Edward Liang writes:*
The most recent big new for tech savvy people was the announcement of new Samsung galaxy S5. Without going into too much detail on the features, basically the S5 is bigger, better, and faster compared to the last generation. These aspects sound great on paper, but the question is, does average consumer really “need” the new features? Or are they just another marketing gimmick like every other press conference from other manufacturers? The problem here is the benefits from what the marketing team tells us is way bigger than the actual benefit itself. For example, the marketing may empathize that with the better camera you can take pictures that are above HD quality, but can an average person really distinguish the difference between HD and above HD quality? Even if the person can distinguish it, does he really need it? The necessity problem really extends into the production problem of newer cellphones, as majority of them are assembled in developing countries, which have lower labour cost, but the product will be sold at developed countries for much higher price. Not only the inequality of the revenue and income wage during production, also pollutions from the production, and the E-waste from the old cellphones.
Bottom Line: There will always be newer and better products every year, but the purchasing power is depending on the consumer; sometimes whether we should buy the newer cellphone to satisfy our wants or just stick with our old phones that are just as good, the decision can be tough. Ultimately, to buy, or not to buy, that is not the only question, we should also consider all the externalities before making the purchase decision.
* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.