It’s All About the Benjamins, Baby! (A Letter to My Parents) by Trixy Su

Ever wonder where your allowances go? Ever wonder where my allowances go? To my parents, ever wonder why I’m always out of money?

It’s crazy. I’ve been getting the same allowance since I was in high school, and no matter how much prices go up, I’d still be strolling along the same budget line.

Being a resident in one of the best condominiums in Katipunan, I'm a big fan of fast food joints - I am called to eat at these places. There are just times when you get sick of “lutong bahay” and all you want to do is fatten yourself up with a nice 650-calorie burger alongside a box of deep fried nuggets and greasy fries. Mmmm.

For an allowance of Php1500 (I know!) weekly, I spend a maximum of Php500 in KFC and Php250 in McDo – for every KFC meal I buy, it costs me two meals of McDo. With the circumstances I am sadly and regretfully under, my budget line, or the combination of the quantities of two goods that I can afford with the money I get, is exhibited in the graph below.Since I can only consume along and everything below the budget line, if I won’t be eating in McDo and consume KFC alone, I’d be able to afford 3 meals in one week. If I won’t be eating KFC and just be consuming McDo, I’d be able to buy 6 meals in one week. Beyond that, I cannot afford it anymore. :(

After all the eating, because I am too unfit already to walk to and fro school, I have to take trikes. By all means, trike drivers sure know how to maximize their profits – the economical and uneconomical way (simply giving you lesser change than you’re supposed to get).

Trike rates are as follows: Php15 from the condo to Berchman’s Hall and vice versa, Php20 for trips to SOM.

Because trike prices have gone up (or so they say), I spend Php350 on trikes for the whole week. Insane. But because trikes for me have become a Giffen good, or goods that I will consume even if its prices increase, I pretty much have no choice. :(

Aside from the abovementioned, there exist other variable costs which include trips to Mercury Drug, National Bookstore, 7-11 and Rustan’s. :(

It has become more expensive than you think.

Now, with the knowledge of price hikes and the like, I know I’m saving valuable gas money by staying in the condo, therefore saving money overall.

I know you know where I’m going with this…

Would it help if I say “pretty please?” :)

Too Much by Juris Ida T. Parojinog

Aah, the co-ed school: the venue for budding young relationships. Be it in grade school, high school or college, the close proximity with the opposite sex (or sometimes, even the same sex) makes love affairs inevitable. A boyfriend or girlfriend eventually enters the myriad of academics, extra-curricular activities, social life and family life that take up most of a student’s time.

However, being young and naïve, most student relationships often turn out to be unpleasant. The lack of experience usually makes them vulnerable to breakups within a short span of time. Common relationship errors often include the inability to commit, lack of time and the feeling of being fed up with being tied down.

There are some relatively successful or serious ones, but sometimes, even those fail. These are the relationships that seem to be perfect from the outside: the boy and the girl appear to be made for each other, and they have been together far longer than other couples their age, occasionally surpassing the one-year mark. The problem of capitalizing too much on emotions, however, is one of the main reasons why both puppy love and young love bordering on being serious fail.

Case No. 1: “Getting There” Couple No. 1. Their good friends, which later blossomed into something more. They shall be called the “confuser” and the “confusee”. The confuser really was a source of confusion. There was no commitment, but confuser acts as if they’re together. Confusee is always just a text message away – he really makes himself available for confuser. When drunk, confusee is the one confuser calls for, and confusee is eventually the one that takes care of him. It even came to a point where, while drunk, confuser hugged confusee and asked if confusee loved him. This drove confusee mad and, obviously, more confused.

While seemingly on the brink of being a couple, confuser decided to end their so-called “relationship”. With much deliberation, confuser admitted that he wasn’t that ready for a relationship with confusee because he says that “confusee was giving him too much; confuser can’t reciprocate the kind of love that confusee was giving.” Ouch.

Case No. 2: “Perfect” Couple No. 2. They had a 5-year relationship, starting from the sophomore year of high school until the junior year of college. They have the perfect chemistry: the guy being timid and shy, the girl being energetic and assertive, and both sharing the same level of humor. The girl even became close to the block mates of the guy.

The breakup of “Perfect” Couple No. 2 shocked everyone. They couldn’t understand how this happened. Upon further questioning, it was found that the guy felt that the girl was putting him on a tight leash. The girl was known to be very caring – and it seemed that she cared too much.

