Taxes, Drugs, WiFi, Wall Street Geniuses, and Time

A favorite argument of politicians for low state taxation may be undermined by a new study indicating that state taxes have a negligible impact on Americans’ interstate moves. About 55% percent of moves were due to either a job or family needs, with 13% of interstate movers indicating “other housing reasons” as their motivation—a category which encapsulates individuals wanting a change of climate for retirement or lower costs of living. Intriguingly, “people who do move are nearly as likely to move from low-tax states to high-tax states as in the other direction—in some cases, more likely”.

Did the online drug marketplace Silk Road reduce drug-related crime? Two professors are arguing in a new paper that it in fact did. Silk Road provided an anonymous way for users to electronically buy and sell drugs that would be delivered in the mail.

This new breed of drug dealer is… likely to be relatively free from the violence typically associated with traditional drug markets,” reads the paper, the title of which calls Silk Road “a paradigm-shifting criminal innovation.” “Whereas violence [in the traditional drug trade] was commonly used to gain market share, protect turfs and resolve conflicts , the virtual location and anonymity that the cryptomarket provides reduces or eliminates the need – or even the ability – to resort to violence."

The researchers analyzed data from Silk Roads’ records, discovering that the site appeared to be selling more to drug dealers than casual users due to large transaction sizes. A true B2B sales organization!

The study also notes that the Silk Road trade focused far more on less addictive and harmful drugs than might have been previously assumed. “Drugs typically associated with drug dependence, harmful use and chaotic lifestyles (heroin, methamphetamine and crack cocaine) do not much appear on Silk Road, and generate very little revenue,” the study reads. It explains that skew by pointing to the waiting period between a Silk Road drug buy and the product’s arrival, vacuum-sealed, in the mail. “The site may therefore have suited purchases by recreational users with the resources and time to place orders and wait for deliveries; dependent users with chaotic lifestyles, in contrast, were likely to have had neither.”

Silk Roads’ qualities of anonymity also meant that users couldn’t participate in price discrimination—that is, changing the price of the good they were selling (drugs) based on criteria about the buyer (income or perceived ability to pay).

Speaking of price discrimination, Priceonomics discusses why expensive hotels charge for Wi-Fi.  Most budget hotels include Wi-Fi with stay, which is intriguing considering that budget hotel patrons would be much more sensitive to a $5 increase in the price of a $30 hotel room due to the incorporation of Wi-Fi than would someone looking at a room at $400 a night. Not including Wi-Fi in room price allows expensive hotels to:

1)      Keep browsing speeds fast

2)      Profit off of pay-per-view movies that users with Wi-Fi might instead access via Netflix

3)      Make a lot of money off anyone willing to pay $15 for Wi-Fi.

Why does Wall Street attract so many bright minds? Kevin Roose discusses with Vox the reason many of the most intelligent graduates matriculate to banks each year, choosing to dedicate themselves to 100+ hour workweeks. Roose recently came out with a fantastic book, Young Money, following the trials and tribulations of 8 young analysts on a post-financial crash Wall Street. He provides an excellent combination of social commentary and the classic coming-of-age tale, centering around the fact that many young analysts go the banking route because they wish to delay decisions about their future for two more years.

Uncertainty about the future is very common for any recent or upcoming college graduate, but that isn’t the case everywhere in the world. Business Insider illuminates how different cultures perceive time, which has critical translations into how they conduct business. While Americans approach things from a linear perspective, Asian cultures tend to have a bit more cyclical view. Most intriguing of all,

The [people of Madagascar] imagine the future as flowing into the back of their heads, or passing them from behind, then becoming the past as it stretches out in front of them. The past is in front of their eyes because it is visible, known and influential. They can look at it, enjoy it, learn from it, even “play” with it. 

I guess we don’t have to worry about them choosing the analyst path anytime soon.