JPES B.L.O.G.: Bringing Life to Opinions of this Generation

“Commuters give the city its tidal restlessness; natives give it solidity and continuity; but the settlers give it passion.” – Elwyn Brooks White

Day after day, commuting is a “taken for granted” activity most college students encounter on their way to their workplaces and schools. For some, it is a sunk cost especially to those who have a limited income, in forms of allowances, from their dear parents. But the question is “does commuting kills? Or does it rewards?”

What Are The Costs Incurred?

It is easy to believe that commuting takes a lot of cost from us. Taking the MRT is a sure struggle and challenge for most commuters taking that route. Lucky for the first timers if they don’t cry amidst the sea of people waiting for their turn to the train.

If we will consider things such as inflation rates despite constant allowances, health risks brought about by pollution and health-related pandemics, myriad of walks as a morning exercise (excluding the evening commute), perspiration, time pressure and in some cases, security, all these hassles contribute to the cost a commuter or a student encounters everyday.

Behind the burden

I personally witnessed the tremors of commuting especially during the rush hours. I can’t imagine living a life sustaining all the traffic jams and cramming to meet the call time at school. But as a benefit of commuting, in the short run, commuting can minimize cost among students considering the fluctuating prices of oil (not to consider parking space fees, etc.). Some may argue that having your own car is more comfortable and is a good investment, practicality-wise, I prefer commuting. In fact, it also saves time once you manage to gain your PhDs in commuting.

As an economist, these are simple and petty stuffs to consider compared to analyzing industries, calculating demand and supply and etc. Petty it may be but in order to come up with holistic policies and decisions, petty stuff can turn out to be crucial in the long run for decision makers.

In this “simple” exercise, our skills in economics can be useful in broadening our imagination of analyzing a certain event. In this topic, we any examine its macroeconomic and microeconomic implications as well as its externalities in arriving to a multi-disciplinary approach. Some may say these are unnecessary in solving this dilemma. But if we practice this kind of habit in minute things, recovering from a huge phenomenon like the Global Financial Crisis could be a walk in the park.

Thus, in case of commuting, basic economic principles can be utilized to arrive at a sound and strategic decision of being punctual, of being respectful to our appointments, and of being conscious of our schedule. Remember, time is scarce and optimizing this resource is not an easy job despite econometric and regression models. In this manner, commuting does pay.

–UA&P BEA (by Ralph Martin Tomenes)

Economics is about choices and life is a choice.

It affects everyone’s life each single day. We make economic decisions everyday, everything that involves choices and sacrificing one gain for another greater gain and what we choose is how our life turns to.

Every morning, should you hit the snooze button one more time, or get up now? The consequence is if you hit the snooze button, your incentive is more sleep, but you forgone the time to get yourself ready. Meanwhile, if you get up, your incentive is more time to get ready but your sacrifice is less sleep.

Also, being a working student, economics applies. If you choose to work in a fast food chain, your reward is minimum wage but the cost is less energy and time in performing school works resulting to poor academic performance. But if you prefer to work in university being a student assistant or librarian, there is less physical work and more energy and time to do school requirements, yet it is below the minimum salary.

Even in our dating life, economics rules. Take a speed-dating event; we wouldn’t be amazed to notice that tall men, thin women and high earners get more offers for dates. But if you go to an event where all men are less than six feet, they just get as many offers. This is for the reason that people adjust their standards to what they think they can get at the time.

People feel wealthier when they spend money on experience such as watching movies, going to Enchanted Kingdom, swimming in Boracay, dining in a restaurant with good ambiance rather than on material possessions.

Furthermore, in grabbing opportunities like having scholarship abroad for undergraduate needs a cost and benefit analysis. The cost is the time that you supposed to graduate early at your right age and escaping of cultural shock and home sickness. On the other hand, your benefits are long term attainment for your dream profession, prestige and financial support. It’s up to you to decide whether to accept or reject it.

And obviously economics is applied in business. Retailers intentionally make it less attractive to buy cheaper products. At least one juice company offers you three sizes of juice cups, but doesn’t publicize a fourth, extra small, because they want you to pay more. Though, some entrepreneurs do the reverse to have higher volume of sales. For instance, most of the carinderias now offer combo meals having the rice, vegetables, meat and soup yet it also offer single ordering but having a minimal difference with the amount of the former.

