An important part of your experience in this class is the Everyday Econ Essay. This short essay (no more than 500 words) is designed to develop your skills as an everyday economist. You will choose a principle, or principles, discussed in the course to explain some pattern of events or behavior that you have personally observed, seen on TV, or read in the news. My preference is for the first of these, and many students find it easier to write the essay on something they have personally observed. If you choose to write on something you saw on TV or read in the news, include a detailed reference, including minute marks for TV episodes, so I may find the TV clip or news article. The reference must be from something that originally aired or was published during this semester. The title of your essay must be a question. Your essay will answer that question. If you are wondering what this might look like numerous examples are discussed in Robert Frank’s The Economic Naturalist. Others economic examples from everyday life will be discussed in class. Choose your own, unique example. Your space limit is 500 words. Many excellent papers are significantly shorter. Please do not fill your essay with complex terminology. Imagine yourself talking to a relative who has never taken a course in economics. The best papers are ones that would be clearly intelligible to such a person, and typically these papers do not use any algebra or graphs. This assignment is not a PhD dissertation. You are not expected to do voluminous research in support of your argument, although a relevant fact or two might help convince yourself and others that you are on the right track. It makes no difference whether your topic is “important,” but try, as best you can, to choose something interesting. A really successful paper is one that begins with a really interesting question (one that makes the listener instantly curious to learn the answer) and then uses an economic principle or principles to construct a plausible answer. Your essay must be your own work. Plagiarism will be reported and dealt with according to university policy. Examples: Why do the keypad buttons on drive-up automatic teller machines have Braille dots? (Bill Tjoa) An interesting question! Visually impaired persons can do many remarkable things, but they cannot drive automobiles on public roadways. Keypads at drive- up machines have Braille dots, Mr. Tjoa reasoned, because once the keypad molds have been manufactured, the cost of producing buttons with dots is no higher than the cost of producing smooth ones. Making both types would require separate molds and separate batches of inventory. If the patrons of drive-up machines found buttons with Braille dots harder to use, these extra costs might be worth bearing. But because the dots pose no difficulty for sighted users, Mr. Tjoa concluded the best solution is to produce only keypads with dots. Is this the right answer? The Braille dots on drive-up ATM keypads were in fact a consequence of a Federal regulation requiring them. Perhaps, but so what? For the purposes of the writing assignment, all that matters is that the question posed be interesting and that the proposed answer to it rest on plausible economic reasoning. On both counts, Mr. Tjoa’s response to the assignment clearly succeeded. Why do brides spend so much money on wedding dresses, whereas grooms often rent cheap tuxedos, even though grooms could potentially wear their tuxedos on many other occasions and brides will never wear their dresses again? (Jennifer Dulski) Ms. Dulski began with the assumption that distinctive attire matters more for women than for men on important social occasions. This might strike many as a heroic assumption, but evolutionary biologists tell us that in largely monogamous species, such as humans, distinctive appearance may indeed be more important for women than for men. Precisely the opposite pattern is observed in species in which dominant males take many mates. In those species, bright coloration and other distinctive features are more likely to be found on males than on females. Ms. Dulski reasoned that if men need not wear distinctive clothing on special occasions, a rental company could serve their fashion needs at relatively modest prices. Thus, by focusing on only a few variants of the standard men’s tuxedo, a company could maintain a sufficiently large inventory to accommodate clients of a wide variety of sizes at rental prices that average roughly one-quarter of the garment’s purchase price. If the goal were to appear in distinctive attire, however, it would be necessary to hold an inventory in which numerous different styles were available in all different sizes. Because this would require an inventory possibly dozens of times larger than the corresponding tuxedo inventory to serve a given volume of rentals, a rental price that covered costs would have to be perhaps three or four times a garment’s purchase price. And this, she concluded, is why women buy and men rent. Why are child safety seats required in cars but not in airplanes? (Greg Balet) A mother cannot legally drive her 6-month-old son to a nearby grocery store without first strapping him into a governmentapproved safety seat. Yet she can fly with him from Miami to Seattle with no restraining device at all. Why this difference? In case of an accident—whether in a car or an airplane—an infant who is strapped into a safety seat is more likely to escape injury or death than one who is unrestrained. But the probability of being involved in a serious accident is hundreds of times higher when traveling by car than when traveling by air, so the benefit of having safety seats is greater for trips made by car. Using safety seats is also far more costly on plane trips than on car trips. Whereas most cars have plenty of extra room for a safety seat, parents might need to purchase an extra ticket to use one on an airplane. Most parents appear unwilling to pay $600 more per trip for a small increment in safety, either for themselves or their children. Why do airlines charge much more for tickets purchased at the last minute, yet Broadway theaters follow exactly the opposite practice? (Gerasimos Efthimiatos) In both cases, firms face downward-sloping demand curves and thus stand to gain if they can segregate buyers with high reservation prices from those with low reservation prices. Why would last-minute purchases be associated with lower reservation prices in the case of theater tickets but with high reservation prices in the case of airline tickets? The answer, according to Mr. Efthimiatos, stems in part from how a buyer’s reservation price case is linked to his or her opportunity cost of time. By waiting until the last minute to buy a theater ticket, someone whose opportunity cost of time is high would risk wasting a valuable evening if a seat turned out to be unavailable, and hence his or her willingness to pay a premium for an advance ticket. Although he or she might also be willing to pay a premium to avoid missing a flight, an offsetting factor seems even more important, which is that those travelers whose opportunity costs of time are highest—business travelers, for the most part—tend also to be those who most often need to rearrange their travel schedules to accommodate lastminute contingencies. By making discounts available only to those who are willing to commit to a specific travel schedule well in advance, airlines are thus able to charge higher fares to those business travelers. Most remaining business travelers are made ineligible for discounts by what for them proves to be an extremely effective hurdle— namely, the Saturday night stay-over requirement. Because most vacation trips involve at least a weekend, this hurdle is easily cleared by vacation travelers. But having been away from their families during the week, few business travelers are willing to extend their stay for the weekend just to receive a discount.