Why there is a law against eating horse meat in California?

In class, we talked about a criminal code that eating horse meat is prohibited in California. California Penal Code Section 598 states that “horsemeat may not be offered for sale for human consumption.” Although I have never, don’t want to, and probably will not eat horsemeat, this law seems quite interesting to me. Because in liberal democracies, people have the freedom to choose and make their own decisions, and the government would not interfere with the matters of food choices. People have the freedom to eat what they want unless the law prohibits them from doing so. Thus I wonder if this counts for meddlesome preferences.

Historically, humans and horses have been connected for a long time. Horses have not only played a vital role in the agricultural societies, but they are man’s best friends. Are horses different from other farm animals? Eating horsemeat is illegal in California, but there aren’t laws against eating chicken, pigs, and cows, etc. Some people tend to think that unlike other farm animals, horses are not raised for the purpose of being slaughtered for human consumption. Also, eating horse has been considered as pagan ritual and celebration. With the rise of Christianization, people have become reluctant to eat horse meat.

Although in some of the other countries, horse meat is eaten on a regular basis, it is banned in California. The debate over whether to eat horse raises moral concerns. Some people argue that it is inhumane and cruel to kill and eat horses. They are pets, friends, and family.

Another reason that Americans do not eat horse because there are many substitutes, such as chicken and beef. Also, there has been an increase in vegetarian practices. People support meat avoidance that leads to a decrease in meat consumption in general.

Eating horse meat is identified as a moral question, which is shaped by religious and health concerns. In addition, in utilitarian economics, economists are likely to look for optimal outcomes. Thus they want to make as many people better off as possible. A good law is written to protect and defend most people’s benefits and concerns. Since the law is only restricting people who selling/eating horse meat in restaurants, I think it is not meddle people’s preferences. It is reasonable.

http://web.stanford.edu/~niederle/Repugnant%20markets.pdf

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2034431/

Beijing Air Pollution

You may have heard of the air pollution in China. Beijing experienced the worst smog and fogs last year, which led to school canceled and flights delayed. Thus Beijing was developing a project that named Blue-Sky solution to protect people from poor air quality as smog worsened. I heard that many people wore face masks during heavily polluted days due to personal health. PM2.5 (which is harmful particulates measuring 2.5 microns or larger—per cubic meter of air) concentration levels in Beijing exceeded World Health Organization air quality guidelines. Authorities and entrepreneurs have paid a great deal of attention to the environmental problem. The government is committed to rectifying the problem, and Beijing will allocate 760 billion Yuan (about 124.64 billion dollars) to improve the city’s air quality by 2017. But the economic and environmental crises are intertwined.

The economic activities of production and consumption require the use of energy, which affects the environment in terms of air pollution, and water pollution. Chinese economic growth model results in heavy industry activity and also contributes heavily to the degradation of the air quality. Some factories surrounding the capital, Hebei for instance, a huge steel-producing region, have been forced to close temporarily following the raising of the orange alert. This is because the factories emitted too much pollution and the government needed to step in to prevent them from doing so. The exhaust from the factories is negative externality and the cost to the whole society of producing steels is definitely larger than the cost to the steel production. This negative externality caused by the energy industries results in market inefficiency.  Market cannot allocate goods and resources based on their true value or true cost. Energy market without government regulation does not account for the social cost of energy production, namely the health risk of breathing smog.  In order for the market to be more efficient, the government is trying to increase industries’ production cost by either adding fines to pollution or instate mandatory filter systems. As a result, the supply curve would move to the left, closer to the supply curve that reflects the social cost caused by pollution.

China is also using economic incentives to solve the problem of externalities resulting from the use of energy. China burns a large number of coals that are major cause of air pollution. To reduce the use of coal, the government has introduced a tax on high-sulfur coal and encourage a switch a cleaner burning fuels. The policies provide incentives for lower emissions or a charge from harmful to benign emissions. It is an approach to correct externalities: charge the cost to the producer or consumer who is responsible. Therefore, it is effective to regulate the use of energy by law or by economic incentive such as corrective tax to reduce production emissions.

