Centives

The latest Sports Illustrated: Swimsuit Edition is out now. Dina Spector looked at some of the economics behind it:

• The swimsuit edition sells 1 million copies – up to 15 times as many as other issues.
• Not only has it brought in more than $1 billion for its parent company, it also boosts sales of the products that are advertised in its pages.
• It is the single best-selling issue produced by Time Inc.’s entire portfolio of magazines.
• Before it became its own stand-alone edition, it started off as a small supplement to the main magazine in 1964 to give readers something to be interested in during the winter when no major sporting events take place.

Find out how much the magazine brings in ad sales, the best-selling issue of all time, the future of the issue and more over here.

Source: Yahoo Finance

The Economist argues that there’s a lot business can learn from the military. Highlights of the article include:

• Behind enemy lines, cut off from communication, soldiers are expected to think on their feet and find ways to complete their mission. This kind of delegation and trust is invaluable in business.
• Businesses try very hard to develop a corporate culture. The military has done a great job of preserving its culture.
• Soldiers also have to have soft skills. They spend long periods of time with strangers, and this requires them to be amicable people that others enjoy working with despite difficult circumstances.
• Business would envy a training program that so effectively teaches soldiers to do arguably the most difficult thing imaginable: take another human life at the risk of your own.
• The military’s training also has the advantage of preparing troops for the next rung of leadership. Businesses must do something similar if they want to train the next generation of effective leaders.
• All of these make the military an important case study and veterans an invaluable asset. Perhaps the reason why Israel has so many high-tech startups is because they have mandatory military training.

Read more about how businesses used to be in awe of the military…but have since lost interest, how businesses can capitalize on this arsenal of talent, and other lessons that they can learn over here.

Source: The Economist

Most men shave their faces. Matt Siltala put together some interesting pieces of information about the practice:

• The word ‘barbarian’ comes from ‘unbarbered’ – men with beards who did not shave. (Centives commenter jamapa writes that this is incorrect.)
• Alexander the Great required his troops to be clean-shaven so that the enemy couldn’t grab onto their beards.
• In the United States men on average shave 4.6 times a week.
• They take about three and a half minutes to shave. This adds up to 38 days of shaving over a lifetime.
• Across the world 15% of men shave in the shower. The rest shave at the sink.

Read more about beard and mustache records, as well as beard taxes over here.

Source: Visua.ly

Robert Lerman believes that low income housing should be abolished. His arguments are not as heartless as they may seem:

• Government sponsored low income housing restricts the areas that those with lower incomes can live in.
• Instead the government should boost the purchasing power of those with low incomes so that they can live where they want.
• This could be done by giving low income individuals ‘rent vouchers’. Not only would this empower them to choose where they live, studies suggest it would also be cheaper for the government than building low income housing.

Read more over here about how bad terminology can create bad policy, and other advantages of the voucher idea.

Source: The Atlantic Cities

Derek Thompson looked at the economics of greeting cards:

• The premium paper that card makers use is expensive…and is getting more so. Workers in China who help print out the cards are also beginning to demand higher wages.
• There isn’t much competition. Two companies control 90% of the market and their relationships with retailers and suppliers prevents other entrants to the market.
• E-cards are threatening the industry and cardmakers are now experimenting with gimmicks such as a $20 card with an LCD screen that displays a 50 photo musical slideshow.
• The biggest reason though, is that consumers are willing to pay. Of the $20 billion we spend on Valentine ‘s Day only 4% goes to the card. Compared to the overall cost of the occasion, the cards are a bargain.

Read more about ‘value cards’, the various teams that come together to make a card, and some notes about the psychology of using high prices over here.

Source: The Atlantic

RateSupermarket looked at the price of finding somebody, courting them, and then marrying them:

• A year of dating, and then a year-long engagement is assumed.
• The first year of dating is estimated to cost almost $7,000. The second year costs $10,000. This includes the cost of movie tickets, beach vacations, and ‘apology flowers’. Arranged marriages never seemed more appealing.
• The wedding itself will cost you another $27,000.
• All in all the complete price tag for true love comes out to $43,842.08.

Centives, for one, thinks that investing that money into an Xbox with a host of assorted games will ultimately be more fulfilling. At least that’s what we tell ourselves as we prepare to order take-out. Check out the entire infographic over here.

Source: RateSupermarket

Via: Marginal Revolution, The Globe and Mail

Last year it was pointed out that the word ‘artisan’ doesn’t mean anything anymore. S.T. VanAirsdale thinks the same is now true of the word “fresh”.

• Consumers have gravitated towards ‘fresh’ food because eating is no longer thought of as fuel for the day. It’s meant to be an experience in itself.
• Fast food restaurants like the word ‘fresh’ because it sounds good but doesn’t require any investments in high-quality or health conscious ingredients.
• Yet food marketed as fresh can be sold at a premium.
• For those who can get it to work, the strategy is effective. Domino’s share price has increased 400% since its successful freshness campaign. Subway beat McDonald’s to become the largest food chain because Subway was perceived as fresh.
• Taco Bell is currently trying to compete with Chipotle by releasing its own line of ‘fresh’ products while Arby’s is trying to throw doubts about Subway’s freshness by raising questions about where the meat is sliced.

The full article has many more fascinating anecdotes and points about the freshness wars. It’s well written and you should head on over here to read it.

Source: Slate

The Economist took a look at the technologies that banks are currently using, and might start using, to analyze your social media profile for clues about your likelihood of default:

• One startup validates your employer based on the number and nature of connections you have on LinkedIn.
• Another uses text analysis to determine your credit risk. Those who type entirely in upper or lower case are more likely to default.
• Experts are also looking to see if posting racist comments on Facebook correlates with higher credit risk.
• A lender in Hong Kong asks friends to vouch for your trustworthiness as a borrower. If you fail to pay back your loan, then your own credit history, as well as those of the friends who recommended you, is hurt.

Read more about the other ways that banks could start using social media to learn about you, the privacy concerns that this raises, and how users are getting around it over here.

Source: The Economist

Want to be the American ambassador to France? It’s not about your skills or background. It’s about the money according to a study reported on by Brad Plumer:

• The American President gets to name ambassadors to countries all over the world.
• About 55 of those positions are generally reserved for appointees who were either wealthy donors to the President’s campaign or top fund-raisers.
• These individuals can get posted to stable, developed countries such as France, Japan, or Canada.
• The ambassadorship to the United Kingdom, for example, requires, on average, about $1.1 million personal donations.
• The most expensive is Austria where an ambassadorship has on average cost $1.3 million in donations.
• In fairness to the President rich countries might be getting rich ambassadors because their job consists of throwing expensive parties that the state department’s budget can’t always cover.

Read more about the findings of the paper, as well as further links to more information about the topic over here.

Source: The Washington Post

Pope Benedict XVI has become the first Pope to retire in almost 600 years. L.V. Anderson answered a few questions about what the Pope will do now:

• After retiring Pope Benedict will go to the Pope’s summer residence, and then onto a monastery of nuns in the Vatican. Where he lives after that is up to him.
• Popes have no formal retirement pension plan – and in fact have no compensation plan while they’re employed. The Holy See merely pays for the Pope’s expenses and this arrangement may continue. The Pope will also have continued access to the Vatican’s lavish healthcare plan.
• He won’t automatically get his old job back. If he wants to become a Cardinal he’ll have to be reappointed by the next Pope.
• Officially the Pope will have no say in who is successor will be. But he will likely have influence since he has appointed 67 of the 118 individuals who will select the next Pope.

Read more about what happens to his name, and his twitter account over here.

Source: Slate