Consequently, Economics is about choices that play a vital role for our everyday life…because life is a choice.

–PUP Econres (by Katherine M. Villalobos)

To one side of humanity, luxury can be described with a painted picture in mind of a couple enjoying Champagne over dinner, the man wearing  Rolex silver watch with his nightshade tuxedo while the lady beautifully adorned with jewels in her crimson cocktail dress, discussing the day’s dues. To the other side, this scenery is lifestyle. And as economists, it never was hidden to us: the inequality and disparity of opportunities and resources. How the Lopez’s would complain of the government intervention in MERALCO [1]while the average wife worrying about her husband’s income and how would it suffice to their month’s needs. How nations worry about the global financial crisis while the average Juan dela Cruz lives on a daily financial crisis[2]. How financial institutions would go crazy and drive businessmen crazy (and economists alike) while people living in rural areas (who compose much of the Philippine population) might never know the meaning of stocks, savings, and interest in their entire life. There seems to be an infinitely aggravating economic dichotomy. This, among many, constitutes the reality faced, with its totality described, by economic students.

This blog is purposed neither to serve as an informative feature nor to function as a short discourse of the fascinating variety of economics observable in everyday life, but to serve as an open letter as to what I think Economics should be in an economist’s everyday life.

The radical part in me tells of an inward battle that strives to break the culture of mediocrity dominant in today’s undergraduate economists. Some only digest economic theories with amusement and interest. My problem: some graduate, holding fast to these newfound knowledge, but in the long run, become gradually drained. My hypothesis: much of what we learn in classrooms is encapsulated in technicalities: in theories, economic models and so on. The reason is quite evident: what becomes addition in our knowledge does not automatically become addition in our identity. In short, we fall in the trap of treating economic knowledge in its highest technicality – a possible solution to a possible problem – that we can no longer connect to it. Most economists would actually confess he often find irrelevance to his doctrines especially when laymen ask him to put his theories into their tongue. There is insufficient sustenance in passion because we simply do not find significance in our lives.

The other part in me, sympathetic to the other half, would praise economists who sleep with his theories in  mind and wake up early in the morning eager to apply those theories (as if he deducted application in his dreams). But that is not the point. My blog is purposed for the earlier half. Those who are well do not need a physician.

My point is this: Economics is, and never was, entirely about theory. It’s about life: it’s about facts (hard enough to swallow) and challenges (even harder to accept). In studying Economics, we embrace the reality of scarcity – being fully aware of its dynamics and consequences. In studying it, we are exposed to the possibilities. Economics is a double-edged knowledge: both a gift and a liability. In the absence of the liability, we are told of the explanations that drive the economy and why market economy should be the hero (partly because of ‘self-interest producing harmony’ logic, partly due to the invisible hand – both smith’s ideas). In the absence of the gift, we carry the key and hope for development – at least to the extent our field can offer. Inasmuch as Atlas was said to have been carrying the globe over his shoulders all this time[3], it is an imperative, not just for economists but other members of the academe as a whole, to carry the burden of providing answers and solutions to his nation’s set of dilemmas.

It can be misleading, though, and many may think I’m putting too much burden to people of our lot. But out of the overflow of my heart, I am. I am saying, with the motive to inspire rather than impress, that economists are given so much that much is also expected from us. We do not endure (or enjoy) four years of schooling to contribute zero (I hope not negative) marginal productivity to society. We are not branded as economists by job and by intellect, but as Economists by profession and by heart. As much as we find significance in dwelling in complicated functions to determine equilibrium values and use production functions to solve for optimal values of inputs, Economists should equally find themselves in their respective slots in society – to count as additions and not insignificant zeros.

In the extended long run, we are called to quantify our roles as Economists. By quantifying, I mean extensively involving oneself in the picture. When we say additional jobs are required to lessen unemployment, one should be willing to response to the call of expanding his territory in business terms. When we point to brain drain as a major social illness, we should be willing to harness and erase every thought that devour our sense of Philippine-ism (nationality and patriotism). When the government becomes inefficient, our immediate response shouldn’t be  sympathy, nor grief, nor fear, but a willingness to step up and reform it. To quantify one’s role implies assigning position and values. To differentiate it from merely qualifying, Economists are called to put accuracy and power to their models through a mentality of being able to cross the realms of his theories and stepping up into application, where the true arena of LIFE is.

