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> but then you have to take into account the price distortions such as brand premium. You don't have to take this into account, as the distortion just becomes
by keenerd 16y ago
> but then you have to take into account the price distortions such as brand premium.
You don't have to take this into account, as the distortion just becomes more pollution. Chances are the brand premium ends up in the pockets of marketing and execs, who spend it. Any* time money is spent it eventually "generates" an equivalent amount of pollution.
* Assuming all regulations are equally applied to all manufactures.
- crpatino 16y agoI think you are right, but still... would prefer to keep the model simple. The purpose of using the price as an indicator is to roughly estimate the inputs required to manufacture a product. Under that assumption, profit margins are noise. Of course, profits are eventually expended, but so are the cost paid to suppliers, the taxes and so on. You would have to think about velocity of money and the overall macroeconomic effect. This is way overkill.
- keenerd 16y agoOr just take the limit as time->infinity and simplify it to price=pollution. If you want this taken to the logical extreme, see http://www.tinaja.com/glib/energfun.pdf http://www.tinaja.com/glib/energfun.pdf where it is argued that "using dollars = spending gasoline". As oil is the cheapest available energy source, everything eventually becomes oil burnt.