Saturday, October 27, 2007

Put Your Money Where Your Heart Is

In the ever striated competition between big business competitors, many larger firms are looking for the next "un-tapped"market to sink their teeth into. One of those markets is the over criticized and under estimated gay and lesbian market.

One morning, David Morganlander heard an ad aimed at gay man looking for a date and decided the time was right for national advertisers to target gays and lesbians on a larger scale than they ever had before. Six months later, Mr. Morganlander was president of marketing for Otopiaia Media, which helps companies and their advertising agencies reach gays and lesbians. His firm joins a growing roster of companies serving an increasingly large group of advertisers keen to reach gay audiences.

The reason for advertisers' interest is the annual buying power of the approximately 15 million-strong gay and lesbian population that adds up to $485 billion, according to marketing firm Witeck-Combs Communications.

In a suburb of Chicago, Ill., Oak Park real estate agent Donna Karpavicius decided to specialize in marketing to gays and lesbians. "I had virtually no competition," the Prudential agent recalls of her early career on the city's Northwest Side. "Unfortunately--for me, anyway--there's a lot more now."

Although other gay-related issues have made "breakthrough" headlines, the real estate business quietly has turned the once-taboo practice of marketing to gay consumers into a coveted specialty.

Certainly, real estate isn't alone in trying to latch onto the gay bandwagon as it rushes by with its mother load of marketing potential. Companies such as Ford Motor Co., United Airlines and Starbucks Corp are a few examples of businesses that have had same-sex-couple ad campaigns aimed at gays.Another firm, Cincinnati, OH based Procter & Gamble, is on the forefront of this new wave of marketing. P&G is a cautious advertiser. And as one of the country's largest, it has a lot of clout. So when it does something drastic with its advertising dollars, other companies pay attention. So its decision to pull its advertising on nationally syndicated radio talk show host Dr. Laura Schlessinger's TV show after protests over remarks that offended gays and lesbians was an eye opener on many fronts. It was not only a significant acknowledgement of the economic power and voice of the nation's gay community, but also of the decisions that television executives must now consider when delivering programs in a more competitive TV world.Because of P&G's alliance with gays and lesbians, many conservative groups have called for a boycott of the company's products. There were reports that two influential conservative Christian groups were calling for a boycott of two best-selling products of P&G to protest a statement on the company's internal web site that opposes a local statute to exempt gays and lesbians from special civil rights protection. The group's contention was that the company is implicitly supporting same-sex marriage.

My study of economics has taught me to be weary of the proceedings of large corporations such as P&G. Most big business has continuously hurt the American people by outsourcing jobs to foreign lands and have a history of exploiting foreign labor. But I do have to put me stamp of approval of the non-lethargic way that P&G has repeatedly stood its ground on issues concerning the gay and lesbian community.Buy P&G and buy big.

(Although they could cut the price a bit of their razors)

Information: The Perfect Economic Good (Part 9)

INFORMATION: THE PERFECT ECONOMIC GOOD
Economic goods have many different meanings, but most agrees that an economic good is a commodity or service that can be utilized to satisfy human wants and that has exchange value. The specific meaning of an economic good takes on different meanings depending on its intended use. Similarly, the definition of information can slightly change depending on how it is used and despite its ubiquitous nature; can be seen as an economic good. Examples of information as an economic good can be seen with the analysis of the business of selling cataloged information via electronic databases and the public’s use of public libraries.

Economics may offer insights into the dynamic of information. (Coiera 216) and one thing that many companies strive for is to create a product that you can produced at no cost. Information is that product. What makes information the perfect economic good can be explained by Varian. As previously stated, Varian reveals the fact that that information has an extremely high fixed cost in compilation with a low (marginal) cost to reproduce the same information. The production of information, say in the form of creating a database, is characterized by significant economies of scale, high entry costs and a consequent tendency towards natural monopolies, in which specialists suppliers dominate specific sectors. So even though the start up cost or the cost of obtaining/producing the information may be extremely expensive, the cost to reproduce the information is non-existent. Meaning that company that sells the information can continue to obtain revenue from the same information without accruing any additional marginal cost. Therefore, creating the perfect economic good.


WORKS CITED
Andrews, Biggs, Mary and Seidel, Michael. The Columbia World of Quotations.1st.
New York: Columbia University Press, 1996.

