L’histoire de sa vie

The other day I took a train from NYC to Philadelphia. As I passed through the somewhat desolate station in Trenton, NJ, I wondered to myself: How do states' capitals' median household incomes compare to the states themselves? What states are "richer" or "poorer" than their capital cities?

With the help of data from the US Census FactFinder, I put together this map to answer the question. At one end of the scale is Hartford, CT, whose $29313 median household income is only 41.9% of the state's median household income of $69899. At the opposite end is Juneau, AK, whose $84750 MHI is 118% of the state's $71829.

Only seventeen states have a median household income above that of the state, whereas the remaining 33 capitals lag behind the state's median. On average, state capital MHIs are 90% of their states. And finally, Washington DC, not included in this map, has a $69235 MHI, 129.5% of the overall United States MHI of $53482.

I don't know if there's any conclusions to draw from this. Since this has to do with capital city limits only, there's a possibility that suburbs could influence the findings immensely. (I've been to West Hartford, CT, for example, and found it to be very nice. But it's not the capital of the state, only a directly neighboring city.) Similarly, should there even be a conclusion to be drawn? Austin is a college town with a lot of technology, so it finds itself slightly better off than Texas as a whole. Albany is a Rust Belt city whose industries have been mostly left behind by the changing economy, so perhaps in the past it would have beaten NY as a whole, but today doesn't hold up. In any case, if there's one thing I enjoy, it's answering interesting data-based questions. Raw data below:

Clearly marked pint, half-pint, and third-pint lines on one of my favorite glasses: Great British Beer Festival 2013

In the United Kingdom, it is illegal to sell a pint of beer with less than 568mL of liquid. This corresponds to 20 imperial ounces, which is about 19.2 US ounces. Similarly, "half pints" must contain no less than 284mL, and "third pints" no less than 189.3mL. To enforce this law, pubs in the UK serve beers in marked glasses, with clear lines that show at what point a pint has been reached. There are inspections. There are regulators. There are customers who politely ask for a "top up" when this line isn't met. And as a result, this line is met. Customers who expect a pint receive an imperial pint at a minimum.

The United States Treasury, through powers granted by Article 1, Section 8 of the U.S. Constitution, defined, in 1832, a gallon as 231 cubic inches. As part of the US Code obligations, every state has, on behalf of the Secretary of Commerce, a complete set of "weights and measures," that include a gallon and divisions thereof: half gallons, quarts, pints, half pints, and gills. Thus, a pint, according to US law, is 28.875 cubic inches, or precisely 16 US ounces (473mL).

And yet, when you buy a pint of beer in this country, there is no guarantee that you will get those 16 ounces. In fact the opposite is true: thanks to under-pouring and misleading glassware, you are likely to get much less.

The "standard American shaker pint" glass, the kind you probably think of as a pint glass, holds exactly 16 ounces. Exactly. No room for spillage, and in fact, pour a tall boy of beer into one and you'll note a "reverse miniscus" of liquid, as surface tension keeps the liquid from pouring over the side. But when was the last time you were served, at a bar, a nearly-overflowing glass of beer? When standard shaker pints are used, you're much more likely to receive around fourteen ounces of beer, accounting for head and empty space to prevent (or caused by) spillage.

And yet the problem compounds further: bantam-weight shaker pints, which have thicker walls, a much thicker floor, and are commonly used with a stainless steel Boston shaker to shake cocktails, hold a maximum of 14 ounces of liquid. Again, this is exact. Any more than 14 ounces, and that surface tension will break, sending liquid spilling over the side. And today, many bars have switched from the already questionable American shaker pint to that bantam-weight shaker pint, meaning that once you account for head and spillage, you're likely receiving only around 12 ounces when you ask for a pint. A 25% discount in liquid that surely is not represented in the price.

As it happens, the State of Texas actually does have a law that deals with this, but the Department of Agriculture, responsible for its enforcement, apparently focuses entirely on its application to fuel pumps. The relevant section that should be applied to bars and restaurants that under-serve is Section 13.035(b)(2): "A person violates this chapter if the person represents the price or the quantity of a commodity, item, or service sold or offered or exposed for sale in a manner intended or tending to mislead or deceive an actual or prospective customer."

