Unit 3 Micro: Prezi on Environmental Economics
This term I am teaching some environmental economics to my A2 groups. The link below provides access to a Prezi on aspects of environmental issues such as the Tragedy of the Commons and the economics of waste and pollution. I will be updating and extending the Prezi as I develop the lessons. I hope that it is useful. I will try to include as many examples as I can on European and Global issues to do with environmental issues - the beauty of a Prezi of course is the flexibility of ordering course materials and the chance to embed lots of vivid You Tube clips and images into the resource.
read more...»Revision Presentation: Economics Evaluation Skills
Here is a short revision presentation on evaluation skills for AS and A2 economics questions which we produced a couple of years ago which might still be useful for the forthcoming exams.
read more...»Exam Advice: 10 Ideas for a Better Economics Paper
Here are some thoughts on ways to improve your scores on your summer economics exam papers. They are in no particular order but I hope some of them might be useful
Ten Thoughts on Improving Your Economics Papers
Streamed presentation
PDF handout version
AS and A2 Economics - 10 Ways to Improve Evaluation
As students build their revision efforts ahead of the impending A Level Economics units, here is an updated version of my revision document on evaluation skills for AS and A2 economists…
read more...»Unit 4 Macro: Video Resources on Unemployment
This blog entry brings together a selection of recent news reports and videos covering the economics of unemployment in the UK and inother countries.
read more...»Unit 1 Micro: A World of Seven Billion People
Fergus Walsh from the BBC provides this really clear video info graphic on the expanding global population estimated to have exceeded seven billion during 2011 and forecast to rise to eight billion by 2025.
European Economics: Resources on the CAP
This blog entry will provide a regularly updated set of links to resources to the European Union’s Common Agricultural Policy and attempts to reform this contentious and complex system of farm support.
Check below for suggested links
read more...»Unit 4 Macro: Human Capital and Economic Growth
In A2 macroeconomics the underlying causes of economic growth and development and constraints on both of these are covered in more depth. One of the concepts students might be familiar with is that of human capital.
I have always summarised the idea of human capital as being a measure of the overall quality of the human input available to produce goods and services in an economy. The ONS have published a new study on the value of human capital in the UK and they draw on a definition given by the OECD
read more...»What is the socially optimal level of concerts in Hyde Park?
It seems those fortunate enough to live next to Hyde Park are increasingly bothered by the negative externalities arising from the concerts put on there. This BBC article is a good illustration of the difficulties involved at arriving at a socially-optimal level of production.
Regulatory Capture at HMRC?
Is the story of HMRCs failure to collect the right amount of tax from some big businesses an example of regulatory capture? In the current example, the Public Accounts Committee has said that HM Revenue and Customs enjoyed an “unduly cosy” relationship with major companies, and their procedures have allowed rules to be ‘bent’ so that up to £25bn tax has been underpaid. Regulatory capture (an example of government failure) is what happens when regulated industries are able to gain influence over their regulator, so that instead of serving the public interest, the regulator actually supports the interest of the industry concerned. In this case, there does not seem to be one specific industry concerned (although Goldman Sachs’s underpayment of something between £8mn and £20mn comes in for particular criticism); however the situation does seem to meet the requirements defined by the Economist as “Gamekeeper turns poacher or, at least, helps poacher”.
More on the story here:
Taxman slammed over ‘cosy’ business relations
Goldman Sachs tax deal faces UK legal challenge
Great Blog to Follow - Joseph Rowntree Foundation
If you are at all interested in the latest research findings in the domains of poverty, inequality, economic and social exclusion and the social impact of government policies, the Joseph Rowntree Foundation website is highly recommended. In this particular blog the JRF provide a revealing list of things that they have found during the course of 2011 - there is some excellent background evidence here for AS and A2 students wanting data to support their work on poverty and inequality and social trends in the UK.
You can also follow the JRF on Twitter - use this link
Unit 3 Micro: Sub Normal Profits - BP Leaves the Solar Industry
British Petroleum has decided to exit the solar energy energy industry claiming that the business has become unprofitable because of excess supply and falling prices. In 2011 a number of solar firms have gone out of business including California’s Solyndra and Germany’s Solon. BP will focus instead on investing in other renewable energy sectors including wind power and biofuels.
Whilst the decision by BP to exit the industry appears significant, infact total global investment in solar power continues to rise. MidAmerican Energy Holdings owned by Warren Buffett have agreed to purchase a $2 billion solar project under development in California and a 49 percent stake in a $1.8 billion plant in Arizona.
Google Inc. and KKR & Co have announced a joint venture to pump money in four California solar power plants with total capacity of 88 megawatts. The powerful search engine business uses a huge anount of energy every year and has committed itself to large scale investment in renewable energy supplies to help power their server farms.
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Economics of Deforestation
The Human Development Report 2011 reported that deforestation is a severe problem. In the last two decades, Latin American and Sub-Saharan Africa have experienced severe forest losses, especially when compared to the rest of the world.
