price elasticity of demand

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Oil Panic and the Global Crisis: Predictions and Myths by Steven M. Gorelick

California gold rush, carbon footprint, energy security, energy transition, flex fuel, Ford Model T, income per capita, invention of the telephone, Jevons paradox, meta-analysis, North Sea oil, nowcasting, oil shale / tar sands, oil shock, peak oil, price elasticity of demand, price stability, profit motive, purchasing power parity, RAND corporation, statistical model, stock buybacks, Thomas Malthus

Gasoline Price Elasticity: What Happens When the Price Goes Up (or Down)? Of great relevance to the discussion of global oil depletion is how the price of gasoline affects consumption. The demand for gasoline is affected by its price. Economists call this effect the price elasticity of demand. If the decrease in demand for a product is very responsive to a relatively small (say 10 percent) price increase, that product has high price elasticity of demand. On the other hand, high price inelasticity (low elasticity), or underresponsiveness, is a measure of the necessity of a product, or consumers’ 46 The Global Oil Landscape addiction to it, such that demand and consumption are only modestly reduced when the price goes up (or vice versa).

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China raised gasoline prices by 20 percent in June 2008; the value shown is estimated based on the price relative to that in the US in early August 2008. 66. Note that in economic terminology, demand is price elastic if the price elasticity of demand value is greater than 1 and inelastic if the value is less than 1. For example, if the percent decrease in demand is 2.2 percent given a 10 percent price increase, the price elasticity of demand is 0.22. This low price elasticity, or price inelasticity, indicates that price changes of the commodity have The Global Oil Landscape 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 57 relatively little effect on consumption behavior.

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“Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand,” The Energy Journal, 29(1). Cooper, J. C. B. (2003). “Price elasticity of demand for crude oil: estimates for 23 countries,” OPEC Review, 27: 1–8. US Federal Trade Commission (2005). “Gasoline price changes: The dynamics of supply, demand, and competition,” page 135, citing Epsey, M. (1998). “Gasoline Demand Revisited: An International Meta-Analysis of Elasticities,” Energy Economics, 20: 273–95, for long-term elasticity value and their own analysis for the short-term value. Cooper, J. C. B. (2003). Price elasticity of demand for crude oil: estimates for 23 countries, OPEC Review, 27: 1–8. www.energy.ca.gov/gasoline/gasoline_q-and-a.html Ye, M., J.

Guide to business modelling by John Tennent, Graham Friend, Economist Group

book value, business cycle, correlation coefficient, discounted cash flows, double entry bookkeeping, G4S, Herman Kahn, intangible asset, iterative process, low interest rates, price elasticity of demand, purchasing power parity, RAND corporation, risk free rate, shareholder value, the market place, time value of money

The total voice revenue for a mobile business could be calculated using the following equation: Average number of customers ⫻ Average number of voice minutes ⫻ Average price per minute To produce the most accurate forecast and to gain the greatest insight into the economics of a business, it is often necessary to generate a forecast for total revenue through a combination of forecasts of the individual elements. Price elasticity of demand Once a revenue forecast is broken down into volume and price effects, the modeller must consider the relationship between changes in price and changes in demand or volume. In many markets, an inverse relationship exists between the price of a product or service and the quantity of that good or service demanded by the customer. This inverse relationship can be seen in the downward-sloping demand curve in Chart 10.1. 87 Approaches to revenue forecasting Chart 10.1 A downward-sloping demand curve The price elasticity of demand is a measure of how sensitive the changes in the quantity demanded by a customer are to changes in price.

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This inverse relationship can be seen in the downward-sloping demand curve in Chart 10.1. 87 Approaches to revenue forecasting Chart 10.1 A downward-sloping demand curve The price elasticity of demand is a measure of how sensitive the changes in the quantity demanded by a customer are to changes in price. Price elasticity can be expressed mathematically as: Price elasticity of demand ⫽ Q2 ⫺ Q1 Q1 P2 ⫺ P1 P1 Price elasticities are usually negative, reflecting the inverse relationship between price and quantities. Elasticities also vary depending on the position along the demand curve. The slope of the demand curve at a particular point provides an estimate of the price elasticity of demand. Measuring elasticities is a complex subject and a range of techniques can be employed. A detailed discussion of this topic is beyond the scope of this book.

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FORECASTING REVENUE Chart 10.42 Calculating total revenue The detailed calculations are shown in Chart 10.43 and relate to column H. Chart 10.43 Code for calculating total revenue Row Average market customers Market share Average business customers Price per minute Price elasticity of demand Average usage per year per customer Total revenue (thousands) Calculation ⫽AVERAGE(G34,H34) Input assumption ⫽Average_market_customers *Market_share Input assumption Input assumption ⫽⫺Price_elasticity_of_demand *((Previous_usage*(Previous_ price⫺Current_price))/Previous_ price)⫹Previous_usage ⫽Average_business_customers *Average_usage_per_year* Price_per_minute/1000 Actual calculation ⫽(34803⫹39130)/2 ⫽34% ⫽36966*34% Answer 36,966 34% 12,569 ⫽0.23 ⫽⫺0.47 ⫽0.47*((1600*(0.25 –0.24))/0.25)⫹1600 0.23 (0.47) 1,631 ⫽12569*1631*0.23 /1000 4,714 Mix effects The example above examined the average usage levels for consumer and business customers as a whole.

The Economics Anti-Textbook: A Critical Thinker's Guide to Microeconomics by Rod Hill, Anthony Myatt

American ideology, Andrei Shleifer, Asian financial crisis, bank run, barriers to entry, behavioural economics, Bernie Madoff, biodiversity loss, business cycle, cognitive dissonance, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, different worldview, electricity market, endogenous growth, equal pay for equal work, Eugene Fama: efficient market hypothesis, experimental economics, failed state, financial innovation, full employment, gender pay gap, Gini coefficient, Glass-Steagall Act, Gunnar Myrdal, happiness index / gross national happiness, Home mortgage interest deduction, Howard Zinn, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, liberal capitalism, low interest rates, low skilled workers, market bubble, market clearing, market fundamentalism, Martin Wolf, medical malpractice, military-industrial complex, minimum wage unemployment, moral hazard, Paradox of Choice, Pareto efficiency, Paul Samuelson, Peter Singer: altruism, positional goods, prediction markets, price discrimination, price elasticity of demand, principal–agent problem, profit maximization, profit motive, publication bias, purchasing power parity, race to the bottom, Ralph Nader, random walk, rent control, rent-seeking, Richard Thaler, Ronald Reagan, search costs, shareholder value, sugar pill, The Myth of the Rational Market, the payments system, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, ultimatum game, union organizing, working-age population, World Values Survey, Yogi Berra

Normally, as the price increases, quantity demanded decreases, as seen in Figure 3.1. The responsiveness of quantity demanded to a change in price is measured by the price elasticity of demand. It is defined as: ed = % change in quantity demanded % change in price 46 BANANAS Price P2 P4 Demand for gasoline P1 Demand for bananas P3 Quantity of gasoline Q2 Q1 Q2 Quantity of bananas Q1 figure 3.1 Inelastic and elastic demand Suppose a 10 per cent increase in the price of gasoline leads to a 1 per cent decrease in the quantity demanded. The price elasticity of demand for gasoline is 0.1 (1 per cent divided by 10 per cent). In contrast, suppose a 10 per cent increase in the price of bananas leads to a 70 per cent decrease in the quantity demanded.

