Healthonomics

As I sat down to eat my double cheeseburger with a side of chicken tenders, I wondered what made me purchase a meal I would have almost never bought before college. Sure, the meal was delicious, but after I consumed the pile of meat I knew I had to look into this matter.

Sometimes I want this on Saturday! Photo

My thought process was simple: this was the easiest, most time efficient, and cost effective meal there was. For some reason, Penn State doesn't think East Halls residents want pasta or salad on the weekend—they only want it during the work week. Hm. Well, this leaves us soulless freshman to choose between a fast food style dinner at Flipps, an outrageously expensive microwavable "healthy" meal, or a long, often cold, walk to the more sensible Redifer Commons.

Having blown my meal points last semester (I practically had to live off granola bars that I had in my room),  I ponder the costs and benefits of every purchase on my meal plan.  But why was a double cheeseburger and chicken tenders my cheapest choice? Why does it seem like eating healthy in America is so difficult?

Is my love for donuts the governments fault? Photo

As you may discover if you ever take a macroeconomics course, the government plays a large part in daily processes that we may not even notice. The New York Times explains how the government subsidizes important farm foods and crops, such as corn, soybeans, wheat, rice, sorghum, milk and meat—some of which are found grain-based desserts like cookies and granola bars, which make up a large portion of America's calorie intake. 


Economics Online defines a subsidy as "an amount of money given directly to firms by the government to encourage production and consumption." Subsidies provide both the producer and consumer with added benefits. The producer gets more money and the consumer gets cheaper goods. By this definition we can see how the government can have a direct effect on our eating habits as a country. While cheap and abundant food can be a blessing, our over consumption of unhealthy foods is not. 

The effects of a subsidy. Photo

According to the The Journal of Nutrition, the comparative low cost of cheap foods has turned obesity into a socioeconomic issue. This is a problem that I personally could experience on a small scale with my meal points. I would much prefer to eat a healthy meal, but when the cost of a healthy option is 50-100% more money, I have economic incentive to choose the cheaper option.

What are your thoughts? Should the government change its policies? Or is it not the governments fault, but our own fault? I want to hear your thoughts!

Dog vs. Benjamin

When I was around 10 years old, I begged my parents for a dog. All I could think of was how fun it would be to have a little creature running around the house. I couldn't think of why anyone that loved dogs who would be hesitant to get one. They're just too fluffy.

How can you not love pugs? Photo: vetstreet.com

Of course, this is how I thought before I evolved into a more intelligent being, capable of weighing economic benefit. As you should now know, economics basically refers to how we will distribute and use scarce resources. Money is scarce because none of us really have an infinite supply of it. And yes, pets cost money. Lots of money.

Let me assure you all that I absolutely love animals. I specifically like pugs so much that I've been known to tear up at pictures of them. Still, I didn't let my love of pugs and dogs in general get in the way of my research. After some looking, I found that dogs, on average, cost their owners anywhere from $2600 to $3200 in the first year of ownership alone. Even more surprising is that it's estimated the average lifetime cost of a dog is over $20,000!

You can't put a value on something this cute. Photo: buzzfeed.com

There may also be negative externalities associated with dog ownership. A negative externality is a term used for a negative effects suffered by a third party, as a result of an economic transaction. One such externality could be your dog eating your friend's scone. Your friend doesn't own the dog, but he is negative impacted by your decision to buy the pup. If you add up these hidden costs and negative externalities, you find the true cost of owning a pet.

But here's what I say: who cares?! A dog's worth (especially a pug's) can't be totally quantified. As I previously mentioned, consumers will purchase goods whose benefits outweigh the costs. A dog, at least for me, gives plenty of utility (pleasure). I can still remember the last time I pet a pug and how  it looked up at me and snorted.

French Bulldog. Photo

I think I speak for most of us, when I say that we all appreciate the love, friendship, and fluffiness that canines offer. Even at Penn State you can witness people smiling at the service dogs in training, desperately trying to hold themselves back from petting the little creature. In fact, science proves how beneficial pets are to our health. According to psychologytoday.com, "the likelihood that the non-pet owners would end up being diagnosed as clinically depressed was four times higher that that found in the pet owning people of the same age." They also found that pet ownership helped to decrease high blood pressure for people who experience chronic stress.These extra benefits that dogs have, like when you get happy after seeing a service dog on campus, are examples of positive externalities, or a benefit that a third party receives from an economic decision. And they still don't let us have dogs in the dorms? What a shame. 

Overall, I feel my research shows that the benefits of dog ownership far outweigh the costs. Nothing compares to unconditional love and extreme fluffiness of a dog. 

