Sociology 125 Lecture 8 Tuesday, September 28 Consumerism Extra Film showing of films this week Because of the problem of the film showing Monday night, there will be extra showings on Wednesday & Thursday at 7:15 in room 1310 Sterling Hall. The film Shop‘Till You Drop will also be shown as a second film next Monday, October 4. The film, Taken for a Ride can be viewed on Google Videos at:

Four issues raised in s 1.Time horizons & intergenerational externalities. 2.Skepticism about global warming 3.Alternative explanations of U.S. transportation system 4.Positive externalities and the price of transit tickets

Positive externalities & ticket prices 1.Suppose: (a) the direct costs of a ride = $3, and (b) there is some kind of negative externality = $1/ride 2.Then the true cost per ride = $4 3.To cover these costs, the ticket price should be $4, not $3. 4.Now suppose: (a) the direct costs of a ride = $3, and (b) there is some kind of positive externality = $1/ride 5.Then the true cost per ride = $2 6.So, the ticket price should be only $2 7.But the transit company has spent $3 in direct costs to pay for the ride. 8.Therefore the society has to somehow pay for the $1 of value everyone receives to reimburse the transit company for providing the ride.

Big Take-Home Message from lecture on Transportation For the free market to enable people to make efficient choices two things must be true : 1.There are no significant externalities – positive or negative – to your individual choice: what you chose does not affect other people. 2.The full range of feasible alternatives from which to make your choices can itself be provided by the market. Transportation violates both of these principles : People will make very different private choices depending upon whether or not there exists a good, efficient, cheap public transportation option, but the market itself can never provide this even if it would be economically efficient to do so.

Definitions Consumerism: The belief that personal well-being, happiness and status depend largely on the level of personal consumption, particularly the acquisition of material goods. Hyper-consumerism: the frenetic pursuit of consumer goods

Growth in median size of new home construction in the U.S.,

Over 2500 square feet Under 1200 square feet

What is wrong with consumerism?

1.There are big negative externalities from consumerism 2.Consumerism in fact does not make most people happy 3. There are systematic biases in the system which generate consumerism. If these system-biases were eliminated, many – maybe most – people would adopt a less consumerist life style.

System bias #1: Profit maximizing strategies

1 week of time 2 weeks of time

System bias #2: Market-failures in leisure

Number of hours more per year on average that Americans work than people in other countries.5 weeks 3.4 weeks 6 weeks 9 weeks

From Juliet Schor, The Overworked American, p. 130

System bias #3: Changing reference group for consumption norms

System bias #4: Credit cards

System bias #5: Rising inequality increases consumerism

System bias #6: Abandonment of public consumption by affluent