avoid “over-boxing.” And they want manufacturers to know that online packaging needs to be compact rather than attractive.

Transport

In addition, Amazon reputedly wants us to bundle our items. If we choose one “Amazon (delivery)  Day,” then they can combine what we order. Similarly, those Amazon stores and “lockers” are a single destination for many purchases.

Environment

Then, to all of this, we can add environmental concerns. My new mini-stapler brought a white van with the delivery to my quiet neighborhood. Then, further adding to congestion and pollution, Prime requires a fleet of medium and large trucks. But it’s not that easy. To truly know an environmental impact, we shouldn’t forget how many trips we make to comparison shop before placing an online order, the volume of orders in our area, the parking spaces, whether the trucks are “stuffed.”

This is an Amazon NYC delivery during last February:

Our Bottom Line: Externalities

Defined as the impact on an uninvolved third party, an externality can be a plus or a minus. It can be positive or negative. A vaccine is the perfect example of a positive externality. When someone gets a flu shot, the transaction is between patient and doctor. But many of us benefit because that individual does not get sick. On the negative side, we could cite the loud music in a dormitory that stops a faraway student from studying. The music is the negative externality that leads to a low grade for an unknown individual.

Somewhat similarly, Amazon Prime generates externalities that range from the time we save to the orders we create for corrugated boxes. In ways that are rarely obvious, they affect us, other businesses, and our environment.

My sources and more: These WSJ articles, here, and here, were the perfect complement to Vox, here and here and to a Fast Company look at Amazon Prime. The article that I found most fascinating though was on urban congestion from Wired.

Please note that my externalities definition was in a past econlife.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - When Cars Have To Decide Whether to Kill Grandma by Elaine Schwartz

Imagine for a moment that an out-of-control streetcar is hurtling toward five people. Sitting at the controls, the driver can do nothing and assume those five individuals will die. He can though flip a switch and instead hit a single person.

Doing nothing results in five fatalities. Acting will cause one person’s death. What to do?

It might all depend on where you live.

But first, the reason we need to know.

Autonomous Vehicles

A group at MIT wanted to identify what people believe is ethical because self-driving vehicles will have to make decisions. Yes, most involve the everyday traffic rules we (are supposed to) observe. However, especially in emergencies, some will be about life and death. A machine will have to decide whether to strike someone who is old or young. It could have to choose between harming men or women, more or fewer people, animals or humans. An autonomous vehicle can act or do nothing.

The Study

To see the ethical driving decisions that should be made by self-driving vehicles, those MIT researchers created a survey. Called the Moral Machine, 13 scenarios were presented to millions of people in 233 countries. All had situations in which someone had to die. Their task was deciding who.

The geography of the Moral Machine:

The Results

Among the participants, there was general agreement about three moral dilemmas:

• humans over animals
• save many rather than a few
• preserve the young instead of the old

However, it wasn’t quite that easy. Moving from general preferences to specific answers, researchers uncovered much more division.

Geographically, the responses to the Moral Machine questions divided into three groups:

• The Western Cluster: Values that related to Christianity characterized the answers from North America and some of Europe.
• The Eastern Cluster: People with a Confucian or Islamic heritage from places that included Japan, Indonesia, and Pakistan tended to have similar opinions.
• The Southern Cluster: The third group, not explicitly tied to specific religious roots, was from Central and South America, France, and former French colonies.

Nature Magazine illustrated the differences through a moral compass:

In addition to geography and religion, ethics varied by gender, age, education, income, and politics. Institutions mattered. In more affluent countries with established institutions (like Finland and Japan), survey participants were more likely to condemn an illegal jaywalker. As for age, respondents in the Southern Cluster tended to spare the young rather than the aged.

Our Bottom Line: Externalities

For self-driving cars, ethical programming has become a reality. Necessitating countless choices, the decisions will create externalities. Defined as the impact on an uninvolved third party, the externality can be positive or negative.

Now though we can see that what people call positive or negative will vary.

I wonder if that means having self-driving cars with a Western, an Eastern, or a Southern personality.

My sources and more: I recommend taking a look at Nature’s article on The Moral Machine Experiment.  From there, you might also enjoy this 99% Invisible podcast and this German Ethics Commission report, and do be sure to take MIT’s moral machine quiz.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Why It’s Tough to Plan Congestion Pricing by Elaine Schwartz

It might cost me $11.52 to drive south of 60th Street in Manhattan. And that’s after paying $12.50 at the Lincoln Tunnel and a Jersey Turnpike toll.

That extra $11.52 (I’m not sure how they got that amount) would be the congestion pricing fee. Now that the New York State legislature said yes to the plan, NYC will become the first U.S. city to use downtown congestion pricing.

Here an economist might say that the law of demand kicks in. When price rises–it’s free now–the quantity people are willing and able to purchase decreases. So, if you charge to drive in a certain area like below 60th Street in Manhattan, then you wind up with fewer cars.

Yes?

It’s not quite that simple. Today, let’s look at the details. Then, we can consider the externalities.

Congestion Pricing Plans

The NYS legislative just said yes to congestion pricing and a commission to figure it out. All they know is that there will be a charge and the revenue will go to mass transit.

Why

Because the average speed in midtown Manhattan is between 4.5 and 9 MPH, congestion pricing advocates want cars to move faster. With fewer cars, air quality could improve. Space also could be used differently when fewer cars occupy the streets and we don’t need as many parking spaces. It all could add up to a more efficient, less aggravating, and healthier city.

How Much and Who

The basic concept involves charging a fee to people who drive in the “cordoned” area. The question though is how much and who. You could have one amount or it could be variable, depending on traffic volume. It could apply to all vehicles or depend on the type. After all, people drive commercial, passenger, and emergency vehicles. They ride on motorcycles and mopeds. They take taxis, Uber, Lyft and other ride-sharing options. There are horses leading small carriages.

We also have different categories of drivers to consider. There are the disabled. You have low income households.

Where

We know the targeted area is below 60th street. But we have to consider the vehicles that want to move from lower Manhattan to above 60th Street. On the east and west sides of the city you have the FDR Drive and the West Side Highway. Along those roadways, there could be no charge. But what about the exits? How to monitor who enters midtown? Also, you have drivers who live in the priced area that need to move their cars from one parking space to another because of alternate side of the street parking rules.

When

The fee could apply only during businesses hours. From there, we could ask about weekends and evenings. Do holidays count? Or, it could relate to the number of vehicles.

Technology

If we look way back to 1975, Singapore had people purchase paper decals for its congestion pricing plan. When the Hong Kong system started, drivers were to install an Electronic Number Plate under a vehicle. Then, electronic loops under streets read the plates so drivers could be charged. For Manhattan, planners object to EZPass transponders because they require gantries. It appears they hope someone will invent an app or a GPS device that simplifies the revenue side.

This is a gantry:

Our Bottom Line: Externalities

As economists, we could say it is all about externalities. Defined as the impact on an uninvolved third party, an externality can be negative or positive. People want congestion pricing because too much traffic creates negative externalities. You know what they are. We waste huge time, the air is more polluted, the noise is irritating. Congestion slows business and diminishes pleasure.

As you might be thinking, the gargantuan number of details that compose a congestion pricing plan will surely lead to a slew of new externalities. Who you are and what you do will determine whether the impact is positive or negative or both.

However, I can be sure that my hour’s drive to and through NYC will certainly change.

My sources and more: With NYC’s congestion pricing almost a done deal, the articles are everywhere. Politico, WSJ, Medium, the NY Times, Curbed, AMNewYork, and City Lab are some possibilities.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.