What if electric vehicles were the new status symbol? People who could afford to get a new car would consider buying an electric one instead. On the other hand, people who are less likely to make such a change immediately would be curious to try out the popularity-struck option and plan their purchase. Economists describe this mechanism as signaling as it signals people to buy a product when in fashion.

When green is the new gold, people become less hesitant to get their hands on it regardless of their concern for the environment. …

With industrial development, technological advancement, and globalization, markets have become more concentrated and less competitive. Further, excessive regulations, or the lack thereof, play a part in increasing concentration. Evidence on markets and firms suggests that while the concentration of power has increased in the United States and Japan over the years, European firms follow a relatively mixed market structure. (OECD, 2018)

The microeconomic theory of market structures provides an analysis of the concentration of players in an industry. It does so by comparing their prices, outputs, and profits. …

Why are some nations rich and others poor? These inequalities — whether economic, social, or political — are the by-products of many inequities persisting in the under-developed and developing economies.

In an essay titled Economic Development with Unlimited Labor Supply (1954), Arthur Lewis, a development economist, employed the Classical assumptions of unlimited labor supply at subsistence wages to conceive rural-urban dynamics. This assumption explains the condition of surplus labor to achieve economic development in Marxist literature. It makes for a fundamental presupposition to formulate this model of distribution, accumulation, and growth.

An under-developed economy is, primarily, agrarian society with an inept industrial and manufacturing sector. All the labor force engaged in the agricultural sector work as farmers, casual laborers, or retailers. Resources and capital are scarce as opposed to an unlimited labor force, bringing down the marginal productivity. Disguised unemployment is another feature of such agrarian economies. …

While the root cause of crime is a topic of perpetual debate, the increase in criminal activity in a polity is usually associated with a downturn in the economy. This correlation is not accurate at times. Even if it is, the causal relation is spurious.

According to Pew Research, post-1990s, there has been a decline in violent and property crime rates in the United States, even during the 2006 financial crash and recession.

In the book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, the authors analyze the decline in crime rates in the 1990s as a result of the Roe v Wade judgment of 1973. …

This piece is a follow-up to my previous article, An Economy Made of Tobacco, that provides context to the existing problem to which this article attempts to provide the solution.

“Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which have become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.” (Adam Smith, 1776)

As Adam Smith reasons the suitability of taxation in his well-known book, An Inquiry into the Nature and Causes of Wealth of Nations, why do nations hesitate and find it too hard to follow this philosophy?

Economists, and in general, free-market enthusiasts, argue against taxes as it creates distortionary effects in the market and interferes with consumer sovereignty. However, the notion of consumer sovereignty does not apply in practice as the strong background assumptions of rationality and perfect knowledge do not hold. Further, when the consumption of such habit-forming-products impacts health, in the long run, intervention is required. …

Known for its manufacturing-led growth, remarkable demographic dividend, and an austere One-Child policy, China is the largest producer and consumer of tobacco in the world. According to the World Health Organization, while there are more than 300 million smokers, about half of adult men smoke. It results in more than 700 million people exposed to second-hand smoke, causing 100,000 deaths annually. Yet, tobacco use kills around 3000 people in a day, amounting to more than 1 million people each year.

China, despite the rising health concern, is at the center of the largest tobacco industry in the world. The State Tobacco Monopoly Administration (STMA), along with its commercial arm China National Tobacco Corporation (CNTC), is a monopolistic-state-owned enterprise and the largest supplier of tobacco globally, yielding political and financial clout in the Chinese economy. The extent of this industry is such that the cigarette market alone generated US$226.3 billion worth of retail value in 2018. Moreover, China’s Tobacco Corporation captures 43.6% of the global cigarette market. …

For the longest time, humans have been irreplaceable in many industries of work and life. The development of human capabilities and instincts has led to innovations ranging from nomadic tools and implements to Artificial Intelligence and robots. In primitive eras, such discoveries enabled survival, but in modern times, it furthers productivity, efficiency, and economic growth.

Although technology has enhanced convenience and safety, most would argue that it has raised apprehensions about the nature of work in the future, essentially due to the detrimental impacts of automation and a robot revolution on jobs and wages. …

For a long time, the physical sciences have proved complex theories using neat mathematical tools. But in the case of social science, such concrete measures are simply unavailable, owing to the irrational nature and individual preferences — such as the extent of risk tolerance, time-preferences, and cooperation — of human beings.

The study of behavioral economics and its relatability to the field of development economics has made the neoclassical assumptions redundant in impact evaluation. The development economists, using econometric or regression analysis in the 1950s, now employ experimental and quasi-experimental techniques to test whether these neoclassical assumptions hold.

The forerunners of Randomized Controlled Trials in economic sciences, a method well-known in the field of pharmacology and medical sciences, were the Nobel Prize-winning economists Abhijit Banerjee, Esther Duflo, and Michael Kremer. They led what is now a two-decade-long revolution in measuring impact and influencing local and national policies across the globe. …