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There were some technical difficulties today, presumably all around the world and definitely in my own laptop. Specifically, said difficulties concerned my ASUS “SmartGesture_Win8_64_VER225” touchpad driver, or whatever. This was not the first time. I was Not in the mood. Technology ultimately prevailed, but has left me exhausted and weak, physically and emotionally, much like yesterday’s NFC Championship game.

So this is not a post, but a repost, indeed a reposting. The following have been the most popular articles on Crossroads:

  1. Confessions of an Economic Sportsfan: I Just Spent 8 Hours, 1/4 of a Bottle of Whiskey, & 5,000 Words On the Greatest Sports Plays of All Time (Part 1 of 2)

    Around midnight of December 18th, I sat back with a fairly comprehensive Bleacher Report article (as they go), my laptop, a bottle of whiskey, a recliner chair, a big screen TV, and a YouTube to investigate what makes the “All Time Classic Plays” just so. Eight hours later, I had many thoughts, maybe even answers.

  2. Confessions of an Economic Sportsfan: I Just Spent 8 Hours, 1/4 of a Bottle of Whiskey, & 5,000 Words On the Greatest Sports Plays of All Time (Part 2 of 2)

    The results of this positively unscientific and whimsical process couldn’t be clearer: it’s a play’s impact on a game’s outcome, and how unusually the players pull it off, that are most likely to set a play apart.

  3. Confessions of an Economic Sportsfan: I Am Going There! NFC Wildcard EXCLUSIVE Preview-49ers at Packers-with Pictures! (Part 1 of 2)

    “Arctic blast”? What kind of s#$% is that? Most times there’s a winter storm, or even a blizzard. This time there’s going to be an “arctic blast”? Hell no. WARNING: EXPLICIT LANGUAGE

  4. Early Betting Super Bowl XLVIII: Who Will Win “The Big One”?

    As they were months ago, Seattle and Denver seem to be the heavyweights, but then, so did the 2007 Patriots six years ago.

  5. Home Economics: The Sportsfan’s Cost-Benefit Analysis of Snowshoeing This Chicago Winter

    By assigning probabilities to different outcomes, the expected net benefits of both owning versus renting snowshoes this winter (between January 1st and March 15th) become apparent.

  6. Weighting the Coin: A Theoretical Case for Nomentum

    Forget sports (just for a second, don’t worry) and think about a coin flip. Say it’s a fair coin, and you flip heads two times in a row. Does the coin have momentum? Is the coin more likely to come up heads on the next flip? You’re smart, you know the answer is no.

  7. The Good, the Bad, & the Ugly: Winners & Losers of the 2014 FIFA World Cup Draw

    Who got off easy? Argentina, no question. In addition to being in their element in South America (theoretically), they drew a Bosnia-Herzegovina team playing in its first tournament as its own nation (being formerly part of Yugoslavia), ranked 21st, Nigeria, ranked 36th, and Iran, ranked 45th.

  8. Mike Tomlin, Player Fines, and What the NFL Really Cares About

    The average NFL salary is $2.016 million ($2,015,942), with a median of $0.753 million ($753,229). The average fine ($14,543) is 0.72% of the average salary, and 1.93% of the median salary. For half of all players, the average fine is a harsher punishment than Tomlin’s 1.74% loss.

  9. ESPM Presents: The Search for the Best (& Worst) Contract in Football, LBs

    You should not be surprised to see that as quarterbacks are the most expensive players, the most expensive defenders are those whose job it is to get to the quarterback.

  10. NEWS FLASH: Many of the Best NFL Players Are Pro Bowl Snubs

    Flowers and Talib, 85th and 66th respectively among all cornerbacks, both make the cut with impressive negative grades. Anyone want to bet how many times announcers mention their Pro Bowl inclusion tomorrow in a context affirming their, uh, “quality” play this season?

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After snowshoeing for the first time a few weeks ago, using rented shoes in a Chicago Forest PreserveI recently purchased snowshoes from REI (Atlas Snowfalls1). In classic economic student fashion, I retroactively made this decision more complicated by running through a whimsical cost benefit analysis. Initially concerned that I would not use them enough to merit buying my own, I am now most pleased with my decision. This is why:

The snowshoes I purchased from REI cost $100. Renting snowshoes from REI costs $20, plus $7 for each consecutive additional day. But there are other costs.

