Comments on: Chucking your grass-cuttings over the fence

By: John

John — Sat, 03 Jul 2004 09:33:39 +0000

David, Im using separate data sets on time use and on distances. The time use data says travel time is split about evenly between shopping, commuting and recreation for the adult population as a whole. In comparing with Australia, I assumed equal average speeds, so that the ratios of distances and times are the same. I dont think this is far off the mark, but I’m going to look at comparable Australian tiMe use studies when I get time

By: Tom

Tom — Fri, 02 Jul 2004 20:52:54 +0000

Additional data point: I live in a suburb built in the early 1960s. Several years ago a Walmart opened (on the land that used to be a drive-in theater) along the road I drive to and from work. A little over a year ago (IIRC) a closer Walmart opened, in our suburb. I’ve been from my house, through the register, and back in 20 minutes (with a new printer cartridge). In general, however, I hate Walmart, and have only been in a few times in my life. My main annoyance is the music they play, which keeps me from being able to focus on what I want to buy. For contrast, I am a member at Costco. It is vaguely three times the distance to drive to Costco, but nonetheless shop there several times a year.

By: David Nieporent

David Nieporent — Fri, 02 Jul 2004 17:09:15 +0000

John Q has provided the link above showing that Americans spend a lot more time driving than Australians (who in turn spend more time driving than Europeans). How does this fit into your theory? I’d suggest that it doesn’t, and that the reason it doesn’t is that you are wrong about the convenience of big box retailing, thus inter alia helping to provide evidence for another of my points about people’s systematic irrationality on questions of leisure time. First, John’s link is about distances driven, not time spent driving. Second, ignoring the above distinction, what does the comparison have to do with the price of tea in China? I only looked one level deep into John’s link, but saw nothing suggesting that this difference in distance driven had anything to do with distances driven in the two countries for shopping (let alone the distances driven to shop in big box stores), which is the topic of this discussion. Or, rather, is part of the topic of this discussion; the actual topic of this discussion was over time spent to complete one’s shopping at big box stores—not time to get to the stores. You’re setting up a strawman; the debate is not whether the WalMart is closer than the local corner store. The debate is whether completing one’s shopping at WalMart saves time over the alternative. How absurd is it for you to find an aggregate measure of distance driven by a national population and conclude that the subset of that population that thinks it is saving time by shopping at WalMart over the local corner stores is irrational? Hey, I agree that anecdotal evidence is weak. If you had actual evidence of how much time people who shopped at WalMart spent on their shopping errands, I’d listen. But you don’t, and in the absence of such evidence, I think I’ll stick with the anecdotes of people who actually shop there rather than the guesses of someone who hasn’t even lived in the country in decades.

By: Inn-spectre

Inn-spectre — Fri, 02 Jul 2004 07:19:59 +0000

D^2, I agree that lots of people mistakenly undervalue their leisure time. But that doesn't necessarily mean that Wal-Mart is pushing costs on to a consumer that mistakenly values transit time to Wal-Mart above leisure time. For the sake of clarity and brevity, call an activity foolish if someone does it instead of leisure, because they wrongly think it's a better use of their time than leisure. If a Wal-Mart opens up somewhere, and a consumer foolishly goes there, has the consumer lost out? Not if the behavior the consumer would otherwise do with that time is likewise foolish. In that case, the customer wins, because he wouldn't be using the time for leisure anyway, and he values Wal-Mart more than the other foolish activity. If the consumer foolishly goes to Wal-Mart, but otherwise would use the time for leisure, then yes, Wal-Mart has pushed a transit cost on to the consumer. My guess is the average case is somewhere in between; some foolish behavior will be displaced, and some extra leisure time will be eaten up. Is that a win or loss for the consumer? Impossible to tell without specifics. As far as Americans spending more time driving than Australians and Europeans, are you really suggesting that the main reason for that is that Americans spend more time driving to superstores?

By: q

Fri, 02 Jul 2004 00:23:21 +0000

There’s too much obsessing about mileage here when productivity only matters where QoL (Quality of Life) comes in. If every American drove a 15 year old car instead of a 5 year old car, and used the saving by working fewer days, America would be a happier place.

