Thursday, October 30, 2014

Halloween can pick up Our Economy

Alyssa Van Altena
Mr. Reuter
Economics
25 October, 2014
Halloween Can Pick Up Our Economy
Halloween is one of those holiday’s that you either love or hate, but no matter your opinion it has a great impact on the economy, halloween is expected to bring in $7.4 billion this year and has brought in billions each year in the past. We can assume that those who have embraced it, have spent thousands on it, just for the thrill of one night. Every year stores fill their shelves with some of the best candy, funny and scary costumes, along with every type of decoration you could possible think of.
We know that stores usually have a massive supply of anything halloween but they know that the demand is always going to be high. The last couple of years spending has been down, because of the economy, but this year will be different. As finally consumers are saying that the economy is not going to impact their spending. This year only 19% of consumers say that the economy will affect their halloween plans, compared to last years 25%, which is the least since 2009.
Costume sales are a major aspect of halloween, and make up 40% of the total sales. Everyone is getting costumes, from adults to children, even to animals. It is expected that retailers will bring in $1.4 million from adult costumes and $1 million from childrens costumes. This year 75 million adults are planning on dressing up, while 14% say they will dress up their pets, with a total of $350 million in sales of just pet costumes. Half of the people buying costumes will purchase them at stores such as Walmart and KMart. These stores thrive on providing cheap, yet popular costumes in order to satisfy their many different customers. Also one third of the people purchasing costumes will visit popular halloween stores such as Party City. Each and every retailer wanting to sell their halloween items have the goal of catching the “shoppers' eyes with fun and festive spots promoting costumes, candy and savings” (Rodriguez). Many of you will admit that you have tempted before by these retailers techniques.
Candy sales are yet another huge aspect of halloween for retailers, as 41 million trick or treaters are expected each year between the ages of 5 and 14. Not only do retailers have to sell the candy, it has to be produced by large companies such as Nestle. This is huge as they anticipate large earnings and make more and more product each year. Since there is high demand, businesses are willing to supply more of the candy, but they must still keep the equilibrium price fairly level as they know that they will lose business if they raise the price too high.
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Other attractions of Halloween are haunted houses and pumpkins. Each year haunted houses bring in $400 million to $500 million in ticket sales. The owners of these haunted houses spend at total of $50 million on supplies, the money is then being put back into the economy through them. If you don’t like the scary side of halloween you are probably the pumpkin kind of person. On a goodyear pumpkins can bring in about $113 million into the economy. This can be a difference maker for many farms that thrive on these kind of sales.
Halloween parties are yet another major impact on the halloween economy, because those who throw these parties go all out from the decorations to the food and beverages. To them halloween is the best time of the year and are constantly planning and thinking of ways to make their party one of the best and beat last years. I know one of these families, and over the years they have filled their basement with endless boxes of decorations. They decorate their garage excessively, just for one night every year when they host a party. This year they are even building a temporary extension onto their garage, so it can hold more people and of course food! For them the benefits always outway the cost, making the opportunity cost of Halloween positive and anything halloween is always inelastic.
The economy is coming up and people are willing to spend the money on things such as specialty chocolates, which in return is helping the small businesses, which is talked about in this video. https://www.youtube.com/watch?v=Ki4Na64f5nI
In the end halloween lifts our economy, by getting money into it, so even if you don’t like the holiday, it is still a huge aspect in restoring the economy. You can also take into account the fact that the average person is planning on spending $77.52 on halloween, so we can also see that more money is in consumers hands and that the economy is on its way up.




