Economics in the News – Feb. 6-12, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Fewer days at the office has taken its toll on metropolitan economies and nowhere is that more apparent than Manhattan. Studies from Bloomberg News analysis show that workers in New York’s most famous borough are spending at least $12.4 billion less a year due to roughly 30 percent fewer days in the office. The average worker is spending $4,661 less per year in New York on eating out, shopping and entertainment after work. Other cities are seeing similar patterns too. The average worker in San Francisco is spending $3,040 less per year, while $2,387 less is being spent in Chicago.
That $12.4 billion loss trickles down to other businesses. When a city’s commuter base disappears, sales and transit revenue fall, while income from commercial property tax dissipates. The impact on the transit system has been tremendous in New York, where weekday ridership has been slow to recover and revenue declines are expected to exceed $2 billion per year through 2025. [Bloomberg]
o Did you watch Super Bowl LVII? The NFL’s premier event is usually the most-watched program on U.S. television on an annual basis. Not only in sports but in all of television. The NFL reigned supreme in 2022 with 82 of the 100 most-watched television programs. Fox Sports, who broadcasted this year’s game, expects to bring in $600 million in revenue after selling ad space for $6-7 million per 30-second ad. What would it take for another television program to dethrone the NFL from its television dominance?
The last TV program to generate more viewers than the Super Bowl in a calendar year was the “MASH” series finale in Feb. 1983, which averaged 105.97 million viewers. That year’s Super Bowl averaged 81.7 million viewers. Last year’s Super Bowl, pitting the Los Angeles Rams against the Cincinnati Bengals, averaged 112.3 million viewers. [The Athletic]
o International travelers frustrated with poor exchange rates and foreign exchange fees for purchases charged on a credit card are turning to a new option. Multicurrency accounts allow travelers to exchange their money at more favorable rates and hold money in various currencies.Multicurrency accounts allow travelers to hold, spend, and transfer between multiple currencies. One of the top multicurrency accounts is with Revolut, which currently has roughly 26 million users. Funds in a Revolut account are able to be exchanged into 29 currencies. [The New York Times]
o The next time you go to the movie theater, be prepared to pay more for your favorite seat. AMC Entertainment, the world’s largest cinema chain, announced plans to integrate a tiered pricing model at all its theaters in the United States by the end of 2023. However, the new prices would not impact matinee showings before 4 p.m., or special discounts.
The seats in more desired locations such as the middle of the theater will cost the most, while less desirable seats at the front will be the least expensive. In addition, to access the value tier prices, customers must register with the AMC loyalty program, which includes one free membership tier. The latest tactic continues a trend of theaters’ response to weakening attendance due to more streaming options that offer a more convenient experience for the consumer. [The New York Times]
o Koji Sato, who is set to become chief executive officer at Toyota in April, stated his goal to expand the electric vehicles in Toyota’s lineup. Under Sato’s leadership, Toyota aims to develop new EV’s for its luxury Lexus brand by 2026. The brand plans to utilize an EV-specialized platform, which differs from Toyota’s current strategy of relying on existing technologies.
Toyota ultimately hopes that larger upfront investments in EV-dedicated technologies, that it will help make production more efficient and take advantage of economies of scale. While Toyota continues to be the leader in selling hybrid gas-electric vehicles, headlined by its Prius, its investment in EVs have been minimal. But with the popularity of EVs rapidly expanding across China and Europe, sales in the United States are expected to expand in response to more generous tax credits. Last year, EVs made up less than one percent of Toyota and Lexus retail sales. [The Wall Street Journal]