Is coffee-shop coffee too expensive?

[Japher]

Price differences may be required in order to offer the consistency and convenience based on local, since I'm sure renting a shop on Park Avenue isn't the same as rent on Baltic Avenue.

[Ming]

People will pay what the they think a product is worth.
Personally, I never buy Starbucks coffee because I don't see the value in what they are charging. There are other places that serve better coffee at a far better price.

Starbucks is smart. They offer people coffee they way they want it. And they know they can charge extra for it.
Some people are more than willing to pay to have their coffee made exactly how they like it. For them, they see that it's worth it. They aren't doing it as a status symbol, but are doing it because they think it's worth the extra. So to Imrans point, I see a lot of people doing it for the consistency... and the convenience that they can get the same cup of coffee that they enjoy just about anywhere.

[Agathon]

Originally posted by Ming
People will pay what the they think a product is worth.

Unfortunately, the high sales of Britney Spears records demonstrate that this is a terrible principle to base a society on.

[Patroklos]

What was your concept of worth when you were a 13 year old girl Aggie?

[Ming]

Originally posted by Agathon
Unfortunately, the high sales of Britney Spears records demonstrate that this is a terrible principle to base a society on.

Different strokes for different folks. I'm sure many people wouldn't buy Blue Oyster Cult cds

Everything really comes down to perceived value. I don't know how you can base the concept of "trade" on anything else.

[MOBIUS]

I've seen BOC in concert.

[Ming]

Originally posted by MOBIUS
I've seen BOC in concert.

I've seen them many times...
But to show you how low they have sunk, rah and I saw them about a year or two ago as the headline act at a local Fourth of July celebration in a suburb of Chicago.

It was a blast...

[Agathon]

Originally posted by Ming


Different strokes for different folks. I'm sure many people wouldn't buy Blue Oyster Cult cds

Everything really comes down to perceived value. I don't know how you can base the concept of "trade" on anything else.

Any economist will tell you that perceived value makes markets run badly. The much vaunted efficiency of markets rests on the assumption of perfect information.

The more a society deviates from perfect information, the less efficient it is. Ours deviates radically.

Competitive consumption is a different problem, but no less a waste of resources.

Neither the left or right cover themselves in glory on this point. Neither of them are willing to blame consumers.

[Ming]

Any economist will tell you that perceived value makes markets run badly. The much vaunted efficiency of markets rests on the assumption of perfect information.

True enough... but what is the alternative... having the government set pricing... we know how bad that sucks

What would be the best alternative?

[Agathon]

Originally posted by Ming

True enough... but what is the alternative... having the government set pricing... we know how bad that sucks

What would be the best alternative?

Very strong regulations about misleading advertising. Educating people to see through the most common tricks. Proper labelling of products. Restrictions on advertising aimed at children. Banning clearly pernicious advertising (like advertising prescription medicines - already illegal in many countries).

In other words, the tried and true solutions, but more rigorously applied.

As for competitive consumption. Luxury taxes are the usual response.

As for the government setting pricing. It works splendidly in many areas of the economy such as health care and education (Americans don't seem to understand this, which is why they pay too much for lousy health care and crappy schools). There are conceivably other areas of the economy where state ownership or some sort of single payer system is the best option (for example: accident insurance).

By and large, many of the things organized along market lines are frivolous goods that do little to improve human welfare. It's long been known that, although we can consume a lot more than we could say, 35 years ago, that this has not made people appreciably happier. I can't remember what the exact figure is. I think it is about 10,000 dollars per person in terms of GDP, but there are no appreciable gains in welfare beyond that.

The current optimal method of organizing a society is the Nordic model. They just seem to be able to get a lot more out of a lot less than the rest of us.

[Arrian]

Very strong regulations about misleading advertising

I ****ing hate ads. Not that I can't see through them, mind you.

-Arrian

[lord of the mark]

Originally posted by Agathon


Any economist will tell you that perceived value makes markets run badly. The much vaunted efficiency of markets rests on the assumption of perfect information.
.

Not necessarily. Theres a whole subfield of information economics that drops the assumptions of perfect information. There are studies of optimal search theory, etc. Hell, there were 30 years ago. The question is, will any given intervention make more sense under imperfect information. What is the most efficent mechanism for processing that information.

[lord of the mark]

Originally posted by Agathon
As for competitive consumption. Luxury taxes are the usual response.

That only changes the terms of the competition. It also means that whats determined to be a luxury becomes a huge issue.

[lord of the mark]

Originally posted by Agathon


As for the government setting pricing. It works splendidly in many areas of the economy such as health care and education (Americans don't seem to understand this, which is why they pay too much for lousy health care and crappy schools).

But education through the secondary level is provided by free by the state here. The part thats not set by the state, is higher education, which is probably the strongest part of the US education system.

Health care pricing is problematic, because its usually not paid directly by the consumer.

[lord of the mark]

re coffee.


1. "Coffee shop" coffee in general, is marginally better than coffee made in generic diners, etc, over here. Generally not better enough for me to pay a premium for it, but that reflects my own income level and preferences. For someone with a high enough income, it could well be different.

2. Lattes, espressos, etc are a different product. They are more labor intensive, and naturally more expensive. Occasionally I get one.

3. The above are generally better and cheaper at a good mom n pop espresso place than at Starbucks. However Starbucks is more widely available, and more reliable.

4. Coffee shops in general, provide more than just coffee, they provide a community hang out, with free papers, easy chairs, etc. In many places Starbucks in particular provides the only such one for some distance.

5. I dont count on a skim Latte by itself to provide happiness. I prefer living in a world with an occasional skim latte available to one where its not.

6. Those who lack info to adequately compare Starbucks to their local Java house, are probably better off in a world with free coffee markets than if, say, Starbucks were banned.

7. Im not sure exactly what in Starbucks ads is so misleading that it could reasonably be regulated. Without generating a govt bureucracy that is A. Too vast and costly and B. Too intrusive.