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At least for the UPLB Economics Society[4] (the Organization where I belong), more than promoting academic excellence, part of what the Organization envisions involves developing able leaders with visions equal to what Economists should have: to be goal setters and thermostats in their chosen fields.

The economics of everyday life is not a puzzle, nor a jigsaw of some sort that we have to solve. Solutions are clear and well presented, waiting to be applied. In a nutshell, my hope is for junior economists to envision themselves as part of the larger picture in applying what technicality his University may have inculcated in him.

Part of my vision is for members of JPES to carry out the same goal: to produce not merely outstanding economists of the land, but also leaders of the future.

[1] “Lopezes move to fend off Meralco takeover” posted May 15, 2008, by Daxim Lucas, Philippine Daily Inquirer

[2] The average monthly income of the poor is estimated at P8,877. Statistics from NSO.

[3] Mythology: Atlas, leader of the Titans, was punished to carry the globe in his shoulders for eternity by Zeus after the war of the gods.

[4] The UPLB Economics Society is the most prestigious association of BS Economics majors in the University of the Philippines – Los Banos, and has served the country through its various activities for more than 23 years.

–UPLB Econsoc (by John Kevin Benico)

The whole world is still in the process of surviving the recession that we are all facing. Giant and even small nations are contaminated by an economic flu that results to declines in production that causes some companies to lay-off some of their employees.

                In the ongoing crisis, we encounter today not only declining of production and company bankruptcy but also currency crisis and inflation. In line with this, you will understand better and can come up with a solution if you have background knowledge regarding economics, because these certain issues will mostly be found in microeconomics, one of the branches of economics that deals with the interrelationships among the units comprising the national economy such as consumers, household and others.

                A typical person should have a minimal amount of knowledge in economics for them to make an economic decision intelligently. He must know how he can allocate his resources in order to satisfy his unlimited wants. In the upcoming national elections he can apply his economic literacy to make  brilliant political decisions and this can be done through deciding on which candidate has a better plan to eliminate if not to alleviate major problems in our country such as poverty.

                All of us are consumers. Every day we are spending our resources to meet our wants and needs. As consumers through the help of economics we can make a series of plans or decisions which requires an understanding of the forces behind inflation. It is important to the consumers for them to decide whether they will stock or not a particular commodity; the workings of the foreign-exchange market so that they can plan out what to do if there be another devaluation and if the prices of imported goods like gas will increase; the law of demand and supply so that they will know what to do if there’s a shortage or surplus of certain product; and the structures of interest rates so that they can decide whether or not to purchase an appliance on installment or either deposit money from a bank or withdraw it and let it circulate. Whether he is conscious or not, the present-day consumer should assume all types of relationships among forces that affect not only our economy but also in our daily life because in every aspect economics takes place. With this everyone should know how vital the role of economics is.

–TSU Ecosoc

The broadness of economics makes it difficult to distinguish its practical uses. For Economics in a sense, is used on a daily basis by anybody who makes decisions: from the common fish ball vendor to the lustrous financial managers.

                This article focuses on the practical use of economics in our everyday lives. The topic is actually quite ironic, in a sense economics is used on a daily basis by every living human being (living meaning being able to make his or her decisions). Economics is not exclusive to the Economics majors out there nor is it reserved for those in the stock market and the government. It is applied and used by everyone- the ‘Masa’ as we commonly refer to them.

                It is the 15^th day of the month. Mang Pandoy just got his 5000 Pesos earnings from the construction firm he is working for. Mang Pandoy has a wife and 8 children to feed at home. He needs to buy dinner tonight, his options are sardines or noodles but he can also buy lechong manok. Surely lechong manok can make his family more satisfied, although will he risk wasteful spending on a delicious dinner? He could also opt to go with noodles to save more money; after all raising 8 children requires a lot of resources. He must weigh the benefits of the two choices – in this case lechong manok or sardines. Does it not sound more like a short run problem and a long run problem?