By: dsquared

dsquared — Thu, 01 Jul 2004 23:32:06 +0000

David, Sebastian: John Q has provided the link above showing that Americans spend a lot more time driving than Australians (who in turn spend more time driving than Europeans). How does this fit into your theory? I’d suggest that it doesn’t, and that the reason it doesn’t is that you are wrong about the convenience of big box retailing, thus inter alia helping to provide evidence for another of my points about people’s systematic irrationality on questions of leisure time.

By: nick

nick — Thu, 01 Jul 2004 20:59:23 +0000

But though I’ve never understood myself why Londoners would prefer to commute an hour and a half than live in a tall building… Um, it’s because most areas of London where tall residential buildings have been permitted (for all sorts of reasons) are the parts of London where one tends to live only if there are no alternatives. It’s either ‘council flat’ or ‘Lord Archer-style penthouse’, with not much in-between. (Possibly the Barbican, but… um.) Since the experiments with middle-income ‘high-rise’ projects in the 60s didn’t really go so well, it’s no surprise that there’s not so much enthusiasm even for the kind of glitzy apartment complexes that one sees, for instance, in Atlanta.

By: Sebastian Holsclaw

Sebastian Holsclaw — Thu, 01 Jul 2004 20:01:38 +0000

“If you have fewer outlets, then the average distance between a consumer and an outlet is greater.” WalMart has more outlets than many large grocery chains, but OK. But your point is what exactly? Originally you suggested that they are passing off the cost of getting good to where consumers are onto the consumers by forcing them to commute. This ignores the fact that they simply aren’t allowed in some big cities (see the Chicago fight). Furthermore I have suggested that for similar purchases, the cost of transportion is HIGHER to outlying WalMarts but that it is made up because an even greater savings in transportation costs is found because of the increased size of the purchase. So far as the cost to consumers in terms of travel, I suggested that is adequately reflected for the purposes of the discussion in the housing markets (cities more expensive, suburbs less) and does not need to be duplicated. Maybe I’m wrong about that, but your flip response doesn’t indicate such.

By: David Nieporent

David Nieporent — Thu, 01 Jul 2004 19:39:16 +0000

Sebastian, you can only be a big-box retailer by being having big outlets. If you have big outlets, then you have fewer outlets. If you have fewer outlets, then the average distance between a consumer and an outlet is greater. But the question is not “the average distance between a consumer and an outlet.” The question is the SUM OF THE average distances between a consumer and ALL THE OUTLETS HE NEEDS TO SHOP AT TO COMPLETE HIS ERRANDS. Not only do you need to figure time between outlets, but you need to factor in time for wasted trips—when you go to the big boxes, you know they’re going to have what you need; you don’t need to travel to another store because they don’t carry (or are sold out of) exactly what you’re looking for.

By: David Nieporent

David Nieporent — Thu, 01 Jul 2004 19:32:53 +0000

Perhaps Daniel doesn’t realize—his extensive experience in Oklahoma 20 years ago notwithstanding—that residential and retailing patterns in the United States do not match his intuitions. Walmarts are located where people live, nowadays. Everywhere except the urban areas keeping them out—but those people have a choice as to whether to travel to the WM or shop locally. And what is it with several people here “proving” that WalMart takes more time than buying a quart of milk at the local convenience store? Duh. Nobody goes to WalMart for one item, unless he’s really price sensitive. And by the way, have you people not heard of stopping on your way home from work? You don’t have to drive extra at all to go shopping.

By: dsquared

dsquared — Thu, 01 Jul 2004 19:27:23 +0000

By: isabel

isabel — Thu, 01 Jul 2004 19:18:25 +0000

“and even the stuff you go into Wal-Mart wanting to buy… well, it ain’t built to last.” and “I find it interesting that all measures of quality have been left out of this discussion….Same box, same outer casing, but the guts are quite different.” I agree w/the low merchandise quality statements re: WM products such as these. I learned about the differences between, e.g., the same model plumbing fixture sold at WM v. Home Depot v. the professional plumbing store, a few years ago during home renovation. I wonder if this is common knowledge among consumers, or do the majority of consumers just think they’re getting a great buy on the fixture at WM? I also wonder how much it costs consumers to buy an item again when the first one breaks due to poor quality. E.g., while at Kmart for one thing, my husband remembered he needed a rake. This rake didn’t last a full season. The one his dad (a landscaper) later got him will probably outlive us. There must be some cost associated with a consumer who returns to WM/Kmart/etc. to buy replacement items.

