Nation of Beancounters

Shah Rukh’s birthday celebration and high yields on government debt are not close substitutes

Posted in Uncategorized by Navin Kumar on November 16, 2011

A while ago I thought I used ordinal theory to prove that banning trivial news won’t do anything to raise awareness of serious socio-economic issues or what not. In retrospect I realize all I did was prove that unless two goods are close substitutes, banning one won’t increase the consumption of the other. As far as profoundness goes, this is at the level of “if you jump, gravity will pull you down.”

So the question is: are they close substitutes? Two commodities are substitutes (in economics) if an increase in the price of one leads to an increase in the demand for another. Banning effectively prices celeb gossip at infinity. Does that increase the demand for (i.e. consumption of) serious news?

My answer is no.

To understand why, think about items that are close substitutes. Like Munch chocolates and those small Kit Kats which have only two “planks” in them. Today they cost the same, but you like Kit Kats more (neo-colonization!) so you buy that instead. Tomorrow, you discover that the price of Kit Kats has doubled – so you switch to Munch. Suppose, though, that you discovered that the price of All Out mosquito repellent had doubled while Kit Kats cost the same. Would you buy Munch instead?

Nope: the two items – repellent and chocolate bars – fulfill very different desires. And it is this characteristic that makes them not substitutes for each other.

Superficially, serious and trivial news have similar physical characteristics: in the newspaper, they’re in Times New Roman, font size 8 (I think) and accompanied by colorful photos. They’re delivered by the same news channels on television, with the same cameras and vans. I can see why people would think they’re similar.

Yet physical similarity isn’t the same as substitutability. Amartya Sen publishes books, but I doubt he feels threatened by Mills and Boon.

Similarly, the two forms of new coverage cater to very different kinds of people looking for very different things.

Look at all your friends. Count the number of  them that read Delhi Times exclusively. Ask yourself how many if they’ll switch to the Express if they couldn’t get their hands on a copy of DT for a month versus how many simply find something else to distract them. If the answer is “not many”, we’re giving a lot of power to Katju for no good reason.

Indeed one can go further and argue that serious news and entertainment news are complements (like sugar and tea) –  that DT is a gateway drug of sorts. People are drawn in by the Aamir Khan’s 6 pack news but passively read the editorials as well. This argument is as logically and empirically void as the media-is-distracting-people-argument but it can be made. I suspect the reason it’s not is because no-one wants to caught defending low-status tabloidish content).

(CORRECTION: the post originally said ” if a decrease in the price of one leads to an increase in the demand for another”. D’oh! Gratitude, Pradyumna Bhattacharjee)


One Response

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  1. Yash said, on November 16, 2011 at 4:42 pm

    Awesome read.

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