For economists the economic and social costs of rapid deforestation represent a telling example of the tragedy of the commons where the pursuit of individual self-interest can risk a permanent destruction of natural resources that undermines the sustainability of communities and societies for current and future generations. The United Nations calculates that deforestation and degradation is responsible for nearly 20 per cent of global greenhouse gas emissions.
Will the REDD programme make a difference?
REDD stands for Reducing Emissions from Deforestation and Forest Degradation in Developing Countries and is designed to provide financial incentives funded by advanced nations for developing countries to preserve their forests and instead invest in low-carbon paths to sustainable development.
The UN estimates financial flows of up to $30bn could come from REDD and related initiatives - the scheme effectively allows rich countries to offset their carbon emissions from domestic industries and consumers by funding clean low-carbon development projects in developing countries. But it is highly controversial and opposed by many organisations such as Friends of the Earth and the World Rainforest Movement.
In this blog we have put together some web resources on the issue of deforestation - focusing on causation, consequences and also on some of the policy approaches that might work to bring about behavioural change.
Unit 3 Micro: Oligopoly and Duopoly in Bus Markets
The UK Competition Commission has published an important report into the market structure of local and regional bus services in the UK, twenty five years after the industry was deregulated and largely privatised. Coverage of the report can be found here (BBC news).
Largely as a result of a long-term process of consolidation through merger and acquisition, the UK bus industry is found to be highly concentrated with five businesses dominating the sector even though more than 1,200 businesses provides services.
The five largest operators (Arriva, FirstGroup, Go-Ahead, National Express and Stagecoach) carry 70 per cent of those passengers. The CC also found that head-to-head competition between operators is un-common and that-on average-the largest operator in an urban area runs 69 per cent of local bus services - effectively a monopoly position.
Prezi on Information Failures
Click below to open a new Prezi on aspects of information failures / gaps and market failure together with some of the interventions that might be used to address imfornation imperfections in many markets.
read more...»Unit 3 Micro: Patent Wars- A Touchy Subject for Apple
This excellent news piece from Ben Cohen at Channel 4 looks at the increasingly aggressive patent war being fought by the manufacturers of the world’s leading mobile phone and tablet devices - the most profitable products in the digital economy. “Where once the giants (Google and Apple) competed on features, they now compete on patents.”
The news feature looks in particular at the intellectual property surrounding the slide-screen technology used by millions to unlock a device. Apple claims the IP to this but a video tracked back to twenty years ago suggests that developers were already thinking of something remarkably similar long before the iPhone came into existence. Can the makers of Android defend legal claims from Apple that their IP has been infringed? And who will end up paying for the enormous legal fees and possible extra licencing costs?
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Don’t you just love it when Panorama does your lesson for you!- Part 2
It’s amazing- you wait ages for a good Panorama story about Economics and then two come along at once! Read on for information about another useful Panorama programme for looking at competition between the major supermarkets, and the reality behind the ‘price wars’ in the UK supermarket industry.
read more...»Don’t you just love it when Panorama does your lesson for you!
If you’re intending on teaching your classes about the government’s Private Finance Initiative in the coming days, I strongly urge you to read on
read more...»Unit 3 Micro: Hope Bikes - A Commitment to Excellence
Are you into your cycling? The huge expansion of interest in cycling in the UK from road racing through to BMX and mountain-biking has gone hand in hand with the fantastic success of British cyclists on the international stage. 2012 promises to be another strong year for the industry despite difficult economic conditions.
read more...»Unit 3 Micro: Tacit Collusion in the Supermarket
What do students make of the current price match / big price drop schemes offered by many of the leading food retailers in the UK?
On the surface the brand price match scheme shown in the picture below looks like a good deal for consumers in this time of financial hardship and distress.
But what it this ‘parallel pricing’ serves merely as a form of tacit collusion with prices on a range of products actually higher than they might be without the facade of price comparisons and discount voucher compensation?
Unit 3 Micro: Brand Loyalty in Mobile Phones
Brand loyalty is hugely important in all kinds of industries and markets. The costs of acquiring a new customer vastly outweigh the expense of selling more to existing buyers and most of the mobile phone suppliers in this oligopolistic industry focus an enormous effort in building brand identity and brand loyalty to reduce the rate of customer churn (people who switch brands).
read more...»Unit 3 Micro: Patent Wars might Stifle Innovation
In this six minute piece, Rory Cellan-Jones from the BBC looks at the surge in legal actions concerning alleged patent infringements. Intellectual property lawyers are making huge sums from the trend but small and medium sized enterprises especially in technology spaces might have less scope, freedom and resources to innovate as a result.
Pasty Prices - Something to Chew Over
I am trying to get my head around this example of pasty prices that I encountered at Waterloo Station on Tuesday night. The vendor is selling a large pasty for £3.90 and “The Big One” for £4.00 - a difference of just ten pence? Why not charge more? Or at least cut the price of the large pasty to something like £3.30 to encourage people to pay the £4.00 option? Am I missing something here?
