Wednesday, September 14, 2005

Island Economics

I just got back from my vacation in Hawaii and I wanted to share my thoughts on the business side of the vacation.
  1. Hawaiian real estate has gone through the roof like California and many East Coast cities. This is going to be a challenge for their economy because most of the people who live there can't afford housing. Most of the demand has come from out of state buyers looking for a vacation home. In the mountain resorts the locals deal with this by living in the cheaper communities farther away from the resorts. On an Island you can't do this. It will be interesting to see how this turns out. My thoughts: eventually Hawaiian locals will have to move to a place with better economic opportunity which will increase the wages the resorts will have to pay to keep their employees.
  2. Gambling is apparently the pastime of choice for the Hawaiian natives. I had a lengthy discussion with a local about cock fighting. As with any "vice", making it illegal tends to make it thrive.
  3. Grocery shopping was fascinating. Anything grown on the island was dirt cheap. Anything imported was outrageously expensive. You can see this same effect in your local Safeway or Kroger, but not to this extreme. This is definitely an argument for specialization, outsourcing, and international trade.
  4. The Kauai coffee plantation makes great coffee, but somehow you never see it stateside. It is much better than Kona, which means that Kona must have some good marketing.

Originally Posted 6/27/05

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