Economic Rockstar

Connecting Brilliant Minds in Economics and Finance

082: Peter Boettke on Smith and Keynes and Why We Should Be ‘Living Economics’

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082: Peter Boettke on Smith and Keynes and Why We Should Be ‘Living Economics’

Peter Boettke is Professor of Economics and Philosophy at George Mason University, the BB&TPeter Boettke Economic Rockstar Professor for the Study of Capitalism, and the Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University.

Peter is now the co-author, along with David Prychitko, of the classic principles of economics texts of Paul Heyne’s The Economic Way of Thinking.

Professor Boettke’s most recent book, Living Economics, provides a resource for how teachers and students can engage in many fascinating questions in economics and illuminates the core principles that should guide our thinking.

Peter’s efforts in the classroom have earned him a number of distinctions including the Golden Dozen Award for Excellence in Teaching from the College of Arts and Sciences at New York University and the George Mason University Alumni Association’s 2009 Faculty Member of the Year award.

Peter’s research has primarily been in the area of comparative political and economic systems and the consequences with regard to material progress and political freedom.

Economics:

In this episode, Peter mentions: Classical economics, Austrian economics, Keynesian economics, credit transmission, institutions, the invisible hand, mainline economics, mainstream economics, private property, public choice, rent-seeking, opportunity cost, scarcity, exchange, markets, negative externalities, laissez-faire, Coase theorem, Pigouvian tax, reciprocity, inflation, stagflation and Malthus’ theory of The General Glut.

Economists:

In this episode, Peter mentions: Adam Smith, F. A. Hayek, Ludwig von Mises, Milton Friedman, Paul Samuelson, John Maynard Keynes,Frédéric Bastiat, David Hume, Vernon Smith, Thomas Robert Malthus, J. K. Galbraith, Paul Heyne, Hyman Minsky, Thorstein Veblen, Steve Keen, Ben Bernanke, Arthur Pigou, Gordon Tullock, James Buchanan, Robert Coase, Elinor Ostrom, Vincent Ostrom and Major Douglas.

Papers:

Books:

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071: Darshak Patel on Using Popular Culture to Engage Economics Students in the Classroom and Online

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071: Darshak Patel on Using Popular Culture to Engage Economics Students in the Classroom and Online

Darshak Patel is currently a Lecturer of economics at the University of Kentucky, USA.darshak patel

After a one-year Visiting Assistant Professor appointment at Roanoke College, Darshak served three years as an Assistant Professor of Economics at the University of Tennessee, Martin. 

Darshak’s research and teaching interests include labor economics, microeconomics, industrial organization, the economics of education, and sports economics.  

Darshak graduated with a PhD in Economics at the University of Kentucky with his dissertation exploring the use of  option value theory to explain student decision-making in post-secondary schooling. 

Economics:

In this interview, Darshak mentions: option value theory, pedagogy, decision-making, opportunity cost, logic, profit, the hazard model, entrepreneurship, economic growth and corruption.

Economists:

In this interview, Darshak mentions: Abdullah Al-Bahrani, Kim Holder, Brendan Sheridan, Jadrian Wooten and Milton Friedman.

In this episode you will learn:

  • whether using Twitter to enhance the students’ learning outcomes is effective.
  • how video scrapbooking can be integrated into the economics curriculum.
  • the benefits and difficulties of using social media platforms to teach economics.
  • what option value theory is.
  • about Milton Friedman’s recommendation to the US government to introduce a tax to finance the US involvement in World War II.
  • how Bing Crosby helped promote the purchase of war bonds for the US war effort during the Second World War.
  • about the transition of the Kenyan economy since the 1970s.
  • about the Chinese influence in Africa.
  • how you can use the economic data provided on FRED to bring your economics classroom alive.
  • how Darshak is using popular culture to help interpret economic concepts and theories.

