- Girl Economics
- Posts
- Girl Math? Girl Economics
Girl Math? Girl Economics
20th March 2024
Girl Economics Admin
March 20, 2024
In this edition…
I’ve had LOTS of feedback from the first newsletter and thank you so much to all of you who sent me your thoughts! (If you have any thoughts or suggestions remember you can post in the LinkedIn group right here)
So, what is changing? We’ll still have 2 recommended articles, but there will also be 3 brief summaries of activity that has been going on in financial markets over the past day. There will also be a link to an opportunity involving economics such as an essay competition / conference / internship so you can build your experience with the subject!
I hope you enjoy these new additions. Let’s dive in 👇
Articles of the Day
This article details the loss of Tesco’s appeal against a High Court ruling that its Clubcard branding infringed the Lidl trademark. TOPICS: regulation, competition, branding | Packed with facts and figures, this article from Time Magazine explores the failures of banks to protect consumers from the rising sophistication of scams and what can be done to change this. TOPICS: AI, regulation, ethics, fraud |
In The News
Can’t have your ice cream and eat it?
Unilever, the consumer brands conglomerate offering products ranging from soap to pizzas, announced plans to spin off its ice cream business and cut 7,500 jobs under the leadership of CEO Hein Schumacher, aiming to revitalise the company's performance. The move is being driven by the belief that the ice cream division, including brands like Cornetto and Ben & Jerry’s, would thrive as a standalone entity. The separation could lead to a potential stock market listing by 2025, sparking competition between London and Amsterdam for the listing. The decision comes amidst pressure to reinvigorate growth after years of stagnation, with the company also targeting €800mn in cost savings over the next three years. Despite some skepticism regarding the effectiveness of the separation in boosting growth, the move signals a strategic shift for Unilever, which aims to focus on its core businesses in beauty, personal care, home care, and nutrition.
Japan hopes leaving behind negative rates will be positive for growth.
The Bank of Japan has made a historic decision to end its era of negative interest rates, marking the first rate hike since 2007. Governor Kazuo Ueda led the move, signaling a shift away from ultra-loose monetary policies aimed at combatting deflation. With a 7-2 majority vote, the BoJ will guide the overnight interest rate to hover around zero to 0.1 percent, abandoning its previous negative benchmark rate. The decision reflects growing confidence in Japan's economy, fueled by increasing wages, inflation, and positive investment sentiment. This move is likely to impact global investment flows and signifies broader changes in Japan's economic landscape.
AI Doctors?
Healthcare startup Hippocratic AI has reached a valuation of $500 million after a recent funding round, showcasing the growing interest from Silicon Valley investors in generative artificial intelligence applications. Led by venture firms General Catalyst and Premji Invest, the $53 million fundraising reflects the potential of AI agents developed by Hippocratic to assist hospitals and clinics. Unlike broader AI investment trends dominated by tech giants like Microsoft, Google, and Amazon, which focus on powerful AI models, venture capitalists are increasingly turning to startups with specific industry applications. Hippocratic aims to address "low-risk, non-diagnostic, patient-facing healthcare" and has partnered with Nvidia to enhance the speed and efficiency of its AI agents. Founder Munjal Shah emphasises the importance of safety and clinician approval before implementing these agents in patient care.
From the Community
Why “Girl Math” is just Economics
If you’ve been on TikTok or Instagram recently, I’m sure you’ve come across the idea of Girl Math. This tongue-in-cheek trend reveals a fascinating insight into people’s spending patterns, shedding light on decision-making processes around consumption.
But what does this social media trend have to do with economics?
Enter behavioural economics – the study of human economic decision-making. While traditional economics assumes rational, utility-maximizing agents, behavioural economics acknowledges human flaws and explores how decisions deviate from the expected. And "Girl Math" is a perfect showcase of the biases and behaviours that economists have long studied.
Take the trope of paying in cash, where the purchase feels "free." While it may seem at odds with the "cashless effect," where people are more willing to spend without physical money, it aligns with the "pain of paying" phenomenon. This guilt over spending prompts us to opt for less-trackable methods like cash, allowing us to forget these transactions.
Then there's the concept of "cost per-use," where hefty purchases are rationalised by framing their cost relative to the number of times they will be used. If I’m spending £300 on a bag that I’ll wear every day for a year, then it is basically cheaper than a £20 bag that I’ll only wear twice! This echoes the framing effect, identified by economists Tversky and Kahneman, which shows how presenting options differently can alter decisions.
Overall, many trends in "Girl Math" can be seen as heuristics – mental shortcuts we use to make decisions. As behavioural economics continues to evolve, understanding these quirks in human behaviour can inform policymakers in designing more effective policies for society's benefit.
In essence, "Girl Math" isn't just about fun – it's a window into the complex world of decision-making and economics.
Term of the day: Verblen Goods
Veblen goods are luxury items that see increased demand as their prices rise. Coined after Thorstein Veblen, these goods signify social status through ownership. Their higher prices make them more desirable since ownership of these goods is thought to signal the purchaser's affiliation with the elite - think of classical artwork or luxury cars, for example.
The Spotlight
 | Esther DufloEsther Duflo is a prominent economist known for her work in development economics and alleviating global poverty. She co-founded the Abdul Latif Jameel Poverty Action Lab (J-PAL) and has conducted groundbreaking research to identify effective policies for poverty reduction. Duflo was awarded the Nobel Prize in Economic Sciences in 2019 for her contributions to the field. Her work spans many different areas including healthcare, education, and microfinance! I don't go to the beach. There is no value in going to the beach. If I did go I would probably read economics books. Esther Duflo |
Competition Time!
That’s all for today’s edition of Girl Economics. As ever, I would love for you to reach out and send me a message on LinkedIn!
See you at lunchtime tomorrow!
Reply