economy

Why Do All Movie Tickets Cost the Same?

This Slashdot thread raises an interesting question:

Like tens of millions of Americans, I have paid money to see Mission: Impossible, which made $130 million in the last two weeks, and I have not paid any money to see Young Adult, which has made less than $10 million over the same span. Nobody is surprised or impressed by the discrepancy. The real question is: If demand is supposed to move prices, why isn’t seeing Young Adult much cheaper than seeing Mission: Impossible?

For those of us not too versed in economics, the question does sound reasonable. I am not too good with demand and supply nuances, but I do know that the costs for the movie theater are pretty much the same no matter how many people show up for the show. This comment confirms that and also touches on the economics bit of the question:

If demand is supposed to move prices…

What a bad place to start your argument. In classical economics, demand shifts affect pricing if supply is a factor. When it comes to movie distribution, supply usually isn’t an issue.

Also, profits of Mission Impossible to to cover the losses of the gamble on Young Adult. Essentially, movie ticket prices are aggregated and normalized across movies to mitigate risk. Do you really want to spend $40/ticket on Mission Impossible so that Young Adult would cost only $3?

The actually hard-costs to the theaters (staff, electricity, rent, etc.) is pretty much the same regardless if 5 people are in the theater or 500, and is relatively minor in their overall operations. They pay back to the studios based on how many watchers they have, which where most of their expenses actually lie. They have to pay back the same amount to the studios regardless how how many tickets they sell, so why would they implement variable pricing?

Kikis Kazamias, the merchant of doom and gloom

Once in a while I stumbled upon a piece of writing which is a pleasure to read regardless of the subject. Today I was catching up with Cyprus news when I saw this article in Cyprus Mail. You have to read it even if you couldn’t care less for Cyprus or the state of its economy.

WHEN our finance minister Kikis Kazamias speaks in public about the economy he sounds as optimistic and cheerful as a man who has just been diagnosed with a terminal illness and told he has two months to live.
He really does convey the piss-poor state of the economy and its zero prospects with his lifeless, slow, monotone delivery which, if you listen to for longer than a few minutes, you decide to transfer all your money to another country, and if you have no money you are tempted to slit your wrists.
And it is not just the deathly, self-pitying tone of his delivery that is depressing, but what he says as well – things could take a turn for the worse at any moment, that there may be a need for more austerity measures and at best we would achieve zero growth in 2012.
This litany of gloom did not prevent the opposition parties from accusing the government of tabling an over-optimistic budget, as far as its revenue forecasts were concerned.
If Kikis, the merchant of gloom and doom, carries on talking in public, like he has been doing in the last few days, we will have severe depression epidemic spreading across the country, not to mention a major outflow of capital.

Doesn’t these just span images upon images in your imagination?

Average salary for programmer in Togliatti, Russia

Yandex, also known as “Russian Google”, recently introduced a service for salary comparisons across Russia, based on the known job vacancies. This is a handy little tool that provides a lot of insight into how things are in Russia and across. For example, I immediately checked the average salary for a computer programmer in Togliatty – my hometown.

23,000 Russian Rubles approximately equal to 530 Euros. On the same graph, average salaries for Moscow and Saint Petersburg are also indicated – 1,200 EUR and 1,500 EUR accordingly. Unfortunately I don’t have an equal or reliably objective resource for Cyprus, but based on my own knowledge and experience, I’d say at least in Limassol the average salary for a programmer would be somewhere around 2,000 EUR. Moscow’s 1,500 EUR is roughly the minimum, I’d say.

First of all, this graph once again confirms that Moscow and Russia are two different things. Prices, salaries and opportunities are very different. Even Saint Petersburg, which is the second richest city in Russia is obviously behind here. Togliatt’s average salary being almost 3 times less than the one for Moscow clearly indicates the huge difference.

Secondly, this makes me question (not that I haven’t before) all those bright and brilliant mass media reports of how fast the Russian economy is growing and of how well things are improving in the regions. With 500 EUR being an average salary for a qualified professional – economy has a very long way to go.

Thirdly, it is sad to see how stale the IT industry is in my hometown. The city of almost a million in population has only 55 vacancies for a programmer (according to Yandex only, of course). And out of those most are C++ and 1C (popular accounting software package) vacancies. There are a few web developer positions available, but for the city that large these are too few.

Civil servants salaries in Cyprus

Cyprus Mail reports:

Around 65 per cent of civil servants (some 35,000) are paid wages that are substantially higher than the national average.

And if that wasn’t enough,

The discrepancy between the wages of civil servants and the general population may be substantial, yet even this is slightly misleading. Civil servants’ salaries weigh heavily in calculating the average national salary. It follows that the figure for the average national salary, as given by the Statistical Service, is “bumped up” by the high wages received by civil servants, thereby concealing the true extent of the difference between public and private sectors.

The numbers breakdown follows:

Civil servants wages (May 2011)
Salary Number of recipients
€0 – €1500 10,871
€1501 – €2500 16,465
€2501 – €3500 14,449
€3501 – €4500 6,866
€4501 and above 5,360

Read the rest of the article for more details.

Vasilikos power station is gone. Tough times for Cyprus ahead

Cyprus Mail reports that Vasilikos power station was completely destroyed by the explosion. But we already sort of knew that. The questions were more along the line of “What now?”. Cyprus Mail provides some good analysis as to how this will affect Cyprus in the nearest future.

However the cost of this explosion does not just affect in terms of rebuilding, compensating and repairing. The dynamic effects on companies will ensure a return to deep recession, especially if you factor in the effects of the electricity crisis is having in Cypriot companies. The electricity shortage causes three devastating blows to our economy: reliability, capability and cost.

The lack of reliability in electricity provision is a great drag to the economy. Already power cuts are taking place and sadly it seems that since our electricity system is operating at full capacity the authorities have not been able to announce when and where such cuts should occur. As a result business are already suffering from lost labour time, repairing software and hardware issues relating to cuts, and an ever greater need for technical support, all in a period where the focus has been to cut costs and thus remain competitive with other European companies.

Read the full article for more.