In this case Mang Pandoy has to choose between the short-run happiness of his family and the long-run financial stability of his family. Their 250 pesos they may spend on lechong manok can also be Junior’s ( Mang Pandoy’s 7^th son) school supply allowance. It can also be their monthly electric bill.

But Mang Pandoy is not very fond of weighing his economic options and chooses to make his family happy for the night and goes ahead to buy lechong manok. Mang Pandoy’s family is satisfied for the mean time. And have I told you of Mang Pandoy’s philosophy that “life is short”? His short run benefits have more value to him. But it does not necessarily mean that he chose the lesser option.

Junior might be motivated because of his father’s good intentions and gets high marks in school, gets a scholarship and graduates cum laude. These unforeseen events are what we may call externalities. They are things of which we have no control over, but are consequences of our economic decisions.

Junior gets a good job working abroad. He sends his brothers and sisters to school. They all graduate and Mang Pandoy and his family is better off economically. And all these because of the day they ate lechong manok.

To identify one by one the usefulness of economics

First things first, what is Economics really? Surely it must be something more than a course to take in college, something more than what determines the poorness and richness of a country. It is more than a social science with its many theories, and certainly more than supply and demand. Economics is a way of life. We live it in our everyday lives.

Going back to the basics, history has its own definition of what economics is. The term economics comes from the ancient Greek word oikonomos (οἰκονομία), oikos meaning household and nomos which means law, putting them together we come up with household law or law of the household. Households are the smallest units of our economy and laws are fundamental regulations imposed on us by society. Wait, does that not sound too simplistic? No. As a matter of fact households represent a fundamental aspect of the economy, inasmuch as they are economies themselves.

Are these households the very same residential areas we live in? The answer to that question is a very loud YES! Day in and day out people make economic choices on many categories in life and most of the decision-making begins at home. What shampoo to use? How many kilos of pork to consume? What type of refrigerator to invest in? Buy a Plasma TV, or a Regular one? Spend millions on a sports car or buy a smart car? The list goes on. These many little decisions, insignificant as they seem, have an impact on the overall economy. It may not be obvious to the normal person but through the trained eyes of an economist, these details come to life. 

If economic decisions do in fact occur in every household, then it is also true that every person “out there” makes economic decisions on a daily basis. The fact that a person has money and spends it or either saves it contributes to the whole of the economy. He or she does not have known any complicated economic theories. He or she does not even have to have an economic degree of any kind.

Remembering Mang Pandoy

                Mang Pandoy was our normal Filipino masa. He was unaware of any economic theories. Oblivious to the ups and downs of the economy, and yet he suffers from every economic woe and rejoices at every economic gain. Put simply, everyone who lives in this world is affected by the economy. The same thing can be said in another way: anyone who lives in this world performs economic decisions knowingly or unknowingly.

–ADMU AEA (by James Kenneth Gudito and Paula Vasquez)

Have you ever wondered how life will turn out without economics? Isn’t it just plain chaotic to think that the world will just be a worthless being with a lifeless society? Well I guess you can’t. As you see, we perform our everyday tasks with economics. Come to think of simple transactions such as buying your groceries at a supermarket, which in deeper thought would create a mutual agreement for the buyer, who will find utility and satisfaction to the good, as well as to the seller, for the profits obtained in the business. Economics is not just economics itself but a realm of deep thinking and analysis. Allocation of scarce resources, by definition, obviously makes economics a unique tool of decision making not only for societies but also to such individuals. Considering your options and finding ways to be able to maximize whichever the intent is, makes economics extraordinary. One apparent example which is easy to relate with is budgeting of allowance or money. Though a person has a limited amount of saved money for particular purposes, one would find to spend a much larger percentage of money to which is more significant of use. It is a fact that since there is scarcity; one must know how to deal with it and to be resourceful. Well, such simple decisions only show a mere tainted window of economics. Others might seem to think that economics is purely political, for a much larger scope, only applicable to a society but it is not. Such individuals also benefit because of the beauty that economics conveys. It can be observed that it is more about allotment but there is something more about economics rather than lucid distribution. It is attaining contentment from the good that we derived on, nonetheless, maximizing their happiness, to gain from one’s choice and actions and to be efficient as possible. Many people though have limited resources, would prefer to be fulfilled, at least through an alternative to resembling goods. The masses of people who purchase goods, conjointly the Philippine economy that is striving to recover from its atrophy, will be better off when there is an upright decision making from them, likewise the keen choices they coerce. Evidently, that is when economics comes in the setting. Economics is like facing reality and dealing with it. Everything relies on economics. The world, the people, and the society will never be outright without it. So now what do you think about life without economics? One word: Erratic.

