ISET

ISET Economist Blog

A blog about economics in the South Caucasus by ISET
Jun
13

The Economics of Prostitution

When thinking of “market distortions” we typically imagine government regulations, taxes and subsidies that prevent market mechanisms from achieving an optimal outcome. For example, if you pay $100 for a 30-minute taxi ride (as is the case in many European capitals), you can easily relate it to a government regulation requiring all taxi drivers to be licensed (at a very high cost). In the absence of such a requirement many more drivers would be able to enter the taxi driving profession, increasing supply and reducing prices. However, the government is no...
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Guest — Saba
First of all thank you for your comment. So you mentioned about possibility of increased demand, I agree that it might "activate" ... Read More
Sunday, 15 June 2014 6:06 PM
Guest — Simon Appleby
Legalisation of prostitution in many Australian states lead to a huge increase in demand; once it was no longer unlawful to be a c... Read More
Saturday, 14 June 2014 11:11 AM
Guest — Saba
The same arguments can be applied to men's prostitution as well. However, to be honest I talked only about women's prostitution be... Read More
Monday, 16 June 2014 10:10 AM
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Jun
02

Pawnshop Mentality

“Jewelry you can pawn whenever you encounter financial difficulties", we were told by a friend. In our circles of acquaintances there are quite a number of people who enjoy the services of pawnshops. The reasons range from renovating apartments, paying tuition for children, and buying new hi-fi systems for the car, to repaying the 1000 lari that the 18 year-old son had lost in gambling. According to a survey of GeoStat (which accounts for all figures provided in this article), in 2013 the annual interest rate on pawnshop loans was 54,1%. For loans denomi...
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Guest — Helene Ryding
Makes microfinance look cheap doesn't it?
Monday, 02 June 2014 5:05 PM
Guest — Eric Livny
What about a typical pawnshop loan term? I would think that people use pawnshops ("lombardi") in an emergency for extremely short-... Read More
Tuesday, 03 June 2014 8:08 AM
Guest — Maya G.
You are right Eric, but in some cases "lombards" are the only source for financing HHs needs and not for only short-term. Rural po... Read More
Thursday, 12 June 2014 3:03 PM
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Apr
25

Georgian Churchkhelas: Thinking Out of the Traditional Box

These are Georgian churchkhelas, a kind of national candy made from a string of walnut halves dipped in grape juice thickened with flour (Tatara or Phelamushi), and dried in the sun. There are essentially 2-3 kinds of Churchkhela. Somebody may be better in making them, somebody worse, but all in all, it is the same stuff sold all over Georgia. These are the Turkish analogs. If you have been to Istanbul’s Spice Bazaar, you will know firsthand that there is a much greater variety – both in terms of nuts and the fruit one uses to make the “sauce”. Also the ...
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Guest — RT
https://www.tenthousandvillages.com/ This is a chain of stores in the U.S. that sell all kind of hand-crafted items. E.g. coasters... Read More
Friday, 25 April 2014 6:06 PM
Guest — RT
Turkey's economy made a sharp jump after the 2001 crisis. Are you implying that Turkish sujuks did not exist until then?
Sunday, 04 May 2014 10:10 PM
Guest — Lasha
What you leave out of consideration is perhaps a demand side. In countries with high consumer confidence and strong demand (US, Ja... Read More
Thursday, 01 May 2014 1:01 PM
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Dec
23

The Educational Choices We Make...

Like many, I like having more choice, but hate making choices. As a result, many of the most important choices in my life, including the choice among alternative partners, have been made for me by … others. A 2010 New York Times article Too Many Choices: A Problem That Can Paralyze describes the findings of an experimental study by Sheena Iyengar, a Columbia Business School professor, which suggests that the problem of choice is indeed much more complicated than the standard textbook “truth” we are teaching ISET economics students. Here is how the experi...
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Guest — Lasha
Just love Introduction. From that convincing example, it is clear that with so many options to choose from, people find it very di... Read More
Monday, 13 January 2014 7:07 PM
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Dec
13

On Imitation, Forbidden Fruits, and Sour Grapes

For many observers, the Georgian job market is a mystery. Companies are bitterly complaining about a lack of engineers, forcing them to withhold the expansion of production capacities and to cut down investments. Yet Georgian young people, who could make good fortunes by studying technical subjects, prefer to learn law, business administration and the like, qualifications that are oversupplied in the market and on average do not yield high salaries. Young Georgians, lacking information on what sells well in the job market, apply a simple decision rule ca...
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Guest — Jeff
Have you read Thinking Fast and Slow?
Friday, 13 December 2013 8:08 AM
Guest — Zak
Interesting, especially the visualization. The argument has been round for quite some time now, however, what I have not thought a... Read More
Friday, 13 December 2013 9:09 AM
Guest — Florian Biermann
One should not take the graph too seriously. It is obviously not a scientific article and not a scientifc diagram. Our diagram is ... Read More
Friday, 13 December 2013 2:02 PM
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Dec
06

Location Games

One or two years ago, a Lavazza’s take-away coffee shop opened on the side of Georgia’s east-west highway in the area of Zestaponi. You always could find plenty of coffee shops in Tbilisi, but it was a novelty to have them next to the highway. Soon afterwards, another coffee bar opened along the road, and surprisingly, it was again set up close to Zestaponi. And today, there are even more take-away coffee points along that road, and they all cluster at Zestaponi. Travelling from Tbilisi to Kutaisi or Batumi, you will notice other such clusters. You can b...
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Guest — Florian Biermann
Indeed, in this article we abstract away the price as a decision variable. In that way, we arrive at Black's Median Voter model, a... Read More
Friday, 13 December 2013 6:06 PM
Guest — M
Yes, they still go to the closest vendor. But that doesn't mean that the two vendors are at the same location. Bit puzzled that Ho... Read More
Friday, 13 December 2013 5:05 PM
Guest — Florian
As long as the customers buy at the vendor who is closest, the result does not change. When the "transportation cost" are quadrati... Read More
Saturday, 07 December 2013 4:04 PM
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