An interesting article on the economic value of variety. Though it was written in 2004, it's still relevant. It explains why I'm willing to fork out six times more to eat at Straits Kitchen even though realistically, all I can finish is usually a plate of duck rice, some roti prata and a couple of pieces of goreng pisang. I like having many options to choose from, even if I end up taking only two out of the multitudes available.

Still, I know I've definitely felt the negative impact of having too many choices, but ultimately, isn't variety the spice of life?

In a recent working paper for the National Bureau of Economic Research, Professor Weinstein and Christian Broda, an economist with the Federal Reserve Bank of New York, estimate how much international trade has benefited consumers simply by increasing variety. (The paper is available here.)

The results are striking. Consumers, they estimate, would be willing to pay $280 billion a year, or about 3 percent of gross domestic product, to have access to the variety of goods that were available in 2001, rather than what they could have bought in 1972. That represents a huge, previously uncounted rise in the standard of living. It also suggests that measurements of real price increases, like the Consumer Price Index, are overstated.