–UST Ecosoc (by Joanna Therese R. Lopez)

A day in every MEcOnista’s life is a hodgepodge of various experiences as he strolls around the world of Economics. Everywhere he goes, Economic concepts abound, as if Economics is his guardian angel. He can’t seem to avoid it. And why should he? Economics really is his sidekick. Compared to the common man on the street or to a person without a background on Economics, the MEcOnista is adept in making Economics his tool in his everyday life. From the moment he wakes up to the time he retires for the day, Economics helps him in making the world he lives in intelligible. Now, let’s zoom in to a day in the life of Mec, a MEcOnista, as he deals with it having Economics as his companion.

Mec’s day starts from the moment his alarm clock wakes him up for school. His class starts at 9:30AM so he sets the alarm at 8:00AM so he can prepare for 30 minutes then drive for about 45 minutes going to school. The remaining 15 minutes is his leeway in case he has trouble parking, so he still won’t be late for class. However, this is only the ideal situation for Mec. Because of the tons of schoolwork, Mec gets to sleep very late at night so when his alarm clock rings at 8:00, he always snoozes for a while before finally waking up. Finally, his eyes open then, upon noticing that it’s already 8:20, he jolts out of bed and runs downstairs for breakfast.

Upon eating breakfast, two things spring out of Mec’s mind. First, he thinks about the opportunity cost of having woken up on time. He worries that he might get stuck in traffic then he might not be able to find a parking space right away and so he might be late for class. Second, he looks at his breakfast of Tapsilog and thinks about how lucky he is that he’s still able to eat despite scarce resources that make millions of people in the world hungry. He lamented on these things while eating.

After eating and agonizing for 10 minutes, Mec rushes to his room for more of his morning rituals. Before he goes to the bathroom, he moves to his stereo for some loud music while taking a bath. However, he pauses for a while and thought of the concept of externalities before turning on the music. He thinks that while his neighbors may enjoy his good hip hop music and may even induce them into dancing in their own homes, he thinks about the people who still are asleep who may be agitated by the booming noise in Mec’s house. Therefore, weighing both the positive and negative externalities, he chooses not to turn his stereo on and just decides to sing out loud while in the shower.

He takes a shower for 15 minutes and uses another 5 minutes to dress up and head to his car. Now he’s on the road and just as expected, he hits on a traffic jam. While waiting for the cars to move, he turns his head on to the side of the street where he notices walls and lampposts full of vandalism. He then gets frustrated at the desecration of these public goods. However, he notices the MMDA art and the reparation of drainages and roads as he drove even more. He then felt relief at the sight of these efforts to improve our public goods. He just wished that the people would be more informed on the responsibility of safeguarding our public goods since they are used by a lot of people.

Finally, he arrives in school and again, as expected, he finds all the parking spaces occupied except at a far away spot. He then hurriedly walked for several meters to his classroom. Unfortunately the professor has just finished checking attendance when he got there. Therefore, he takes it upon himself to make up for his tardiness by participating in the class discussion.

Now his Marketing 101 professor asked the class which product they think is better: the iPhone or the Nokia N Series phone. A lot of people gave their own opinions and preferences. Then again, Economics courses through Mec’s mind. He then recited that he’s well aware of the different tastes and preferences of his classmates since each one, upon buying a phone, rationally deliberates on which will give him the optimum results given his budget constraints. Then in the end he simply says he just prefers the iPhone more because of the various applications which can increase his productivity. At the utterance of his last word, the whole class was astonished to the point of being speechless. Even the professor paused for a few seconds before going on with the discussion. After Mec, no one dared to recite, as if reciting with Mec around would be the most stupid thing to do. The bell finally rings and Mec is off to his other class.

