Opportunity Costs

[skthewimp]

The concept of opportunity costs seems to be non-trivial, in the sense that most people don't seem to get it. When I first learnt it as part of my Economics course at IIT Madras, I thought it was fairly common sense. However, looking around at a variety of people, it doesn't seem to be that common.

A few Sundays back, I came home in the evening

Comments

[anonymous]

I live close to Amma Naana. Back in the late 80's (when I could understand the world around) it was a small kiosk in a petrol bunk. Fairlands was a store (comparable to the modern day supermarket) next to it was a bigger and better place and was opposite Park Sheraton. It was multi storeyed and sold imported goods for the foreigners who stayed in the hotel

[deponti]

Excellent analysis of this article and a response that I have also observed when I lived in Chennai (which means, I agree with you both! :D ) I frankly detested Amma Naana's pricing and I gave it a wide berth, feeling that it probably catered to the "Boat Club Elite". But it was the place to buy "foreign" stuff which was not easily come by except maybe at Burma Bazaar....

I didn't know the technical term, "opportunity costs"....perhaps the author of the article doesn't, either.

Yes, inapt comparisons are irritating.

[skthewimp]

i don't expect people not formally trained in economics to know the "opportunity costs". But i expect people to know the context

in case Amma Naana is a place to mostly buy foreign stuff, I don't know what purpose it serves comparing it to the generic food world or nilgiris. that whole business line article seems pointless now

[skthewimp]

ok - i have no clue about Amma Naana. All I was talking about was about the article about it - and the analysis in that was misleading

[shrikanthk]

Excellent post :)
Esp liked the distinction b/w P&L standpoint and accounting standpoint (often misused interchangeably)

[skthewimp]

thanks

[prabhakarkudva]

Nice Read.

[skthewimp]

thanks

[usha123]

I presume opportunity cost is not measured by money alone (by your reference to networking, good karma, etc)

Perhaps the family (model) accrues some other benefits. Are you familiar with Balaji stores near Jayanagar 9th block bus stop. it is a traditional kirana store the size of a supermarket and has a bank of relatives standing between the goods and the customers at the counter. they have customers queuing up and sell everything way way below MRP. I 'interviewed' some of those young people..apparently they all live in a huge house closeby (the married ones with their wives), and I understood that this format also gives them the freedom to work part of the year in Bangalore and go home part of the year to Rajasthan..the cousins rotate through the store and live comfortably both in Bangalore and in Rajasthan..I don't know how they share revenues..

it might make a good case study too :-)

[skthewimp]

I'm not saying anything about family-run store. I've seen several (though I haven't seen Balaji) and I have the feeling that most of them will be able to continue to do well despite the competition from modern retail.

and the way in which the cousins rotate at Balaji also sounds good. On a tangential note, I wonder if people from Rajasthan, etc. are taking over retail here (I remember deponti also blogging once that she buys from one such store), displacing the settys

what I'm cribbing about here is with the technical details of the analysis in business line, which I find misleading.

Anbusivam

[ext_105053]

Nice Read......, Clear thoughts...on Opportunity Cost - Anbusivam