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Voluntourism and the obvious pitfalls of ‘orphan demand’

When eco-tourism first emerged as a buzzword in the 90s, this was universally accepted to be a good thing. Demand by affluent travellers for authentic first-hand experience of pristine jungles, mountains and beaches caused local communities to see their natural resources as a source of tourist income. They were incentivised to work harder to protect those resources. A range of new jobs that depended on conservation efforts were created.

At the outset of the millennium we are now seeing the rise of ‘voluntourism.’ Not dissimilar from eco-tourism in some ways, this is driven by demand by affluent travellers from the developed world looking for first-hand experience volunteering to alleviate poverty. The experience typically lasts between one day and four weeks, with tourists carrying out low-skilled work such as caregiving in orphanages or constructing temporary housing for displaced persons. As a result, providing experiences assisting highly visible people in need becomes a source of income.

It does not take an economist to recognise that market demand for ‘helping experiences’ creates perverse incentives. The most troubling of these is the phenomenon of ‘orphan demand.’

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Scavenging for rationality at the Camberwell Sunday Market

In economics, we are often presented with the benchmark of a perfectly competitive market, in which a large number of buyers and sellers trade homogenous products with perfect knowledge regarding price and utility. The only feature Camberwell Sunday Market shares with this benchmark is a large number of buyers and sellers.

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D-Day for debt restructuring

Dubbed ‘the sovereign debt trial of the century’,[1] NML v. Argentina saw notorious ‘vulture fund’ Elliot Capital Management face off against ‘rogue debtor’ Argentina. The decades-long case concerned the restructure of more than US$82 billion of debt that fell due during Argentina’s economic crisis of 2001.[2]The debt restructure that followed has been the most acrimonious in recent history.

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Monash versus Melbourne: The blow by blow

essa presidents
ESSA Presidents Dean Pagonis (Melbourne) and Matthew Vethecan (Monash) know there can be only one winner

As students from Monash and Melbourne converged on the heart of Clayton campus for the inaugural ESSA Monash versus Melbourne Economics debate, the tension crackling in the air was palpable. For the Melbourne team, losing to the new kids on the block would be an irrevocable stain on their self-perception. For the Monash team, the desire to reign supreme on their turf was a powerful driving force. The topic ‘The Eurozone Project is a Failure’ provided ample scope for intellectual sparring.

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ESSA Networking and Trivia Night: Invaluable Career Advice and Useless Facts Collide!

Last week more than 200 students with a passion for economics and a penchant for random facts, converged on Melbourne University’s Grand Buffet Hall to attend ESSA Networking and Trivia Night. The mix of graduate recruits and senior representatives in attendance gave students a chance to rub shoulders with partners, whilst at the same time getting the ‘skinny’ on what they might expect on rotations in their graduate year.