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It turns out that the incidence of the tax depends on the relative size of the price elasticities of demand and supply at the equilibrium prices and quantities. The actual formula (almost never revealed by textbooks) is: es es + ed ed Formula 2: proportion of sales tax borne by producers = es + ed Formula 1: proportion of sales tax borne by consumers = where es and ed are the elasticities of supply and demand in equilibrium. Note that the proportions sum to one – the total tax is split between buyers and sellers. Formula 1 shows that the greater the price elasticity of supply, and the smaller the price elasticity of demand, the more the tax is paid by consumers.

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Finally, price ceilings provide an incentive for illegal activity – only in this case it is sellers (job seekers) bribing buyers (employers), or employment arrangements out of sight of the law. 1.8 Who bears the cost of sales taxes? Contrary to popular belief, the person who ends up ‘paying’ a sales (or excise) tax is not the same person on whom the tax is levied. Rather, the incidence of the tax depends on the relative size of the price elasticities of demand and supply. The texts demonstrate this proposition using demand and supply diagrams. The left-hand diagram of Figure 3.6 shows supply and demand for parking spaces. We assume the government collects the sales tax from producers of parking spaces. This adds to producers’ costs, so a $4 per unit sales tax shifts the supply curve upwards by $4 per unit for each level of output.

Elements of Mathematics for Economics and Finance by Vassilis C. Mavron, Timothy N. Phillips

constrained optimization, discrete time, price elasticity of demand, the market place

Since will, in practice, be negative (demand ∂P normally decreases with increases in price), then in order to have a positive number for the own price elasticity of demand, we define: change approaches EP = − P ∂Q . Q ∂P 174 Elements of Mathematics for Economics and Finance Therefore: The elasticity EP is approximately the percentage change in the demand Q resulting from a 1% decrease in P . The elasticity EP measures the sensitivity of the good to its own price. Similarly, we can define the cross-price elasticity of demand EPA by EPA = PA ∂Q . . Q ∂PA The elasticity EPA is approximately the percentage change in the demand Q for the good following a 1% increase in the price PA of the alternative good.

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Thus Q is regarded as a function of the variables P , PA , and Y . Examples are 1. The price of new cars is related to the price of fuel and the income of the driving population. 2. The price of domestic gas and the price of domestic electricity are related. 3. The prices of DVD players and DVDs are related. The own price (or direct price) elasticity of demand EP measures the relative percentage changes of Q and P (with PA and Y assumed fixed). If △Q is the change in Q following a change △P in P, the relative percentage change of Q to that of P is △Q Q △P P As △P approaches 0, then × 100 × 100 = P △Q . Q △P △Q ∂Q approaches ; so the relative percentage △P ∂P P ∂Q .

Crude Volatility: The History and the Future of Boom-Bust Oil Prices by Robert McNally

"World Economic Forum" Davos, Alan Greenspan, American energy revolution, Asian financial crisis, banking crisis, barriers to entry, Bear Stearns, Bretton Woods, collective bargaining, credit crunch, energy security, energy transition, geopolitical risk, housing crisis, hydraulic fracturing, Ida Tarbell, index fund, Induced demand, interchangeable parts, invisible hand, joint-stock company, market clearing, market fundamentalism, megaproject, moral hazard, North Sea oil, oil rush, oil shale / tar sands, oil shock, peak oil, price discrimination, price elasticity of demand, price stability, sovereign wealth fund, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, transfer pricing, vertical integration

While difficult to determine precisely, surveys of the academic literature suggest the short run demand price elasticity of crude is around −0.06.5 That is, a one percent change in price would yield a −0.06 percent change in demand. So a 100 percent increase (doubling) in the price of crude would reduce demand by only 6 percent.6 Compare crude oil’s −0.06 price elasticity with goods whose demand is more sensitive to price changes like restaurant meals or fresh tomatoes, which one study estimated had price elasticities of demand of −2.3 and −4.6, respectively.7 Thus, whereas a 10 percent change in the price of oil would only cause refiners to buy 0.6 percent less crude to turn into gasoline, a 10 percent change in price would cause consumers to buy 23 percent fewer restaurant meals and 46 percent fewer tomatoes.

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Writing in June 2009, the IEA noted the correlation of financial flows with rising oil prices, but concluded that tight OPEC spare capacity provided a “plausible account of how the fundamentals have changed and provide a clue as to why oil was priced so high in the first half of 2008, fell some 75 percent in the following six months, and is now hovering around $70 per barrel.”53 Energy economist James Hamilton concluded that although the oil price run-up from 2004 to 2008 was influenced by the inflow of investment dollars into commodity futures contracts, oil’s low price elasticity of demand and the failure of production to increase sufficiently prior to the peak explained the phenomenon. Supply and demand, instead of speculation per se, was the cause of oil’s dramatic price moves.54 Officials agree with Hamilton. An interagency task force led by the U.S. Commodity Futures Trading Commission and composed of several federal departments as well as the Federal Reserve, Federal Trade Commission, and the U.S.

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Hamilton, “Understanding Crude Oil Prices”; see also Hamilton, “Causes and Consequences of the Oil Shock of 2007–2008,” National Bureau of Economic Research Working Paper 15002 (2009), in which he notes that while price elasticities are difficult to measure and debatable, −0.06 appeared to be consistent with the run-up before the peak in 2008 (13–14). For a discussion of estimates of short-term estimates of crude oil demand, see also Difiglio, “Oil, Economic Growth,” 49. 6. Crude demand excludes other inputs such as natural gas liquids and biofuels. 7. Anderson et al., Universal Tuition Tax Credit, 60. 8. Price elasticity of demand = change in quantity demanded divided by change in price. If a 1 percent increase in price causes oil consumption to fall by 0.06 percent, then to cut consumption by 5 percent prices must rise by 83 percent (0.05/0.83=0.06), whereas for fresh tomatoes with a price elasticity of −4.6, prices would rise by 1 percent (0.05/0.01=0.046). 9.

