No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Tuesday, October 7, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Market Research Economy

Dixie Cups, CAFE Standards, and Numeracy

by TheAdviserMagazine
3 months ago
in Economy
Reading Time: 3 mins read
A A
Dixie Cups, CAFE Standards, and Numeracy
Share on FacebookShare on TwitterShare on LInkedIn


The second use is more resource-saving  than the third.

At my cottage in Canada, I have running water from a pump in the lake but not safe water. So in what we call the “bath hut” I have a bottle of clean water from which I pour a little into a Dixie cup when I brush my teeth. After I’ve finished brushing, I swirl the toothbrush around in the Dixie cup water and then empty the water.

I used to throw away the Dixie cup immediately after, but when I had a friend visiting last week, I noticed that he reused his. So I started doing the same.

What I found, though, is that the cup lost a lot of resilience after the second use. So I started throwing the cups away after the second use.

Then my numerate mind went to work. I realized that getting the second use was more important than getting the third use. Why?

Here’s why. Imagine that I’m at my cottage for 18 days, which is approximately right. If I use each Dixie cup once, I use 36 (one in the morning and one in the evening.) If I use each cup twice, I use 18 of them, saving 18 Dixie cups. If I use each cup 3 times, I use 12 of them, saving an additional 6.

 

So the saving in resources from a second use is triple the saving in resources from a third use.

The point generalizes. What if I went for a fourth use? Then I would use 9 cups. The saving from the fourth use would be only 3 cups. And so on.

What’s the point?

There are really two points.

The first is the power of thinking on the margin. The next use, in going from 2 to 3 uses, is less resource-saving than in going from 1 to 2 uses.

The second relates to an issue I worked on when I was the senior economist for energy with President Reagan’s Council of Economic Advisers: the CAFE mandate. CAFE is short for Corporate Average Fuel Economy. The mandate was part of the Energy Policy and Conservation Act, a law that President Ford signed in 1975. It was an indirect result of the price controls on gasoline, imposed by Nixon and kept by Ford. People were facing an artificially low price of gasoline and, OMG, were acting as if they were facing an artificially low price of gasoline. They weren’t switching to fuel-saving cars as quickly or extensively as many government energy planners thought they should.

So rather than get rid of the price controls, Congress and the president came up with a requirement that each auto manufacturer, for a given model year, reach an average fuel economy of x miles per gallon, where x steadily ratcheted up over the years.

I had 2 bosses at the CEA, chairman Martin Feldstein and member William Niskanen. Bill and I would have liked to repeal CAFE but that wasn’t going to happen. So we argued against further increases and in favor of relaxing the standards.

We were unsuccessful.

But here’s an argument that I didn’t emphasize but should have. The fuel economy saving from moving from a mandate of, say, 20 mpg to a mandate of 22 mpg is greater than the fuel economy saving of moving from 22 to 24. Imagine that in the United States, people drive their 100 million cars an average of 10,000 miles, for a total of 1 trillion miles. With an average mpg of 20, they use 50 billion gallons of gas. If the mandate is raised to 22, they use 45.5 billion gallons, for a saving of 4.5 billion gallons. But if the mandate is raised from 22 to 24, they use 41.7 billion gallons, for an extra saving of 3.8 billion gallons. If the mandate is raised from 24 to 26, they use 38.5 billion gallons, for an extra saving of 3.2 billion gallons. Notice that, just as with Dixie cups, each increment of required mph saves less gasoline than the previous increment.

I’m assuming away behavioral effects. The so-called rebound effect is that with higher mandate fuel economy, the price of an extra mile falls, and so people will drive more miles. But this assumption doesn’t hurt my reasoning because with each increment of mandate mpg, the rebound effect attenuates also.

So this is one of the things a microeconomist who studies regulation does on his vacation. Oops. I’m in Canada. Not vacation, but holiday.



Source link

Tags: CafeCupsDixieNumeracystandards
ShareTweetShare
Previous Post

Navigating international indirect tax regulatory compliance

Next Post

The companies firing staff for AI today will regret it in five years

Related Posts

edit post
The Pieces Of The Resolution The Democrats DON’T Want You To See

The Pieces Of The Resolution The Democrats DON’T Want You To See

by TheAdviserMagazine
October 7, 2025
0

  Health care spending has been at the forefront of the Democrats’ tantrum that led to the government shutdown. Where...

edit post
Military pay date may pressure Trump and Congress if shutdown drags on

Military pay date may pressure Trump and Congress if shutdown drags on

by TheAdviserMagazine
October 6, 2025
0

Soldiers march during a military parade to commemorate the U.S. Army's 250th Birthday in Washington, D.C., U.S., June 14, 2025....

edit post
Bari Weiss Will Run CBS News for the Ellison Hasbara Empire

Bari Weiss Will Run CBS News for the Ellison Hasbara Empire

by TheAdviserMagazine
October 6, 2025
0

This is Naked Capitalism fundraising week. 1085 donors have already invested in our efforts to combat corruption and predatory conduct,...

