“A foundational assumption in these models is the idea that taste parameters never shift… [but] our analysis shows that the assumption of time-invariant preferences for each good is neither the correct nor necessary condition to make consistent comparisons of welfare over time when there are demand shocks for individual goods….[A]llowing for demand shifts is an economically important force in understanding price and real income changes.”
This is new economic analysis of consumer price indices based on (big) (barcode) data about what is actually sold. It is interesting analysis, I feel, in its own right. But in addition changes in tastes, demand shifts, raise the issue of whether it is appropriate for public policy to aim (as it, as religion, as philosophy has, for thousands of years) to influence what economics calls tastes, what people want.
Can we as a society want to want different things from what we currently want? Is it OK for us to want that?
If what we as consumers want turns out to be mutable, how does that affect that discussion?
(I was once in a meeting where an economist said, You have not demonstrated that the optimal amount of waste is zero. Is economics the only way to find out that optimum?)
(This is what you see when you approach Seudre, in Charente Maritime, France)
Hanif Kureishi, The Last Word (2014): [At a restaurant in Mayfair:] They began with vodka, oysters and tiger prawns, but as with all of Rob’s sprawling meals, it was some time before they even reached the base camp of the first course. Hours later, staggering out into the quiet, grand city, and feeling as if he’d swallowed someone’s head, Harry said, ‘Who would have any idea that the financial system has collapsed?”
(This is a football match on the foreshore during the feast of the oyster and the mussel at Les Boucholeurs, Charente Maritime)
(This is the Bouillabaisse restaurant at Passau, at the end of Germany. It serves oysters from Charente Maritime.)
I just read “In search of the Trojan war” by Michael Wood (2nd edition, 2005). The epigraph is:
It is irrelevant how many centuries may separate us from a bygone age. What matters is the importance of the past to our intellectual and spiritual existence.
– Ernst Curtius, speech in memory of Heinrich Schliemann, Berlin, 1 March 1891. (Schliemann was the discoverer and first digger of Troy.)
My son-in-law told me yesterday that the country with the most castles for its size is Wales. Does that tell us something in these times? I think so. At the end of this afternoon we walked through an abbey and around some ponds (the Etangs d’Ixelles). Does it make a difference to know that once, the abbey’s fishponds lay here? Of course it does.
I studied history as my main subject at school, but decided to do economics at university because history was of no practical use. I had 18 months off between school and university during which I decided that economics was also of no practical use, so I reverted to history because it was more interesting. Since then I’ve changed my mind about both subjects.