I think it's time for this state, and any other state that has similar laws, to begin enforcement of this. The law provides for a fine for every infraction, and I think it's time that those fines be levied. States that don't have similar laws ought to legislate thusly. The customer is being cheated, lied to, and this is a disgrace. I'd like to see marked pint glasses that clearly and correctly show where liquid reaches 16 ounces. I'd like to see the demise of both the American shaker pint and its even more devious bantam-weight cousin as serving vessels. And I'd like to see establishments stop cheating customers, be it through good conscience or through proper application of consumer protection laws.

But it also requires action from the customers. Demand a full pint. Demand top-ups to get to 16 ounces when American shaker pints are used, and stop patronizing establishments that cheat you out of volume. Order cans or 12-ounce bottles and ask for a pint glass, to demonstrate the embarrassing pour that occurs when bantam-weight shaker pints are used. This cheating needs to end, but it'll take a lot of work for us to get our full pour.

I've written a lot about this topic in various other locations, but I figured it's time to talk about it here: much of craft beer is absurdly underpriced. I've touched on supply/demand before in this blog, but a quick refresher can't hurt. Basically, to the left is a supply and demand curve. It's basic. Where that dot labeled "equilibrium" is is the magical world where supply matches demand. In that world there's an equilibrium price and an equilibrium quantity. It's magical, of course, because it rarely exists with specific goods.

Craft beer is one of those goods where the equilibrium seems to be a fantasy, impossible to reach. Instead, we're at a point on the supply curve down and to the left of the equilibrium: quantity is low, price is low.

The symptoms of this are obvious in many craft beer scenes around the country: super quick sellouts, the recent Hunahpu's Day disaster, beer scalpers, etc. When demand outpaces supply, these types of things happen. These are simple market inefficiencies. And there's only two ways to fix these inefficiencies: increase supply or decrease demand.

Increasing supply is a somewhat nice idea, and in the market overall, this is already underway. More and more craft breweries are opening, expanding, increasing production. However, because beers are not perfect substitute goods, an increase in supply in the overall market does not translate to an increase in supply for particular beers. As a result, rare or limited releases continue to see the problems described above. In fact, this is precisely where the problem is most evident and these beers are the exact ones I would argue are underpriced.

Thus, demand must be decreased. And as the supply/demand curve image shows, if the quantity can't increase, the price must. And as it does, the consumer appetite will decrease, demand will drop as prices approach equilibrium. Note that there's nothing "fair" about this – it's a purely capitalist system, but it's also a system that, with the scarcity that exists, works.

Jester King's Aurelian Lure and Nocturn Chrysalis were priced at sixteen dollars per 500ml bottle. There were about 500 bottles of each. Every bottle sold out within three minutes. That's absurd. Jester King could have easily charged twice that and the sellout would still have occurred, albeit at a slightly slower rate. In fact, I would argue that Jester King could have charged ten times as much – an unheard of (some might say obscene) $160 per bottle, and still sold out in a reasonable amount of time. (Of course, they would have had to remove the "limit one per person" stipulation. And I wouldn't have gotten any.)

A six-pack of Saint Arnold Divine Reserve may run you as much as twenty dollars. Look on Craigslist a day or two after it's been sold out in Houston, and you'll see postings asking for fifty or one hundred dollars. No matter how often people flag the posts (myself included) as prohibited, those sellers will sell the beer they bought. If they wouldn't, then we wouldn't see the same thing after every somewhat limited release. The prices they request are closer to the market equilibrium, and the gray market rewards them for taking advantage of a massive market inefficiency.

Part of the problem, I believe, is that there seems to be some kind of "noble pricing" that breweries implement. Reputational risk is probably a concern, but honestly, a lot of breweries are owned by or started by people who find it abhorrent to charge more than what they think is fair. Freetail is a great example of this, and they have stated before that they purposely keep prices low, intentionally do not capitalize on the extreme demand for Ananke and other special releases, and do not plan to change this in the future. Honestly, I think that's noble, wonderful for my wallet and those wallets of my friends, and unsustainable.

The prices probably won't rise in the near future, unfortunately, because of this reason and other reasons. But I repeat that I believe this is unsustainable. The growth in craft beer demand looks to continue at ridiculous rates, while supply simply cannot keep up. The result will be increased gray market activity, more catastrophes at beer releases, more rapid sellouts and angry consumers, and ultimately chaos. It's not impossible to envision a future in which a brewer throws his hands up and sells out or quits, in retaliation to this chaos. And that benefits nobody.

The responsible but unpopular thing to do is to raise prices. Craft beer is massively underpriced and unless this changes, there may be a crisis ahead.