Bates, Benjamin “The Economics of Information and Intellectual Property: Creating a Social Economics Approach. 06 Apr. 2006 http://www.valt.helsinki.fi/staff/bates/Bates-EI2.htm.

Bates, Benjamin. "Information as an Economic Good: A Reevaluation of Theoretical Approaches." Mediation, Information, & Communication - Information & Behavior (1990): 379-394.

Britz, J.J. "When is it good to steal?." School of Information Technology. 06 Apr. 2006 .

Campan, Gael. "Does Justice Qualify as an Economic Good?: A Bohm-Bawerkian Perspective." The Quarterly Journal of Austrian Economics 2(1999): 21-33.

(Gael 21-33)

Coiera, Enrico. "Information Economics and the Internet." Journal Of The American Medical Informatics Association Aug 2000: 215-221.

Golderman , Gail . "Getting Down to Business." Library Journal 128(2003): 38-43

Kyrk, Hazel . "The Income Distribution as a Measure of Economic Welfare." Economic Review 30.2 (2005): 342-356.

Laperche, Blandine. "The Hidden Face of Electronic Commerce Between Enterprises." Information & Commerce Technology Law 10.3 (2001): 273-283.

Lopez, Andres. The Impact of Protection of Non-Original Databases on the contries of Latin America and the Caribbean. Diss. World Intellectual Property Organization, 2002. Geneva

Lossee, Robert. "A Discipline Independant Definition of Information." Journal of the American Society of Information Science 48(1997): 189-283.

Sholle, David. "What is Informatio? The Flow of Bits and the Control of Chaos." M.I.T Communications Forum. Massachusetts Institute of Technology. 21 May 2006 .

Varian, Hal. "Markets for Information Goods." University of California, Berkley. , Berkley. April 1998.

Information: The Perfect Economic Good (Part 8)

WHO OWNS INFORMATION

Bohm-Bawerk theorized the importance or establishing ownership of information and wrote extensively on how human beings struggle for control of this good. (Campen 24) With most economic goods, control of that good is determined by possession, which can be assessed by physical possession. The qualities of information deter it from being possessed physically so other means of determining ownerships must be set. Bohm-Bawerk goes on to say that integration of the legal right (ownership) to Information as ownership (Campen 25)

Also, information is only able to acquire the proper market price when some form of monopoly protects it, as through the protection of a patent or copyright, which is the usual recourse for creating value and protecting investment. (Coiera 217) Debates on the subject of intellectual property rights (IPRs) have expanded to a vast extent, not only in the main developed countries but also in the international negotiating arena so much that some say that the creation of new IPRs for databases could upset the balance between protection and dissemination, tipping it dangerously towards the former. (Lopez 2) Jeremy Bentham observed some 200 years ago when discussing the usefulness of patents, IPRs are monopolies that encourage the production of things that, were it not for the promise of exclusive appropriability by virtue of IPRs, would probably never have created. (Lopez 7) That being said, its clear on the one hand that, in spite of the existence of both legislation and technological means that could protect investment in the creation and maintenance of databases, there are problems not only with the enforcement of relevant contracts and laws, but also with the “circumvention” of technological protection measures, all of which inflicts monetary losses on database owners (not only operating in the private sector but also, in many cases, being State bodies). (Lopez 3)

Today, legal protection for “non original” databases only exist in the European Union (EU), Mexico and some Nordic counties. In the USA, various bills have been put forward on the subject but none approved. (Lopez 5)

Information: The Perfect Economic Good (Part 7)

INFORMATION AND AMERICA’S PUBLIC LIBRARY

Public libraries are one of the most successful houses of information to date. Carnegie had it right when he invested all that money into creating a system where everyday citizens can obtain information. After it was all said and done, Carnegie funded total of 2,507 libraries: 1,689 in the United States; Carnegie's libraries played an important role in the education, politics, finance and social development of the United States as a house for information. Carnegie's establishment of many public libraries is one of the most important events in the history of the American public library.

The system of pooling money from the public to sustain this institution has been a great way to keep it going. Each public library has established it own way of collecting money to fund their library system. The Public Library of Cincinnati and Hamilton County shares a pool of money that is funded by the State of Ohio and Kenton County Public Library is funded by shares of property taxes just in Kenton County. Through out one day, thousands of people visit and use public Libraries to check out books, use the internet, take cooking classes, and perform in depth research. Basically, they visit the library to obtain information. Julia Allegrini, Branch Librarian at Kenton County Public Library’s Mary Ann Mongan Branch located in Covington, KY says that the attendance at her library rivals that of a small amusement park. Anything that draws in that many people has economic potential.

