Tim Harford on long-distance relationships

by on November 25, 2006 at 7:48 am in Education | Permalink

In today’s FT:

Economist Tyler Cowen, a professor at George Mason University, has
pointed out that the Alchian-Allen theorem applies to any long-distance

The theorem, briefly, implies that
Australians drink higher-quality Californian wine than Californians,
and vice-versa, because it is only worth the transportation costs for
the most expensive wine.  Similarly, there is no point in travelling to
see your boyfriend for a take-away Indian meal and an evening in front
of the telly.  To justify the trip’s fixed costs, you will require
champagne, sparkling conversation and energetic sex.  Insist on it.

optimal-experimentation theory suggests that at this tender stage of
life you are highly likely to meet someone even better.  Socialise a lot
while your boyfriend is not around.

Here is Trudie on that same topic.  By the way, here are two clips from Tim’s BBC Econ TV show, on YouTube.

1 Matt November 25, 2006 at 9:14 am

I can’t say anything about Californian wine in Australia, but in the places where I do have some long-distance wine experience I can say this doesn’t hold. In Russia, for example, now that one cannot get any decent wines from Georgia or Moldova there is a fair amount of Chilean wine. But, it’s both of lower quality and higher price than in the US, which is of course closer. And, the rare Georgian wine one can find in the US is almost always of lower quality (and again higher price) than in Russia. Similarly while you can find really quite nice Russian champaign (if you know what brand to look for) in Russia at a decent price, it’s almost impossible to find decent stuff like that here in the US. So, consider me a bit skepical about the wine part.

2 Edgil November 25, 2006 at 11:06 am

As an Australian in New York my wine experience is in line with Matt’s – while you can get the better Australian wines here, for the most part the Australian wines available in the US are less good and more expensive than those available in Australia. Presumable the ability to pass off a poor wine as a good wine in a market with less experience of that wine (with a corresponding mark-up) is worth more than the long-distance transportation costs.

3 Matt November 25, 2006 at 2:32 pm

No, I got the point. My observation was that the Chilean wine in Russia is much worse than that in the US (and, I suspect, Chile, and people do in fact buy that. The same goes for Georgian wine in the US- it’s a small amount sold here but what it sold is generally of much lower quality than in Georgia (or Russia, back when you could get it here). And, the Russian champaign you can buy here is much worse than that you can buy in Russia. I’d not said anything about the preference of people, just that, whatever might be true of Californian wine in Australia it’s certainly not true in general.

4 Alan Little November 26, 2006 at 4:25 am

Whereas a wine merchant in San Francisco once lamented to me that foreigners (e.g. me, or more specifically my French wine snob brother for whom I was buying a gift at the time) have an unfairly dim view of American wine because the locals drink the best stuff and only the mass produced and inferior gets exported.

5 Bill November 28, 2006 at 12:41 pm

Building on Alan’s comment then, one should expect especially appealing individuals find the most satisfaction locally and without traveling?

6 不動産投資 July 19, 2008 at 12:36 am

資金を増やそうとするのに不動産投資をするのが手っ取り早い。日本で不動産で東京 賃貸をさがすのはきわめて難しくシステム開発は日本の会社が良い。

7 likaida March 16, 2009 at 9:34 pm
8 likaida March 16, 2009 at 9:37 pm
9 likaida March 16, 2009 at 9:48 pm
10 likaida March 16, 2009 at 9:50 pm

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