Shortages in Modern China

The always interesting Adam Minter on the intersection of demographics (sex ratios, migration, urbanization) and economics, when marriage is in view:

It’s a society-wide problem, but particularly in China’s countryside, where sex ratios are much wider, and the lack of affluence drives out young, marriageable women. These twin factors have given rise to what’s widely known as “bachelor villages” — thousands of small towns and hamlets across China overflowing with single men, with few women. Though there’s no definitive study on their frequency, bachelor villages have received widespread attention from academics, as well as journalists. The 2011 study on bride prices cites Baoshi Village in Shaanxi Province, population 1013, including 87 single males over the age of 35. In rural China, where men are expected to marry before 30, those 87 men are likely to remain lifelong bachelors.

How might this problem naturally resolve itself? (I’m not considering mail order brides a “natural” solution, though it is a market solution.) It will be interesting to see what the next generation of families learn from this one. Will families encourage their sons to go to the cities and not stay home? Will there be financial incentive for families to not send their daughters to the cities in search of greater income if it leads to greater difficulty in getting married?

Megan McArdle on Minimum Wage Effects

Lots of good material for discussion in this article, not just about minimum wage effects (see Mankiw, Chapter 6) but perhaps more importantly, about the use and limitations of models in economics (see Mankiw, Chapter 2).

Nor did their study track longer-term impacts on the establishments they did include in their sample. Did more restaurants run into financial trouble over the long run and decide to close down? Did they abandon expansion plans or decide to invest in labor-saving equipment, such as drink stations where customers can fill their own cups rather than having a drink filled by a server? These are the sorts of effects that take years to materialize; if you just stare hard at a short period, you’ll miss them. But if you try to broaden the time period, you run the risk of finding spurious effects that were actually caused by some completely unrelated change in the local laws or economy. The shorter the time period of a study, the more I tend to trust its results — but the less I’m willing to generalize those results to broad statements about the effects of increasing the minimum wage.

Things That Shift the Demand Curve: Expectations

An example from recent news:

Russian consumers flocked to the stores Wednesday, frantically buying a range of big-ticket items to pre-empt the price rises kicked off by the staggering fall in the value of the ruble in recent days.

As the Russian authorities announced a series of measures to ease the pressure on the ruble, which slid 15 percent in the previous two days and raised fears of a bank run, many Russians were buying cars and home appliances — in some cases in record numbers — before prices for these imported goods shoot higher.

The Swedish furniture giant IKEA already warned Russian consumers that its prices will rise Thursday, which resulted in weekend-like crowds at a Moscow store on a Wednesday afternoon.

Shops selling a broad range of items were reporting record sales…