tag:blogger.com,1999:blog-1141932539860553199.post237576684662591441..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: Homey In Chief making an idiot of himself by misquoting Adam Smith, yet againMark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-1141932539860553199.post-48880492967708256212013-07-17T18:38:42.948+01:002013-07-17T18:38:42.948+01:00Chr, it is possible that I buggered up my own argu...Chr, it is possible that I buggered up my own arguments by saying "goods and services consumed at point of use" that should of course say "goods and services consumed at place of purchase".<br /><br />MC, yes, that's another good example, but the price levelling applies to things which don't have to be consumed at point of purchase, so clothing, books and CDs level out.<br /><br />Overall, it is also said that insurance got a bit cheaper when price comparison sites came in - but this has not eroded the different premiums which insurers charge for riskier and safer postcodes.<br /><br />And of course internet estate agency has done precisely f- all in levelling out house prices across the country.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-8389263027080272352013-07-17T18:29:27.526+01:002013-07-17T18:29:27.526+01:00Chr: "I am just suggesting that the regional ...Chr: <i>"I am just suggesting that the regional price difference only exists for goods/services where consumers choose them for primarily qualitative reasons"</i><br /><br />My problem is that I'm not sure there is such a thing, whatever you buy is a trade off between price, convenience, quality etc, and this applies no more to restaurants than clothing. <br /><br />OK, some restaurants or theatres have snob value, I'll give you that, so maybe people are more likely to willingly overpay for these things, and maybe these things are more concentrated in London, maybe maybe, but the reason they are concentrated in London is because there are more high spenders in London, which gets us back to my explanation.<br /><br />But pubs or Burger Kings or Travelodges or whatever are the same all over the country, they are still more expensive in central London, with a noticeable price decline as you head out of town.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-19783819227822958402013-07-17T18:01:08.754+01:002013-07-17T18:01:08.754+01:00Of course there is competition between restaurants...<i>Of course there is competition between restaurants and theatres. There is also competition between clothing and cameras, but the price of clothing and cameras is the same everywhere so that is at best irrelevant.</i><br /><br />For the most part clothing and camera sellers are competing based upon offering the best quality for the best price though...<br /><br /><i>Surely, people care about the quality of the clothes or cameras they buy as well? So how come no price difference?</i><br /><br />Yes quality at cheap prices. Not really the same for a restaurant or bar is it.<br /><br />Having said that aren't many high end clothing brands only available in London?<br /><br />b) I understand what you are talking about Mark. I am just suggesting that the regional price difference only exists for goods/services where consumers choose them for primarily qualitative reasons. <br /><br />d) But there is competition (e.g. shops in the station), you didn't make use of it when you had the chance.JJhttps://www.blogger.com/profile/15509020747779905069noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-60721102825658482442013-07-17T16:58:21.990+01:002013-07-17T16:58:21.990+01:00Also nowadays, everyone is competing with, or inde...Also nowadays, everyone is competing with, or indeed selling via, the internet which tends to level out the prices of things not consumed at the point of sale even more. Very few people are going to pay more for clothes, say, in London, than they can get them for in a few days from a shop in Wales via the internet, unless they are the sort of person who likes shopping in pricey boutiques.Anonymoushttps://www.blogger.com/profile/11871621274712323998noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-47926216094827086782013-07-17T15:29:06.244+01:002013-07-17T15:29:06.244+01:00Chr, look, I'm talking about more or less iden...Chr, look, I'm talking about more or less identical "nice" boozers.<br /><br />Of course there is competition between restaurants and theatres. There is also competition between clothing and cameras, but the price of clothing and cameras is the same everywhere so that is at best irrelevant.<br /><br />But, please note: <br /><br />a) there is competition between them in Leeds as there is in London<br /><br />b) please accept that I am talking about REGIONAL price differences of things which are measurably of IDENTICAL quality everywhere. And I look for the one factor which dictates whether there is a price difference, and that is simply that they only exist for "goods and services consumed at point of use".<br /><br />It is a simple statement based on observable facts and for which there is a simple explanation.<br /><br />c) This probably excludes things like posh restaurants and theatres, which are unigue to London and for which no price comparison can be established. I have made that clear once and and am now repeating it.<br /><br />It's like, we know what the cost of a ski-ing holiday is in Switzerland, but you can't compare that with the cost of a ski-ing holiday in The Netherlands.<br /><br />d) Similarly, the cost of a coffee or sandwich on a train is f-ing outrageous and they are crap quality, but you pay that higher price because there simply is not competition (assuming you forgot to bring your own).<br /><br />Your comments about "quality" being more important for some things might or might not be correct*, I'm not disputing or debating that.<br /><br />* Surely, people care about the quality of the clothes or cameras they buy as well? So how come no price difference?