Both cases show a typical lover’s error: loving too much. Giving too much of yourself in a relationship is does not necessarily mean that you’ll have a lasting relationship. Of course, you have to do your part to make the relationship work, but only up to a certain point. Anything beyond that might be detrimental to the relationship instead of keeping it together.

A word of advice to young lovers out there: be wary of loving too much. As the famous Spice Girls song goes: “too much of something is bad enough”. If you are to give yourself to somebody, make sure that your partner is going in the same direction and is willing to give him/herself to you in the same way. This will not only save your pride, but your heart as well.

Of Elasticity, Friends, and the Like by Trixy Su

It’s funny how friends always say to each other “friends forever!” Do people really mean that? I mean, “forever,” if you think about it, is a very long time. Lots of things can and will happen, and when they do, will you still be able to hold on to that promise?

By saying “friends forever,” it’s as if you’re disregarding everything that will happen from the time that you said the phrase and possibly ‘til the day you die (or even beyond that), that nothing can ever happen to ruin or change the relationship that you have with that person – as if saying “even if you betray me, kill my dog or steal my favorite pair of shoes, or whatever happens, we will still be friends!”

Like some goods, people can be elastic too – that is, easily substitutable. Let's say I'm a consumer of Jack and Jill Potato Chips and, without much ado, the company raises their prices one peso higher than the original. Because this for me is an elastic good, I’d easily switch to Granny Goose brand potato chips.

Based on my experience, friends have literally come and gone. Either I lost touch with them, or something happened that just made me want to not be around them anymore. That’s sad, if you think about it. But how much did I really lose? I’d say almost nothing.

These people that have gone were easily replaced by people that came. Simply put, because my friends’ “prices” have gone up, I demanded them less. I’m more interested in friends that are less “expensive,” yet still offer the same or maybe even better things to me.

In the population of prospective friends, or basically just everybody else, there exists these people who are “less expensive” yet have the same to offer, which makes it easy for someone like me to replace the others -- kind of like a perfectly competitive market, where there are a large number of firms that produce the same homogeneous product.

As a consumer, I know that there will be other places that sell the product I want, and at a lower price than that of others. So why would I tolerate a higher price if I’d be getting the same product anyway? Just the same, why would I stick with friends who cancel plans with you at the last minute or never reply to your emails or don't say hi to you when they see you in school? These friends are substitutable. Sound familiar?

Fortunately, where there is elasticity, there’s also inelasticity. Like goods for which no substitutes exists -- meaning, even if its prices go up, people will still buy it -- I have friends who I know can never, ever be replaced, no matter what the cost.

Economics for the Poor, too!! by Hannah Ang

The common perception of economics is how to make the rich, richer or how to make the most out of the money the rich people already have. For the less knowledgeable, economics is just a tool used for evil big-time conglomerates to make it harder for the consumers. I had a similar perception of how economics is used in big business and how it could be used to maximize my limited weekly allowance. However, I learned otherwise in a class that I took in my stint as an exchange student in Japan. This class was Financial Markets in Asia, wherein I was astonished by the concept behind the Grameen Bank.

Grameen Bank was conceptualized by Muhammed Yunus, who won a Noble Peace Prize for this innovative idea in 2006. Yunus is banker, economist and former professor in Bangladesh, wherein women were the targeted borrowers. He introduced the idea of group lending, which ensures the repayment instead of asking for collateral. They would borrow in groups, in which the members become the co-guarantors of repayment. They would also create a support system for their efforts towards economic self-advancement. What makes this concept innovative is that Yunus was able to think outside the common concept that the poor could not afford transaction cost or effectively invest and get high returns. In short, the poor is not bankable. In addition, the interest rate in these loans actually the prevailing commercial interest rates, yet, it is able to enjoy a high repayment rate. The logic behind this is that the poor would have a significant increase in the return on investments as compared to big companies whose return on investment per dollar would be smaller. This is because the poor have more to gain than the rich and as matter of fact, the rich has more to loose. Therefore, it more profitable for lending firms to lend to the poor than to the rich.

It has also been applied in other countries and is proven to be effective. An example of which would Indonesia. In Indonesia, the Bank Rakyat Indonesia, which is a state-owned commercial bank, applied this concept and created a branch specifically for financing the poor. Its program the Badan Kredit Desa targets the poorest households, which are most women. No collateral is required because it drives on the so-called social capital, wherein the borrowers would be ashamed if they are not able to repay the loan. Or in our society, they have to maintain their kahihiyan towards other members of the community because it is ran by the head of the village. The average loan size is approx. USD 33, which is normally repaid in 10 to 12 equal instalments. Its effectiveness is asserted because of the high repayment rate (more than 97%) with gross loans reaching more than USD 2.4 million.