Resources:

Books:

  • The Two-Second Advantage: How We Succeed by Anticipating the Future–Just Enough by Vivek Ranadive and Kevin Maney
  • Soccernomics by Simon Kuper and  Stefan Szymanski

Papers:

  • Al-Bahrani, A., Dowell, C. & Patel, D. (2016). Video Scrapbooking: An Art Form Revived in the Economics Curriculum. Journal of Economics and Economic Education Research. Forthcoming.
  • Patel, D. and Saunoris, J. (2016). Using FRED Data Series to Improve Learning Outcomes in Economic Courses: From Student to Practitioner, Journal of Economics and Finance Education. Forthcoming.
  • Al-bahrani, A., Patel, D. and Sheridan, B. (2015). Engaging Students Using Social Media: The Students Perspective. International Review of Economics Education, 19, 36-50.
  • Al-bahrani, A. and Patel, D. (2015). Incorporating Twitter, Instagram, and Facebook in Economics Classrooms,  Journal of Economic Education. 46 (1), 56-67.
  • Al-bahrani, A. and Patel, D. (2015). Using ESPN 30 for 30 to Teach Principles of Economics, Southern Economic Journal, 81 (3), 829-842.

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044: Nancy Folbre on Feminist Economics and the Care Economy

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044: Nancy Folbre on Feminist Economics and the Care Economy

Nancy Folbre is a recently retired Professor of Economics at the University of Massachusetts, Amherst andNancy Folbrecurrently directs a research program of gender and care work at the Political Economy Research Institute.

Professor Folbre’s research focuses on the interface between feminist theory and political economy, with a particular focus on the work of caring for others.

Nancy was elected president of the International Association for Feminist Economics (IAFFE) in 2002, has been an associate editor of the Journal Feminist Economics since 1995, and is also an editorial assistant of the Journal of Women, Politics & Policy.

Nancy is recipient of a MacArthur Fellowship, and she has consulted for the United Nations Human Development Office, the World Bank and other organizations.

Professor Folbre has also written extensively on the social organization of time, namely the time allotted to care for children and the elderly and how family policies and social institutions limit the choices people can make between paid and unpaid work.

She is a contributor to the New York Times Economix blog.

Nancy’s book ‘Saving State U‘ (New Press, 2010) makes a case for strengthening public support for higher education in the United States.

Other recent books include ‘Greed, Lust, and Gender: A History of Economic Ideas’ (Oxford University Press, 2009) and ‘Valuing Children: Rethinking the Economics of the Family’ (Harvard University Press, 2008).

Nancy received a B.A. in philosophy from the University of Texas at Austin in 1971, an M.A. in Latin American studies from UT Austin in 1973, and a Ph.D. in economics from the University of Massachusetts, Amherst in 1979.

In this episode, you will learn:

  • why Nancy Folbre decided to study economics.
  • how the household is very much like the market economy.
  • about feminist household economics.
  • what the underlying principles and foundation to feminist economics.
  • why we should see unpaid work as part of the economy.
  • how the state and the market has reinforced the patriarchal system.
  • why the capitalist system, ironically, has downside effects on women today despite the benefits it provides.
  • why we should adopt the Scandinavian model of paternal responsibility.
  • about the unmeasured ‘Care Economy’ where people perform unpaid work.
  • about the opportunity cost to care work.
  • why Replacement Cost is a better proxy from a National Accounting perspective for measuring the size of the Care Economy.
  • why people are intrinsically motivated to care and that money is not an issue.
  • why Nancy Folbre strongly believes that we should think carefully about how we reward care work.
  • about the ‘Care Penalty’ and why we shouldn’t take advantage of the care workers motivation to work in the care industry.
  • about the societal pressures on a man who decides to stay at home and be the care giver.
  • why we should be providing a better account of the costs and benefits of raising kids.
  • if women have a ‘wage-penalty’ as they are, in most cases, the care-giver.
  • whether we can capture the value spent by parents caring for their children.
  • if intrinsic values of happiness lead to economic benefits for household.
  • if children of developed and less-developed countries are treated differently by their parents in terms of their perception of value.
  • about the rapid decline in fertility rates in India, Asia and Latin America.
  • why self-interest was always described in gender terms and why it was always permissible for men to be self-interested than women.
  • if having more women involved in economics and the economy would lead to better outcomes.

Economists:

In this interview, Nancy mentions and discusses: Gary Becker, Shoshana Grossbard, Friedrich Engels and Adam Smith.