By: Sebastian Holsclaw

Sebastian Holsclaw — Thu, 01 Jul 2004 18:37:20 +0000

Jroth. San Diego. I take the 163 to the 8 to the 15 exit Aero Drive. Total time 10 minutes, though I do drive too fast for some. Hooray freeway system. D-squared. I can’t tell which transportation costs you are talking about. You complain that somehow Wal-Mart is throwing the transportation costs at the consumer. This is wrong. I work for a company that ships using third-party private carriers. The price to deliver to outlying Wal-Marts would be higher than delivering to the middle of most cities if we were shipping the same amount. (If we ship X products to Wal-Mart and X products to Donwtown grocery it would cost more to get to Wal-Mart.) In reality it turns out to be cheaper to ship to Wal-Mart not because it is easier to ship there, but because they buy larger amounts of product which drives the unit cost of shipping down dramatically. My supply-chain guy always says something along the lines of: if we ship one bottle we lose money, if we ship one hundred bottles shipping eats most of our profit, if we ship ten thousand bottles shipping is not a significant expense. So because Wal-Mart buys more, shipping costs are actually lower. If they were competing with a buyer who purchased as much product as they do, Wal-Mart’s shipping costs would be higher than their competitors. But they purchase in enough bulk to make up for the added mileage. Unless I have totally missed your point, this deals with your explicit pricing issue. But it seems to be exactly the opposite of the assumptions of your “by jingo I think he has got it” post. You seem to allude to added costs of travel on the part of the consumer but you aren’t clear on how that intersects with price. And that is specifically why I mention housing prices. If one of the benefits of living downtown is that you can walk to the store, one of the detriments in living in the burbs is that you cannot. This is reflected in the price of housing. If, as you say, this evens out across the economy as a whole, you have to look at the lower price of burb housing PLUS the added cost of driving in order to shop and see if that is reflected ‘accurately’ in the price. I don’t see how you would tease out that one little aspect of housing prices, but that is where it is reflected in the economy. Suburb housing is dramatically cheaper because it isn’t as convenient. Why do you feel the need to count that inconvenience twice?

By: JRoth

JRoth — Thu, 01 Jul 2004 18:01:12 +0000

A lot of reference to land use patterns, and a lot of pure crap about their real-world effects. Interesting. Anecdote that it is, sebastian, I can’t of course deny that you live in a downtown that is 10 minutes’ drive from a WalMart. I will say, however, that that is an astonishing bit of geography. Unless this WalMart was built on a brownfield, it’s not clear to me how a downtown, urban residential area, first ring subrurb, and second ring suburb can all be traversed (any time of day?) in ten minutes. Regardless, there are clearly people who live on the other side of town, who have 15, 20, & 30 minute drives, since the retailers once located on that side of town are now gone. Example: Greene County, PA - coal & sheep country. No WMs exist in GC, but they have been built in locations nearby. Although they are not convenient for residents in and around the county seat, they have drawn off enough business (from those already outside town) to kill what was, only 20 years ago, a fully-functioning downtown. So these people now have a choice of where to drive 30 minutes to buy underwear. And this is measured as an increase in GDP. And on the fantasy that, if you already live in the burbs, WM is ultra-convenient. My father is w/in 2 miles of the nearest WM in northern NJ. This, of course, translates to over ten minutes to actually get into the door of WM - longer on Saturdays or weekday evenings. 12 MPH. The minimum time for him to buy a non-convenience food product is 30 minutes round trip. Urbanite that I am, I can get that same item (actually, better) with a 15 minute total trip to either of 2 nearby grocers. That trip, of course, is on foot, meaning that I have improved my health on the trip. For all this convenience, my father pays higher land prices, has no better schools (I know, I studied there and have taught here), and is more likely to be in a car accident than I am to be a crime victim. Ah, but it’s his revealed preference, right? Well, not really: he was tranferred there, with mostly equivalent housing choices. Thanks to postwar planning and distorted economic incentives, he doesn’t have the option of living in a town that still has a proper high street.

By: dsquared

dsquared — Thu, 01 Jul 2004 17:15:48 +0000

Of course the information you get may be of little use, but that´s not the same thing as being meaningless. Indeed, but the depreciation rate one would want to use for this purpose would be meaningless rather than useless. Since one wants to have profits counted in GDP, the only way you could create this “index” would be by making an arbitrary assumption about the rate of profit.