This model is currently adapted by the ABS-CBN Bayan Foundation through their program, “Pangkat-Buhayan”. In this loaning scheme, the community meets once a week to talk about concerns within their community and their small business that can from micro-financing. The loan sizes could start from Php 4,000 to 40,000. It currently has a 97% repayment rate. However, it has limited coverage with a total of 50,000 clients for the past 10 years. Sadly, other financial firms in the Philippines and NGOs have not caught on this concept despite its proven effectiveness.

Study Hard, Party Harder? by Juris Ida T. Parojinog

Without a social life, Juris Ida will be dead. Period.

Ever since coming back to school from my Junior Term Abroad (JTA) in France, I have been attending school NON-STOP. My fellow ComTech JTAers will attest to that. For our 2^nd JTA Semester in Ateneo, we had Statistics, Marketing, Communications, Philosophy, and Theology; a relatively lighter load as compared to our 1^st JTA Semester. This was to be followed, with ideally just a weekend for a “semestral break”, by our fully-loaded Summer Semester, which has Political Science, History and Economics.

However, the forces of nature seemed to think that we had too much of a grand time abroad and hence, we have to make up for it here. Although the subjects in the 2^nd JTA Semester were supposed to be easier, it demanded a lot of work. That’s not a good thing for a full semester to be taken up in only three months, with three subjects to be taken up in six weeks following suit. There was actually an overlap that happened because even though our summer classes already began, we still had to pass a paper for Statistics and Philosophy. We are basically pressed for time because the dean promised us that we will graduate on time, along with the rest of our batch mates, but there will be suffering. This was not expressed outright – we had to learn it for ourselves.

So what now is Juris Ida’s status? Comatose? Dead on arrival?

Fortunately, Juris Ida is still alive. Despite her hectic academic schedule, she managed to sneak in some parties, hangouts and football games. She has social activities at least twice a week, and that’s exclusive of hangouts in between class and weekend getaways, thanks to a certain group of friends who always contacts her to have a few drinks, go to Tagaytay, go clubbing, etc. This still does not include the physical activity she gets from playing football for fun, getting the adrenaline rush from keeping the enemies from putting any balls inside her goal – goalkeeping with passion.

From the outside looking in, one might think that Juris Ida is spending too much time with her friends as opposed to concentrating on her studies. I beg to differ. When I get home, I immediately catch up on my readings and do anything possible to make sure that I do not lag behind in my classes. Despite all the fun and games that have kept me sane throughout the nonstop studying I’ve been doing, I make it a point never to set aside my studies. No way am I letting my parents’ money go to waste that easily. I just put in a little spice in my academic life to make sure that I don’t get too boring or worse, end up being depressed and burnt out from all the school work I’ve been doing.

I’ve never been that grade-conscious, and I always make myself available for my friends. Whenever somebody invites me to hang out, I just tick off the things I have to do for school, figure out how I can accomplish it, and tag along. In spite of this, I make sure that I don’t party too hard that I leave my readings and books in the corner of my room, gathering cobwebs and dust. This, in Microeconomics, is what we call Convexity, wherein averages are preferred to extremes. I’m not saying that every student should follow this type of lifestyle; this is purely subjective. I just believe that this setup works fine for me. I pass my subjects and never miss out on the fun.

For me, that’s college life in its finest.

Which Superhero Would You Be? by Ck Chua

If given the choice to become a superhero (existent or self-invented) who would it be?

If I were to come up with a superhero, I guess I’d have to involve one of the most favorite things I like to do – shopping and what I would like to do in the future – create a retailing business. I love to shop. I am a shopaholic. So I’m told. I even get comments like: “Ck! You shop like a girl!”. I don't really see anything wrong with a guy that likes to shop. Nothing would relax me more than a day in the mall with an unlimited wallet (I wish!) and countless shopping bags in my hand. For all you avid shoppers out there, don't you just love the feeling of holding a shopping bag in your hand?