In April 2001, two studies were released which showed to what effect that Americans use public libraries. “Public Library Use and Economic Hard Times” was put out by the University of Illinois and the American Library Association’s “Attitudes Towards Public Libraries” were both commissioned by Chicago based American Library Association (ALA) as part of its five-year Campaign for America's Libraries. The ALA contracted with the University Of Illinois Library Research Center (LRC) to study library use over the last five years at U.S. public libraries that serve populations of 1 million or more. Using data from just a few of those large libraries, the study found that circulation has increased significantly since March 2001, when the National Bureau of Economic Research made clear the beginning of a recession. Using statistical analysis, the LRC found that circulation in March 2001 was 8.3 percent higher than would be expected from the trend observed since January 1997. Following the events of September 11, circulation in October 2001 exceeded the trend by 11.3 percent.

"This data confirms what librarians have seen from experience… that people turn to their libraries and librarians," said ALA President John W. Berry. "Libraries are America's great information equalizers - the only place people of all ages and backgrounds can find and freely use such a diversity of resources, along with the expert guidance of librarians."
(http://www.ala.org/ala/pressreleasesbucket/libraryusage.htm)

Information: The Perfect Economic Good (Part 6)

ELECTRONIC DATABASES AS AN ECONOMIC GOOD

One information good that follows Bates thought that information has a utility and follows Varian’s reasoning of bypassing the three areas of concerns are electronic databases. There is no uniform definition of what is meant by databases from the legal or economic point of view (Lopez 9) but according to Google.com, an electronic database is an organized collection of electronic records that can easily be searched using specific software. In the European Directive 96/9 EC article 1.2 it states that a database is “a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means” (Lopez 9)

This would include telephone directories or university courses, including things as diverse as genetic or satellite information banks, dictionaries, meteorological records, horse racing results, TV program guides, collection of legal, commercial or financial information newspapers, libraries (both physical and digital), company brochures medicinal vademecums, compilation of natural or experimental observations in the fields of physics, chemistry, biology, etc.; indexes made by Internet search software agents may also come under this definition. (Lopez 9)

With developed countries being the main producers and consumers of databases (Lopez 3) many their companies have categorized information about their service or product and placed them in an electronic database and have charged patrons a fee to access this. A very popular example of this phenomenon is the fact that most major metropolitan newspapers have started to charge a fee for browsing back-issues of the newspapers. In addition to newspapers, there are companies whose sole purpose is to collect information, catalog it and sell access to the information.

With the onslaught of lower quality information that can be obtained cheaply, specific areas are more than willing to pay a lot of money for good information. Clinicians pay for subscriptions to journals or purchase texts to maintain their skills, knowledge and professional standing. Pharmaceutical companies are happy to pay physicians for data about their prescribing behaviors so that the data can be arranged to reveal prescribing patterns for the companies’ products. (Coiera 217) Also, producers may obtain more revenue for individual information items if they bundle them with other, disparate items and then sell access to the whole package to recover their fixed costs through creative pricing and marketing. (Coiera 220)

LexisNexis and EbscoHost are two very large collections of information where thousands of people and organizations, public and private, pay to use. In “Getting Down to Business”, a review by Gail Golderman and Bruce Connolly of electronic databases, a synopsis of the contents of a few of the larger databases can be found. The following are a few examples.

Company: ProQuest Information and Learning
A leading source of international business information for more than 30 years, is considered by many to be an essential resource for colleges, universities, and business schools. With a front-end searching and display interface produced by ProQuest Information and Learning, the database remains at the top of the list for the study of business conditions and industry specific topics worldwide.

Database: Business & Company Resource Center
Company: Gale Group
Integrates worldwide coverage for company profiles, industry profiles, and 3650 business periodicals, of which 2600 are available in full text. Company pro-files are offered for U.S. and international public and private companies. The database details 4600+ worldwide company histories and chronologies, which are updated annually; investment reports; financials; rankings; suits and claims; and product and industry reviews. It also offers valuable access to business journal news and analysis, consumer marketing data, emerging technology reports, and 20-minute delayed stock quotes.