With snowshoes I own, I invest a little more care and work into them, and try to use them only on snow-covered terrain (and not on plowed roads and sidewalks). I would pay $1 per outing to avoid that and use them however, without a lot of tender loving care.

With rentals, I have to go through the trouble of renting and returning them. It costs $4.50 round trip on the CTA, as well as maybe two hours of time, worth maybe $5 an hour each.

As for benefits, the rentals are a different model with different, higher quality features, costing $140. I would be willing to pay $3 more per outing to use the better shoes.

The ownership of shoes in itself benefits me $0.25 a day, as I know I have them, I can go whenever I want, I do not have to worry about acquiring shoes, etc. And an outing of snowshoeing itself is worth about $30 to me.

Costs

Own Shoes
  • $100 one-time
  • $1/outing (tender loving care)
Rental Shoes
  • $20/rental
  • $7/consecutive additional outing
  • $14.50/rental (transportation)

Benefits

Own Shoes
  • $0.25/day (peace of mind)
Rental Shoes
  • $3/outing (better quality)
  • $1/outing (no tender loving care)
Snowshoeing
  • $30/outing (enjoyment)

CBA Calculations

Own Shoes

$30/outing + $0.25/day – $100 – $1/outing = $29/outing + $0.25/day – $100

Rental Shoes

$30/outing + $3/outing + $1/outing – $20/rental – $7/consecutive additional day – $14.50/rental = $34/outing – $34.50/rental – $7/consecutive additional day

Conclusions

I am glad I purchased my own shoes! For a rental to be personally profitable, I must go on an extended trip where I use the shoes in consecutive days, which I will not be doing too often. What are the final numbers?

By assigning probabilities to different outcomes, the expected net benefits of both owning versus renting snowshoes this winter (between January 1st and March 15th) become apparent. Say there is a 10 percent chance I go snowshoeing twice, an 80 percent chance I go six times with a two-day trip, and a 10 percent chance I go 10 times with two two-day trips.

Own Shoes–Net Benefit

0.1 * ( ($292) + ($0.2573) – $100) + 0.8 * ( ($297) + ($0.2573) – $100) + 0.1 * ( ($2912) + ($0.2573) – $100) = (0.1-$23.75) + (0.8$121.25) + (0.1*$266.25) = -$2.375 + $97 + $26.625 = $126

Rental Shoes–Net Benefit

0.1 * ( ($342) – ($34.52) ) + 0.8 * ( ($347) – ($34.56) – ($71) ) + 0.1 * ( ($3412) – ($34.510) – ($72) ) = (0.1-$1) + (0.8$24) + (0.1*$49) = $24

Neat! While this is just for fun, using mostly made-up numbers, and I may have made a mistake, my $100 investment should result in something like a $100 profit. Go me! Of course, despite taking something simple and making it complicated, it is still not complicated enough to reveal the truth. There is inflation, future costs and benefits should be discounted to some degree, my estimations and probabilities may not be very accurate, etc.

No one–including economists–thinks an individual should become mired in such equations before deciding whether or not to buy something.2 Fortunately, people are actually quite good at this already. Paraphrasing a former economics professor, we have evolution to thank for this ability. Everyone willing to spend more energy getting their food than their food provided (or more money than the benefit of their purchase provided) died.3

Remember that. Though far from perfect, in many ways, we are all good economists. And that is the Home Economics lesson of the day.


  1. Which are pretty great by the way. I have now used them twice, and the 25s hold my 175 pounds okay over most midwestern snow terrain. Seemingly good value for the cheaper price; the bindings do get stuck sometimes. 
  2. Although it becomes a better idea the more expensive and/or riskier a purchase is. A candy bar, or even a pair of $100 snowshoes may not be worth such scrutiny, but how about a $50,000 new car, or a $5 million house? ($5,000,000, keeping the formatting consistent.) 
  3.  This has been about individuals. There are also entities called “corporations” and “governments”. All economists acknowledge market failures (like negative externalities) and a role for government in the marketplace (public goods, such as national defense). Yet generally, we are wary of governments because they tend not to play by the same rules of evolution as the rest of us. Their costs can outweigh their benefits, and they won’t die. They’ll just raise taxes. 
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