August 14, 2008
Voting with your feet
One of the most important elements of economics is reaction. Both businesses and consumers will react to economic conditions, and these reactions will bring change. An example of such a reaction is the concept of voting with your feet. What does this colorful term mean in economics?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"I love this term. What it simply means is that people will move to communities that offer better amenities at better costs, and they will move away from communities that offer less desirable amenities at higher costs. But in doing so, these costs will be balanced out. That is, the communities that they move to, prices will go up or rents will go up. The communities that they move away from, prices will go down and rents will go down, and that provides some compensation between the communities that are desired and the communities that aren't desired. And let me give you two recent examples of this. There was a study in California that showed that people are moving to communities that have better environments, less pollution. However, in doing so, they're increasing the prices of houses in those environmentally sound communities. There was a second study right here in North Carolina that found that property values of homes were found to fall in communities where announced sexual offenders moved to. So this was an indication, obviously, that people were moving away from those communities and in doing so, property values went down. So this is how people can actually register their opinions, their desires, their wants by moving and voting with their feet."
Posted by Dave at August 14, 2008 08:00 AM