easter break!
In today's Introductory Microeconomics (henceforth known as IM) lecture, on the topic of inefficiency, my lecturer gave us this example.
In 2001, Australia's second largest insurance company, HIH Insurance collapsed, racking up over $5 billion in losses and making its mark as Australia's biggest corporate collapse yet. John Howard then ordered a Royal Commission inquiry into the matter.
--------------------------------
HIH Royal Commission. Day 131.
Wayne Martin - QC
Raymond Reginald Williams - former CEO of HIH Insurance
Martin: "Could you tell us please if, on your frequent first-class trips to London, you booked the seat next to you for your briefcase?"
Williams: "I don't recall specifically. But that may have been the case, on some occasions."
Martin: "That your briefcase was also travelling first class?"
Williams: "That may have been the case."
Martin: "Did you express the view to Qantas that this briefcase should be eligible for frequent flier points?"
Williams: "I can't recall that."
Martin: "And were you subsequently informed that said briefcase would not be eligible for such points on the grounds that it was not, in fact, a person?"
Williams: "That may have been the airline's position on that issue."
Martin: "Was that briefcase, from that point on, booked under the name of Casey Williams?"
Williams: "Casey Reginald Williams."
-------------------------------
Also, another interesting tidbit about correcting negative externalities (i.e. taking into account the cost or the negative spillover effects from actions of certain economic agents, for those who don't do Econs). Some airports charge airlines noise tax as one of the ways to account for noise pollution during takeoffs and landings. I never thought of that! Though I should've, considering they've managed to monetize environmental pollution by way of pollution credits.
In other news, the Easter holidays start today and goes on for the next ten. With luck and willpower, this time will be spent finishing assignments and catching up on work I've gotten behind in, and less on procrastinating.
Speaking of which, I stumbled across a nifty quote the other day. You may or may not have heard it.
"I used to be an amateur crastinator, but I've recently joined the pro ranks."
I am also, quite scarily, getting addicted to coffee. I've never been much (or anything even) of a coffee drinker, but for the last few days, I haven't been able to get by without a takeaway after uni. I'm not sure when or how it started, but coffee, which for years I thought tasted bad, suddenly started tasting good.
Very good.
*shudder*
In 2001, Australia's second largest insurance company, HIH Insurance collapsed, racking up over $5 billion in losses and making its mark as Australia's biggest corporate collapse yet. John Howard then ordered a Royal Commission inquiry into the matter.
--------------------------------
HIH Royal Commission. Day 131.
Wayne Martin - QC
Raymond Reginald Williams - former CEO of HIH Insurance
Martin: "Could you tell us please if, on your frequent first-class trips to London, you booked the seat next to you for your briefcase?"
Williams: "I don't recall specifically. But that may have been the case, on some occasions."
Martin: "That your briefcase was also travelling first class?"
Williams: "That may have been the case."
Martin: "Did you express the view to Qantas that this briefcase should be eligible for frequent flier points?"
Williams: "I can't recall that."
Martin: "And were you subsequently informed that said briefcase would not be eligible for such points on the grounds that it was not, in fact, a person?"
Williams: "That may have been the airline's position on that issue."
Martin: "Was that briefcase, from that point on, booked under the name of Casey Williams?"
Williams: "Casey Reginald Williams."
-------------------------------
Also, another interesting tidbit about correcting negative externalities (i.e. taking into account the cost or the negative spillover effects from actions of certain economic agents, for those who don't do Econs). Some airports charge airlines noise tax as one of the ways to account for noise pollution during takeoffs and landings. I never thought of that! Though I should've, considering they've managed to monetize environmental pollution by way of pollution credits.
In other news, the Easter holidays start today and goes on for the next ten. With luck and willpower, this time will be spent finishing assignments and catching up on work I've gotten behind in, and less on procrastinating.
Speaking of which, I stumbled across a nifty quote the other day. You may or may not have heard it.
"I used to be an amateur crastinator, but I've recently joined the pro ranks."
I am also, quite scarily, getting addicted to coffee. I've never been much (or anything even) of a coffee drinker, but for the last few days, I haven't been able to get by without a takeaway after uni. I'm not sure when or how it started, but coffee, which for years I thought tasted bad, suddenly started tasting good.
Very good.
*shudder*
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