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3 Comments

1. Eugene says

   I read this news and what I feel interesting is how do we estimate total cost of anything for its lifetime? From my naive economic sense I think that the sum of purchase cost + total maintenance cost + total fuel cost will be it. And this cost should be a linear approximation to the cost of energy required for the thing to work in the lifetime, Because even the non-fuel cost will be funneled to other activities that consume energy, such as the salaries paid to the GM employees from purchase will be used by employees on energy consumed for his/her commute, communication or living. Because almost all countries consume oil at the same price, so poor people will consume less energy than rich people, right?

   So I wonder if this stories is true, we can compare the total cost of owning between Hummer and Prius. Prius should be more expensive after factoring all cost for replacing batteries during its life time than Hummer. (Just a guess.)

   I wonder someone can prove or disapprove what I said.

   Posted March 22, 2007 at 10:28 pm | Permalink
2. bob koepp says

   Eugene – In a “pure” economy, I think what you say would be true. But there are many distorting factors that can make “monetary value,” and even “exchange value,” unrepresentative of “real value.”

   Posted March 23, 2007 at 10:14 am | Permalink
3. Eugene says

   Hi Bob,

   I know you point. What I described is a thought experiment. But even for subsidy, manipulation of exchange rates always can be realigned somewhat. Also we regularly forget the whole system is dynamical and time and the market force always bring ups and downs of prices. I wonder where are data that we can have for such estimation? The news in fact did not mention any numerical evidences, while I am more interesting to see the data and methodology to estimate the cost.

   A digression here. Just like what I read from the economist today regarding death of Cathy Seipp, a conservative blogger, of lung cancer. Though most of patients of lung cancer are one time smoker or not, 15% of them are never living with smokers. While lung cancer has big share of patients, but it receives much less research funding! I guess the best way for debate is to find out the evidences and present them!

   Well, the method will not work in Global warming. We only have very short period of records.

   Posted March 24, 2007 at 9:54 am | Permalink