Economics:

In this interview, Nancy mentions and discusses: feminist economics, market choice, economics of the household, altruism, rationality, interdependent utility, collective bargaining, choice, efficiency, inequality, incentives, opportunity cost, replacement cost, free market, Invisible Hand and happiness.

Quotes by Professor Folbre in Episode 044 of the Economic Rockstar Podcast:

Work can be very productive and create value for society even if it’s unpaid – Nancy Folbre

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“Definitions of femininity and masculinity are changing in a positive way” – Nancy Folbre

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“Smith had a lot of confidence in the pursuit of individual self-interest” – Nancy Folbre

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Many people have taken Smith’s praise of the free market as an endorsement of selfish behavior, that it doesn’t matter if you think only of yourself because in a market economy we can be confident that everything will turn out just fine.  What I argue in the Invisible Heart is that’s really incorrect. The market economy really depends to a very great extent on a sense of commitment and obligation to other people of trust and reciprocity and concern for the welfare of others. That affects overall economic organisation and success in some pretty profound ways – Nancy Folbre

“We need to change the way we think about work and about value” – Nancy Folbre

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Leading happy and worthwhile lives is kinda the point of the whole economic enterprise and sometimes we lose sight of that. And there’s certainly a lot of evidence that what makes people happy is good human relationships, having close ties with family and friends and community. If we appreciated that a little bit more fully, we could organise our economic system a lot more successfully – Nancy Folbre

“I think Feminist Economics is a part of the whole heterodox challenge to the mainstream economics, and I fell good about that” – Nancy Folbre

Recommended Books:

Blog:

Conference:

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039: David Zetland on Aguanomics, Water Scarcity, Water Wars and ‘Toilet-to-Tap’

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039: David Zetland on Aguanomics, Water Scarcity, Water Wars and ‘Toilet-to-Tap’

David Zetland is an assistant professor at Leiden University College, where he teaches various classes on economics. He was a PostdoctoralDavid Zetland Fellow in Natural Resource Economics and Political Economy at UC Berkeley (2008-2010) and a Senior Water Economist at Wageningen University (2011-2013). David blogs on water, economics and politics at aguanomics.com and gives many talks to public, professional and academic audiences.

David has two books The End of Abundance: economic solutions to water scarcity (2011)  and Living with Water Scarcity (2014). He received his PhD in Agricultural and Resource Economics from UC Davis in 2008. David lives in Amsterdam.

Influencers:

Adam Smith, Friedrich Hayek and Nassim Taleb.

Economics:

In this interview, David mentions and discusses: scarcity, shortage, commodity, supply, demand, marginal cost, opportunity cost, unintended consequences, monopoly, common-carrier system, the water-diamond paradox, development economics, governance, probability, fat tails, Buddhist economics, the problem of over-consumption, non-satiation assumption, GDP, pricing, fairness and efficiency.

Economists:

In this interview, David mentions and discusses: Adam Smith, Friedrich Hayek, Nassim Nicholas Taleb and Ernst Friedrich Schumacher.

The Water-Diamond Paradox (23rd minute in this Episode)

Find out:

  • if we should be worried more about a shortage of water or a scarcity of water.
  • if we should learn from the oil industry and develop the technology-equivalent of extracting oil from oil sands and desalinate the ocean water?
  • if we can tell whether we know the water footprint of a cow and if it’s different in California than Ireland.
  • why water is actually free and what you pay is for the delivery.
  • if there is an opportunity costs to acquiring water?
  • why people living in the slums of India pay up to 50 times the price for water than those who have cheaper piped water.
  • if a water monopoly is an effective market structure.
  • if price competition in the market for water would result in the over-use of water consumption.
  • about Scottish Water and how other utilities across the UK and adopting their distribution and pricing structure.
  • about the water-diamond paradox.
  • why David decided to do a PhD in economics after failing to get rich in the dotcom era.
  • how David came to get his family name ‘Zetland’.
  • about the coming ‘Water Wars’ and how it has already started.
  • about Sao Paulo’s troubled water situation and how it’s creating gang warfare on the streets.
  • who we should assign the property rights to water.
  • about Chile‘s exemplary assigning of water property rights.
  • what David proposes to be the most effective way of managing water.
  • how Singapore are becoming independent in creating their supply of water and are no longer depending on imports from Malaysia.
  • how Singapore are building technologies to recycle water from waste.
  • why the ‘toilet-to-tap’ water recycling initiative has failed in the US but is working in Singapore.
  • how marketing recycled water works in Singapore and not in the US – one known as ‘New Water’ and the other ‘Toilet-to-Tap Water’.
  • why Singapore treats water as a national security issue.
  • why it will take 20 years to build a desalination plant and why San Diego will need 15 of these plants to serve the water needs of the locals.
  • about the new Irish water utility, Irish Water, and how the management decided to ‘award’ themselves bonuses even before the Irish people payed for their water.
  • about ‘Buddhist Economics’ and the assumption of non-satiation.
  • what David would suggest if he was an Economic Advisor to any country regarding water policy.

Why David Studied Economics:

When I was between 25 and 30 years old, I travelled to 65 countries and when I came back to the States I was looking around and figuring out what to do. I tried to get rich in the dotcom era and that totally failed and I started to work with a bunch of academic mathematicians and they were really kinda cool people. But they were pretty cool and I thought ‘well this is interesting. Maybe I should go and do something academic’. I went back to grad school to get a PhD and I wanted to do development economics. My research project, which was to go and study cocaine production in South America, sounded to my advisors a littlest dangerous. Then one of my advisors said that there was this really strange case in Southern California where San Diego is in a big fight with other water utilities and maybe you should look into that. So that ended up being my dissertation – David Zetland.

David’s Advice to a Country Implementing a Water Policy:

“You have to take care of your environment. Then you have to commodify all the rest of the water. But all that revenue really should go to the citizens of that country. Other than that, I’m open to any other discussion about what’s a better system in terms of balancing between efficiency, which is pricing and fairness which is the distribution of those revenues” – David Zetland.

‘Water Water Everywhere and Not a Drop to Drink’: The Right to Water – It’s a Necessity After All

The ‘Right to Water’ is an important part of the conversation but it tends to confuse things. People need water for drinking, cleaning, washing and so on. But is there a right to water to put on your garden? Is there a right to water to wash your car? Do farmers have a right to water that goes on their fields if that means the river is going to be dry? So, there comes a point where the ‘Right to Water’ runs out and we have to start talking about water as a scarce good or an economic commodity. That’s the separation you need to start with.

Shortage is worse than scarcity because you can’t get any of what you want, even if you have time or money – David Zetland

David Zetland’s book ‘Living with Water Scarcity’ is about learning how to manage water scarcity, the same way we have learned to manage land scarcity, time scarcity and money scarcity. Water scarcity is not confined to any particular region or country. This is a global phenomenon. We can generalise water scarcity in terms of the lack of water available. But there exists specific concerns such as the scarcity of clean water, which is becoming a problem in northern European countries and eastern United States, where there’s lots of water but a lot of it is polluted.

Ireland's Anti-Water Charges Protest 2014

Ireland’s Anti-Water Charges Protest 2014

The irony for people living in Ireland, for example, is that the country is surrounded by water but yet availability of fresh, clean water can be scarce in some regions. There are a few towns and villages in Ireland who have been buying bottled water or are on boiling notices due the presence of cryptosporidium in their water. Water shortages is not necessarily an immediate concern for Ireland. However, California, on the other hand, is experiencing their 4th year of drought. This is something that is being experienced in many regions around the world, but ‘California has more reporters hanging around’ and other regions’ grief remain unreported.

The ‘Water Water Everywhere and Not a Drop to Drink’ problem leads people to think that we should desalinate the ocean and get all the water that we want from the ocean. This, however, would be a great physical and expensive task to undertake and the conversation on desalination tends to stop. Should we learn from the oil industry and develop the technology-equivalent of extracting oil from oil sands and desalinate the ocean water?

Adam Smith explained the value in exchange as being determined by labor: ‘The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it’.

