Frequently Asked Questions
The title is self-explanatory. In this series, Gatien and Patrice address FAQ coming from the field, from our daily life, and from you (send us your questions here).
Read my opinion on economics and plain language.
Why is there a difference between a cost and a price ?
The difference between a cost and a price: costs have a perspective, prices do not.
The price is the amount of money the seller and the buyer agree on for a good or service.
The cost is the amount of resources needed to get a good or service:
- cost of production for the seller
- cost of acquisition for the buyer
- transaction costs borne by society as externalities (discussed in another post)
If you see two similar goods or services at different prices, it does not mean that one was more expensive to make that the other. And if nobody buys the more expensive good, it means that it isn’t worth more than the other (it may mean the opposite).
What are “economic perspective”?
To come soon.
Economists and plain language
“It depends”
It’s certainly the most common answer I’m tempted to give when someone asks me anything in economics.
Not to sound fancy, or educated, or in search of compensation for intellectual work. Economics is about human behaviors, and their complexity reaches far beyond my understanding. “It depends” or perhaps a somewhat jargon-full answer reflects what I honestly believe.
This said, economists (and Academics in general) do not serve well Science and the world with this kind of answer. We need to work to make our speech intelligible from different perspectives.
Courses, training and mentoring are unequaled avenues to get better at it. Not for some duty to transmit knowledge, but because I get paid to face the most straightforward reality check to my vision of the world. Students and trainees demand knowledge, usable knowledge – knowledge they can relate to in their life and professional aspirations. Their questions make me love economics and find true meaning into it.
Of course, to fully appraise the knowledge and techniques a discipline holds and develops, you need to make the plunge into ongoing scientific debates. And those take place with all the nuances the native jargon can offer. But not everyone wants to be an economist.
I currently manage a cost-of-illness study in Uganda. When I am there, I regularly provide training and discuss the use of economic evidence and data with data collectors and local participants. With their questions (and yours!), we’re making this FAQ series.