More From Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources – and What Happens Next by Andrew McAfee

back-to-the-land, Bartolomé de las Casas, Berlin Wall, bitcoin, Blitzscaling, Branko Milanovic, British Empire, Buckminster Fuller, call centre, carbon credits, carbon footprint, carbon tax, Charles Babbage, clean tech, clean water, cloud computing, congestion pricing, Corn Laws, creative destruction, crony capitalism, data science, David Ricardo: comparative advantage, decarbonisation, DeepMind, degrowth, dematerialisation, Demis Hassabis, Deng Xiaoping, do well by doing good, Donald Trump, Edward Glaeser, en.wikipedia.org, energy transition, Erik Brynjolfsson, failed state, fake news, Fall of the Berlin Wall, Garrett Hardin, Great Leap Forward, Haber-Bosch Process, Hans Rosling, humanitarian revolution, hydraulic fracturing, income inequality, indoor plumbing, intangible asset, James Watt: steam engine, Jeff Bezos, job automation, John Snow's cholera map, joint-stock company, Joseph Schumpeter, Khan Academy, Landlord’s Game, Louis Pasteur, Lyft, Marc Andreessen, Marc Benioff, market fundamentalism, means of production, Michael Shellenberger, Mikhail Gorbachev, ocean acidification, oil shale / tar sands, opioid epidemic / opioid crisis, Paul Samuelson, peak oil, precision agriculture, price elasticity of demand, profit maximization, profit motive, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, Salesforce, Scramble for Africa, Second Machine Age, Silicon Valley, Steve Jobs, Steven Pinker, Stewart Brand, Ted Nordhaus, TED Talk, telepresence, The Wealth of Nations by Adam Smith, Thomas Davenport, Thomas Malthus, Thorstein Veblen, total factor productivity, Tragedy of the Commons, Uber and Lyft, uber lyft, Veblen good, War on Poverty, We are as Gods, Whole Earth Catalog, World Values Survey

The very contrary is the truth.… Whatever… conduces to increase the efficiency of coal, and to diminish the cost of its use, directly tends to augment the value of the steam-engine, and to enlarge the field of its operations.” A modern economist would say that Jevons was discussing the price elasticity of demand for energy (in this case, the energy stored inside lumps of coal). This intimidating term just refers to the fact that total demand for a product such as energy responds to a change in its price. For most products, demand goes up if price goes down. Jevons was saying that this was true for coal energy, but he was also saying something more: that the percentage increase in total demand would be greater than the percentage decrease in price.

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As our population increases, we want more food, but we don’t have any desire to consume more fertilizer or use more land for crops. Jevons was correct at the time he wrote that total British demand for coal was increasing even though steam engines were becoming much more efficient. He was right, in other words, that the price elasticity of demand for coal-supplied power was greater than one in the 1860s. But he was wrong to conclude that this would be permanent. Elasticities of demand can change over time for several reasons, the most fundamental of which is technological change. Coal provides a clear example of this. When fracking made natural gas much cheaper, total demand for coal in the United States went down even though its price decreased.II With the help of innovation and new technologies, economic growth in America and other rich countries—growth in all of the wants and needs that we spend money on—has become decoupled from resource consumption.

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Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

airline deregulation, Alan Greenspan, Albert Einstein, bank run, barriers to entry, behavioural economics, Bretton Woods, business cycle, butterfly effect, capital controls, carbon tax, Carmen Reinhart, central bank independence, collective bargaining, congestion pricing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price elasticity of demand, price stability, prisoner's dilemma, profit maximization, public intellectual, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

The tax might be administered on oil companies, but it might be consumers who really pay for it through higher prices at the pump. Or the extra cost might be imposed on consumers in the form of a sales tax, but the oil companies might be forced to absorb it through lower prices. It all depends on the “price elasticities” of demand and supply. With the addition of a longish list of extra assumptions—on which, more later—this model also generates rather strong implications about how well markets work. In particular, a competitive market economy is efficient in the sense that it is impossible to improve one person’s well-being without reducing somebody else’s.

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We might as well assume that these types of cars are perfect substitutes. But if the tax is on luxury cars alone, the perfect-substitutes assumption is no longer innocuous. The effects on government revenue and car sales will depend critically on the size of what economists call the cross-price elasticity of demand (the sensitivity of demand for one category of goods to the price of another category). The larger this elasticity (in absolute value), the greater the shift in consumer purchases from large to small cars, and the lower the tax revenues collected by the government. Economists have to ensure that their prescriptions hold even when assumptions become more realistic.

The Joy of Tax by Richard Murphy

banking crisis, banks create money, carbon tax, carried interest, correlation does not imply causation, en.wikipedia.org, failed state, full employment, Gini coefficient, Global Witness, green new deal, high net worth, Jeremy Corbyn, land value tax, means of production, Modern Monetary Theory, Money creation, offshore financial centre, price elasticity of demand, quantitative easing, race to the bottom, savings glut, seigniorage, The Spirit Level, The Wealth of Nations by Adam Smith, transfer pricing

For instance, tobacco and alcohol products carry additional charges that help fund the impact upon health services, and the cost of care for those who suffer the consequences of using these products. Now, some will be cynical about this claim that such taxes are charged to reflect the externalities inherent in the products to which they relate. They will instead say that because the products in question are either essential or addictive they have what is called a very low price elasticity of demand, meaning that if tax is added to them, even in significant amount, the demand for the product remains largely intact and that this simply makes them a very easy way of raising tax. There is no question but that the price inelasticity of such products has been exploited in the past (as, for example, with the tax imposed on tea imported into the USA which gave rise to the Boston Tea Party and all that followed from it), but it is now likely that the correction of externalities not reflected in their prices is the main reason for taxing these items.