It seems like Mec’s Philosophy class goes smoothly as his professor gets him into an information overload of food for thought. Now the bell rings again, and Mec’s off for lunch.

On deciding which food to buy, Mec finds out that he’s torn between his cravings for a burger worth P75 and a lemon chicken rice meal worth the same amount. Mec knows that he can’t just buy everything he wants because of the fact that he’s limited by his allowance, and so he discerns to the best of his rational faculties on which food will give him the greatest satisfaction for P75. Finally, he decides to buy the rice meal. However, the foregone option for the burger still lingers in Mec’s mind. He just decides to buy it on another day. The bell rings again and it’s class time for Mec.

Mec continues the day with 1 more class and at 1:30PM he’s already out. However, he still has some org stuff to do for MEcO so he goes to the org room to meet up with his orgmates. Together, they brainstormed on how to go about doing the blog that the JPES asked them to do. During their brainstorming, Mec and his colleagues realized how Economics really is applicable to their daily lives and so Mec got to appreciate his Economics subjects more. After an hour and a half of discussion, Mec decides to go home to start on his blogging.

On his way home, Mec noticed that his gas gauge is telling him that he needs to gas up at once. He then goes to the nearest gas station to fill up his tank. Upon entry into the gas station, the gas boy courteously greets him and asks what kind of gas he wants to load up. Mec then said he’s loading an unleaded and so the gas boy hurriedly loads Mec’s car. While waiting for the loading to finish, Mec notices that there are a few gas boys in the gas station compared to the many cars and gas vending machines around. He then thinks that perhaps, if the management adds a few more gas boys, then the gas station will be able to be more productive in their gas filling and this will bring them more customers to serve. Mec’s gas tank finally gets loaded already and so he checks how many liters got into his tank. He noticed that there were only a few liters that were filled and his gas gauge barely went up. He got disappointed at this and thinks that the OPEC countries were responsible for controlling the supply of petroleum that’s why the prices went up and he got only a little gas for what he paid for. Therefore, Mec thinks that because the price elasticity of demand is quite inelastic for petroleum, even if its price rises, he still has to gas up nevertheless, so poor Mec paid up and went home barely satisfied at his gas filling.

The rest of Mec’s day continued until it was about time to go to sleep. He then says his prayers and thanks the Lord for the great day he has had and for his knowledge of Economics for without it, he wouldn’t have been a day more aware and a day smarter.

Such story is a typical day in a MEcOnista’s life. Indeed, Economics is applicable and is a powerful tool in understanding the world we live in. Especially during the time of globalization, we can’t help but think of our economy and how it’s affecting our lives each day. It’s really inevitable to discard Economics even for the man who knows nothing of it because while he’s ignorant of Economics, it continually knocks on his door until he notices it. Every decision we make has an application of Economics in it for Economics is based on the rational reasoning of humans. We really can’t escape Economics for we live in its realm. Therefore, since that is the case, the next best thing is to embrace Economics and use it to our advantage.

–ADMU MEcO

When one hears the word “economics”, more often than not, complicated matters automatically come into their minds. Many people think that economics is typically only associated with complex affairs and most individuals forget that economics is very much a part of our everyday lives, from the biggest to the smallest detail. This is why economics is practical in our day to day activities. It is the art of living.

In our every action and in our every decision, there is some economic aspect to it. From simply turning on or turning off the lights, to buying property, we are moving our economy. By simply deciding to switch the lights on or off, we are applying economic principles. We could say that by opting to turn the lights out, we are trying to save energy and money, and that is what we call the opportunity cost of goods. This common act might not seem like a big deal but if you look deeper into it, one would see hidden effects or consequences. For example, a fluorescent bulb’s life is greatly affected by how often one flickers with the light switch. This means that the more you switch your lights off, the faster the bulb gets worn out.  Consequently, the more frequent you have to change it.  And this is the trade-off between the cost of choosing to save money by saving energy as against the cost of frequently of replacing the bulb.

 Just like the light bulb, everything in our world is finite and is, therefore, limited. Economics is the science that allocates those scarce resources and assesses their effects in our lives. It is the skill of analyzing and choosing to get the desired results. Plain and simple – economics is basically what makes our world go round.

–DLSU Econorg