In honor of the interview with the charge of price controls in the Ministry of Economy, and in honor of the new ideas of the Minister of Finance, comment on price controls. In fact, the bread, used stainless steel tables the product that was the heart of the latest used stainless steel tables scandal, is the classic example. Despite its symbolic meaning, citizens of Israel used stainless steel tables in general, and in particular the poor citizens of Israel, not that consume bread. In 2011, the lowest fifth of Israel took the bread and sixty five cents shekels a month. This amount constitutes 0.3% that year (in words - three tenths of a percent) of the total expenditure on food of households in the lowest, and 0.06% (six hundredths of a percent) of the total expenses. Some just helped them Supervision of bread?
And now the more general point. Mental exercise: Price control ceases to be an abstract concept, used stainless steel tables and becomes a concrete policy step. You Monitm be responsible for price controls, and you should not have any political constraint. Nothing. What you say - going. What price insert supervision? I do not even ask what price you set for them. Only some products. To assist used stainless steel tables you in the decision, see this link:
Notice also that the definition of the kind of product entering the supervision of products is even more narrow category expenditure surveys that show, that the decision in fact even more difficult than that this link reflects. Now, I have no particular problem with intervention in market prices, and I'm not going into all the arguments on the subject of price control (and touch wood, there). I want to say only one thing: a quick look at the enormous diversity of the consumption basket of households in Israel, used stainless steel tables even of poor households, showing some price controls is a step hopeless struggle used stainless steel tables for the cost of living. Consumption basket so varied, it is impossible to really help someone by the choice of some products and income used stainless steel tables supervision. For such a step would be meaningful oversight should put dozens of products. Lapid's new proposal is not that detailed, serious and calculation of its impact must take into account all kinds of elasticities of substitution, but it can be done short back of an envelope calculation, under extreme assumptions. If prices of all products listed solutions Torch (canola oil, whole wheat bread, yogurt, dairy desserts, used stainless steel tables soy milk, frozen vegetables and toilet paper. By the way, soy milk ?!) will be reduced fifty percent, and if any of their products in each category also will be reduced fifty percent (that is, if "canola" discounted fifty percent, then all category "sunflower oil, corn and other" Tosel fifty percent if "wheat bread" then all category "special bread", etc.), used stainless steel tables households in the lowest save - are you sitting? - 54 dollars a month, which is about half a percent of the total expenditure of households in this. Households in the fourth, which is a kind of middle class, will save 82 dollars a month (which are, incidentally, about half a percent of total monthly expenditure). If you are tempted used stainless steel tables to think for a moment that NIS 54 or 82 it's actually a lot of money (although it's not. It's used stainless steel tables half a percent of the total monthly expenditure), remember that even this is accepted only under very extreme assumptions. In reality, of course, the effect will be much lower. Sometimes it seems I just share the public if the salaries of those deliberating what to bring to supervision and some mail will cost it would make a more or less similar.
Once trying to think seriously about price controls, which means looking at what people really want to know consume, and think concretely what can be done, it is difficult to avoid the conclusion used stainless steel tables that it is simply not serious policy step. Not particularly bad, not particularly well. Especially used stainless steel tables serious.
Facebook, Omer Moav makes a convincing my opinion, that for a given average price, volatility in the price of a particular product actually used stainless steel tables good consumer. Big, because used stainless steel tables it can respond to price changes - to buy a little less as expensive, buy a little more as cheap. Therefore, anyone who thinks that supervision of consumer goods prices can benefit consumers by reducing the volatility probably wrong.
This successful application of consumer theory famous result, used stainless steel tables straight from page 56 Bmskoll (canonical book advanced economic studies). According to this result, under fairly general conditions, take Conditioning used stainless steel tables - indirect utility function is quasi-convex in prices. Probably already understand, but just in case it is clarified: The argument is that if two vectors of prices give the same benefit indirectly, then the vector which is a linear combination of these two vectors will give a lower benefit. Yes, I know. If there is a caricature of an economist everyone enjoys beat her, it is the economist who thinks in those terms to the world. But, believe it or not - this is exactly the argument of Omar.
Do thoughts of quasi-Konooksiot stood before him of Omar when he explained the matter? I do not know. Maybe, maybe not. But either way, this is an example where good knowledge of mathematics provides used stainless steel tables useful intuitions, and my personal experience - intuitions used stainless steel tables remain long after I almost forgot the math. And another thing: how many people have tried to challenge the validity of the argument, for example, claiming that require off cucumbers tomatoes are perfect substitute (does not matter). Anyway - that's not true. Do not need this assumption at all. If anyone wants to know what are the conditions needed to this claim will be correct, it can access to meet 56 Bmskoll and test. Strictly transparent.
15 Comments on Exercise price controls
That's right. Product portfolio consists of so many effective products in order to produce the amount of expenditure in terms of average weight have relatively extensive inspection system. Unless the problem is not with the manufacturers but few are marketing our client and their apparent can be treated. Only apparent because it is not at all simple.
Listen, used stainless steel tables been a while and certainly it's me, but what I remember preferences are convex say that it was preferable to linear combination (ie high benefit). used stainless steel tables Because of declining used stainless steel tables marginal used stainless steel tables utility you prefer a basket with 2 tomatoes and 2 cucumbers on the basket used stainless steel tables with only 4 tomatoes or cucumbers basket with 4 only. But maybe I do salad (ha! Trying to compete with soy milk joke regulated) and I do not understand the solution of school
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