The Economist really hit a home run of sorts for their volume and quality of interesting tidbits relating life to the dismal science for their last issue of 2005.  Lots of good material to all of those incoming students to Larry Smith’s Intro to Economics classes at UWateroo for next term.

First off is this gem relating how lack of any government regulation in (because failed states don’t have any governments) created conditions for something of a renaissance in the Telco services in Somalia:

[The] collapsed state [of Somalia] provided a curious competitive advantage [for Telco operators].

No government means no state telecoms company to worry about, no corrupt ministry officials to pay off (there is no ministry), and the freedom to choose the best-value equipment. Taxes, payable to a tentative local authority or strongman, are seldom more than 5%, security is another 5% (more in Mogadishu), and customs duties are next to nothing. There is no need to pay for licences, or to pay to put up masts.  It is a vivid illustration of the way in which governments, for all their lip service to extending communications, can often be more of a hindrance than a help.

Also interesting is impact of illiteracy on the efficacy of Marketing spends:

[One Somalia mobile operator] expanded its reach across the country, drawing in customers with its low prices. You can call anywhere on the planet on [its] mobile for $0.30 a minute. Pricing is especially important in Somalia…because many potential customers are illiterate and so immune to advertising.

I didn’t occur to me, until now, about the importance of literacy to the development of modern economies for their ability to increase the effectiveness and sophistication of marketing efforts and thus increase aggregate demand in society. (Larry Smith would be probably be proud though I think Bob Krider, my Marketing Strategy prof from SFU would be probably be evincing some kind of audible disdain for that last comment.)  Society teaches its citizens to read so they can read up on all the wonderful things they should want to and do buy thus pumping up the society’s economy.

This other item discusses how one’s religious devotion in North America is good for you.

At the microeconomic level, several studies have concluded that religious participation is associated with lower rates of crime, drug use and so forth. Richard Freeman, another Harvard economist, found 20 years ago that churchgoing black youths were more likely to attend school and less likely to commit crimes or use drugs.

Okay that’s kind of obvious but did you know going to Church is good for your checkbook?  This researcher used a novel statistical technique to try to prove causality between going to church and income:

Mr Gruber finds that [after some statistical alchemy, in an urban population in the US]  a 8.5% rise in churchgoing… leads to a 0.9% rise in income. 

Well you can read all the gory details about that here.

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