Database: RDS Business Reference Suite
Company: Gale Group
A collection of three highly complementary business information databases, originally produced by Responsive Database Services (now part of the Gale Group family). Business & Industry, Business & Management Practices, and TableBase are particularly strong for company and industry analysis. In combination, they form a powerful resource that provides access to company and industry news, management practices, and market research information. Since they are three distinct products, institutions may elect to purchase each separately. The Business Reference Suite contains 1400+ business sources, 60 percent of which are full text and nearly half are international in scope.

Database: Business Source Premier
Company: EBSCOHost Publishing
Emphasis on research-oriented and scholarly business literature. Of the 3350 titles from 1965 to the present, over 80 percent are available in full text, and of these 911 are peer-reviewed.


So, while some electronic journals may make it’s contents available free to the public, it may provide extra services to its fee paying subscribers, such as the ability to see articles prior to general release, advanced search and current awareness notification services, higher-resolution images, and access to links to related materials. (Coiera 221) As you can see, the information that is contained in some of these databases could be very valuable to organizations, businesses or individuals. With millions of people paying a fee to access the information contained in each of these databases, or a combination of databases, we see that information definitely has a value attached, has a utility, and with the fact that people can print out information obtained from these databases, can be transferred. Additional things that makes information an economic good is the uncertainty of the precise outcome of production or exchange of information goods, the infinite reproductability of information and that the transfer of information goods to another does not diminish the stock of the information held by the first holder and information is reproducible at next to no cost.

Information: The Perfect Economic Good (Part 5)

WHY INFORMATION SHOULD BE CONSIDERED AN ECONOMIC GOOD

One reason that information is said not to be a good is because it cannot be consumed. What information consumes is rather obvious. It consumes the attention of its recipients. Hence, a wealth of information creates a poverty of attention. (Coiera 221) The evidence that points towards information not being an economic good, reversely, can also be used to prove that the characteristics of Information falls well within the definition of being an economic good.

According to Bates, information possesses the several attributes that other economic goods have (Bates 380). Again, Bates states that information has a utility, it can be transferred and most importantly, it has the capability of having value attached to it (Bates 381), which are all attributes of other economic goods such as computers, livestock or lumber. Varian also explains how his three areas of concerns about information being an economic good can easily be disputed. Varian spells out three ways that the fact that you must first experience information before one know what is really is can be thwarted by previewing the information, obtaining reviews of the information or purchasing information simply on the reputation of the information.

Friday, October 26, 2007

Information: The Perfect Economic Good (Part 4)

WHY INFORMATION IS SAID NOT TO BE AN ECONOMIC GOOD

Economic goods, for the most part, take on a tangible quality. In other words, economic goods are easily traded by categorizing their physical attributes. Automobiles are bought and sold as in unit(s). Similarly, in Saudi Arabia, oil is sold by the barrel and in the Midwestern states; corn is bought by the bushel. The intangible nature of information has been a major argument for information to not be considered an economic good by some economists. Thomas Jefferson succeeded in capturing the social benefits that could come from the free dissemination of ideas (information) in that they have properties that are clearly different from other economic goods.

“…If nature has made any one thing less susceptible than all others of exclusive properties, it is the action of the thinking power called an idea, which an individual may exclusively posses as long as he keeps it to himself, but the moment it is divulged, it forces itself to the possession of every one , and the receiver can not dispossess himself of it. …That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made hem, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe…incapable of confinement or exclusive appropriation”
(Lopez 7)

Some say that information is not an economic good because information is not actually consumed and can be reproduced and distributed at almost no cost. (Coiera 215) Many economists have gone as far as to say that since information does not have a precise definition or the ability to be quantified, it has no place in the realm of economic goods. (Bates 380) When looking at the dynamics of information as an economic good, there are many different opinions on if information can be an economic good or not, as noted in the beginning of this paper. Bates states that there are three reasons why information should not be an economic good. The fact that it is very unclear as to if information is a public or private good; the uncertainty of weather advertising could be considered information and that information fails to meet conditions of social efficiency all contribute to reasoning why information is not an economic good. “In Markets for Information Goods”, Hal Varian of the University of California, Berkley, also gives three areas that information causes difficulties in market transactions. Varian address the fact that one must experience information before one knows what it really is because of its intangible nature, as opposed to something that is tangible. Varian goes on the relay the fact that information has an extremely high fixed cost in compilation with a low (marginal) cost to reproduce the same information. Lastly, Varian concludes that information and its goods are nonexcludable. (Varian)

