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