Why aren't car sales going down?

When I was writing my previous blog post, I used shoes and shoelaces as an example of complements (in economic theory, when the price of one good goes up, demand for its complement will go down).

As I continued writing, I realized that shoes and shoelaces was a lame example and that perhaps cars and gasoline would be a better example. Unless you've got an electric car or you just want somewhere to sit, a car isn't much use without gasoline. Likewise, unless you're an arsonist, you can't do much with a jug of gasoline if you don't have a car.

Public vs. private auto insurance

In February, I bought my first car in Ontario — a used 2009 Ford Focus. The dealer took care of the plates, and I took care of insurance.

Since auto insurance is private in Ontario, I searched online for the company that would give me the best price. After a phone call, and a fax that showed I owned the car, the transaction was done and the insurance company sent me proof of insurance papers in the mail.

It was simple. It took very little time. I didn't have to sign anyone or talk with anyone face-to-face.

Corporate charity makes me ill

The Ontario government recently donated $81.2 million to Ford's coffers, according to the Toronto Star. The money will be used for Ford's engine factory in Windsor, and is in addition to $17 million in provincial money and $80 million in federal money given to the engine factor in 2008.

Unfortunately, the article doesn't explain why government is giving away $178 million to a single corporation, other than it will help Ford: "We've been able to bring the Essex engine plant back to life and transform it into a leading-edge facility with a significant role in the company's long-term engine production … plans," Ontario economic development minister Sandra Pupatello told the Star.

Do car mechanics try to sell repairs you don't need?

In experimental economics, an easy study to do is run a simple economic game and see if different groups of people behave differently.

For example, I blogged in November about a study that looked at whether government employees are more selfish than the average worker when asked to donate to a charity. Another example: some health economists I know are interested in whether doctors behave differently than other businesspeople because of their Hippocratic Oath.