Sociology 125
Lecture 8
Tuesday, September 28
Consumerism
Extra Film showing of films this week
Because of the problem of the film showing Monday night, there will be extra showings on
Wednesday & Thursday at 7:15 in room 1310 Sterling Hall. The film Shop‘Till You Drop
will also be shown as a second film next Monday, October 4. The film, Taken for a Ride
can be viewed on Google Videos at:
http://video.google.com/videoplay?docid=-2486235784907931000#
Four issues raised in emails
1. Time horizons & intergenerational
externalities.
2. Skepticism about global warming
3. Alternative explanations of U.S.
transportation system
4. Positive externalities and the price of
transit tickets
Positive externalities & ticket prices
1. Suppose: (a) the direct costs of a ride = $3, and (b) there
is some kind of negative externality = $1/ride
2. Then the true cost per ride = $4
3. To cover these costs, the ticket price should be $4, not $3.
4. Now suppose: (a) the direct costs of a ride = $3, and
(b) there is some kind of positive externality = $1/ride
5. Then the true cost per ride = $2
6. So, the ticket price should be only $2
7. But the transit company has spent $3 in direct costs to pay
for the ride.
8. Therefore the society has to somehow pay for the $1 of
value everyone receives to reimburse the transit company
for providing the ride.
Big Take-Home Message
from lecture on Transportation
For the free market to enable people to make efficient choices
two things must be true:
1. There are no significant externalities – positive or negative –
to your individual choice: what you chose does not affect
other people.
2. The full range of feasible alternatives from which to make
your choices can itself be provided by the market.
Transportation violates both of these principles:
People will make very different private choices depending
upon whether or not there exists a good, efficient, cheap
public transportation option, but the market itself can
never provide this even if it would be economically efficient
to do so.
Definitions
Consumerism: The belief that
personal well-being, happiness and
status depend largely on the level
of personal consumption,
particularly the acquisition of
material goods.
Hyper-consumerism: the frenetic
pursuit of consumer goods
Growth in median size of new home construction in the U.S., 1963-2007
2400
2200
2000
Square 1800
Footage
1600
1400
1200
1963
1967
1971
1975
1979
1983
1987
1991
1995
1999
2003
2007
% of new home
construction
45
40
Over 2500
square
feet
Over 2,500
square feet
35
30
25
20
15
Under 1,200 square feet
10
5
Under 1200 square feet
0
Construction of Small & Big houses, 1973-2005
What is wrong with consumerism?
What is wrong with consumerism?
1. There are big negative externalities from
consumerism
2. Consumerism in fact does not make most
people happy
3. There are systematic biases in the system which
generate consumerism. If these system-biases
were eliminated, many – maybe most – people
would adopt a less consumerist life style.
System bias #1:
Profit maximizing strategies
2 weeks of time
1 week of time
System bias #2:
Market-failures in leisure
400
9 weeks
350
Number of hours
more per year on
average that
Americans work
than people in
other countries
300
6 weeks
250
200
3.4 weeks
150
100
50
.5 weeks
0
Japan
UK
France
Germany
The percentage of workers who would give up different
proportions of a future pay raise for additional leisure?
50
40
30
20
10
0
Nothing
40% of pay
raise
70% of pay
raise
100% of pay
raise
From Juliet Schor, The Overworked American, p. 130
United States
Ireland
Switzerland
Norway
U.K.
Sweden
Spain
France
Finland
Belgium
Austria
Portugal
Denmark
Netherlands
Germany
Italy
0.0
1.0
2.0
3.0
4.0
5.0
weeks of paid vacation
6.0
7.0
8.0
System bias #3:
Changing reference group for
consumption norms
System bias #4:
Credit cards
System bias #5:
Rising inequality increases
consumerism
System bias #6:
Abandonment of public
consumption by affluent