Finally, I think it is important to “internalize externalities” because private solutions work sometimes if there is a universal moral code in terms of environmental protection.

Work Cited:

http://www.cnn.com/2014/02/24/world/asia/beijing-smog-solutions/

http://www.bloomberg.com/bw/articles/2013-12-11/yes-you-can-see-chinese-smog-from-space

http://globalvoicesonline.org/2015/03/01/a-former-state-tv-reporter-shines-a-viral-light-on-chinas-smog/

Why do people buy luxury goods?

In class, we’ve learned about the demand curve for normal goods: when the price goes up, the quantity demanded goes down; and also the demand curve for inferior products: when the price goes down, people stop consuming them. This led me to think about the demand curve for luxury products: when the price goes up, more people want to buy them. What motivates people to purchase those expensive goods when they already have much cheaper alternatives? I believe there are a variety of reasons behind it.

First of all, luxury brands are not only expensive, but they are likely to be exclusive and sophisticated. Some people purchase luxury bags because they are eye-catching and of high quality. For instance, a high-end designer-bag may cost over $1000 and there are plenty of less expensive substitutes, but still, a luxury bag tends to have top-notch material and special design. (people who buy them believe so)

For some people, luxury brands represent a sense of success, accomplishment, and social status. They feel good and proud about their buying experiences because luxury seems “exclusive” and it is a status symbol. Indeed, in the luxury industry, “experience and perception are far more important than utility.” For instance, Valentino Spring 2015 Haute Couture is a high fashion women’s clothing collection. “Today only 2,000 women in the world purchase couture clothes and only 200 are regular customers.” Often, designers will loan clothes to super models and celebrities for publicity. Because it is custom-made and it requires delicate hand work, luxury clothing cannot be mass-produced and it gives a sense of uniqueness.

lvmh-hermes

There are also some people who just love luxury labels and they buy luxury just for the “labels’ sake.” They purchase overpricing goods just for the luxury logo. According to an article in Forbes.com, “Luxury Brands and Evoking Feelings of Competition.” Feelings like competing with your friends, colleagues, and even strangers are universal. Suppose that your friend has a new sports car, it may sound silly, but it may result in increasing your luxury spending. Thus, these kinds of competing feelings play a vital role in today’s advertising/marketing techniques such as celebrity endorsed products.

In addition, different backgrounds and cultures resulting in people from different countries have different values and attitudes towards luxury. For example, researchers from University of Delaware concludes that American consumers generally buy goods for “self-fulfillment,” rather than please others; while Germans and Italians focus on function, “placing emphasis on quality standards over prestige.”

Nowadays, luxury goods are more accessible. You don’t have to go to luxury boutiques, but rather Neiman Marcus, Nordstrom, Bloomingdale’s and varied online stores are provided luxury goods. Or you even can buy luxury via Amazon. Gucci for example has made Amazon their official authorized online retailer.

People value luxury goods for varied reasons, not only because of their exclusivity and display of owners’ wealth and prestige, but also due to the increasing accessibility of most luxury goods and their ability to stir up competitions among friends and acquaintances.

Articles:

http://www.economicsonline.co.uk/Competitive_markets/Demand_and_income.html

http://www.forbes.com/sites/arieladams/2013/05/23/luxury-consumers-value-products-not-buying-experiences/

http://www.infoplease.com/spot/fashionside1.html#ixzz3QZSqeckK

https://aytm.com/blog/research-junchttps://aytm.com/blog/research-junction/building-a-brand-based-on-emotions-competition/tion/building-a-brand-based-on-emotions-competition/

http://www.udel.edu/udmessenger/vol21no1/stories/research-briefs.html

http://www.vogue.com/slideshow/9073685/valentino-spring-2015-couture-runway/#1

http://www.luxurydaily.com/98pc-of-affluent-consumers-shop-online-unity-marketing/