The merry month of May

The merry month of May

There seems to be an experiment on applied economics taking
place here in Jakarta's "duty free" shops. Probably some
brilliant young student of economics has persuaded the shop
owners to participate in the experiment with a view to publishing
the results in a doctoral thesis.

As I understand the justification for these shops, it is to
bring much needed foreign capital into Indonesia. Now, the point
of the experiment seems to be to determine how much unofficial
duty can be applied to a product or commodity before the price
becomes too outrageous for consumers to stand, and they stop
purchasing the product.

Every month the price of wine (for example) goes up at an
accelerating rate (now totaling about 120 percent since last
September. People have grumbled for some time, but continue to
buy. I wonder if the price of wine will become too outrageous in,
say, the month of June. It could happen that everyone will decide
during that particular month to forgo all purchases of wine and
buy a cheaper product, such as beer during the entire month. It
could happen if foreigners begin to complain at dinner parties
during the month of May. I wonder what would happen if they
mention to their friends that the price of wine has reached the
point at which they don't plan to buy any more during the next
month. I wonder how that might affect the results of the economic
experiment.

GARY GENTRY

Jakarta