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July 29, 2005

Economic Idiot Award IV.

Another in our popular series of Economic Idiot Awards. This could be awarded to Charles Clover, the author of the piece (and Environment Editor of the Torygraph....yes, yes, I know, we don’t expect these people to get economics) or perhaps to the Royal Institute of Chartered Surveyors, the source of the information. It rather depends on who put the "but" into the report.

The amount of farmland on the market has increased for the first time in three years, but the price of land is falling, the Royal Institution of Chartered Surveyors said yesterday.

So, lessee. There’s an increase in supply and no word of an increase in demand. We are therefore surprised that prices are falling? We might accept "and the price of land is falling" and "therefore the price of land is falling" would also seem to be appropriate (although since we know nothing of the demand side possibly not entirely correct). However, "but" is clearly showing a disillusioning ignorance of the workings of markets and thus is a worthy winner of the Economic Idiot Award.

Masonic handshakes and lashings of ginger beer all round I think.

As an aside I think this has probably cocked whatever slim chance I ever had of writing for the Telegraph environment section yet still, these things need to be said.

Update: The Winner Responds! Take it away Mr. Clover:

I agree, "and" would have been better.  Land prices, however, are an Alice in Wonderland world where the laws of supply and demand don't always hold.

Otherwise your email was needlessly prolix.

Well, it’s a blog post whose existence you were advised of but yes, I am guilty of being prolix. Many thanks for the gracious acceptance speech.

July 29, 2005 in Economic Idiot Award | Permalink

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Oh dear. Charles Clover at The Daily Telegraph does not understand that when supply increases, prices usually fall - and so wins Tim Worstall's Economic Idiot Award IV. Here's the offending text:The amount of farmland on the market has increased for th... [Read More]

Tracked on Jul 29, 2005 9:04:06 AM

Comments

I like this series because the "Economic Idiot Award" is invariably awarded to someone who knows what they're talking about for writing something sensible.

The RICS, oddly enough, knows a bit about the relationship between price and turnover in arable land (note: arable land is an investment commodity, not a consumption one and so a simple Marshallian supply-demand analysis of this kind would be the action of a economic naif). It's a complicated relationship.

Tim adds: If I seriously thought that those who’d produced the article were such sophisticates I might even agree with you. But c’mon, as written the sentence is silly isn’t it.

Posted by: dsquared | Jul 29, 2005 8:44:27 AM

It makes sense if you read it backwards: "The price of land is dropping, *but* farmers are still putting it on the market."

Which kind of implies something else is making them sell other than the price. Which is what the second paragraph is all about.

As for prolix, we're all guilty - so far we've written more than fifteen times as many words about the original sentence than were actually in the original sentence.

Posted by: N.I.B. | Jul 29, 2005 11:23:51 AM

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