Sunday, August 26, 2007
I Doubt this is Still True
by Ken Houghton
So, while I try to gear up again, this note from Tim Harford's Undercover Economist column** in the weekend FT caught my eye:
But would this still be true? One of the glories of the universal scanner technology is its ability to reduce the need for manual price changes on goods.
The corollary has been that stores have been "guaranteeing" that their scanned price will not be greater than the marked price. This is a labor-saving device: prices need not be marked on the goods themselves, but rather only on one or two signs for the shelf.
It does imply some other measures; for instance, "price checks" at the register may be more frequent. But the current effect of inflation on the cost of managing a supermarket undoubtedly should be lower than it was even in the 1990s. If it isn't, the fault lies with the management.
*My productivity appears not to have kept the firm at which I currently consult from laying off a significant number of people—and they have very little direct exposure to the U.S. mortgage market.
**Harford is one of those economists, like the sainted Coyle and the aggrandized Levitt, referenced in this post of Jeremy's as a:
The column title, of course, is the same as the title of Harford's popularization effort.
While Tom is hanging out with senatorial candidates this weekend, I've been recovering from a productive work week.*
So, while I try to gear up again, this note from Tim Harford's Undercover Economist column** in the weekend FT caught my eye:
According to a credible 1990s estimate from the economist Daniel Levy, the typical American supermarket spent $100,000 a year changing the labels on its products: at high inflation rates it would have spent much more.
But would this still be true? One of the glories of the universal scanner technology is its ability to reduce the need for manual price changes on goods.
The corollary has been that stores have been "guaranteeing" that their scanned price will not be greater than the marked price. This is a labor-saving device: prices need not be marked on the goods themselves, but rather only on one or two signs for the shelf.
It does imply some other measures; for instance, "price checks" at the register may be more frequent. But the current effect of inflation on the cost of managing a supermarket undoubtedly should be lower than it was even in the 1990s. If it isn't, the fault lies with the management.
*My productivity appears not to have kept the firm at which I currently consult from laying off a significant number of people—and they have very little direct exposure to the U.S. mortgage market.
**Harford is one of those economists, like the sainted Coyle and the aggrandized Levitt, referenced in this post of Jeremy's as a:
popular economics [writer] [who] ha[s] created a stage in which another economist talking about how much of the world of interpersonal relationships and intrapersonal striving is not, in fact, like buying bananas at the supermarket can be called channeling one's Inner Economist, instead of, well, one's Humanity.
The column title, of course, is the same as the title of Harford's popularization effort.
Labels: Economics, technology
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I think Al Franken is running for the Senate, not for Governor.
Barry
Barry
# posted by 
: Sun Aug 26, 08:28:00 PM
: Sun Aug 26, 08:28:00 PM 
I read about as much of Harford's book as Cowen's, which is to say I didn't finish either, although I found Harford's more interesting reading. (Which I guess is further evidence that I only stuck with Cowen's as long as I did because of expectations.)
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