Updates today on Colorado marijuana, California eggs and pricey library e-books:
- With Colorado’s recreational marijuana tax close to 30%, I was skeptical that they would generate the revenue they expected. Now, it appears they might. During January, the state collected $2 million. If the spending continues at $14.02 million a month, they could raise the $40 million that is targeted for schools.
- Continued spending, even at vastly higher prices, means that consumer demand for legal pot is more inelastic than I expected. Typical for medical necessities and very inexpensive items, inelastic demand is also the rationale behind “sin” taxes.
- When we looked at California’s spacious cage mandate for all chickens laying the eggs that are sold there, Missouri was the only state that objected. Now, Alabama, Iowa, Kentucky, Nebraska and Oklahoma have joined the federal lawsuit. All say that California cannot discriminate against them.
- In court, the Commerce Clause will be the focus. That started me thinking about the fallacy of composition. With the fallacy of composition, we see that sometimes what works for one individual becomes impossible when everyone tries. Think for a moment about a crowded movie theater. If someone yells fire and just one person runs, that individual with reach the door. Everyone, though cannot dash for the exit simultaneously. Similarly, interstate commerce is fine if only California mandates colony cages. But, what if every state had a different egg rule?
Virtual e-Book Replacement:
- The library saga continues with e-books still the problem. Several weeks ago we noted that publishers were charging libraries an astronomical $85 an e-book. John, the librarian at my school, just told me that now they are trying out a yearly per e-book charge. It appears that publishers have historically enjoyed a cycle of book replacements in schools. Since an e-book can exist forever, I suspect the yearly charge is for virtual replacement?
How to tie all of this together? I guess, as economists, we can always say, “demand and supply.”