The Edamame Economy and the New Goods Problem

A blog about business and economics.
Jan. 7 2014 11:44 AM

The Edamame Economy and the New Goods Problem  

New(ish) goods!

Photo by Tim Boyle/Getty Images

David Brooks has a column out today where he's at his observational best, riffing on the rise of boutique hotels and the paradoxical trend toward "mass boutique" chains. It's all a bit frivolous, he writes, but these hotels:

... do exemplify a shift in the consumer market, which you might call the shift from the lima bean economy to the edamame economy. It’s easy to forget how much more boring the marketplace was a few decades ago—more boring cuisine, more boring restaurants, more boring hotels.

The edamame economy, though, isn't just a joke. It's a very real issue for macroeconomic statistics. It's a version of the "new goods problem" in inflation statistics. You track inflation by looking at what something (men's socks, chicken thighs) cost in December and comparing that to what it cost earlier. But sometimes people invent new stuff. We most often hear about this in terms of high tech gadgets—it's not just that Blu-ray players are cheaper than they were five years ago, they didn't exist at all 15 years ago.

Brooks' point about edamame is that this extends well beyond the sphere of what's typically called technology or innovation. Pho is not a new invention, but Vietnamese beef noodle soups are much more broadly available in the United States today than they were 15 years ago. And that's broadly true throughout the service economy. There are more kinds of things you can buy in most places than used to be the case, thanks to a combination of idea diffusion and e-commerce. Now of course if you're talking about a retired person getting by on the average $1,269 monthly Social Security benefit, the range of restaurants you can eat out at is less important than whether you can afford to go out at all. Conversations about "CPI bias" often obscure the fact that the Consumer Price Index is used for a range of different purposes and the extent (or even existence) of bias is highly sensitive to what the actual issue is. The point is really just that economic change is a good deal more complicated than a single summary statistic.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.


War Stories

The Right Target

Why Obama’s airstrikes against ISIS may be more effective than people expect.

Why Is This Mother in Prison for Helping Her Daughter Get an Abortion?

The XX Factor
Sept. 23 2014 11:13 AM Why Is This Mother in Prison for Helping Her Daughter Get an Abortion?

Divestment Is Fine but Mostly Symbolic. There’s a Better Way for Universities to Fight Climate Change.

I Stand With Emma Watson on Women’s Rights

Even though I know I’m going to get flak for it.

It Is Very Stupid to Compare Hope Solo to Ray Rice

Building a Better Workplace

In Defense of HR

Startups and small businesses shouldn’t skip over a human resources department.

It’s Legal for Obama to Bomb Syria Because He Says It Is

How Ted Cruz and Scott Brown Misunderstand What It Means to Be an American Citizen

  News & Politics
War Stories
Sept. 23 2014 4:04 PM The Right Target Why Obama’s airstrikes against ISIS may be more effective than people expect.
Sept. 23 2014 2:08 PM Home Depot’s Former Lead Security Engineer Had a Legacy of Sabotage
Sept. 23 2014 1:57 PM Would a Second Sarkozy Presidency End Marriage Equality in France?
  Double X
The XX Factor
Sept. 23 2014 2:32 PM Politico Asks: Why Is Gabby Giffords So “Ruthless” on Gun Control?
  Slate Plus
Political Gabfest
Sept. 23 2014 3:04 PM Chicago Gabfest How to get your tickets before anyone else.
Brow Beat
Sept. 23 2014 4:45 PM Why Is Autumn the Only Season With Two Names?
Future Tense
Sept. 23 2014 1:50 PM Oh, the Futility! Frogs Try to Catch Worms off of an iPhone Video.
  Health & Science
Sept. 23 2014 4:33 PM Who Deserves Those 4 Inches of Airplane Seat Space? An investigation into the economics of reclining.
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.