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K. 51 GDP 171 debt and 213 and economy 84 fiscal policy and 58–9 government spending as proportion of 76+n, 77, 81–2 taxation as proportion of 34–5 General Anti-Abuse Rule 112, 113, 224 General Anti-Avoidance Principle, proposed 224 Generally Accepted Accounting Principles, UK 222 gifts 183, 184 gilts 49–52 Gini coefficient 63n global warming see climate change global wealth tax 190 Global Witness 124 Google 135 government(s) 27, 39–40 balancing books/budget 52, 60–1, 76, 86–7, 94–5, 212–13, 238 borrowing 89 businesses, mistaken analogy with 86–7, 89 and creation of money 49, 209–10 demand for services to be supplied by 157–60 and the economy 104, 156–60, 170, 210 (see also austerity) intervention following 2008 crash 78, 79 and ownership 59 participation and 31, 37–44 spending see government spending states without 32 surpluses 58, 59, 60, 76–8, 130 and ‘taxpayers’ money’ 39–44 see also democracy government debt 46, 49–52, 59–60, 87, 213–14 government spending and business success 185 effects of cutting 89–90 flat taxes and 75 need for 95–6, 210 relationship to taxation 45, 52–5, 80–4, 162, 210, 211–12, 214 Greece 148 Green New Deal Group 9, 10 Green parties 84, 94 growth 83, 84, 90, 104, 158, 170, 171–2, 215 Guernsey 124 harmonization, international 133 health services 64, 158, 168 see also NHS Heritage Foundation 35 HM Treasury 109, 110–11, 114, 117 HMRC 112–14, 116, 119–21 access to 118–21, 202–3 and accountability 116–18, 203, 204–6, 218–20 attitudes 119–20 on compliance 33–4, 35, 67 and data exchange 123–4, 127 and research 108, 110 staff and resources 113, 120–1, 202–4 structure and governance 203–4, 219, 220 Hodge, Margaret 114, 117 horizontal equity 138–9, 197 House of Commons Library 109 House of Commons Select Committees 205, 220–1 see also Public Accounts Committee and Treasury Committee house prices 185–6, 214, 225–6, 229 housing 159, 175–6, 186, 225–7, 228–9, 238 housing support 192, 194, 229 identity theft 201 ignorance 68, 108 illegitimate economic activity 56 imports 88 income(s) 180–1 falling in real terms 83, 90 sources of 138–9 taxation and 31 under-declaration of 98–9 income tax 14, 16, 65, 163–5, 230 citizen’s income and 193–4 higher rates 73 as proportion of tax paid 28, 29, 30, 72 schedular form 152 tithing and 15 as universal 235 voting and 65 inequality 63n, 74 see also equity/equality and redistribution inflation 46, 53, 54, 57, 59, 61, 182, 210 flat taxes and 75 house prices and 185–6 influence 31, 37 information exchange 123–4, 127, 184 infrastructure 158–9, 229 inheritance taxes 15, 29, 31, 73, 183, 226 innovation 136–7 Institute of Directors 68–9, 72 Institute of Economic Affairs 68–9, 70–1, 101 Institute for Fiscal Studies 109 insurance premiums 29, 223 interest 51, 52n, 58, 181–2 banks and 49, 50 monetary policy and 59 money and 51 tax and 30, 196, 223, 228–9, 231 interests 69, 70, 71, 109, 113, 116 conflicts of 115 government and 19, 44 intergenerational contract 143 International Financial Reporting Standards 222 International Financial Reporting Standards Foundation 199 international issues 133–6, 197–8 see also tax havens interpretation 111–12, 153 investment 89, 176, 234 savings and 209, 231 investment income 72, 98, 99, 138, 163, 180, 224, 231–2 Ireland 126, 134, 146, 163 ISAs 175, 231 Jersey 10, 124, 126 Jesus 16 Joffe, Lord 114–15 Kennedy, John F. 32n labour, taxing 190 see also national insurance land ownership 185 land value tax, proposed 186–7, 227–8 land-based taxes 15, 16, 21, 163, 164, 185–7 landfill tax 31 landlords 228, 229 language 115–16, 153, 196, 218 law 36–7, 39, 148, 153 complexity 154, 217 letter and spirit of 112, 153, 154, 218 purposive basis 112, 217–18 law and order 132, 159 Lawson, Nigel 182 lawyers 69, 102, 114, 116, 217 liability 184, 221, 225, 226 see also companies libertarians and libertarian views 39–40, 42, 68–80, 132 life expectancy 167n, 168 Lincoln, Abraham 61+n living standards/needs 35, 57, 61, 141–4, 168 loans 47–8+nn, 49–52, 208, 209 repayment of 49, 50, 53 local government 65, 186 see also council tax London, City of 18–19, 187 loopholes 97, 112, 153–4, 168, 187, 196, 197 Luxembourg 126, 134–5, 146 macroeconomics 85, 87–8, 161, 165, 170–1 Magna Carta 18–19, 22, 37, 131 Man, Isle of 124, 126 marginal tax rates 145, 172–3, 174, 192, 194, 235 markets, government policy/taxation and 58–9, 61, 63–4, 170–1, 187–8, 191, 212, 215, 236 marriage 24–5, 225 Mazzucato, Mariana 136 Meacher, Michael 153–4 media comment 157, 158 microeconomics, misapplication to government 86–7 middle ground in politics 157–8 minimal-state ideology 155–6, 158 Mirrlees Review 109 misconceptions 86 mistrust 152, 154 Mitchell, Dan 134 monarchy 20–2, 117, 219 monetary policy 58, 59–60 money 46–7 creation of 45–52+nn, 53, 86–7, 181–2, 208–9, 214 debt and 213 decreasing value to individuals 144–5, 181 destruction of 48n, 49, 53, 213 and the economy 209 equivalence 181, 224, 233 importance of 57 profit and 48–9 promises and 49, 51, 56 tax and 14, 56–7, 85–8, 180 value of 56–7, 66 see also bank transactions and financial transactions mortgages 89, 228–9 MPs, resources available to 109–10, 112 multinational companies 124–7, 150–2, 198, 201, 222 Murphy, Richard 110, 112, 113, 126, 131n, 153–4, 192, 203n mutuality 133 nation states 23, 24, 25–7, 35 National Audit Office 205 national debt 46, 52, 76, 213 national insurance 167–9, 172–3, 189, 232 and benefits system 189, 191 as proportion of tax paid 29, 161, 169, 189 proposals for replacing 72, 164, 189, 190, 194, 232–3 and unearned income 231–2 needs 57, 141–4 see also sufficiency Netherlands, the 126, 135, 146 NGOs 110 NHS 158, 167, 189 Northern Ireland 166 objectivity 105 OECD 125, 126, 134n, 150, 151 Office for Budget Responsibility 52, 91–3, 205 Office for Tax Responsibility, proposed 205, 220–1 offshore arrangements 99–100, 190 oil 35, 63 opacity see secrecy Osborne, George 59, 76–8, 82, 90–1, 174 overdrafts 48 ownership, tax and 38–44 Oxford Centre for Business Taxation 108–9, 110 Oxford Dictionary, definition of tax 30–2, 35–6, 37, 43 Paine, Thomas 24 