July 31, 2006

For those of you who don’t know me, my name is Megan McArdle, and I’ll be your resident econblogger for the week (as well as a hefty dose of everything else–I’m a dilettante.)

I’m an economics journalist by profession, so as you might imagine, I spend rather a lot of time reading economics blogs. One of the best out there is Econlog, written by Bryan Caplan and Arnold Kling. You never imagined economics could be applied to so many questions, such as: why happiness researchers want you to commit suicide, and an inquiry into why LA has so many liquor stores, when big box retailers are allowed to sell liquor there (unlike Virginia, his current state of residence, and my own beloved New York State).

If I didn’t know anything else about these states, I would predict that California’s grocery stores would dominate the liquor market. Why make a special trip to a seedy liquor store when you can buy tequila at CostCo during your weekly shopping?

But this prediction is way off. The blatant fact is that there are seedy liquor stores on virtually every commercial street corner in Los Angeles. People are free to buy their liquor in regular grocery stores, but for reasons I can’t grasp, grocery stores only seem to have a modest slice of the market.

Another way to think about this Los Angeles Liquor Puzzle: It seems like the Wal-Mart model should be working, but it’s not. The mom-and-pop liquor stores are thriving in the face of big(ger) box competition.

The comments are also fun; in the post on finding yourself that very special mail-order bride to share your life, commenter Kedar weighs in with some . . . er . . . economic analysis:

Arranged marriage lasts longer. Success rate is also higher. It is a good idea to ask relatives find someone you will see only at the wedding. Love starts at the wedding and it takes time to reach the peak of love and also time to fall. So it takes time for the marginal cost to outweigh marginal benefit of marriage.

I’m imagining a proposal along these lines: “Hey, I calculated that it would take 37 years for the marginal cost of living together to exceed the marginal benefit! What do you think?”

But the image isn’t nearly as compelling as picturing the look on my relatives’ faces if I asked them to “find me someone I will see only at the wedding”.

Not to mention the look on my face when I got my first glimpse of what they’d picked out.