I’m also a cheapskate when it comes to buying things. I particularly like finding bargains especially in flea markets or tiangge’s. I get this gratifying feeling whenever I buy something that I feel is underpriced than what’s its actually worth. It's like walking into those 100-peso stores and getting something that’s very useful. As a frequent shopper, I’ve always wondered how retailers actually price their products. I base my decision when buying things mostly on price; price can also affect how much I buy of that specific product. I am what you call a price elastic consumer in that I am very responsive to price changes and my decision to buy products is heavily influenced by price changes. Most people, unless your filthy rich are like these, their purchasing decisions are heavily based on price thus making them price elastic consumers.

Having studied Microeconomics and being a shopaholic, I feel that I have a responsibility to tell all my fellow shopaholics out there in the world what firms are really up to and aspire for. See if I am a firm, there is actually only one thing I have to posses to able to make my business into a profitable one – the power of telepathy. I know this sounds kind of crazy but its true. Economics tells us that one of the most efficient ways to actually maximize the profit of a firm is to be able to minimize costs and at the same time generate a lot of sales. Price discrimination in economics occurs when a firm can charge different prices to different consumers on the basis of non-cost related characteristics. Not having a fixed price can be very advantageous to them since they can set prices at a high and some people would patronize their products. The most efficient form of price discrimination is perfect price discrimination where a firm can charge a different price for each consumer w/ the price exactly equal to the maximum price the consumer will pay. But in reality, this can’t happen. No one in this world can actually tell what consumers think or how much they’re willing to pay for a product. Therefore, the salesperson not knowing this, he won’t really be able to maximize profit. No one in this world would be able to achieve this except for… Telepahty Man! Yes, Telepathy Man has the capabilities to read people’s minds and know what people are willing to pay for a certain product.

So shoppers beware, if I become a superhero and have a business of my own in the future, get ready cause Telepathy Man will surely empty your wallets and rip you off! If I am able to do this, I will be filthy rich… take that Gokongwei!


cartoon taken from: http://www.alexhughescartoons.co.uk/Home/labels/illustration%20friday.htm

Noli Me Tangere! The Science of Sensual Shopping by Hannah Ang

As the Filipino culture culminates, we seem to find ourselves gravitating towards into black holes found randomly around the metro, which also known as shopping malls. The train lines seem to have stops that are built and integrated with the mall/s. An example is LRT2, where the Cubao station is integrated into Gateway, through which you connect to more malls and to the MRT line. Even real estate seems to be affected by this gravitation towards these black holes. The brochures handed-out to sell residential properties would include what are the nearest malls because it is a sure-fire way to increase real estate value.

Ironically, even the churches that during the Spanish colonization were the center of the community are now found inside the malls right in the center of the food courts.

Shopping indeed has changed the way we live our lives but what is not noticed by the average shopper is that we also have changed the way of shopping works. Take for example, in the Philippines, decades ago when the only bookstores were the Institute of National Bookstore, Goodwill and Expressions, most of the books that were sold were heavily wrapped in plastic. In those days, we would find books wherein the plastic was forcibly opened.

According to Paco Underhill in his book, “Why We Buy: the science of shopping”, customers want additional information because of the wide variety of choices that the customers are faced with. In those days, the only information you would get was a very short summary at a back which is insufficient information for the customer. It doesn’t assure the customer that this book interests would interest me more than other books.

From the retailers’ point of view, an uncovered book would just lead to merchandise to spoil and incur more cost. While that maybe true, Underhill says that these type of retailers loose important profits from customers who gets frustrated due to the lack of information but that has changed and been innovated by Powerbooks, Fully Booked and alike. They provided customers with chairs and tables, comfy corners where they could read open copies for most books that they consider buying. Some customers would skim through the chapters or others would read until the third or fourth chapter before deciding to buy the book. Either way by the time the open copy is ruined they already have covered the cost of the open copy with the number of books they sold. We as consumers now demand experiencing the product with our own senses before we purchase it.

Some bookstores are still reluctant to adapt to this and even some industries which might benefit in adapting to this business strategy are reluctant as well. Nonetheless, these businesses could use the economic concept of profit maximization. These firms should examine the marginal profit obtainable from selling (instead of producing, since they don’t really produce) one more unit while acquiring one additional capital (or in this case, the open copy). This information can be vital to determine if this strategy would be effective for their business.

Personally, I recommend business strategy to vendors of gaming consoles. Right now, I am having a hard time contemplating which would be a better purchased when I have finally saved up. PSP or Nintendo DS Lite? It’s hard to decide because most of the time they are locked behind a glass display, screamed Noli Me Tangere. But trying each console for a couple of hours would really help me decide. ;-)