You must focus on one or more economic issue related to the topic and discuss the economic issue and/or associated with your topic. Topic is related to economic of information
Economics of e readers focuses on the impact of electronic book and article reading on the goods market and on the information market (Hudson, 2011)
On the goods market, it basically affects the sales and marketing of books. E readers are improving on the production of books as it is cost effective. Every producer aims at cost efficiency which in real sense is more output and sales at a lesser cost. Instead of the traditional writing of a book then printing it followed by distributing it to stores all over the country, the publishers only open a website and sell the soft copy book at a cheaper price than it would have actually cost when in hard copy.
This is evident from the 112 million dollars of sale from e readers in 2009, in America only. This means that the market is indeed responding positively from the on line market Hudson, 2011). Firms are moving from analogue to digital, most companies do not buy newspapers instead they subscribe to the print media and, at times the entire fourth estate, to allow them to read a soft copy of their newspapers at a cheaper cost. This means employees do not get to deal with stacks of old newspapers as they simply read it online and store it in their computers.
E reading is also improving the environment as well, apart from the fact that trees will no longer be cut down in order to produce paper, the emission of gases, which affect the ozone layer, from the industries will be a thing of the past. In a span of only one year the newspaper and books industry is believed to cut down close to 125 million trees that are used to make paper. This is what is slowly leading to global warming. The carbon monoxide produced by vehicles as they transport these books will also be eradicated. This is what makes the streets to be stuffy and is a step in the right direction.
On the information market, e reading helps to a large extent in the spread of information. The improvement in technology has helped to a great extent. The iphones, ipads and tablets can access internet and are more portable. People can easily read articles and books on how to improve on their lives by the simple click of a button. Classes can take place on line as students simply have to purchase books from the internet. Advertisements can be done on the internet and consumers can be able to compare and contrast the goods and shop at the comfort of their own houses. Consumption depends on the information that people will get. This information can vary from the prices of products, quality, good service and offers made. This means that there is an information market (Myerson, 2008).
The information market is quite different from the goods market. The major differences are;
- Information has zero marginal cost, once the information has been given to one person; it has zero cost to make that information and to spread it (Stiglitz 2000). This means that there is basically no competition and no rivalry in this market.
- There is no exclusion in this market; this is because information is widely known. At times there can be the creation of an artificial boundary that leads to lack of free flow of information but this is known not to last for a long time. This is contrary to the goods market whereby the consumption of some goods and services can be exclusive to a percentage of the population with similarities and not to everybody else. This makes information to be termed as a public good.
- There is no transparency in the information market. This is because in order to evaluate the information you have to first get it and it can be costly to get the information, and then after evaluating it you find that it is not true or of any importance to you (Alchian, 1972).
The major merits of e readers on the economy, is that it has greatly opened up a new market for goods and services (Biba, 2010). This untapped market where consumers and producers can easily meet and exchange goods and services saves on time, and to any economist time is money. The other advantage is that e reading is environmental friendly. It reduces the production and transportation process that is not environmental conscious. E reader is cost effective and gets rid of all the bulk that comes with the hard copy literature. This is true because almost 25 percent of all the published books are usually returned back to the publisher where they are burnt.
E reader has created new jobs, especially for those who have the proper technological knowhow of designing websites, blog pages and even the online agents who monitor the payments and the downloading of the books and articles (Biba, 2010).
On the other hand, e reader has its own economics demerits. Due to it there has been a decline in the volume of labour that is required especially drivers, printing companies and libraries. An increase in the level of the unemployment leads to a decrease in the level of GDP and reduces the economic growth of a country (Myerson, 2008).
E reader has made the reader and the writer to loose the touch that they once had when people would line up to get their books autographed by the author. This is an experience that used to bring a lot of sales because everybody wanted to get a copy of the book. E reader has also created a new type of crime that happen on line. This is what is termed as online piracy. Once one individual has paid and downloaded a book or an article, he can now sell it to other people at a cheaper price and this leads to loss of sale as most people will opt for the cheaper version of the same book.
Economics of e reader has proved, that information has an economic value in essence that the more people who know about a product or a book the better. The internet offers that world of endless possibilities because with the touch of a button, an author is dealing with millions if not billions of book readers who are ready to interact with him from all parts of the world. With this kind of market out there, the need to go through the entire process of printing books and articles and distributing them to a limited number of stores is more costly and less efficient than posting it online and making easy sales.
References
Stiglitz E Joseph, (2000), the contributions of the economics of information to the twentieth century information, journal of economic literature.
Alchian A Armen, Demtez Harold, (1972), production, information cost and economic organization, Oxford University Press New York
Biba, Paul. (2010), E reader Economics 2nd edition, Pauline’s Printers Press, New York.
Hudson C Marie. (2011), the Economics of E Readers’, Oxford University Press New York
Myerson B Rodger, ( 2008), mechanism design, the new Palgrave dictionary of economics 2nd edition, Pauline’s Printers Press, New York.