David frames this as ‘Technologies and Techniques’; techniques meaning how we use technologies and how we use water. “In the case where you have scarcity, you could say we’re going to build a desalination plant, drill a deeper well, build aqueducts, take shorter showers or stop watering our lawns. We should try and help people use as many ways as possible instead of focusing on one particular silver bullet.”

Who’s the Straw that Broke the Camels Back?

Numerous groups are pointing the finger at each other and casting blame each others way for causing pollution, drought and water scarcity. Besides the natural precipitation, farmers use half as much water as people in the city, such as industries and municipalities. In California, farmers use four times as much water as cities, say in the UK. Farmers obviously use water in various forms, but they’re not necessarily using more than the cities.

Then there’s the big discussion about who should be allowed to or who has the right to us water and that’s where the politics and mudslinging comes in. However, the level of precipitation is different in Arizona and California, as well as in Spain and Cyprus, compared to regions in Ireland and the UK.

Quotes from David in this Episode:

“These pro-poor policies can end up being so anti-poor. It’s terrible, it’s actually almost a crime” – David Zetland

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on how cheap water in India results in water utilities not having the infrastructure to deliver water to the slum areas. These people end up paying up to 50 times for their water from tankards. This water is dirty and people, particularly children, queue up for hours to collect and carry this water to their homes which can often be on the 3rd or 4th floor of a building.

“The customer is vulnerable to being exploited by the monopoly and the monopoly is vulnerable to being exploited by the customer. And that’s where regulations come in” – David Zetland on the need for regulation in the market for water.

Why is water, which is something we need to live, so cheap, whereas diamonds, which are a pure frivolous luxury, so expensive? – David Zetland on the Water-Diamond Paradox.

Water Wars in Sao Paulo, Brazil

Sao Paulo’s reservoirs have fallen to such low levels that their supply fails to meet with their expected demand. There were a lot of ways in which Sao Paulo could’ve dealt with this risk, such as fixing their leaky networks. They cannot get water from somewhere else. You’ve got a limited amount of water and 10 to 20 million people who need water to drink. The utility can shut off the water supply at various locations if they like and that raises the question of rich versus poor. That kind of decision is not going to please anybody. There have been protests over this.

David’s assessment of this is that if Sao Paulo wants to avoid a war on the streets, they need to shut of everybody’s water and have tankard trucks distributing water in Jerry cans in the corners – one man, one bottle. And that’s because you’d be addressing the concern of social equality and human rights.

Israel is not going to invade Turkey for their water. You can’t win that battle. You can’t bring back the water – it’s too heavy.There won’t be wars of plunder, there’ll be just conflicts over who’s going to get the water. Water gangs will form and they will take your water.


Recommended Books:

  • Check out David’s review of ‘Small is Beautiful’ by E. F. Schumacher.
  • Find out here why David decided to give his book away for FREE.

Where to Find David Zetland:

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014: Shoshana Grossbard on Why Dry Cleaners Charge Women More, on the Economics of Love & Marriage and on Polygamy

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014: Shoshana Grossbard on Why Dry Cleaners Charge Women More, on the Economics of Love & Marriage and on Polygamy

Shoshana GrossbardShoshana Grossbard is Professor of Economics at San Diego State University and founding editor of the Review of Economics of the Household.  Shoshana has been a fellow and visiting lecturer  at numerous universities including Stanford, Columbia University, the University of Zaragoza, Spain, Tel Aviv and Bar Ilan University, as well as in Munich and Bonn, Germany.

Shoshana obtained her Phd from the University of Chicago where she developed an interest in the New Home Economics from its founders, the late Nobel Laureate Gary Becker and the late Jacob Mincer. The main focus of Shoshana’s research is household economics, family economics and the economics of marriage and, as a student, developed her first non-unitary model of household decision-making. Shoshana is actively promoting the establishment of household economics as a separate specialty in economics. She is one of the first social scientists to have analyzed consequences of gender imbalance in the sex ratio for intra-household distribution, labor supply, fertility and cohabitation. The economics and social impact of polygamy is also a research interest.

