Friday, August 15, 2003 :::
It's time for a waste-of-bandwidth post, don't you think?Through much of the past decade of my life, laundry has required quarters. I'm thus in quarter-acquisition mode; if something costs $6.30, I offer $7.05 if I have it, receiving 3 quarters in change. For the past year, though, I've not needed quarters for laundry; I have needed coins for tolls. Most of the tolls I pay are 40 cents; quarter, nickel, dime. If you pay for everything in dollar bills, on the average transaction, supposing the amount due has a mantissa randomly distributed with an equal probability of 1% for each possible number of cents, you'll receive 1.5 quarters, .8 dimes, and .4 nickels (plus 2 pennies). Thus nickels, the bulky, cheap cousin to the penny in terms of its nuisance-to-value ratio, are the hardest to acquire; one has to conciously acquire nickels.
What I properly ought to acquire is probably the automatic toll-paying doohickey that lets me go through tollbooths at 30mph while it charges my account, but what is of more interest to me is the fact that the value of a nickel to me is not exactly one fifth the value of a quarter; it's now slightly higher, while before it was slightly lower. Certainly the value ratio is constrained by the fact that there are a number of market-makers out there willing to accept quarters and pay out nickels, or vice versa, in a fixed ratio; there are change machines that will only give, say, 95 cents in coins for a paper dollar, but those have never really taken off, probably in part for cultural reasons. I think it would be interesting, though, if the Federal Reserve and the U.S. mint took their signals from market prices; a couple years back, when there was a penny shortage in New York, the mint might (in a particular theoretical world) have noticed that the value of a penny, relative to a basket of other coins and bills, was a few percent higher than 1 cent before it ever got to be newsworthy, and could have cranked up the output as best as possible to avert the problem.
::: posted by dWj at 3:01 PM
