Friday, November 25, 2005

Air guitars, eBay and the economy

There have been several measures proposed to judge the health of a given economy, the most famous of which is the Hemline Theory, which states that stock prices rise and fall along with women's hemlines. (This is only a correlation, but some people have tried to postulate a causation along these lines: short skirts mean sales of accessories like epilators and stockings. Both are associated with good social life, hence also with sales of cosmetics, food and entertainment. All of which is possible only when the economy is good).

Anyway, here's a new one: "The health of the economy is proportional to the number of intangible items sold on online auction sites each day". I name this the "Air Guitar Hypothesis".

Here's what I mean:

1. Probably the earliest such event.
2. One of the most recent clones.

And if you find too many intangibles being traded on eBay, you should probably watch out for bad business plans and burst-prone bubbles.

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