Liftonomics

Gainz. In this day and age it seems everybody wants them. Increasingly, more people are hopping aboard the "gain train" and finding a new active lifestyle. And no, this isn't some arbitrary guess, the numbers support it! So, sit back and crack open a protein shake and enjoy this blog.

Did you know there's over 34,000 fitness clubs in the U.S. with a total revenue of $24.2 billion in 2014. When you look at the industry on a global scale, the revenue is a over $80 billion!

When I speak of revenue, I am referring to a simple economic concept: revenue is simply the amount of money that firms receive. Do not get this confused with profit! Profit (denoted as π in economics) is the difference between revenue and costs. Revenue minus costs = profit. 

Will we all look like this soon? Photo: daimanuel.com

But let's take a less broad view and look at Penn State. According to the National Collegiate Fitness Index (CFI), PSU ranked number 1 for active lifestyles among large universities. According to Josh Davis, strength and fitness program manager in Campus Recreation, “Campus Recreation offerings together with kinesiology classes provide numerous opportunities for our student body to become involved." And it's true—the amount of opportunities at Penn State from IM sports to the advanced fitness centers make an active lifestyle more accessible. The fact that sports and other activities are more convenient for people to join means more people will join.

An increase in the participation of sports is an example of a key economic driver for an increase in activity levels. What's an economic driver you might ask? It's simply something that might affect a company's revenue or stock price. Other drivers for the fitness industry and specifically Penn State gyms could be the age of the population. Greater numbers of young people are more likely to work out and at college there's not shortage of youthful energy. 

Oh, how we love you PSU. Photo: new.psu.edu

The age of Penn State students might be one reason why our gyms received almost 40,000 visits per week, but as budding economists we want to ask what other factors may be at play.

It's believed that it's us, me and you, who are changing the fitness industry. Millennials have taken a keen liking to "athleisure" brands like LuLuLemon. This clothes which can be used inn the gym or for casual dress make working out more convenient. In fact, the U.S. activewear market grew a staggering 8% in 2013, with $35.1 billion in sales.

LuLuLemon has inspired younger generations to get active. Photo: huffingtonpost.com

This new trend in clothing as well as the use of social media is motivating people to hit the gym. Millennials especially love to partake in communal exercises and then brag about it on social media afterwards. Think about it. When was the last time someone did a Color Run or Tough Mudder and didn't post it somewhere? 

Thinking like an economist helps us explain hard questions like "why are more working out?" and gives a more in depth understanding of the world around us. Thanks for reading and go make some gainz!

Trump's Trade Grenade

Whether you like it or not, Donald Trump is our president and for those of us who know anything about economics, his being our most powerful leader means he has a "YUGE" affect on our economy.

If you've been watching the news lately you might have noticed that President Trump is talking a lot of smack. Just recently, he called for a 20% import tax on Mexican goods. To the layman, this may sound like a good idea. More tax on their goods means more money for the U.S. Right? 

Wrong.

:/

If President Trump actually follows through (who knows what we can believe, but let's just suppose he did) there would be losers. Namely, the biggest loser would be you and me, the consumer. This is because firms would have to pay extra for goods coming from Mexico. To stay profitable, these firms will have no choice but to raise their prices. This means that if you want a Mexican-made good (major car brands for example make many of their cars in Mexico) you will have to pay more money!  Not only that, but when the price of a good increases, consumers will often respond by demanding less of the product (this is represented as a movement along the demand curve, graphically). Consequently, in the simplest terms, everyone from the consumer to the firms is sad. 

When price goes up (to P2), demand goes down (to Q2). Photo via sanandres.esc.edu.ar

Economically speaking, President Trump's audacious tax plans are just not a good idea, and history has proved this to us. You may have heard of the terms "mercantilism" and "laissez-faire." Well, if I were to explain this in a way that won't put you or me to sleep, I would say this: mercantilism is policy where a country exports more than it imports in order to grow its economy. Some European countries tried this from the 16th to 18th centuries. Eventually, they realized it was bad. Then these countries instituted laissez-faire, in which countries can freely trade and it worked! Mr. Trump, however, his spouting ideas that are dangerously mercantilist. 

Let's all wish for his success as our POTUS. Photo via: storypick.com

Let's hope that we don't see these random import taxes come to fruition. I don't know about you, but I wasn't given a small loan of million dollars from my parents. Actually, my parents won't even give me a small loan of 0.000001% of that. So, I don't want my goods to increase in price. I like have as much disposable income (economic term) as possible so I can have as much purchasing power as possible! It's simple economics!