The Undercover Economist, Revised and Updated Edition: Exposing Why the Rich Are Rich, the Poor Are Poor - and Why You Can Never Buy a Decent Used Car!

Category: Economics
Author: Tim Harford
All Hacker News 7


by davidf18   2017-08-19
One of the documents is 38 pages and the other is 20 pages. Were there are emotions such as immigration and especially illegal immigration, it is important to provide the data and answer the exact question which I could not see the proper distribution.

“The facts support the application of Ricardo’s theory to immigration. Skilled immigrants lower the wages of skilled natives, and unskilled immigrants lower the wages of unskilled natives. … In contrast, in the United States, which takes in a far higher percentage of low-skilled immigrants than the U.K. does, it is unskilled wages that have stayed low: the income of unskilled workers has barely kept pace with inflation for the last forty years.” -- Tim Harford: The Undercover Economist (2nd ed) p. 30

Financial Times columnist Harford has a BS & MS Economics Oxford

The question is: For people whose parents were born in the US without a high school education and also without a college education, and including those who have no income because they can't get a job is there wage growth or a decrease?

It is economists that state that immigrants who are uneducated displace those citizens who are working class.

by davidf18   2017-08-19
The reason that housing is increasing in cost is because of a market failure where politics is used to create housing scarcity, called "economic rents." In this case, the use of politics to create zoning laws that place artificial restrictions on housing density. As in any form of "economic rents", this benefits a special interest group -- in this case the landlords over the general population of rents and buyers of houses.

In another case of politics creating scarcity was the artificial limit of 13,000 taxi medallions in NYC. Uber/Lyft fixed this scarcity by increasing the supply of taxi-like vehicles while lowering the cost of taking these vehicles. The price of a taxi medallion was $1.2 million prior to Uber/Lyft is now $700,000. With the political restriction on taxi medallions effectively eliminated, the "taxi landlords" lost out and the consumer gained.

London, NYC, DC, Boston, LA, SD, SF and other cities all have these restrictive zoning laws that artificially limit density to increase housing costs.

Economics Nobelest and NYTimes columnist Paul Krugman has discussed this.

Harvard Economist and city expert Edward Glaeser has written extensively on this topic. Financial Times columnist (with a BS and MS in Economics from Oxford) addresses this topic in "The Undercover Economist." He discusses how in the 1930's London had Green Belt (park) surrounding the city installed which has resulted in increased housing prices for landlords. But bad zoning laws that limit housing density has also contributed.

See: Edward Glaeser: Build Big Bill

Tim Harford: The Undercover Economist (2nd Ed). This book has sold over 1 million copies

David Ricardo explained this in 1817. David Ricardo: On the Principles of Political Economy and Taxation

See Ch 2.3 - 2.5

by davidf18   2017-08-19
Krugman doesn't state so explicitly, but the reasons for the high cost of living in Manhattan is because of "rent seeking" a Microeconomics market inefficiency created by using politics to limit density to create artificial scarcity in housing and thus increase the price of housing for new entrants and artificially inflate the cost of housing for existing property owners.

Another reason for the high cost of housing is the overuse of historic landmark status laws.

For more about how to fix the high cost of housing, see Harvard Economist's column:

For more about the explicit Microeconomics, see Tim Harford's fun to read book, "The Undercover Economist"