Tuesday, October 13, 2009


I picked up a copy of The Economic Naturalist: In Search of Explanations for Everyday Enigmas; Robert H. Frank. My hardcover copy was twenty five cents, plus four dollars for shipping, so you can see that right from the get go the natural economist in me was probably making a mistake, or at any rate was some kind of intellectual market outlier. He had me at "I was in the Peace Corps in Nepal" and promptly lost me with his first two examples of clever questions and answers. The first two examples of the kind of thinking that he urged his students to do were

1) why do drive up ATM machines have braille dots on them?


2) why do women buy expensive wedding gowns they will only wear once, while men rent cheap tuxedos that they may have call to wear more than once?

To each he and his students give patently made up, economist answers. To the first his student offers the explanation that it must be cheaper to simply put braille on all ATM machines than to spend time/money putting it on some and then trying to make sure that the ones with braille go where they need to be and the ones without go to the drive in ATM sites. Fair enough. Economies of scale and all that, putting braille dots on is probably pretty cheap to begin with. Blah Blah sounds good to me.

To the second he and his student offer a slightly more longwinded market driven explication that is based on the non monetary fact that "women are stylish" and demand lots of unique choice for this day and that men are not, and don't. They also spend a bunch of time explaining to the bored reader that if women wanted to satisfy their need for a unique wedding dress through a rental that that would be cost prohibitive for the rental agencies. The rental agencies would have to have lots of styles in lots of sizes. And they'd have to change their inventory frequently. True enough.

At the end of that chapter a moment of reality intervenes. A reader writes in and explains that there's actually something that comes between the ATM machine vendor, the bank, and sheer dollar push/pull and that is, of course--the government, regulation, law and custom. In other words: the ADA requires that all bank ATMs have braille. Never mind! It was still very logical for Frank and his students to try to figure out the basic economic rationality that underlies the decision to have Braille at every ATM because although economies of scale/dollar cost were not actually causing the phenomenon what the hell, it sounds good.

The exact same reasoning holds true for their "explanation" of why women spend a ton of money buying a dress they will wear once and men rent an outfit they will wear many times. Here's how that question looks in real world speak.

1) The market for wedding dresses and Tuxedos is different because each wedding requires only one wedding dress--in fact, other members of the wedding party are forbidden to wear anything like it (custom). The wedding party may contain many members who wear Tuxedos as Tuxedos are merely considered formal wear for men and are explicitly not supposed to be unique (custom). So the market is segmented and completely different in scale.

2) Men who expect to wear Tuxedos or other formal wear on many occasions throughout the year do, in fact, buy their own stuff, often used. Many men do so. The rest of mankind is aware that they will gain weight in the years intervening between Tuxedo events and they sensibly avail themselves of the cheap rentals and easy tailoring that go with them to save closet space.

3) A woman's bridal dress signifies long term commitment and family. Although a woman does not expect to wear the same dress again it is sentimentally supposed to be handed down to her daughters and grandaughters for them to wear. Its not a piece of clothing like a cocktail dress. It is considered a family heir loom and it is purchased, worn, and stored as one.

The monetary argument is just one among many--a second order rationalization for a perfectly ordinary cultural explanation that is way more sensible and satisfying.

And so goes the rest of the book. This is why I ended up being an Anthropologist instead of an Economist. Its not the Graphs, Robert (he thinks its the graphs) its the dreamy Just So Story nature of the explanations.


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