Works Cited
"Discount Halloween Costumes from SPooKY HaLLoW - Www.CostumeHunters.com."Halloween Costumes Buy Discount: Costume Hunters. N.p., n.d. Web. 25 Oct. 2014.
"Economic Impact of Halloween on Businesses." YouTube. YouTube, 30 Oct. 2013. Web. 26 Oct. 2014.
Fottrell, Quentin. "How Halloween Candy Explains the Economy." MarketWatch. MarketWatch, Inc., 31 Oct. 2013. Web. 25 Oct. 2014.
"Halloween 2013 By The Numbers: A $7.6 Billion Treat." Forbes. Forbes Magazine, 31 Oct. 2013. Web. 25 Oct. 2014.
"MetamorFit." MetamorFit. N.p., n.d. Web. 25 Oct. 2014.
Mont, Joe. "Halloween Tricks Bring Economic Treats." The Street. The Street, Inc., 07 Oct. 2011. Web. 25 Oct. 2014.
Petrecca, Laura. "Halloween to Scare up Big Bucks for Retailers." USA Today. Gannett, 19 Oct. 2014. Web. 25 Oct. 2014.
Rodriguez, Ashley. "Halloween Shoppers Will Buy More Costumes Than Ever in 2014." Advertising Age CMO Strategy RSS. Advertising Age, 17 Oct. 2014. Web. 25 Oct. 2014.
"The Real Cost, and Value, of Halloween Is More Than $10 Billion." 247wallst.com. 24/7 Wall St., 29 Oct. 2012. Web. 25 Oct. 2014.


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The Fall of Caribou Coffee

October 26th, 2014
Katelyn Mistele
Economic A4
Reuter


The Fall of Caribou Coffee


Next time you want to indulge in a caribou coffee house blend served directly to your car from the drive through window, or you want to treat yourself to a specialty drink, maybe the s’mores white chocolate mocha, think again. Caribou Coffee closed 80 of their locations last May, and decided to rebrand 88 other stores within the next 18 months. If you want to get your Caribou fix, you may need to travel to great lengths because of the recent downsizing of the company. This downsizing however, was the most economically wise decision as Caribou was no longer able to compete with top coffee market competitors.
In 2012, Caribou Coffee was bought out for $340 million by a private German company which happens to also own Peet's Coffee and Tea. In the best interest of the Caribou brand, and the ability for long term growth, it was decided that over 160 stores would either be cut or rebranded to Peet’s Coffee. This decision affected 26% of Caribou’s underperforming stores.


Caribou Coffee has always been a unique brand but never could keep up with other coffee suppliers, and never came close to competing with the biggest supplier of all: Starbucks. Starbuck’s controls most of the coffee market operating in many states nationwide, but the market still runs virtually laissez-faire. Starbuck’s brand yet that is on it’s way to potentially someday becoming a monopoly but there are many other coffee supplies that still have a big presence in the US. Other coffee brand’s may look to Caribou however, and choose to do the same thing and downsize their companies.




Caribou coffee now still owns 468 locations that are open and operating, and these are centered mostly in Minnesota, in the Minneapolis regions. Other states that still have Caribou include, North and South Dakota, Iowa, Western Wisconsin, Kansas, North Carolina, Colorado, and is still present in ten markets internationally. So, no fear, Caribou’s brand is not dying yet! By downsizing Caribou was able to compete and control smaller markets, like in Minneapolis where they virtually run the coffee market.
But the demand for Caribou Coffee has not diminished. Consumers took the closing of locations to heart, especially those in Illinois. Illinois used to be home to 60 Caribou Coffee locations which are all no longer under the same brand, and consumers are angry because they favorite coffee drink is now scarce and only available in certain states, Illinois not being one of them. Consumers also took the downsizing of the company to social media, where they complained about the closing of their favorite coffee store. Other consumers were angry at the short notice the company gave because they still had gift cards they needed to use. The supply of Caribou may have shifted westward, from the original midwest stores, but the goods online are still and will continue to be highly available and accessible to those consumers with gift cards.
So was rebranding and downsizing Caribou a good idea? Personally, I think it is a good idea in a sense that Starbuck’s owns most of the market. How can a company compete with Starbucks generates annual a great growth percentage revenue wise, and in operating income?


