(Behavioural) economics through sunglasses
When you’ve embraced economic thinking, even a summer break from work doesn’t stop you seeing how profoundly we humans truly are economic beings
This summer I have once again been wearing my trusted economics sunglasses. As before they supplied some interesting observations, confirming how good economics is at describing and explaining a lot of our behaviour.
1. The weather
In my home town (and much of England), we would on average get 8 rainy days per month in June and July. That’s two a week. Of the other days, not all are warm and sunny, so really nice days are generally quite scarce. Not so this year: we had 41 consecutive dry days between the middle of June and the end of July. Most of these were genuine summer days (30 with a temperature above 25 degrees C). In June we had 75 hours more sunshine than average, and in July that was nearly 100 extra hours.
Scarcity is a core concept in economics: when a resource becomes relatively scarcer, market prices tend to go up. This helps ensure that the resource is allocated to those who value it the most, and encourages suppliers to increase their supply. We cannot buy or sell good weather, of course. But scarcity is also an important factor in…