In addition to the aforementioned reasons, some think that information does not qualify as an economic good because of its ease of reproduction. While production costs are typically high and fixed for information products, these products can be copied cheaply (and indefinitely if they are in a digital format). The master copy of a book, movie, or soundtrack is expensive to produce but cheap to copy. Creating and maintaining the information content of a web site is expensive, but making copies of the information for consumers who visit the site costs almost nothing. In economic terms, the marginal costs of reproduction for information goods are low. Worse, initial production costs are “sunk.” In that they are incurred prior to mass reproduction and cannot be recovered in the case of failure. (Coiera 217)

Information: The Perfect Economic Good (Part 3)

DEFINITION OF INFORMATION

Information has been difficult to define in and of itself, let alone defining it as an economic good. The actual nature of the information produced and distributed by information technology remains abstract and under-defined (Scholle). Instead of being a tangible object that one can hold in their hand, information is more of a concept, having similar traits as that of a conceptual idea, adding to the naysayer’s argument that information is not an economic good. This idea that information does not hold the same qualities of a physical economic good and therefore, should be left out of the realm of all other classes of economic goods has been a prevalent economic concept. To analyze the way that information does not qualify as an economic good, one must first have a baseline definition describing what is meant when one says “information”.

The original meaning of the word “information” derives from the Latin, informare, which means “to put into form”. “Informing” therefore carries the sense of “imparting learning or instruction” or more generally conveys the sense “to tell (one) of something”. As Webster points out, the semantic definition of information conveys that “information is meaningful, it has a subject, it is intelligence or instruction about something of someone.” (Scholle) Relying on the Internet, the following definitions of information is found:

· a message received and understood
· data: a collection of facts from which conclusions may be drawn; "statistical data"
· knowledge acquired through study or experience or instruction
http://www.wordnet.princeton.edu/perl/webwn

Because of the nature and the omnipotent features that information and information goods possess, there are many different uses and definitions of information dependant on how information is used. Each discipline has its own way of defining information. According to Robert Losse, in his paper entitled, “A Discipline Independent Definition of Information”, he states that electronic engineer’s concern, when speaking of information, would be to create a product that could transmit the most amount of information (bits of information) in the shortest amount of time.

Conversely, those who work with communications and are scholars of communication are more concerned about mass media’s overloading of information (Losses 254). Losses goes on the give a definition of information that can be used interdisciplinary and which can be used in any facet. His definition is as follows:

The characteristics of the output of a process, these being informative about a process and the input. (Losses 254)

Economic institutions that are instrumental in defining “information”, is one in which information is emptied of any relation to “meaning”. Within the limits of specific disciplines this non semantic use of the term “information” is, at times, applied in a carefully circumscribed manner, but this field may undergo an extension in which it applies itself to processes where the semantic definition of information normally holds sway.(Scholle)

Thursday, October 4, 2007

Information: The Perfect Economic Good (Part 2)

WHAT IS AN ECONOMIC GOOD?

The question of what is an economic good is not a difficult one to answer, but because there are so many things that could fall under the category as a “good” (Campen 22) and several different economists have varying opinions as to what an economic good is and what characteristics that it should possess a universal definition is not easy to locate. The type of definition that is used is dependant on which economic theory that is practiced. Going to the first place that most of us beginning the search for knowledge, the internet, a few different definitions were found. A synopsis of the definitions that were found using this medium consists of the following:

• a physical object or service that has value to people and can be sold for a non-negative price in the marketplace. (http://www.about.com/)


Moving on to more respectable sources, more reputable definitions are found. C. E. Ferguson defined an economic good in broad terms, quite similar to those found by searching the internet. Ferguson stated that an economic good is:

The ends through which the goals of economic actors are achieved. (Bates 380)

Marshal, another economist did not stray from the concept of generality by defining an economic good when he stated:

Represent all desirable things, or things that satisfy human wants. (Bates 380)

Another definition found states that an economic good are things that are, to be sure, “goods” but not means to an end. (Campen 22) Apart from an item or concept being defined as an economic good, it must also be known as a good. (Campen 24) Taking into account these definitions, a conclusive definition of anything that can be bought, sold, or exchanged can be categorized as an economic good.