They can’t. I however, did enjoy Caribou more so than Starbucks, and I still believe that the company benefitted by selling their company. As well I think the private new ownership was wise in the new approaches to the business because Caribou can not longer compete with top stores, but Peet’s does have a chance as it was super popular in the west and they did slow their store growth for some time to focus on the quality of their company, so hopefully the infusion of stores nationwide will begin to defeat the reign of Starbucks.




Caribou isn’t gone! In fact there are still store operating in western Wisconsin. It was a sad day when over 160 stores were no longer the familiar Caribou brand, but it was an economically wise decision to do so.




Bibliography













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Unexploded Ordinances

Visaya Phattaphone
Mr. Reuter
Economics
October 15th, 2014
Unexploded Ordinances


Look at the picture above. Beautiful isn’t it? Welcome to Laos, a landlocked country in the heart of Southeast Asia. With a population over 6 million people, Laos is a country that is gaining attention in the international community through increased tourism but also through a dark secret: unexploded bombs.
In 1954 after gaining independence from France, all of Southeast Asia saw a new threat loom on the horizon. The threat of Communism. Vietnam was the first nation in the region to assume a communist regime and it would be this regime that would eventually control all of Southeast Asia. In an attempt to stop said regime, The CIA and US military forces intervened and created South Vietnam and the Royal Lao Army in the late 1950s. Eventually the Vietnam War began and Laos was induced into the conflict. In the mid 1960s following JFK’s assassination, President Lyndon Baines Johnson assumed the presidency and would become the president who would escalate the Vietnam War. Between 1964-1973, Johnson would authorize a massive bombing campaign in an attempt to destroy the Ho Chi Minh Trail and ultimately win the war through this superior air power. Many of explosive ordinances dropped on the Laotian countryside range from mortars and landmines to cluster munitions. In total, by the time the Vietnam war ended nearly 200 million tonnes of bombs along with 266 million cluster munitions were dropped on Laos with 30% of the cluster munitions failing to detonate. In fact, since so many bombs were dropped on Laos, the final bombing run total would come to one bombing run every 8 minutes for 24 hours for 9 straight years.
With all this history, how does it all tie to economics? The Laotian economy to this day is attempting to grow thanks in part to less restriction from the communist government but . The problem lies within the reality that economic growth cannot occur with all of these UXO’s littering the countryside. Every year, villages that attempt to develope are halted with the threat of UXO’s. There’s also a parallel between the 42 poorest districts of Laos along with the areas hardest hit by UXO’s Families are impacted because many practice agriculture and rice farming and typically the father or the head of these families are injured or killed resulting in a lowered GDP Per Capita for any family. The average GDP per capita is $1,645 and may be forcasted to decrease even further with such a threat. There’s also a tremendous negative externality from all of these UXO’s. Families will also show a tendency to suffer from the Income effect. Families will suffer from an income effect because the majority of their income will be directed towards taxes and paying for quotas for their crops instead of sending children to school. Luckily there are some positive externalities to this situation. Since 1996 when the government of Laos initiated UXO clearance programs, a market for scrap metal has developed and has resulted in cheap available housing for families. Another market for prosthetic legs have developed from this situation as well.



Bibliography


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The Economics of Video Games