Shoshana has published 5 books and more than 50 articles on the determinants of marriage, consumption and labor supply and on the law and economics of household decisions. She is fluent in English, French, Hebrew, Spanish, and Dutch and has presented her work at many universities in more than 13 countries.

Economic Themes:

In this interview, Shoshana mentions and discusses: household economics, family economics, economics of the household, household decision-making, sex-ratios, the economic and social impact of polygamy, determinants of marriage, opportunity cost, consumption and labor supply, immigration, population, marriage, price discrimination, government intervention and elasticity.

Economists and Economic Schools:

In this interview, Shoshana mentions: New Home Economics, Gary Becker, Jacob Mincer, Adam Smith, Arleen Leibowitz, Linda Edwards, Andrea Beller, Elizabeth Landes, Catalina Amuedo-Dorantes and Sankar Mukhopadhyay.

Shoshana’s Defining Moment/Affirmations/Mantra:

Shoshana is defined by the feminist movement of the 1960s/1970s in her early student days and her mother’s dislike of being a housewife.

I’ve remained a feminist for the rest of my life. It was always very clear to me that I was going to have a career in addition to having a family.

Personal Habits:

Hard work. I work very long hours, I work very hard and I’m very motivated to be successful. There’s no other way.

If you don’t work hard, things don’t just fall on your lap – Shoshana Grossbard

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Advice:

It’s very important to have a critical eye. Whatever you read you have to realise that most research, including research by economists is biased by the point of view of the writer and they have an axe to grind typically. You have to try to figure out what’s the axe they’re grinding before you read it.

In this episode, you will learn:

  • about Shoshana being a 1970s hippie and her demonstrations against King Constantine of Greece.
  • about the differences in female educational participation between the 1960s and present day.
  • about the sexist advertisements that existed which placed the wife in the household.
  • about the origins of the New Home Economics.
  • about what the theory of household means.
  • how Shoshana transitioned herself from an interest in the economics of education to the economics of polygamy while a student of Gary Becker.
  • how Shoshana’s approach to the study of polygamy differed with Gary Becker’s.
  • what quasi-wages are for the stay-at-home mum or dad.
  • if there is an opportunity cost to marriage.
  • the implication on labor force participation as a result of marriage.
  • about WiHo or Work-in-Household.
  • about the importance of the sex-ratio in determining labor force participation.
  • how Shoshana calculates the sex-ratio.
  • how women’s participation in the labor force can be a direct result of fluctuations in the sex-ratio.
  • how a high sex-ratio (more men than women) can increase the bargaining power of men.
  • how a low sex-ratio (more women than men) can increase the bargaining power of women.
  • if Hilary Clinton‘s year of birth allowed her to be the successful and educated person she is today due to the low sex ratio in the US between 1946 and 1950.
  • about the marriage-squeeze hypothesis (in which there is a shortage of men or women for marriage).
  • about the detail of Ireland’s population pyramid, which indicates a male marriage squeeze for those aged 4 to 10 (more males due to births) and a female marriage squeeze for those aged 20 to 29 (more females due to male emigration).
  • about the relevance of the sex-ratio of immigrants and how the freedom of labor can solve the problem of a  marriage squeeze.
  • if the availability of polygamy translates into a higher bargaining power for women.
  • if polygamy solves a marriage market disequilibrium.
  • about the polygamy ruling in Canada.
  • how polygamy can be harmful for young men and why they are known as the lost boys.
  • about the Fundamentalist Latter Day Saints in British Columbia.
  • if the government should intervene in markets where gender price discrimination occurs.
  • who pays more for dry-cleaning services – males or females – based on their elasticity of demand.
  • if we should trust our spouse given the ideology behind economics that all market participants are self-interested and seek to gain wealth without any consideration of others.
  • if spousal love diminishes once you have children and that the love you have toward your child compensates for the lack of love from your spouse.

Origins of New Household Economics:

When Gary Becker and Jacob Mincer started New Home Economics, it was mostly their initiative but it was the students at the University of Columbia at that time who participated in the labor workshops that were very instrumental in promoting and developing it.

There were a high proportion of women who attended the workshop including Arleen Leibowitz and Linda Edwards and, later on, Andrea Beller and Elizabeth Landes.