parties, political 84, 94 partnerships, business 42 partnerships (marriage) 24–5, 225 Paul, St 16 Pay As You Earn 167, 173 PCS (Public and Commercial Services Union) 203n peace 131–3, 136, 137 Peasants’ Revolt (1381) 20, 37 pension funds 50, 60 pensioners 72, 232 pensions 143, 167, 168, 174–5, 189, 192, 235 citizen’s income and 192 personal allowances 72, 193, 230, 235 Pickett, Kate 145 Piketty, Thomas 190 Plaid Cymru 84, 94 plutocracy 71 politicians 84–5 poll taxes 15, 16, 20, 33, 37, 186 pollution 63, 191, 212 poverty 192, 194 power 17, 20, 23 price elasticity of demand 64 product safety 159 profit, banking and 48–9 profit-shifting 134–5 proof, onus of 196, 217, 224 property taxation and 31, 39–44, 54, 71 see also council tax, housing and land property rights 39, 41, 42–3, 132 protest 33, 37 see also conflict Public Accounts Committee, House of Commons 109, 114, 117, 204 public spending see government spending Quaker beliefs 10, 131n quantitative easing 46, 47n, 49–52, 58, 60, 229–30, 238 Rabushka, Alvin 78–9 recession 78, 79–80, 191 reciprocal rights and double tax treaties 223 reclamation see under tax/taxation redistribution 62–3, 66, 144, 185, 230, 238 Reed, Howard 192 representation, taxation and 19–20, 22–7, 31, 37–8, 65, 66, 70–1 repricing, tax as 64, 66 research 108–10, 135–6, 236 responsibility 39 retirement, saving for 174–5, 231 see also pensions right-wing views 68–80, 156–7, 158 rioting 33 road use 191 Roman Empire 15–16 Rousseau, Jean-Jacques 26–7 royalties 181, 223 sales taxes 15–16, 163, 187 see also VAT saving 59, 87, 89+n, 90–1, 172 investment and 209 tax and 175, 231 schools 108 Scotland 33, 37, 166 independence referendum (2014) 23, 24, 26, 128–9 Scottish National Party 84, 94 secrecy 69, 99, 122, 151, 152, 201 secrecy jurisdictions 135 seigniorage 182 self-employed people 98, 167, 168, 173 shadow economy 55–6, 146–8 shareholders 200–1, 233 simplicity 133, 152–5, 218, 230, 236 of money creation 51 see also flat taxes Singapore 126 skills, funding 136–7 Smith, Adam 24, 70, 129–31, 137 smuggling 14, 163 social contract 26–7, 132–3 social mores, taxation and 24–7 social security systems 191–2 see also welfare benefits socialism 157 speculation 171, 185, 187, 214, 224 Spirit Level, The 145 stamp duty 29, 73, 187, 228 Starbucks 135 states and statehood 23, 24, 25–7 extent of role 156–60 see also government(s) stigma 194, 235 student loans 173–4 subjectivity 105 sufficiency 141–4 sustainability 57, 215 Switzerland 135 tax/taxation acceptance of 25–6, 32–8, 67–8, 96 administration of 16, 123, 219–21 (see also HMRC) alternatives to 45–7 and choice 68, 96, 103, 106, 126–9 as counterbalance 53–5 definitions and perceptions of 30–2, 35–6, 37, 40–4 education concerning 102, 106–8 efficient 160–1 embracing 25, 27, 44, 238 functions 55–66 history 13–26 inclusivity and default 196, 217 indirect 74 ownership 38–44, 216 payment in kind 14, 15, 16 political context 37–9, 105 process, stages of 122–3 progressive 15, 139, 145, 181, 189, 230 and property 39–44, 54 as proportion of income 74–5 range of and proportions of revenue raised in UK 28, 29 reasons and purposes for 52–66, 160, 178 as reclamation of money spent 52–5, 75, 81, 180, 210 regressive 139, 189–90, 227, 237 responsibility for 219 right to spend 39 scope of 196, 217 unacceptable 33, 37 see also under government spending tax abuse 14, 16, 96–102, 103, 168, 195–6 victims of 101 see also tax avoidance and tax evasion tax avoidance 43, 96–7, 99–102, 103, 110, 173, 198 anti-avoidance principle 112, 113, 196 flat taxes and 74 proposed legislation against 153–4, 224, 236 tax base(s) 16, 31, 122, 179, 222–3 defining 179, 196 finding 197, 201 inclusive 195–7, 217 inconsistent 183 tax competition 133–4, 135–6 tax design 169 tax evasion 43, 69, 96–9, 100–1, 103, 110 tax gap 110, 220 tax havens 35, 69, 99–102, 123–4, 126, 134, 135–6, 201–2 registration of companies in 151 and secrecy 149–50 UK and 146, 174 wealth taxes and 184 tax justice 220 tax justice movement 149, 151, 184, 201 Tax Justice Network 9, 124 tax offices 118–21 tax policy 156, 229–30 tax reliefs 25, 97, 165, 175, 176, 196 Tax Reporting Standards Board, proposed 222 Tax Research Network 109 Tax Responsibility, Office for, proposed 205, 220–1 Tax Select Committee, proposed 205 tax systems 129–55, 168–9, 171, 178–80, 224 Taxation, Department of, proposed 219–21, 227 Taxation and State-Building in Developing Countries (Brautigam et al.) 26n Taxpayers’ Alliance 68–9, 70, 72 ‘taxpayers’ money’ 39–44, 216 Teather, Richard 101 technology 135–6, 176 temporary residence rule, proposed 197, 222 tenants 228, 229 Thatcher, Margaret 33, 68, 70, 86, 101 theft 36, 43, 44 tithing 15 tobacco 64, 74, 191 trade deficit 89 transparency 123–7, 216 transport 158–9, 176, 191 Treasury Committee, House of Commons 117 tribunals 118 trust 119–20, 148–9, 152, 154 trusts 42, 184 truth 30, 52, 84, 133, 146–52 Turner, Adair 52n 2020 Tax Commission 72, 75, 76 Tyler, Wat 20 UK aggregate tax rate 35 proportion of tax taken by different taxes 28, 29, 139 right to leave 32 shadow economy 146 and tax havens 146, 174 tax paid by income decile 139–40 UK GAAP 222 ‘UK plc’ 86 UK political parties 84, 94, 157–8 unemployment, effects 83, 89 universal credit 174 universities 107–9 US dollar 55–6 USA, Declaration of Independence 22–3, 24, 26 VAT 64, 74, 174, 187, 189, 236–7 exemptions 64, 236 as proportion of tax paid 29, 161 vertical equity 139 Virgin Islands, British 124 voting rates 42, 65 Walmart 150 Walmsley, Brad 70–1 wars 18, 53, 131–2 wealth concentration of 185 taxation and 28–30, 31, 73–4, 180–7, 190–1 Wealth of Nations, The (Smith) 24, 129–31 wealth taxes 16, 123, 163, 165, 183–7 global 190, 226–7 proposed 226–7, 228 see also financial transactions tax welfare benefits 62–3, 167 interaction/integration with tax 142, 174, 191–5, 234–6 national insurance and 189 unclaimed 194 as universal 235 welfare state 142–3 well-being, taxation and 35, 61 Wilkinson, Richard 145 work 194–5, 238 see also employment World Economic Forum 74 Worstall, Tim 71 Zimbabwe 35 About the Author Richard Murphy is a UK chartered accountant.

