“Location’s very important. If you think about, say, the Department of Motor Vehicles, the location of the DMV in Washington, DC, is not important at all. Basically, if you want to deal with the DMV, you have to go where they put their offices. But Starbucks realized they don’t have that kind of power. They can’t make you show up. So you walk six blocks, you see six Starbucks. It’s not a sign of Starbucks’ power over us. It’s a sign of Starbucks’ desperation. They have to make it convenient for you to buy coffee. Otherwise, you’ll go to a competitor. And that doesn’t come cheaply. They have to pay a lot of money in their rents.”
That’s Tim Harford from his appearance yesterday evening on NPR’s Marketplace. As Harford explains to Kai Ryssdal and in his book, The Undercover Economist, economics is more than just “the numbers” and whether the market goes up or down.
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