It is wrong to view New Home Economics as ideologically motivated to maintain old-fashioned gender roles.

One of the major ideas of the New Home Economics is to consider households like firms where there is household production and to analyse them with the same tools economists analyse business firms.

So basically, households are non-profit firms but there are many small non-profit firms in the economy that are considered part of the economy that are counted in GNP. But the most prevalent non-profit firm, the household, is not counted in the GNP.

Jacob Mincer and Gary Becker were not concerned about what was counted in GNP but they were more micro-economists. So they wanted to use all the tool available from price theory and apply them to the analysis of what households do:

  • How do they divide the housework?
  • Do women participate in the labor force?
  • The trade-off between household production and participation in the labor force.

The Origins of Shoshana’s Work:

Shoshana‘s approach to the study of polygamy took account of the point of view of women whereas Gary Becker considered variables such as how men’s incomes determined the number of wives he would have.

Shoshana challenged Gary stating that it’s not just about men’s income but it’s also a matter of women’s education, the age of the women, the fertility of the women and the resources that they have because they can bargain with the men about what they’re willing to do.

Shoshana continued to work on economic development issues because polygamy is practiced mostly in less-developed countries where she examined data in Nigeria and then the study of consensual marriages in Guatemala.

Jacob Mincer advised Shoshana, when she was seeking a job, to do more mainstream economics rather than the exotic research mentioned above which may not be of interest to economists in general. That is when she switched to the study of labor force participation and developed a theory of allocation of time in markets for labor and marriage.

There is a major difference between the model developed by Grossbard and that developed by Becker and Mincer. When Becker and Mincer talk of household production, they refer to households as a unit or as an entity making decisions. However, in Grossbard’s model it is the individuals making decisions.

Household Decision-Making and Quasi-Wages

The fundamental question of New Household Economics: Is there an opportunity cost to marriage and what is the implication on labor force participation as a result of marriage?

Individuals, from an early age, have a concept and vision of how they want to live their lives.

Work in Household (WiHo) represents the willingness to work in a household to, say, raise children.

On Gender Price Discrimination:

“We should all be conscious that sometimes there is exploitation of the consumer and if you don’t like the subliminal advertising that companies use to make you buy perfume or aftershave well then just don’t buy it.”

I’m not a fan of regulation – Shoshana Grossbard

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Dry cleaners charge more for women’s blouses than for men’s shirts, despite them being the same product, with perhaps the main difference being that the buttons on a blouse are typically located on one side of a blouse to that of a man’s shirt.

Dry cleaners are aware that the price elasticity of demand for a woman needing dry cleaning is less than that of a man, meaning that there is more of a need for women to use the dry cleaning services and would, hence pay more as no-one else would do it for them.

On the other hand, the elasticity of demand is more for men, meaning that dry cleaners may charge less for the same service so as to encourage men to dry clean.

Shoshana states that the reason for this gender price differential by dry cleaners is that the majority of men would not go to a dry cleaners as they have a wife, girlfriend or mother who would take on the task of cleaning their clothes. The WiHo or Work in Household is higher for these women as they have, in the majority of cases, taken on the responsibility of running the household chores.

The women who arrive at a dry cleaners are those who have a low WiHo perhaps due to a working career or an unwillingness to take on the responsibility of such chores or even due to the lack of people willing to do the work, such as a spouse.

How the Activities of a Home Differs to the Activities of a Market

Adam Smith stated: “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner but from the regard of their own interest”.

If we view all participants in a household as economic agents who have a certain degree of self-interest, should we trust our spouse?

The statement by Adam Smith is about the functioning of the market and how the competition among the bakers and the other professionals brings down the prices and eventually the consumer benefits.

The problem with household production, which is a non-profit firm, is that most of what is produced at home is not going to be sold in the market, principally the children, the beauty of the  home, the harmony in the home. These are products that are being consumed by the producers themselves or by the people who pay for the WiHo. In this case, the market system doesn’t work.

The benevolence of the spouse is a very important element. Adam Smith also had a Theory of Moral Sentiments and in the framework of the household, altruism matters. So, benevolence and altruism matters.

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