vacation

Gari Melchers

Zachary Bartsch2 Comments

Who’s your favorite artist? Warhol? Picasso? Van Gogh? Maybe someone much earlier, such as Michelangelo or Titian? Of course, there is something about the style or subjects that you enjoy. But something about the artist’s personal life might also matter to you. Personally, I’m a fan of Hieronymus Bosch, about whom we know little, and William Blake, who had some social and political opinions that would still be considered liberal even today.

Picasso, Dalle, and Warhol were all eccentric. Picasso had multiple girlfriends who didn’t get along, Dalle enjoyed exemplifying surrealism in his dress and behavior, and Warhol was a reclusive hoarder. Their eccentricity increases their allure and fosters an aura of mystique that they are privy to some unknown truths.

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On Vacation, Does the Law of Demand Apply?

Jeremy Horpedahl1 Comment

I’m on vacation this week. But no, I’m not just saying this to get out of posting this week, or to brag. Americans really have started going back to the normal routine of vacations after a long break during the pandemic.

You might think that the high price of gasoline will slow down summer travel. Not so, according to estimates from AAA. While the total number of estimated travelers for Independence Day weekend is still slightly below Summer 2019 (by about 1 million travelers), travel by car is predicted to be just above 2019 levels (by about 0.5 million travelers), with 42 million Americans traveling by car. Air travel has been a mess lately and quite expensive (even compared to pre-pandemic levels), and is predicated to be about 0.5 million below 2019. Bus/train/cruise travel is still the big loser, well above the past two summers, but still 1 million travelers below 2019. (These are all estimates, of course, but AAA is in the business of knowing this data well.)

What gives? Basic economic theory would tell us that if the price of something increases, people should buy less of it. And traveling by car is much more expensive than in Summer 2019. We should also think about substitutes, and airline travel is certainly a substitute for car travel. But if we look at what has happened to both airfares and gasoline prices since July 2019, we can see that gasoline prices have increased much more (about 60% vs. 25% for airfares).

So, do we just throw up our hands and say: “it’s just too complicated, lots of factors at play”?

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Post Pandemic Vacation Arbitrage

Zachary Bartsch1 Comment

My wife traveled to Ireland with a friend after she graduated with her bachelor’s degree. She had lived in Europe as a child and had travelled for mission trips. But travelling to the Irish Republic as a young adult, for the singular purpose of celebration and leisure, made a big impact on my eventual wife and she recounted it for years.

Remember pre-Covid when life was so easy? Many of us had planned trips, for business and leisure, that were interrupted. By now, the vast majority of people are back to ‘normal’ (I think?). Classes are in-person, masks are largely optional, and there is no more line stretching out down the sidewalk near the Trader Joe’s. With all this normalcy, one might ask:

Where’s your next vacation?

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