Lean Analytics: Use Data to Build a Better Startup Faster by Alistair Croll, Benjamin Yoskovitz

Airbnb, Amazon Mechanical Turk, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, barriers to entry, Bay Area Rapid Transit, Ben Horowitz, bounce rate, business intelligence, call centre, cloud computing, cognitive bias, commoditize, constrained optimization, data science, digital rights, en.wikipedia.org, Firefox, Frederick Winslow Taylor, frictionless, frictionless market, game design, gamification, Google X / Alphabet X, growth hacking, hockey-stick growth, Infrastructure as a Service, Internet of things, inventory management, Kickstarter, lateral thinking, Lean Startup, lifelogging, longitudinal study, Marshall McLuhan, minimum viable product, Network effects, PalmPilot, pattern recognition, Paul Graham, performance metric, place-making, platform as a service, power law, price elasticity of demand, reality distortion field, recommendation engine, ride hailing / ride sharing, rolodex, Salesforce, sentiment analysis, skunkworks, Skype, social graph, social software, software as a service, Steve Jobs, subscription business, telemarketer, the long tail, transaction costs, two-sided market, Uber for X, web application, Y Combinator

Every startup makes money from different things, so there’s no easy way to compare pricing across companies. But you can learn some lessons from different pricing approaches. A fundamental element of any pricing strategy is elasticity: when you charge more, you sell less; when you charge less, you sell more. Back in 1890, Alfred Marshall defined the price elasticity of demand as follows: The elasticity (or responsiveness) of demand in a market is great or small according as the amount demanded increases much or little for a given fall in price, and diminishes much or little for a given rise in price.[83] Unlike Marshall, you have the world’s greatest pricing laboratory at your disposal: the Internet.

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[77] http://www.startupcompass.co [78] http://paulgraham.com/growth.html [79] http://startup-marketing.com/authentic-growth-hacks/ [80] http://en.wikipedia.org/wiki/Technology_adoption_lifecycle [81] http://www.chasminstitute.com/METHODOLOGY/TechnologyAdoptionLifeCycle/tabid/89/Default.aspx [82] http://www.avc.com/a_vc/2011/07/301010.html/ [83] http://en.wikipedia.org/wiki/Price_elasticity_of_demand [84] http://www.guardian.co.uk/technology/2012/oct/22/smartphone-patent-wars-explained [85] http://mailchimp.com/resources/research/ [86] http://mailchimp.com/resources/research/email-marketing-benchmarks-by-industry/ [87] http://mailchimp.com/resources/research/email-marketing-subject-line-comparison/ [88] The 2012 Digital Marketer: Benchmark and Trend Report, Experian Marketing Services (http://go.experian.com/forms/experian-digital-marketer-2012)

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value of created content, Engagement Funnel Changes Pirate Metrics model, Analytics Frameworks pivot tables, Creating an Answers-at-Scale Campaign pivoting products and markets enterprise startup lifecycle and, The Enterprise Startup Lifecycle Parse.ly case study, Customer Lifetime Value > Customer Acquisition Cost Revenue stage on, Market/Product Fit Socialight case study, Socialight Discovers the Underlying Metrics of Pricing Platform as a Service (PaaS) model, Model Two: Software as a Service (SaaS) platform model, The Minimum Viable Vision Please Stay Calm app, Model Three: Free Mobile App PM Solutions study, Slower Cycle Time Porter, Michael, Stage Five: Scale post-sales support metric, Support Costs predict-before model, Empathy: Find Problems, Don’t Test Demand predictive analysis, Keywords and Search Terms price elasticity of demand, Number of Engaged Visitors, Socialight Discovers the Underlying Metrics of Pricing Price Intelligently service, Pricing Metrics price sensitivity testing, Socialight Discovers the Underlying Metrics of Pricing Price, Richard, Attacking the Leading Indicator Priceline site, Model Six: Two-Sided Marketplaces pricing metrics determining normal values for, Number of Engaged Visitors setting pricing correctly, What Mode of E-commerce Are You?

India's Long Road by Vijay Joshi

Affordable Care Act / Obamacare, barriers to entry, Basel III, basic income, blue-collar work, book value, Bretton Woods, business climate, capital controls, carbon tax, central bank independence, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, congestion charging, Cornelius Vanderbilt, corporate governance, creative destruction, crony capitalism, decarbonisation, deindustrialization, demographic dividend, demographic transition, Doha Development Round, eurozone crisis, facts on the ground, failed state, financial intermediation, financial repression, first-past-the-post, floating exchange rates, foreign exchange controls, full employment, germ theory of disease, Gini coefficient, global supply chain, global value chain, hiring and firing, income inequality, Indoor air pollution, Induced demand, inflation targeting, invisible hand, land reform, low interest rates, Mahatma Gandhi, manufacturing employment, Martin Wolf, means of production, microcredit, moral hazard, obamacare, Pareto efficiency, price elasticity of demand, price mechanism, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, race to the bottom, randomized controlled trial, rent-seeking, reserve currency, rising living standards, school choice, school vouchers, secular stagnation, Silicon Valley, smart cities, South China Sea, special drawing rights, The Future of Employment, The Market for Lemons, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, transaction costs, universal basic income, urban sprawl, vertical integration, working-age population

Technical note: It is often claimed on the basis of econometric estimation that the price elasticity of demand for Indian exports is quite low (for example see Rangarajan and Mishra 2013 and Kapur and Mohan 2014). In my opinion, this result is the result of estimating export equations that mix up demand and supply. Robust elasticity estimates require a structural model in which export demand and supply equations are estimated in a simultaneous equation framework. Joshi and Little (1994) did this for the period 1960–​1990 and found a short-​r un price elasticity of demand for exports greater than one, and a long-​r un price elasticity of demand of three (with 80 per cent of the long-​run effect coming through within two years), across a wide range of specifications.