I asked the guy running the concession “what is the difference between the large pasty and the big one?” His cogent reply put me right “The big one is bigger!” I bought the large pasty because as far as I can see, there is no difference in size.
LSE Lecture: Daniel Kahneman - Thinking Fast and Slow
This is a blog drawing on a lecture at the LSE with Professor Richard Layard in discussion with Nobel winner Daniel Kahneman!
read more...»Unit 1 Micro: Asymmetric Information - Buying a Used Car
An autumnal hat tip to Kevin Hinde at Durham Business School for spotting a new report from the Office of Fair Trading which finds that the market for second-hand, used cars remains the biggest source of complaints from customers. Nationally over 56,000 people have complained to the OFT-managed Consumer Direct in the year to date with 70 per cent of the complaints relating to faults with the cars and over 13 per cent about misleading claims or omissions by the seller. The used car market is a classic example of asymmetric information and the risks of consumer welfare being damaged by fraudulent selling and sub-standard service. The OFT have released a short film on customer rights that might be a good teaching resource to use when covering this topic.
LSE lecture: Darwin economy
Last week I took some of my pupils to the LSE for Professor Robert Frank on “Liberty, Competition and the Common Good: The Darwin Economy”, chaired by Paul Mason. Frank’s book is about the fact that Charles Darwin understanding of competition offers a better guide to economic reality than Adam Smith and rational choice theory. Smith’s view is putting us all at risk by preventing us from seeing that competition alone will not solve our problems.
read more...»Behavioural Economics: Bittersweet Symphony - The Psychology of Food
Last night I attended a discussion with Professor Charles Spence, Head of the Crossmodal Research Laboratory at the Department of Experimental Psychology, Oxford University. He was speaking about the psychology of food, and his work with Heston Blumenthal at the Fat Duck.
It was a tremendously entertaining and revealing talk about the ways in which top chefs are embracing ideas from psychology and neuroscience in creating new products and experiences.
But how many of the innovations will find their way into the everyday meals that we eat rather than the ‘once in a lifetime’ conspicuous consumption of a meal at a Michelin-starred restaurant? Constant trial and error from Chefs in charge of their own destiny is a world away from the financial imperatives and constraints of the mass-volume industrial food processing businesses.
read more...»Unit 3 Micro: Unilever hit by rising costs
Here is a good example of a global giant in consumer products whose profitability has been affected by external headwinds over which it has little control.
The Anglo-Dutch business Unilever - the world’s second-biggest consumer-goods company – has announced that profitability might fall in 2011 even after it increased prices to offset soaring costs for the commodities used to make its products.
read more...»Unit 3 Micro: Impulses to Change Management Models
It is natural for large parts of our media to be obsessed with tracking the machinations of Greek politics and the frantic attempts by European politicians to shore up the fragile Euro Zone with palliative bailouts and stability funds. But the really interesting and significant discussions in economics and finance are taking place at a microeconomic level. As I reach twenty-five years teaching this fantastic and utterly fascinating subject, each day I am drawn more to the complex wiring of microeconomic decision-making and further from sterile debates about the direction of macro policy and the irrelevance of most of what passes along those dreadful ticker streams on Sky News, CNBC and Bloomberg.
That is why taking time out to listen to programmes such as Global Business, Analysis, The Bottom Line, Hard Talk and many other wonderful outputs from BBC radio provides fresh ideas for the classroom and one’s understanding of new directions in economic thinking.
A few weeks back Peter Day from the BBC met Professor Gary Hamel one of those highly-sought management thinkers who are at least prepared to challenge the conventional wisdom of university lecture halls and business schools. Are we now looking at radical shift in the nature of corporate organisation and behaviour? Will the business landscape look very different in the next few years as new models and strategies emerge post-recession and consumers are compelled to revise their choices? Hamel thinks that there is some important straws in the wind and Peter Day teased some of them out in a lively thirty-minute discussion.
read more...»Unit 3 Micro: Time of Use Pricing for Energy
When is electricity demand highest in the UK? The answer comes at the end of the blog!
The UK government is committed to the rolling out of smart energy meters between now and the end of 2020. Millions of homes will have smart meters installed which track how much electricity you use and when you use it - the installation cost is approximately £350 per unit although this may come down with the utilisation of economies of scale. Smart meters will give consumers and the utility businesses minute-by-minute information about energy consumption and this could fast-forward the launch of time of use pricing tariffs for us all in the years ahead. It will mark a move away from flat-rate tariffs towards fully-fledged peak and off-peak pricing.
At the moment around one in ten households are on Economy 7 tariffs which offers lower prices for electricity used during off-peaking times in the late evenings and early mornings. Economy 7 seems to have been around for as long as CEEFAX and if you understand that you are giving your age away!
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