Wednesday, August 19, 2009

Choice at the Supermarket

One of the first things many of us like to do in an economics class is to put forth the idea that economics is the study of how people choose. And while it's easy to toss out examples involving purchases, it's often more stimulating and entertaining to use situations that involve other resources, such as time. Today's issue of The Wall Street Journal offers just such a situation.

The article focuses on the issue of waiting in check-out lines. And the basic choice is one of efficiency (get as many people checked out as quickly as possible) vs. equity (make sure no one has to wait too long while others who come to check-out later are taken first).

The article examines consumer attitudes, as well as resource allocation by stores. I could see this being used as an opener with a "polling question" for the students.

"When you're shopping, is it more important that you get checked out quickly (efficiency) or that you get served in the order in which you arrived at check out (equity)?"

This can also segue into a discussion of larger policy issues, because they are often choices about efficiency vs. equity. But more importantly, it can help your students understand that individuals make choices based on different preferences. Consequently, designing the marketplace (and I don't mean a store) can be a very difficult proposition for outside parties. It can also be used to explain how we develop our own rules and practices (institutions) to meet our needs.

Would this be a useful ice-breaker for your first day of class? Or would it be better later in the course? I look forward to your comments.

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