Quality Investing: Owning the Best Companies for the Long Term by Torkell T. Eide, Lawrence A. Cunningham, Patrick Hargreaves

air freight, Albert Einstein, asset light, backtesting, barriers to entry, buy and hold, carbon tax, cashless society, cloud computing, commoditize, Credit Default Swap, discounted cash flows, discovery of penicillin, endowment effect, global pandemic, haute couture, hindsight bias, legacy carrier, low cost airline, mass affluent, Network effects, oil shale / tar sands, pattern recognition, price elasticity of demand, proprietary trading, shareholder value, smart grid, sovereign wealth fund, supply-chain management, vertical integration

The genuine rarity of some items makes them collectors’ items, such as a fuchsia crocodile Hermès Birkin bag that recently sold for $223,000 at a Christie’s auction in Hong Kong. Hermès has a high degree of control over the distribution of its products, thanks to its own-store network, giving it complete authority over pricing. Hermès products are almost never discounted. Price increases are common and always at least in line with general price inflation. The price elasticity of demand is negligible, reflecting the perverse fact that the more expensive a luxury item gets, the more desirable it can become. The combination of these features gives Hermès unmatched pricing power. The benefits are reflected in Hermès’ compelling financial characteristics: cash flows are strong and predictable thanks to operating margins exceeding 30%; return on invested capital exceeds 30%; the compound annual growth rate of sales during the past two decades is 11%, with the worst year in the period being 4% in 2009.

Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup by Andrew Zimbalist

airline deregulation, business cycle, carbon footprint, East Village, en.wikipedia.org, full employment, gentrification, Gini coefficient, income inequality, longitudinal study, megaproject, Nelson Mandela, New Urbanism, price elasticity of demand, principal–agent problem, race to the bottom, selection bias, Suez crisis 1956, urban planning, young professional

It would have been insensitive and ill advised to compete against churches, synagogues, hospitals, YMCAs, Girl Scouts and all the other worthy organizations that rely on charity for their survival. Also, the USOC relies almost entirely on donations and we didn't want to compete for the same dollars” (Made in America, p. 60). 31. Ueberroth, Made in America, p. 121. 32. The extent to which it does one or the other depends on what economists call the price elasticity of demand. The more sensitive consumers are to price changes (the higher the elasticity), the more the tax on hotels or car rentals will lower demand for travel to the city. 33. An exclusive product category refers to a type of product, for example beer, and a single company being the only one allowed to advertise in that category during the competition or in association with the Olympics.

Mobility: A New Urban Design and Transport Planning Philosophy for a Sustainable Future by John Whitelegg

active transport: walking or cycling, Berlin Wall, British Empire, car-free, carbon tax, conceptual framework, congestion charging, congestion pricing, corporate social responsibility, Crossrail, decarbonisation, Donald Shoup, energy transition, eurozone crisis, glass ceiling, high-speed rail, Intergovernmental Panel on Climate Change (IPCC), megacity, meta-analysis, negative emissions, New Urbanism, peak oil, post-industrial society, price elasticity of demand, price mechanism, Right to Buy, smart cities, telepresence, the built environment, The Death and Life of Great American Cities, The Spirit Level, transit-oriented development, urban planning, urban sprawl

Road pricing and urban freight transport. Urban freight platforms. Boege, S (1995) The well-travelled yoghurt pot: lessons for new freight transport policies and regional production, World Transport Policy and Practice, Volume 1, Number 1, 7-11. Brons, M, Pels, E, Nijkamp, P and Rietveld, P (2002) Price elasticities of demand for passenger air travel: a meta-analysis. Journal of Air Transport Management 8, 165-175. Brown, L (2009) Plan B 4.0. Mobilizing to save civilization, Earth Policy Institute, W W Norton and Company. Burke, M and Dodson, J (2014) Suburban density: disrupting the density debate in Gleeson, B and Beza, B (2014) The Public City.

The Plundered Planet: Why We Must--And How We Can--Manage Nature for Global Prosperity by Paul Collier

agricultural Revolution, Berlin Wall, business climate, carbon tax, Doha Development Round, energy security, food miles, G4S, Global Witness, information asymmetry, Kenneth Arrow, megacity, new economy, offshore financial centre, oil shock, price elasticity of demand, profit maximization, rent-seeking, Ronald Coase, Scramble for Africa, search costs, sovereign wealth fund, stem cell, Stewart Brand, Tragedy of the Commons

It takes six kilos of grain to produce one kilo of beef, and so the switch to protein is raising grain demand. The two key parameters in demand are income elasticity and price elasticity. As a rule of thumb, the income elasticity of demand for food is low: if income rises by a fifth demand for food will rise by around a tenth. The price elasticity of demand for food is only around one-tenth; people simply have to eat. This implies that were the supply of food fixed, to choke off an income-induced increase in demand of 10 percent the price would need to double. As this example illustrates, quite modest increases in global income will drive prices up alarmingly unless matched by increases in supply.

Open for Business Harnessing the Power of Platform Ecosystems by Lauren Turner Claire, Laure Claire Reillier, Benoit Reillier

Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, barriers to entry, basic income, benefit corporation, Blitzscaling, blockchain, carbon footprint, Chuck Templeton: OpenTable:, cloud computing, collaborative consumption, commoditize, crowdsourcing, data science, deep learning, Diane Coyle, Didi Chuxing, disintermediation, distributed ledger, driverless car, fake news, fulfillment center, future of work, George Akerlof, independent contractor, intangible asset, Internet of things, Jean Tirole, Jeff Bezos, Kickstarter, knowledge worker, Lean Startup, Lyft, Mark Zuckerberg, market design, Metcalfe’s law, minimum viable product, multi-sided market, Network effects, Paradox of Choice, Paul Graham, peer-to-peer lending, performance metric, Peter Thiel, platform as a service, price discrimination, price elasticity of demand, profit motive, ride hailing / ride sharing, Sam Altman, search costs, self-driving car, seminal paper, shareholder value, sharing economy, Silicon Valley, Skype, smart contracts, Snapchat, software as a service, Steve Jobs, Steve Wozniak, TaskRabbit, the long tail, The Market for Lemons, Tim Cook: Apple, transaction costs, two-sided market, Uber and Lyft, uber lyft, universal basic income, Y Combinator

We will also see in Chapter 13 that the extent to which multihoming is possible has implications for regulators and competition authorities. Price elasticity We all know that the demand for products and services changes depending on their price. If the price of baked beans goes up, people will buy fewer cans – and vice versa, if the price goes down, more baked beans are sold. The price elasticity of demand reflects this by giving the percentage change in quantity demanded for a 1% change in price. It is the quantitative articulation of the question ‘How many more cans of baked beans will I sell if I decrease the price by 1%?’ A small change in price of some goods sometimes results in a large change in demand.