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-37681634518602483142013-07-17T15:16:49.132+01:002013-07-17T15:16:49.132+01:00But Mark a pub doesn't just sell alcohol, it s...But Mark a pub doesn't just sell alcohol, it sells the whole experience. A pub in central London is going to have a completely different ambiance to one out in Essex. After all there are people that won't set foot in a Wetherspoons. Also if the pub was a dump would you pay £4 a pint?<br /><br /><i>"The simple answer is, there are price differentials for "goods and services consumed at point of use" because there is less pressure of competition - customers cannot shop around so much."</i><br /><br />But there is competition. A meal at a restaurant vs. going to the theatre or even just going without. The decision is surely qualitative.JJhttps://www.blogger.com/profile/15509020747779905069noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-81778158757810955812013-07-17T14:39:33.338+01:002013-07-17T14:39:33.338+01:00Chr, that's a long way round of explaining it ...Chr, that's a long way round of explaining it and misses the important bit. <br /><br />The simple answer is, there are price differentials for "goods and services consumed at point of use" because there is less pressure of competition - customers cannot shop around so much.<br /><br />You might argue that with "goods and services consumed at point of use" there is more competition on quality or that quality is more important, and you might even be correct, but that is pretty irrelevant. <br /><br />I mean, I can drink beer in Central London for outrageous £4/pint, or in outer London for more reasonable £3/pint or out in the sticks for sensible £2.50/pint. <br /><br />It's exactly the same beer in every pub, and my enjoyment thereof is the same wherever, but if I'm in central London and fancy a pint, I'm not going to pop out to Essex to drink it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-91835402390683351632013-07-17T14:24:37.102+01:002013-07-17T14:24:37.102+01:00No Mark you've misunderstood me, I'm not t...No Mark you've misunderstood me, I'm not talking about the difference in quality between two Travelodges or BKs. <br /><br />What I am saying is that the goods/services that are more expensive in London than elsewhere are so because they are the types of good/services where quality/attractiveness matters more than price. And therefore when this is the case the difference in price of these goods/services between different locations can in the main be explained by wages/rents.<br /><br />JJhttps://www.blogger.com/profile/15509020747779905069noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-38606506000859013712013-07-17T13:53:37.691+01:002013-07-17T13:53:37.691+01:00Chr, are you seriously saying that all goods and s...Chr, are you seriously saying that all goods and services consumed at point of use in London are higher quality than elsewhere?<br /><br />That a Travelodge in London is better than one in Leeds? That a Burger King in London is better than one in Newcastle? That an Odeon in London is better than one in Macclesfield?<br /><br />It is quite simply and observably the case that in London BK is a tad more expensive than elsewhere, a hotel room is much more expensive than elsewhere, a pint of bog standard lager is a more expensive than elsewhere - there is even a large difference between the price of a pint in central London, inner London and outer London. <br /><br />The same with coffees, anything else <i>despite there being no measurable difference in quality</i> between London and elsewhere.<br /><br />(Very posh restaurants and theatres are a separate case because they probably are of higher "quality" in London so are irrelevant for these purposes.) Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-54868545158442493302013-07-17T13:45:07.819+01:002013-07-17T13:45:07.819+01:00Burger King isn't competing with those establi...Burger King isn't competing with those establishments based on price though. It's competing based upon the quality/attractiveness of its offering. Whopper or Big Mac etc. JJhttps://www.blogger.com/profile/15509020747779905069noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-56425795977091119202013-07-17T13:41:13.009+01:002013-07-17T13:41:13.009+01:00Mark, fast food restaurants was a brain fart but y...Mark, fast food restaurants was a brain fart but you've ignored the other examples I gave. <br /><br />I'm not disputing embedded rents or that high wages play a part. I'm disputing your consumed on site reasoning. Saying that surely it's quality or price that are the determining factors.JJhttps://www.blogger.com/profile/15509020747779905069noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-88541775881321322772013-07-17T13:02:45.252+01:002013-07-17T13:02:45.252+01:00Chr, nope, that has little or nothing to do with i...Chr, nope, that has little or nothing to do with it. I'm talking about REGIONAL variations.<br /><br />It's about <a href="http://markwadsworth.blogspot.co.uk/2011/10/embedded-rent.html" rel="nofollow">embedded rents</a>.<br /><br />The price for entirely homogeneous stuff (beer, coffee, cinema tickets, Burger King) is higher in high wage areas.<br /><br />Burger King in London is competing with the same old local chippy or McDonalds as the Burger King in Blaenau Gwent. But wages are higher in London, so BK prices are higher.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-35474181216522376872013-07-17T12:56:51.574+01:002013-07-17T12:56:51.574+01:00"We know this for a fact because the retail p...<i>"We know this for a fact because the retail price of goods not consumed at point of use are much the same everywhere in the UK**... Prices paid for goods and services consumed at point of use vary much more widely, so the gap between prices in London and other regions is much more marked"</i><br /><br />Is this the reason or is it that prices vary widely for goods where firms compete based upon offering a better quality product/good/service (restaurants, bars, theatres, football clubs) and prices are pretty much the same where firms are competing based upon price (supermarkets, fast food restaurants etc)?JJhttps://www.blogger.com/profile/15509020747779905069noreply@blogger.com