Economics in the News – Oct. 18-24, 2021
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- Are you planning to upgrade to the new iPhone 13? A new iPhone costs $1,000 to upgrade and can be considered a large purchase. Many people believe it’s worth going into debt for a new phone each year, despite having a limited emergency fund.
Financial advisors estimate that if a $1,000 cost to buy a new smartphone were instead used to be placed in a retirement account, that account would be worth roughly $17,000 in 30 years. Flipsy, a company that buys and sells used smartphones, published an analysis which stated that it costs $418 more to upgrade your phone each year instead of upgrading every three years. Economists refer to the cost as an opportunity cost. [The New York Times]
- Expect fewer discounts heading into the holiday season. Backed up supply chains and inflation are two reasons discounts will be hard to find this holiday season. Lack of supplies in stores reduces the number of discounts that stores can offer.
Some brands have taken steps to price items more strategically in an effort to recover from the COVID-19 pandemic. They are reducing the amount of goods they sell or better targeting promotions for select customers. [The Wall Street Journal]
- The fastest-growing segment of the real estate market are single-family homes built exclusively for the purpose of renting. They make up six percent of the homes being built in the United States after growing 30 percent between 2019 and 2020. Single-family rentals allow renters the flexibility of having a space of their own, without the burden of putting a down payment on a property.
However, in renting a single-family home, many people are losing out on the investment advantages of homeownership.Millenials under the age of 35 have the lowest rate of home ownership in the United States at 37.8 percent. Appreciating home values, student debt and stagnant wages have made it more challenging for millennials to purchase homes, contributing to the decline of national homeownership. Single-family homes for rent and the ability to work remotely, has allowed people an alternative for building a suburban lifestyle. [The New York Times]
- The Seattle Kraken – the newest franchise of the National Hockey League – debuted their new arena at Climate Pledge Arena this past Saturday night. The new arena is the first of its kind in North America. It aims to be the first net-zero carbon arena in the United States and was built by renewable sources.
From electric Zambonis used to clean the ice surface to cooking with electricity, Climate Pledge Arena is the first all-electric arena in North America. Solar panels will supply 3 to 5 percent of the building’s energy needs, as Climate Pledge Arena management is planning to file for zero-carbon certification from the sustainable building organization International Living Future Institute. [NBC News]
- The Colorado River is a lifeblood to the Southwest, powering $1.4 trillion in economic activity each year. However, a 22-year drought along with numerous fast-growing cities have caused the federal government to cut water supplies in the first-ever federal shortage declaration on the Colorado River.
The seven states – Arizona, Colorado, California, Nevada, New Mexico Utah and Wyoming – and 30 Native American tribes that rely on water from the Colorado River basin are preparing for difficult choices that they will have to make amid the plummeting waters. Due to the water shortage and federally mandated cutbacks, farmers in the region are having to cut back on the crops they are planting. [60 Minutes]