Marginal Revolution: China market of the day

November
S	M	T	W	Th	F	St
1	2	3	4	5	6	7
8	9	10	11	12	13	14
15	16	17	18	19	20	21
22	23	24	25	26	27	28
29	30

« Unemployment During the Great Depression | Main | Heroes and Cowards, part II »

China market of the day

From a loyal MR reader:

I just read that there is a company in China hiring young females who are paid to get pregnant and deliever a baby for couples suffering from infertility.

The interesting thing is the price discrimination. There are eight types of females with different "qualities".

Example： Females who are middle school graduates and are not very pretty receive 40,000 RMB.

Females who have bachelor's degree and are pretty receive 100,000 RMB.

Here is a database (beware: some claim a Trojan virus at this site), here is price information, both in Chinese.

Posted by Tyler Cowen on November 7, 2008 at 02:07 PM in Data Source | Permalink

Comments

Some antivirus programs with active scanning will report GIFs on that site as containing a trojan. Might be a false positive, might not be, don't know.

Posted by: MM at Nov 7, 2008 2:53:13 PM

I guess it shouldn't surprise me, but Tyler I have to ask: Can you read Chinese?

Posted by: Andrew Mundy at Nov 7, 2008 2:57:15 PM

There's a big market for eggs in the U.S., with Ivy League coed donors commanding much higher prices than beauty college dropouts.

Posted by: Steve Sailer at Nov 7, 2008 3:04:04 PM

The database link will try to put a trojan program on your computer, if my antiviral software is correct.

Posted by: PJ at Nov 7, 2008 3:04:29 PM

Here's Google Translate.

Posted by: david at Nov 7, 2008 3:04:38 PM

I think there is a virus attached to the database link please investigate. If this is not the case I apologise.

Posted by: steve at Nov 7, 2008 3:17:19 PM

This is not really price discrimination.

Posted by: Paul at Nov 7, 2008 3:18:53 PM

(beware: some claim a Trojan virus at this site),

I think you guys should investigate this stuff before you post links to the masses.

Posted by: steve at Nov 7, 2008 3:21:43 PM

The pricing is based on perception of different quality "goods," not different classes of consumers. I agree with Paul.

Posted by: Michael at Nov 7, 2008 3:34:06 PM

Ahh so! He did not specify that the female was not the customer. It may be price discrimination. Our Western sensibility did not allow for the assumption that China might go that far with social engineering.

Posted by: Andrew at Nov 7, 2008 3:57:24 PM

Paul, Michael, and perhaps Andrew:

It's second degree price discrimination, e.g. offering different versions of a product or service to sort customers by willingness to pay.

Posted by: a student of economics at Nov 7, 2008 9:17:49 PM

Thanks student, my memory only served me the quantity of units sold in 2nd degree.

Posted by: Michael at Nov 8, 2008 1:39:34 AM

Fertility? Trojan virus? How are the girls going to get pregnant at all?

Zing.

Posted by: A Good Man at Nov 8, 2008 3:22:19 AM

Fertility? Trojan virus? How are the girls going to get pregnant at all?

Zing.

Posted by: A Good Man at Nov 8, 2008 3:22:51 AM

NYTimes had an article about sperm banks coupla years ago: http://www.nytimes.com/2006/03/19/magazine/319dad.html?_r=1&pagewanted=all and they said there is a market in what women are looking for "..She did have a few ideas of what she might look for: she wanted a man of her same blood type, O positive. Because she herself is so tall, she preferred a medium height. (Short donors don't exist; because most women seek out tall ones, most banks don't accept men under 5-foot-9.).."

Posted by: dave.s. at Nov 8, 2008 7:46:59 AM

No, you cannot say it is price discrimination. The quote only tells you that a better quality product was sold at a higher price than a lower quality product.

The only sense in which there might be price discrimination in this case is if the company who (allegedly) hires these women is charging different mark-ups on the two products. But we have no information about costs, so we cannot make that inference.

If I had to guess, I would say that a beautiful college graduate in China would have a much higher reservation price for such a "service" than an ugly middle school graduate. If there were any price discrimination, it would probably be against the buyers of the lower quality product.

Having said all that, I think this is a hoax. Good for teaching some microeconomics, though.

Posted by: Valter at Nov 8, 2008 8:22:06 AM

Why on earth would it be a hoax? The same thing goes on in the U.S., you know. Except usually they pay one woman for surrogacy and another woman for the egg. And the better educated, more beautiful women get paid more for their eggs. Women also get paid more if they are members of some relatively small group (e.g. Jewish).

Posted by: Eva at Nov 8, 2008 12:02:32 PM

Dear "student of economics":

You clearly have no understanding of what price discrimination is. Have you actually studied it? From which text? I'd really like to know so that I can avoid that text, if this is what it is telling you.

For your edification: price discrimination is about selling the same product at different prices to different consumers. Sort of like how Tijuana hookers charge American fratboys more than they charge locals. The cited story here is about merely selling a higher quality product at a higher price, regardless of who you are seling it to.

Simple analog: charging everybody more for a BMW than for a Kia is not price discrimination. Charging a New Yorker more than a Kansan for the (same) Bimmer is price discrimination.

Posted by: a professor of economics at Nov 8, 2008 1:24:06 PM

steve:
"There's a big market for eggs in the U.S., with Ivy League coed donors commanding much higher prices than beauty college dropouts."

these infertile couples are making a mistake to think they will only have sons.

Posted by: roissy at Nov 8, 2008 2:52:29 PM

"price discrimination is about selling the same product at different prices to different consumers"

I don't think it is save to assume that the product (here: a female ovum) has a different quality based on the level of education and/or attractiveness of the woman in question.

It could, however, be argued that a woman with a higher education has higher opportunity costs - pregnancy will limit the time she can earn a salary, and as her higher education could give her access to higher paid jobs, the time she can't use for working costs her more.

Posted by: Shua at Nov 8, 2008 5:00:58 PM

"I don't think it is save [sic] to assume that the product (here: a female ovum) has a different quality based on the level of education and/or attractiveness of the woman in question."

Wow. A female ovum contains the mother's genes. Qualities that we know have a large genetic component are beauty and intelligence. Shua, could you be more clueless?

Posted by: Richard at Nov 8, 2008 10:45:10 PM

Richard: I don't answer rhetorical questions. Do you?

As for your argument, the genetic impact on intelligence is hard to quantify.

Posted by: Shua at Nov 9, 2008 7:35:35 AM

Yeah, although I can't say genetics has no impact on intelligence, I don't think I'd take such a price premium based on the degree of education they have in determining how smart the child turns out to be. It seems like too much of a gamble.

Posted by: Michael at Nov 9, 2008 3:31:24 PM

We are professional cheap kids shoes online store .We provide Nike shoes cheap ,Nike air jordan,cheap kids clothing
cheap womens clothing,Nike shoes online store,Nike shoes cheap,Nike shoes for kids,air jordan sneakers,nike air jordan,air jordans,brand shoe,shoes brand, dropship Nike shoes , brand clothes,brand clothes ,shoes brand,cheap kids clothing for cheap wholesale Air Jordans shoes for kids & women.