Narconomics: How to Run a Drug Cartel by Tom Wainwright

"World Economic Forum" Davos, Airbnb, barriers to entry, bitcoin, business process, call centre, carbon credits, collateralized debt obligation, corporate social responsibility, Credit Default Swap, credit default swaps / collateralized debt obligations, failed state, financial innovation, illegal immigration, Mark Zuckerberg, microcredit, price elasticity of demand, price mechanism, RAND corporation, Ronald Reagan, Sam Peltzman, Skype, TED Talk, vertical integration

Peter Reuter, Understanding the Demand for Illegal Drugs (Washington, DC: National Academies Press), at http://www.nap.edu/catalog/12976/understanding-the-demand-for-illegal-drugs. 3. The extent to which they cut their prices, if at all, depends on the elasticity of supply. For further discussion of this, see this 2002 paper on the elasticity of the demand and supply of drugs, published by the Department of Justice: William Rhodes et al., “Illicit Drugs: Price Elasticity of Demand and Supply,” at https://www.ncjrs.gov/pdffiles1/nij/grants/191856.pdf. 4. Keene’s dangerous Pumpkin Festival was reported in “Cops or Soldiers?” in the Economist on May 22, 2014, by my fearless colleague Jon Fasman, at http://www.economist.com/news/united-states/21599349-americas-police-have-become-too-militarised-cops-or-soldiers. 5.

The Skeptical Economist: Revealing the Ethics Inside Economics by Jonathan Aldred

airport security, behavioural economics, Berlin Wall, carbon credits, carbon footprint, citizen journalism, clean water, cognitive dissonance, congestion charging, correlation does not imply causation, Diane Coyle, endogenous growth, experimental subject, Fall of the Berlin Wall, first-past-the-post, framing effect, Goodhart's law, GPS: selective availability, greed is good, happiness index / gross national happiness, hedonic treadmill, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, labour market flexibility, laissez-faire capitalism, libertarian paternalism, longitudinal study, new economy, Paradox of Choice, Pareto efficiency, pension reform, positional goods, precautionary principle, price elasticity of demand, Ralph Waldo Emerson, RAND corporation, risk tolerance, school choice, social discount rate, spectrum auction, Thomas Bayes, trade liberalization, ultimatum game, When a measure becomes a target

As Paul Krugman puts it: ‘Productivity isn’t everything, but in the long run it is almost everything’ (Krugman [1997], p11). Note that an expanding population may ensure growth without productivity improvements, but it will also increase the demand for public services. 43 Moller (2001). Technical note: more precisely, whether the services sector takes a growing share of output depends on the price elasticity of demand for its products, their income elasticity, and the ratio of productivity in the services sector to economy-wide productivity. Intuitively if, say, demand grows strongly with income but is insensitive to price increases (and service productivity lags behind), then the net effect of economic growth will be a rise in demand for the service, despite a higher price.

Virtual Competition by Ariel Ezrachi, Maurice E. Stucke

"World Economic Forum" Davos, Airbnb, Alan Greenspan, Albert Einstein, algorithmic management, algorithmic trading, Arthur D. Levinson, barriers to entry, behavioural economics, cloud computing, collaborative economy, commoditize, confounding variable, corporate governance, crony capitalism, crowdsourcing, Daniel Kahneman / Amos Tversky, David Graeber, deep learning, demand response, Didi Chuxing, digital capitalism, disintermediation, disruptive innovation, double helix, Downton Abbey, driverless car, electricity market, Erik Brynjolfsson, Evgeny Morozov, experimental economics, Firefox, framing effect, Google Chrome, independent contractor, index arbitrage, information asymmetry, interest rate derivative, Internet of things, invisible hand, Jean Tirole, John Markoff, Joseph Schumpeter, Kenneth Arrow, light touch regulation, linked data, loss aversion, Lyft, Mark Zuckerberg, market clearing, market friction, Milgram experiment, multi-sided market, natural language processing, Network effects, new economy, nowcasting, offshore financial centre, pattern recognition, power law, prediction markets, price discrimination, price elasticity of demand, price stability, profit maximization, profit motive, race to the bottom, rent-seeking, Richard Thaler, ride hailing / ride sharing, road to serfdom, Robert Bork, Ronald Reagan, search costs, self-driving car, sharing economy, Silicon Valley, Skype, smart cities, smart meter, Snapchat, social graph, Steve Jobs, sunk-cost fallacy, supply-chain management, telemarketer, The Chicago School, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, Travis Kalanick, turn-by-turn navigation, two-sided market, Uber and Lyft, Uber for X, uber lyft, vertical integration, Watson beat the top human players on Jeopardy!, women in the workforce, yield management

Revue des droits de la concurrence 3 (2007): 34–38, http://ec.europa.eu/dgs/competition/economist/concurrences _03 _ 2007.pdf. Note, for instance, a study of air travel fares: “The results are consistent with the hypothesis that, as more carriers operate on a given route, the carriers’ competition for consumers with higher price elasticity of demand increases, while fares charged to consumers with inelastic demand stay high”; J. Stavins, “Price Discrimination in the Airline Markets: The Effect of Market Concentration,” Review of Economics and Statistics 83 (2001): 200. In line with this rationale, the competition agencies in a merger review may seek to maintain price discrimination when it protects buyers who cannot pay a higher, uniform price.

The World's First Railway System: Enterprise, Competition, and Regulation on the Railway Network in Victorian Britain by Mark Casson

banking crisis, barriers to entry, Beeching cuts, British Empire, business cycle, classic study, combinatorial explosion, Corn Laws, corporate social responsibility, David Ricardo: comparative advantage, Garrett Hardin, gentrification, high-speed rail, independent contractor, intermodal, iterative process, joint-stock company, joint-stock limited liability company, Kickstarter, knowledge economy, linear programming, low interest rates, megaproject, Network effects, New Urbanism, performance metric, price elasticity of demand, railway mania, rent-seeking, strikebreaker, the market place, Tragedy of the Commons, transaction costs, vertical integration

Although the method was just as unsuitable for canals as for railways, the canal system never became so extensive as the railway system because the railways arrived so soon after the canals, and so the problem was not fully appreciated. Setting maximum fares is particularly important where the price elasticity of demand is low—that is, the number of people who wish to travel is largely invariant to the price. Most railway companies believed that demand was inelastic—especially for Wrst class travel—and so wished to charge as high a price as possible, subject to the regulations. Where the regulated fare by a direct route was well below the maximum that the customer was willing to pay, it paid the company to send the customer via an indirect route instead—a principle well Regulation 247 known to some taxi-drivers.