Paige Frick
Mr. Rueter
Econ
26 October 2014
The Economics of Video Games
Video games are one of America’s greatest pastime from children to adults. Over half of Americans own at least one console, from a Nintendo DS to an Xbox. There are so many different gaming consoles and so many platforms to play a game on. Many platforms exist, which include the more popular gaming consoles, like the Xbox, the computer, and the mobile device. Mobile gaming has become very popular as well, and at least every smartphone has a game or two on it. Apple’s app store makes millions on selling games, like Flappy Bird. Millions of copies of games are sold every year and it impacts the economy. From the early 2000’s, video game production and has increased greatly, and as more games are being sold because of how many people own consoles and how many games are being released. Although, many video games can be expensive, and the cost of all these video games piles up, people still  buy the latest video game. As the demand of video games continues to increase, the supply also increases.
The impact that the video game community has on the economy is greater than one would think. The video game industry creates many jobs, which is a positive externality. In the United States more than 120,000 people are employed and earn salaries up to $90,000 a year. While other companies have been laying off their employees due to budget concerns, the video game industry has created more jobs in the past years. Youtube gamers also have a big role, too. Many gamers who upload content of themselves playing a new video game adds to the popularity of the certain game as well as Youtube gamers being able to make a living playing video games. This way of making a living encourages many people to put their content on the internet and promote the games.

According to the study “Video Games in the 21st Century: the 2010 Report”, video games have add almost 5 billion dollars to the United States economy back in 2009. Also, the study showed that the video game community’s growth rate from 2005 to 2009 was more than 10 percent; seven times the growth rate of the economy of the United States. California, being the state to produce the most video games and the state that is most involved in the community of gamers has greatly impacted the growth of the economy. California added $2.1 billion dollars to the United States economy. The revenue of the industry had doubled, and at the same time the United States Gross Domestic Product had only grown about 16 percent. Also, the industry had added almost $5 billion dollars to the Gross Domestic Product back in 2009.  So, from an economic standpoint, the video gaming community really does impact the economy - producing employment opportunities and adding billions of dollars to the growing economy of the United States.




Works Cited

"The Entertainment Software Association." - Games: Improving the Economy. N.p., n.d. Web. 26 Oct. 2014.
"Video Games Impact the Economy More Than You Think." CNBC. N.p., n.d. Web. 26 Oct. 2014.
"Game Industry Adds Billions to U.S. Economy." Msnbc.com. N.p., n.d. Web. 26 Oct. 2014.





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Catch the Hallyu Wave

Megan Johnson
Economics
Mr. Reuter
24 October 2014
Catch the Hallyu Wave
When you hear the phrase “K-Pop”, what do you think of? Most people would either answer with an “I don’t know” or something along the lines of “You mean like Gangnam Style?”. Of course, there is nothing wrong with knowing very little about this foreign idea of music and culture. However, I would like to encourage you to keep an open mind as we delve into the growing culture that is the Hallyu Wave.
First off, I should explain to you what the “Hallyu Wave” is. The Hallyu, or Korean Wave, is an expression that explains the South Korean culture’s surprisingly vast increase in popularity that started in the 1990s. This “wave” has been attributed to many aspects of Korean culture, but the biggest, and arguably the most popular, is K-Pop. K-Pop, shorthand for Korean pop, has been around since the early 90s, but has recently started to gain popularity. And it doesn’t mess around, either. “South Korea is now the 11th biggest music market in the world… rak[ing] in over $187 million in 2012…” (Ryssdal).
Now, before I go any further, I must explain the seriousness in which Korea takes their music industry.  On the contrary to America, with a very “do it yourself” feel and a love for stories where artists come from nothing, Korea has a method which many tend to call fabricated. In Korea, every artist comes from an entertainment company, under which they train for an average of two to five years before they even debut. They are then advertised and promoted like crazy by their company, in an attempt to create a fanbase for them. There have been many debates among fans over whether or not this method is just, but I’ll leave you to chose a side for yourself.
So then, why is a small, seemingly insignificant country, making so much money from just one industry? It’s all in the supply and demand. Companies are coming out with new rookie groups all the time, and those groups, combined with the older, very successful groups, create a lot of fans. These fans make up the consumers. The “consumers” then “demand” product out of these artists, like CDs, merchandise, and concerts, in turn making the fans fork over vast amounts of cash. This is because when the demand increases, the prices rise, and the supply also increases.
The question then arises, if South Korea is such a small country, why does their music industry create so much revenue? This is primarily because of how international K-Pop has gotten in the past few years. This Westward expansion of sorts has caused a whole new world of consumers for the K-Pop industry. American fans have spiked the digital downloads, and created many opportunities for Korean groups to advertise and perform in America. Take 2NE1 for example, a girl group under YG Entertainment (the second largest company in Korea) that debuted in 2009. They recently partnered with Microsoft, and now their song (whose music video now has over 100 million views), is playing in every living room across the country.


