Daniel Gross Is Wrong-- Again
by
DuckworkerMike
10/26/2009, 10:20 PM #
Dan says that pick-your-own is a scam or worse. But he's an economist (at least he pretends to be one) and so he should know better. Here is where Dan dies on the sword of Economist-Logic.
People act in their own best interests to maximize their utility. What that means is that if we see one person buying pizza every night of the week and one person eating rice six nights a week and filet steak one night we are seeing two people making the most of their food dollars through the invisible and unmeasurable phenomenon of maximizing their utility.
What we have here, people spending more for apples at a pick-your-own joint than they would at Krogers or Giant or A&P is simply an indication that people are getting more than just the bags of apples. They are getting exercise or fresh air or family time away from electronic gizmos. Whatever it is, that is what not only makes up for the differential in the price of the apples, but it probably provides surplus utility as well, They get all this intangible stuff plus the apples that are sometimes all the tastier for having been picked by "us".
If it were truly a scam, you'd have hordes of unhappy people wielding not dollars but pitchforks, and demanding their money back. Instead, you have return customers, people who follow this ritual year after year. Why? Because they like it. Because they have fun. Because it's worth it, worth every penny-- to them.
Me, I get plenty of utility buying my apples from a guy I know at the local farmer's market. They cost a bit more than at the store, but less than at the pick your own place which we don't have time or inclination for, but they are better than those in the grocery store because I know exactly how they were raised. It's not always, as Dan well knows, about finding the cheapest commodity. If it were, we'd all still be driving Yugos and no one would buy a Mercedes. In fact, in Dan's non-existent world where savy consumers zoom to the bottom, there would be no Mercedes-- just a few Yugo lookalikes. Why? Because we'd all be trying to save the same bucks. But people are not like that. People do maximize their utility, and some of them get a lot of utility from picking apples. It's not a scam, not even close. It's people being happy. Dan, clearly, would be happiest getting his apples from the closest fruit stand or market. That's his utility function, but his is not yours, or mine, or anyone else's. And to call the pick-your-own orcharists scammers does them a wrong, by suggesting they are no better than pirates, and that their customers are no better than fools, instead of calling it what it is-- some people providing a good and a service, and consumers happily consuming both.