Finding symmetries in an unsymmetrical world ..

Lessons from my Father on early economics ..

Posted on: December 18, 2009

Having been grown in humble middle class family, I use to accompany my Dad to most of the trips to “Sabji-Mandi” , or the local market on  humid evenings.

Dad had a fixed regime to purchase anything, even if we intended to buy just one Kg’s of Potatoes, he would make me escort him to virtually the entire Mandi, and enquire about the prices that the potatoes were selling at . Satisfied, he would eventually go back to the lowest vendor, with a quality that he perceived was wholesome .

After each of these trips, I would grit my teeth ,and complain to my mother after I got back home “Dad, always purchases from the same vendor he asked the price from, and yet he makes me carry all the grocery bags, and accompany him to wherever he went. More so, after I m back, I miss on my cartoons! I m not going with him again.”

But the next time, dad would ask us two sisters ,who would like to come with him for the trip, I would jump, and say I .the temptation of a ride was far overwhelming . It was on one of these trips back home that I asked dad ,what I so often complained to mom .To which he explained If you do not know the price at which something sells, how do you decide, how much it is worth paying for.”

Dad grew up much before liberalization and the onset of Free trade, and open economy, and yet he understood it all, so well.

So, Knowledge of the markets is the prerequisite for any buying decision, for not only it helps a customer make a buying decision, it also gives the intangible “perceived equity” of the price that the goods are purchased at.

When you purchase a good, stock, or pay for any intangible asset (time being the most important) there are two questions to be asked –

(a.) How much are others willing to pay for it ?

(b.) Can I get it cheaper elsewhere?

(c.) What is my opportunity cost of investing the time I take to make this buying decision? (in terms of time and effort ‘lost’)

Living in the information age , that we are in, there is an immense, often overwhelming knowledge spillover in the internet ,and around us . And unless we know how to organize and manage this “limited commodity” – our time , there is no escape !

In one of my other first few stints with Economics, I was preparing a “chatni” , or the Indian Sauce , and it occurs that Onions are the basic ingredients of the preparation . Those were the days when the price of onions was shot to a whopping 40-60  Rs a Kg, it was the year 1994 ( I believe it was , coz the BJP government fell after that )  . Just when I was done with my culinary arts , and presented the same to my mother who was amused as to how I could prepare a nice preparation substituting radish with onions . That brings me to the concept of substitute goods, ie if the price of a good shots up, and unless the good happens to be a Giffen good, its perceived NEED must fall .

To think of it now, it is these interactions with economics I had in my early years, that shaped the way I perceive and decode economics.

What are your Real life lessons ?

~

ek

“Lucky are those who do not have time for Time-Pass ”

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4 Responses to "Lessons from my Father on early economics .."

Realistic , Original , nostalgic. To all those oblivious to small things around like myself too this is indeed a message. I hope you keep posting more , for those whose gray matters have stopped racking may pledge to do so here.

Keep Rocking
KM

In prices of things, it’s best to to scout around, ‘get tired’ and be jubilant with a steal deal rather than buy for comfort and sourgrape later on once you find out that it’s sold much cheaper somewhere else.

You have an ‘intelligent’ posts in here.
Hopefully I can cope up and learn!
🙂

Thanks for dropping by 🙂

[…] be it the Knowledge of the markets episode I had multiple times as a child while assisting my father to the “local mandi “ (market) – and […]

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