Seinfeld and Economics by Linda S. Ghent

Ghent is a Professor and Chair in the Department of Economics at Eastern Illinois University. In other words, his book should only be read if you believe your return, both in enlightenment and enjoyment exceeds its opportunity cost, that is, money spent on the book and the time required to read it. The cost of buying and reading his book–The Misunderstood Economy–was not only the dollars spent on it, but also the value of the time spent reading it and the alternative use of that time. The late Robert Eisner, an economist at Northwestern University, somewhat tongue-in-cheek illustrated opportunity cost this way. It helps us better understand the return we expect from our choices. It’s a measure (a very imprecise one) of what you’ve given up. Economists call the value of the goods and services you sacrificed in making a choice an opportunity cost. “Did I do a bad thing by lying to my uncle and saying I couldn’t go to dinner? “Ĭlass, what was the opportunit cost of that lie?Ī related concern is what economists call “opportunity cost.” Whenever you make a decision to do something–like dramatically accelerate mortgage payments–you foreclose using the money for other purposes. In the Chinese restaurant-opportunity cost clip,Jerry lies to his uncle and says he can’t go to dinner with him. Now, watch Seinfeld bring the concept alive. You could use the money to pad the savings account rather than pay down the mortgage fast or earn a paycheck instead of attending college. Here is the basic definition: Whenever you make a decision to do something–like dramatically accelerate mortgage payments or go to college–you foreclose using money and time for other purposes. When it comes to personal finance one of the most important economic ideas is ( The Chinese restaurant.). Maybe the equation is this: Couch potato + Seinfeld = economics + knowledge (or is it supply + demand). A trio of academics have put Seinfeld clips up to illuminate basic economic concepts.

Hah! What the sneering critics don’t realize is that viewers are actually learning the basics of economics, at least when it comes to watching 9 years of Seinfeld (and the reruns). (Google “television” and “vast wasteland” and you’ll see what I mean.)

Critics still rail against TV as a vast wasteland. I can assure you that you will observe a vast wasteland.” That’s Newton Minnow, former Chairman of the Federal Communications Commission, in a talk he gave before the National Association of Broadcasters in 1961. … “sit down in front of your television set when your station goes on the air…and keep your eyes glued to that set until the station signs off.

Seinfeld and Economics by Linda S. Ghent