Porn and Transportation are Substitutes

OK, I couldn't leave this one alone. Greg Mankiw points to some research showing that "many websites focused on adult or erotic material have experienced an upswing in sales in the recent weeks" since the stimulus checks were mailed out. I can buy the theory that many of their marginal customers are liquidity constrained, which I'm guessing is the way Greg sees it, but there's another issue here that hasn't been addressed. The stimulus checks are only one of a number of things that have happened over the past few months. You might also have noticed, for example, a dramatic increase in the price of gasoline, coming at a time when people were already adjusting to dramatic increases over the past 4 years. I think that particular change is an important part of the picture.

"Adult or erotic material" is a form of entertainment, or, if you will, recreation. But unlike various other forms of entertainment and recreation, it can be consumed at home. And I suspect that a lot of people think it's more fun than most other forms of entertainment and recreation that can be consumed at home. You can go out to a bar or a club or a ball game or a movie or a show or the beach or, well, a brothel, if you're in Nevada, or you can stay home and consume forms of entertainment that can be consumed at home. I can remember seeing a story recently (I don't remember where) about how brothels in Nevada are being hit hard by the economic slowdown. If you stay home, you don't have to use up gasoline, so the relative cost of at-home entertainment goes down when the price of gasoline goes up. Adult Web sites are probably not a Giffen good, so, if we could hold other income constant, we should expect that the demand for adult Web sites should go up when the price of gasoline goes up.

Granted, other income isn't constant. The rising price of gasoline affects a lot of other areas besides entertainment and recreation, so it represents a general decline in real income. And the economy is weak. So maybe the stimulus checks compensate for these declines in income. If the effect of the stimulus checks is to bring income up to the level that it was before the increase in gasoline prices, we should expect an increase in demand for adult Web sites. So the stimulus checks matter, but it isn't just the stimulus checks.

I should give credit where credit is due. The basic substance of this idea about gas prices and porn comes from this YouTube video:



Not coincidentally, the woman in the video (Isobel Wren, whom you may remember from an earlier post on this blog) has her own Web site "focused on adult or erotic material." And in the interest of smoothing the transition to a less energy-intensive economy, or maybe just to be naughty, I'll give you the link again. (Note that it is an adult Web site, so don't click the link unless you're over 18 and your boss isn't watching.)


UPDATE: I just noticed that this video is the same one that I linked to in the earlier post. Oh, well, now you get to watch it in embedded form.

Rolling On About Blogs

Even though Dean Baker and I are both “liberal Democrats” (he more than I, I think, or at least he’s more loyal), I seem to disagree with him more often than I agree with him. Nonetheless, I am quite impressed with his blog. I’m something of an academic snob when it comes to economics blogs: that is, I’m hesitant to “waste my time” on any blog that isn’t written by someone with the title “Professor”. (For example, you’d have a hell of a time getting me to read my own blog – at least until I realized how smart the author is:) However, I find that Dean Baker makes up in provocative thought for what he lacks either in academic credentials or in agreeing with me.

Other non-academic blogs that I like: Economics Unbound (Michael Mandel of Business Week), Brad Setser (international finance; not an easy read, but he clearly knows his stuff better than most), Battlepanda (Angelica Oung, though lately she seems to be leaving it mostly to her co-bloggers). That last one is kind of an outlier in my blog space: as far as I know, Angelica doesn’t even have an advanced degree, much less an academic appointment, but I like her writing, and her perspective seems unique. (I could say that Angelica is my link into the lefty/feminist/youth blogosphere, but she seems rather to the right among the lefties.)

Now that I’ve mentioned the non-academics, I should be true to my snobbery and give the prominent final position to the academics. Brad DeLong and Greg Mankiw are the acknowledged kings, and they provide a nice political counterpoint to each other. Also excellent are Econbrowser (James Hamilton, the energy macroeconomics and time series analysis expert, with Menzie Chinn, who writes mostly about international finance issues), Economist’s View (Mark Thoma, University of Oregon, leaning left but more faithful to economic analysis than many on the left), macroblog (David Altig of the Cleveland Fed and the University of Chicago), and EconLog (Arnold Kling and Bryan Caplan, who lean right/libertarian). [A few others that I have to mention: William Polley (academic; interesting but not prolific); New Economist (academic?? I don’t know, but many of the posts certainly are); Angry Bear (distinctly left-leaning and often more about politics than economics; academic?? Again I don’t know). As for Marginal Revolution (Tyler Cowen and Alex Tabarrok), being a macro guy, I seldom read it, but everyone else seems to.]

About About

Apparently About.com is not a reliable source. You can check this link to see if they have corrected the error, but the following is exactly what I cut and pasted from the linked page:

“The unemployment statistics and national unemployment rate do not include workers whose unemployment compensation benefits have expired or those who have given up looking for a job.”

...and later on:

“The unemployment statistics don't including people no longer collecting unemployment benefits or those who have given up looking for work.”

Everyone who has studied labor economics or Bureau of Labor Statistics methodology knows that the part about unemployment benefits is wrong. The unemployment rate does not depend on who is getting benefits. The unemployment rate comes from the Current Population Survey, and workers whose unemployment compensation benefits have expired are still counted as long as they meet the BLS definition of “unemployed”: “Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.” (You can dig deeper on the Web site to find a more precise definition and description of the methodology, but this is the gist of it.)

It’s important that many people have given up looking for jobs, so they are not counted as unemployed (and also not receiving benefits). Also, many whose benefits have expired have taken part-time jobs and therefore are also not counted as unemployed. And many people are still looking for jobs but not “actively”, and those people are also not counted. And many may be looking actively but have made other commitments that prevent them from starting immediately, and those also are not counted. But it has nothing directly to do with whether you receive unemployment benefits.