Measure Consumption Using Garbage?
According to a paper to published in the Journal of Finance “Asset Pricing with Garbage,” the amount of garbage we produce is a better measure of consumption than traditional tools.
In short:
The more garbage we produce, the richer we are, times are good, the Risk premium on stocks should be low.
The less garbage we produce, poorer we are, times are bad, the risk premium should be high( meaning you are taking a lot more risk to get a return on you money).
Typically consumption is measure by government…If the garbage things takes off private sector can now start measuring consumption.
May be we all should start weighing our garbage.
Advertisement
