According to Dr. Robert Frank, a professor of economics at Cornell University's Johnson Graduate School of Management, the subject of economics has gone mainstream in the past few years, becoming approachable and interesting. Jean talks with Dr. Frank about his new book, The Economic Naturalist: In Search of Explanations for Everyday Enigmas. Dr. Frank says there are economic principles at work everywhere you look. He shares some examples of seemingly strange ideas that make sense from an economic point of view:
Why do drive-up ATMs have braille dots? Dr. Frank says it's cheaper—not to mention easier—to make the same machine for both drive-up and walk-up locations.
Why do travelers from Kansas City pay less to fly to Orlando than Orlando travelers flying to Kansas City? Dr. Frank says many factors go into determining airline tickets—one is the number of choices available to the flyer. For example, travelers from Kansas City to Orlando will pay less because they are typically price-sensitive tourists with many choices of destinations, Dr. Frank says. Travelers to Kansas City from Orlando will pay more.
Why do many fast food restaurants promise a free meal if a customer isn't offered a receipt? Dr. Frank says the offer is really an effort to deter theft, not enhance customer service. He says restaurant owners and managers fear that employees will pocket cash if they are not required to give a receipt.
Why do brides spend money on wedding dresses they only wear once, while grooms rent their tuxedos? The dress requires more of a fashion statement, Dr. Frank says, and therefore rental companies would have to carry not only a huge stock of designs, but sizes as well. Tuxedo styles are limited and easier to rent.
