Sunday, May 28, 2006

the balassa-samuelson effect

I wasn't going to post today, but I just got an email from my dear friend IB (he gets two initials because just "I" would be confusing) in which he complimented me on having a new post everyday. Well, it wasn't so much a compliment as it was just a comment; he is the very busy father of a ridiculously adorable 2-month-old, so he may have just been marvelling at the gobs of free time that I have.

I did little or nothing of interest today. I dyed my hair dark brown, which according to my roots is more or less my natural hair color. What I really need is a hair cut, but I've decided to wait until I get to India in order to take advantage of the economic forces that make a haircut, even a good one, so much cheaper there than here. My best friend Muffin (I'm sure he'd prefer that I just use his real name instead of our mutual term of endearment for one another, but it's more fun this way) used to get fabulous haircuts from one of the best stylists in Sri Lanka for about $10. It's so cheap because the overall wage level in Sri Lanka (or India) is so low relative to that of the US. And the wages are so much lower because productivity in manufacturing (and other sectors in which international trade takes place) is so much lower in India and other developing countries, and wages tend to reflect productivity. But hair stylists, of course, aren't any more productive here than they are in India or anywhere else. They get paid more here only because the overall wage level is higher here. And because services aren't tradable, they don't compete with Indian hairstylists (well, except in my case), so their wages stay higher despite the fact that the service they provide is the same as the service that Indians provide more cheaply. (This is called, as you may have guessed by now, the Balassa-Samuelson effect.)

All of which means that for the first time in my life, I may actually get a really good haircut at a really nice salon, because it will probably still be cheaper than the mediocre, utilitarian "Great Clips" cuts I get here.

1 comment:

Anonymous said...

My stylist used to work at Salon Nayana in Chennai. Here is the website. It lists the salon's address and phone number. You may already have found something better.



http://www.salonnayana.com/include/br_chenn.htm


I miss him terribly. I've been getting very middle class haircuts at a moderately upscale barber shop on Melrose called Rudy's. My stylist there is an awesome chick who juggles fire as a hobby. Unfortunately, she doesn't understand the subtleties of my hair like Rukman, the chap who worked at Nayana, did. Sigh.

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