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Tuesday's Assorted Links
Platinum Coin, Starbucks, Gas Stations, Tipping, Prescription Drugs
Hi y’all! Here are five stories from this week that contained a lot of neat applications of economic principles.
How would minting a trillion-dollar platinum coin work to fund the government's spending, and why shouldn’t we expect that to happen [The Indicator from Planet Money]
Loss aversion provides a simple explanation of why Starbucks customers were so enraged when the company changed its loyalty program [Fortune]
A look at who owns your local gas station, and where their profits really come from [The Economics of Everyday Things]
Is tipping getting out of control? [AP News]
A drug company made $114 billion by gaming the U.S. patent system, but its monopoly is set to end [The New York Times]
A few states have implemented salary transparency laws over the past few months in an effort to provide job applicants with more information about pay scales. These moves reduce the information asymmetry in the salary negotiation process, but almost immediately, some businesses began to manipulate the laws by posting broad salary ranges, shifting the power balance back in their favor.
The last post in today’s newsletter reminded me of a book I read a couple of years ago on the healthcare industry in small towns across America. The Hospital: Life, Death, and Dollars in a Small American Town by Brian Alexander gets a behind-the-scenes look into an independent rural hospital in Bryan, Ohio. The book talks about how consolidation has impacted the hospital industry but also covers how changes in the medical industry more broadly have impacted rural communities.
Because Alexander is interviewing real people facing literal life-and-death situations, the book can be a bit overwhelming at points. I regularly needed to put the book down and process some of the discussions in the book. It also left me feeling incredibly thankful that I’ve lived in large enough cities that emergency medical care wasn’t far away.