What non-subsidized common products and services do you think have the highest average consumer surplus? Cell phones? Shampoo? Antibiotics? Just wondering.
Obviously it depends what margin you are at; for many people antibiotics or pharmaceuticals mean the difference for life or death but right now they do not for me. And surely we cannot answer with "all food" or "all water." For average value, I'll go with antibiotics, but a separate question is about median value.
I'm not sure cell phones have a positive marginal utility for a lot of people. I would be happy with an email-only iPhone and I know people — close to us all right now — who don't even own a cell phone.
How about a toothbrush? Eyeglasses? The median adult wears them. Often it's a car, though in the longer run you can adjust by moving to a walkable city. A properly functioning toilet and waste disposal system? Television? Painkillers?
I thank the lunch group for a useful conversation on this topic.
I think indoor plumbing and electricity would have to rank very high. Do those count as subsidized?
neither food nor water count as non-subsidized in the US
I agree that mobile phones are probably not as highly valued as people assume – and I would say non-0subsidized medicines and vaccines and the like are almost certainly the best answer. However, computers may be right up there for a lot of people — they can truly change lives — and they are not highly subsidized. The hardest part about this question may be finding *completely* unsubsidized items of any interest.
Any consumer good sold into a market with low barriers to entry and little differentiation should qualify as a candidate for “donating” a high consumer surplus. Cash-and-carry grocery stores donate a huge consumer surplus, which Whole Foods is doing a creditable job of capturing. Costco probably donates even more than do cash-and-carry grocery stores, but is kind of blowing it by introducing too many new products, including even salespeople, into their stores.
I want to say coffee shops, but that’s probably idiosyncratic to me. I’ll go with the cash-and-carry grocery store.
Are we sure we have moved past salt?
Low price, rigid demand, and a profitable target of monopolization and taxation throughout human history.
You almost had it — I’d say toilet paper.
What about internet access? Or google searches?
People would give up food and water before they gave up their cell phones.
DVR. High speed internet access. Cell phone.
Refrigerators.
I would be happy with an email-only iPhone.
Well, get one and don’t give anyone your number or call from it.
Hey, look. An email-only iPhone. Right there.
(For that matter, if you don’t need it to work over the GSM/EDGE/GPRS network, the iPod Touch will do that, and not let you make a phone call no matter what.)
sash: That’s an interesting view of “subsidy”, which seems to lead to the hilarious extrapolation of “everything is because of the government and thus subsidized because without government we’d have anarchy”.
(Not saying that you’re going there or intending anything of the sort, but I’ve heard that one before from others.
Also, what stephen said – yes, all of that would be possible without the State’s research spending. The State is not the source of all improved technology or innovation, strangely enough! It’s been involved with a lot of it at one level or another simply because the State has been involved in so very much of everything over the past century; but I see no reason to assume that somehow that’s fundamental to the fact of innovation or invention.
Certainly the histories of the 18th and 19th centuries do not support the view that the State’s spending on research is necessary for innovation.
The best I can find the State doing is providing incentives in the form of brand-new markets for new things, like Napoleon’s relation to the invention of metal-canned food; though even there, Appert was developing modern canning before the State ever got involved.
Unsurprisingly, the people who put forward arguments like that are (nearly? entirely?) always proposing near-plenary powers for the State in some area where it makes them pleased to imagine them.
The only thing innovation and invention really depend on the state for are its basic police and contract-enforcement powers; which is about the same as saying that they depend on civil order. Which, hey, they do. That just doesn’t, as some people mistakenly assume, make the State the found of all creation.)
Vaccinations!
Its probably just the residue of being an electricity economist, but I’d have to say electricity. It costs about 12 cents or so per kWh, it’s valued at about $6.00/kWh (average, based on outage calculations which therefore have the disutility of surprise in them) and the average household consumes about 12,000 kWh/yr or so. That’s a pretty healthy aggregate consumer surplus.
To figure out the answer, just look at what poor peasants buy in third world countries. I used to say TVs, but I suppose cellphones are now right up there with TVs in popularity. If people who make $100 month own TVs, that tells you the consumer surplus is huge for Americans.
BTW, I don’t have a cell phone.
Books : far more are sold than read
At what age does the transition from can’t-live-without-cellphone to could-do-without occur? I’m 35 and can’t live without it, my friend is 51 and often leaves his at home or switched off. It’s a real pain in the ass when we’ve agreed to meet somewhere and he’s running 30 minutes late.
We once spent 12 days without power, after an ice storm. Rural property, private well. I promise you, the ability to flush the toilet is right at the top of the list.
Birth control.
It *can* be birth control if we think of unwanted pregnancy as primarily on a cost on existing consumers, and if we compare think about the opportunity cost in sexual caution, the value of avoiding pregnancy scares, and the gains to be had from women in the labor market.
Birth control, birth control, a million times birth control.
who the hell is paul langley?
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