edit post
What China Knows – Econlib

What China Knows – Econlib

by TheAdviserMagazine
October 6, 2025
0

Process knowledge is hard to measure because it exists mostly in people’s heads and the pattern of their relationships to...

edit post
Now Accepting Applications: Theory Development Workshop at Oklahoma State University (with Per Bylund)

Now Accepting Applications: Theory Development Workshop at Oklahoma State University (with Per Bylund)

by TheAdviserMagazine
October 6, 2025
0

The Institute for the Study of Free Enterprise announces a new workshop for PhD students and early-career faculty. From the...

edit post
Mongolia to join data center frenzy with Chinggis Khaan sovereign wealth fund

Mongolia to join data center frenzy with Chinggis Khaan sovereign wealth fund

by TheAdviserMagazine
October 6, 2025
0

A view from the statue of Genghis Khan in Ulaanbaatar, Mongolia on April 04, 2022.Anadolu | Anadolu | Getty ImagesMongolia,...

Next Post
edit post
The companies firing staff for AI today will regret it in five years

The companies firing staff for AI today will regret it in five years

edit post
Wall Street Keeps Benefitting From Tariff Upheaval

Wall Street Keeps Benefitting From Tariff Upheaval

  • Trending
  • Comments
  • Latest
edit post
What Happens If a Spouse Dies Without a Will in North Carolina?

What Happens If a Spouse Dies Without a Will in North Carolina?

September 14, 2025
edit post
Does a Will Need to Be Notarized in North Carolina?

Does a Will Need to Be Notarized in North Carolina?

September 8, 2025
edit post
California May Reimplement Mask Mandates

California May Reimplement Mask Mandates

September 5, 2025
edit post
DACA recipients no longer eligible for Marketplace health insurance and subsidies

DACA recipients no longer eligible for Marketplace health insurance and subsidies

September 11, 2025
edit post
‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

September 9, 2025
edit post
Tips to Apply for Mental Health SSDI Without Therapy

Tips to Apply for Mental Health SSDI Without Therapy

September 19, 2025
edit post
Dow Jones Futures: Cheap Tesla Model Y On Tap? AppLovin Tries To Bounce

Dow Jones Futures: Cheap Tesla Model Y On Tap? AppLovin Tries To Bounce

0
edit post
Property Tax Repeal & Replacement: Tax Revenue Impacts

Property Tax Repeal & Replacement: Tax Revenue Impacts

0
edit post
New Tariffs Aimed Directly at Real Estate Investors

New Tariffs Aimed Directly at Real Estate Investors

0
edit post
Episode 229. “I’m almost 50 and have nothing to show for my life”

Episode 229. “I’m almost 50 and have nothing to show for my life”

0
edit post
Meet the Dutch companies that raised the 10 biggest funding rounds in Q3 2025; 7 are hiring right now

Meet the Dutch companies that raised the 10 biggest funding rounds in Q3 2025; 7 are hiring right now

0
edit post
EUR/USD: Head and Shoulders Pattern Suggests Bears May Target 1.16–1.14 Zone

EUR/USD: Head and Shoulders Pattern Suggests Bears May Target 1.16–1.14 Zone

0
edit post
Dow Jones Futures: Cheap Tesla Model Y On Tap? AppLovin Tries To Bounce

Dow Jones Futures: Cheap Tesla Model Y On Tap? AppLovin Tries To Bounce

October 7, 2025
edit post
New Tariffs Aimed Directly at Real Estate Investors

New Tariffs Aimed Directly at Real Estate Investors

October 7, 2025
edit post
Here’s The Best Time To Buy Bitcoin As Impulse Wave Sets Path To 0,000

Here’s The Best Time To Buy Bitcoin As Impulse Wave Sets Path To $150,000

October 7, 2025
edit post
EUR/USD: Head and Shoulders Pattern Suggests Bears May Target 1.16–1.14 Zone

EUR/USD: Head and Shoulders Pattern Suggests Bears May Target 1.16–1.14 Zone

October 7, 2025
edit post
Episode 229. “I’m almost 50 and have nothing to show for my life”

Episode 229. “I’m almost 50 and have nothing to show for my life”

October 7, 2025
edit post
Entrepreneur says Goldman Sachs once gave him 39 separate interviews to land the job—and the decisive conversation was less than a minute

Entrepreneur says Goldman Sachs once gave him 39 separate interviews to land the job—and the decisive conversation was less than a minute

October 7, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • Dow Jones Futures: Cheap Tesla Model Y On Tap? AppLovin Tries To Bounce
  • New Tariffs Aimed Directly at Real Estate Investors
  • Here’s The Best Time To Buy Bitcoin As Impulse Wave Sets Path To $150,000
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.