Wednesday, December 15, 2010

Economist's Notebook: Are Holiday Catalogs Good for the Economy?

'Tis the season of the catalog in my mailbox.  This despite the fact that I never use catalogs anymore, as I can do it all on my computer.  Over at the New York Times' Green blog there is a complaint about the waste that all this junk mail represents.

So is it entirely wasteful, given my total disregard for them?  Perhaps not.  Clearly the companies that sell via mail-order still see considerable value in catalogs, they get to passive consumers rather than active ones that seek them out on the web, and yes even I, the rational economist, have flipped though a catalog and found something that I didn't know existed and later purchased.  So they are clearly seeing value from their mailings, and an essential part of markets maximizing social surplus is creating it from where it was not previously (buyers and sellers coming together and making mutually beneficial trades).  The postal service likes them as it represents business for the USPS, as do the producers of paper and the printers.

So the question is, does the disutility from having to deal with catalogs I don't want, plus the environmental cost, outweigh the gain to society from the millions of catalogs being delivered daily to American homes?  Probably not, is my thinking, especially with my free curbside recycling.  They represent information about products and services to American consumers and in general in economics, information is a good thing and leads to more efficient outcomes.  So though I sigh when another stack ends up in my mailbox, I must admit that they are probably a net positive for the economy.

What do you think?


Brian said...

We accept an explicit trade of 8 minutes of marketing for every 22 minutes of television programming. The exchange is crude and unwieldy, but it is a clear exchange which assigns a value to the disutility of television marketing. We also have many opportunities to bow out of that particular exchange and still get the same product through netflix, itunes, hulu, etc. The market for our time and attention is evolving rapidly in that arena.

The catalog business doesn't offer any similar exchange, and we do not get the option of just turning off catalogs. Your disutility is mild, my disutility might be higher, but as long as the marketer is making money, on average, from the exchange, they are basically turning our collective disutility into their own profits. I need an opt-out system for my mailbox, or the ability to assign a cost to marketers for my time.

jessibeaucoup said...

I use and I hardly receive any catalogs anymore. I can't believe that anything that uses that much paper to be a net positive.