In short, the Hallyu Wave is starting to become more and more mainstream, thus helping Korea’s economy grow substantially. And who knows? Maybe in a few years K-Pop will be a normal occurrence on the radios right here in the US.







Bibliography


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Tuesday, October 28, 2014

Painful Truth of the Women’s World Cup

Jackie Godden
Straub B3
Economics
27 October, 2014
Painful Truth of the Women’s World Cup
Every four years the world’s best women soccer players from from across the globe battle to earn their country the FIFA Women’s World Cup. The first Women’s World Cup was in 1991, and in 2015 Canada will host the seventh tournament. The upcoming tournament is far different than the past; the 2015 Women’s World Cup will be played on artificial turf. Athletes everywhere are furious about the Canadian Soccer Association's decision and FIFA’s approval. Playing on artificial turf is far different than playing on grass. A survey conducted by FIFA found that 77% of female players think all matches at a major tournament should be played on natural turf. The marginal cost of playing on artificial turf is far greater than the marginal benefit.
United States Women's National Team players claim the game is totally different on artificial turf, and leads to many negative externalities. Megan Rapinoe says, “It plays totally different,” and fellow midfielder Shannon Boxx says, “It’s not the same game.” Playing on artificial turf increases chance of injury. Star of the U.S. Women’s National team Sydney Leroux used twitter to express her anger about the CSA and FIFA’s decision. She tweeted a picture of her scraped, bloody, and turf-burned legs. Other athletes spread the picture in support. Kevin Durant tweeted to show his support, Colin Kaepernick spread it on instagram, and Tom Hanks tweeted his opinion. turf2.png
kevin-durant-facebook-post-good.jpg
Sure, artificial turf has its advantages; it requires no maintenance and upkeep. But the truth is that artificial turf causes more negative externalities than positive externalities. The Canadian Soccer Association released that hosting the FIFA U-20 Women’s World Cup in 2014 and the Women’s World Cup in 2015 will bring in $337 million. Creating natural turf fields would increase expenses, but it would end the conflict.
A FIFA world cup has never been played on artificial turf before. Men’s teams never have, and probably never will play a world cup match on artificial turf. Women’s teams are outraged at the inequality. Fifty of the world’s best womens soccer players from around the world have joined together and obtained legal counsel to fight the inequality. The women demand that natural grass be installed. Fixing this problem could be as simple as laying sod over the artificial turf, like it has been done in the past. Is $337 million dollars really worth injuring the best athletes in women’s soccer?
The Women’s World Cup should not be played on artificial turf because it increases the chance injury and changes the game. Artificial turf increases chance of concussion and ankle sprains, and causes turf burns and turf toe. It also reaches painfully hot temperatures. Female athletes deserve the same rights as men. The opportunity cost to achieve equal rights might require female soccer players suing FIFIA, and possibly a strike.
FIFA and the CSA should consider marginal benefit and marginal cost of playing on turf. Less maintenance is not worth increased injuries and angry athletes. They should also consider the marginal cost and marginal benefit of creating natural turf fields for the tournament. Placing sod over the artificial turf is worth the price considering it would reduce injuries and end this conflict between athletes and FIFA.





Bibliography:

"United States women's national team stars not backing down on stance vs. artificial playing surfaces." FOX Sports. N.p., n.d. Web. 27 Oct. 2014. <http://www.foxsports.com/soccer/story/uswnt-stars-not-backing-down-on-stance-artificial-playing-surface-2015-womens-world-cup-091014>.
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