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Monday, March 02, 2009

Odd example of a demand shift

Co-author Dennis W. points me to a fascinating story from 2007:
The state-owned New Agency of Nigeria (NAN) surveyed prices in the north-eastern state of Gombe and found that a good quality machete was now selling for 400 naira ($3.50) compared with 800 naira ($7) before the elections, which were marred by politically motivated violence in many states.

"A price survey on machetes, which served as a popular weapon among political thugs in the state, indicated a drop in the price of the implement," NAN reported over the weekend.

Machetes are primarily used as a tool for farming in Nigeria but they are also popular among political gangsters.

"Before the conduct of the general elections, I was selling a minimum of seven machetes daily but can hardly sell one a day now," said Usman Masi, a trader quoted by NAN.
In one sense the story is dated but in another the story is timeless. Demand shifts can occur for any number of reasons one of which is expectations (see chapter 4 of Microeconomics Demystified!). In the case of Nigerian thugs, they did not expect their services to be in much demand after the election and therefore the demand for one of the primary capital tools they use fell. The reverse is happening now in the United States, as the demand for long guns and 10+ magazine semi-auto handguns has spiked since the election (up 30-50% in most cases) and I am sure they have spiked again since our "attorney general" suggested they were going to press for reinstating the "assault weapon" ban.

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