We all know Lady Gaga as a singer, dancer and performer.   But in the last two years, she’s climbed from just an entertainer to a monster endorser and creative visionary.

According to CCG’s very own CEO Rana Florida,

She [Lady Gaga] has changed the way endorsement deals work. She’s putting more of her influence, thought and creative energy into a line rather than just endorsing them. She has been able to successfully marry music, fashion and culture, making her a truly visual maven. She is her own movement.

Read more about Lady Gaga’s influence  at CNN International.

Is Lady Gaga the first artist to truly exemplify the qualities of the creative class?  How has she leveraged the 3-T’s: technology, talent and tolerance to build her brand  and influence?

Last week, The Economist released its Big Mac Index (via Catherine Rampell of The New York Times Economix) which basically compares how much it costs to buy – you guessed it – a Big Mac in countries across the world. The magazine explains the index as a:

…lighthearted attempt to gauge how far currencies are from their fair value. It is based on the theory of purchasing-power parity (PPP), which argues that in the long run exchange rates should move to equalise the price of an identical basket of goods between two countries. Our basket consists of a single item, a Big Mac hamburger, produced in nearly 120 countries. The fair-value benchmark is the exchange rate that leaves burgers costing the same in America as elsewhere.

And it goes on to note a number of caveats about it:

The Big Mac numbers should be taken with a generous pinch of salt. They are not a precise predictor of currency movements. The bulk of a burger’s cost depends on local inputs such as rent and wages, which tend to be lower in poor countries. Consequently PPP comparisons are more reliable between countries with similar levels of income.

The chart above (from The Economist) shows how the world’s major countries shape up on the Big Mac Index. Basically, Asia is the cheapest place to buy a Big Mac, while burgers are pricier in Europe, Scandinavia, and Canada.

In keeping with the same lighthearted spirit as The Economist, my colleague Charlotta Mellander and I decided to look at how the Big Mac Index stacks up against key measures of economic prosperity and well-being, running a series of basic correlations and plotting some scatter-graphs of it against key measures of economic and social well-being. As usual, we point out that correlation does not imply causality, but simply points to associations between variables, and other intervening variables may come into play.

The Big Mac Index is closely associated with economic output – measured as Gross Regional Product per capita with a correlation of .55. The scatter-graph shows the relationship between the two.

The Big Mac Index is also associated with a key indicator of the transition to modern, post-industrial economies: the creative class – a measure of the percentage of the workforce employed in science, engineering, and technology; business, management, and law; health care; education; and arts, culture, design, entertainment, and media occupations. The correlation between the two is .35, indicating a reasonably close association.

On the flip side, the Big Mac Index is negatively associated with blue-collar economies, being negatively associated with the percentage of the workforce in manufacturing, construction, and other physical labor work – the correlation being -.53.

The Big Mac Index is positively associated with life satisfaction – as measured by Gallup surveys. The correlation between the two is .62 – the highest of any (see the scatter-graph above).

When all is said and done, the Big Mac Index appears to follow the logic of economic development – reflecting the more general costs of living in the world’s most advanced and wealthiest economies.

How do economic crises affect inequality? In the past, inequality increased prior to economic crises, only to moderate during and after crisis periods. In the present crisis, many expected inequality to decline. Others, however, note that with job loss in the millions and unemployment above 10 percent, while investment bankers continue to rake in big bonuses inequality is on the rise.

A new study by researchers at the Minneapolis Fed and New York University tracks inequality in the U.S. since 1970 (via Mark Thoma). I find that while income inequality has increased during the crisis, consumption inequality has declined.

Recent evidence shows how the distribution of resources changes in recessions in complex ways.

• The bottom of the earnings distribution falls off substantially relative to the median, causing earnings inequality to increase in recessions.
• This increase is substantially mitigated by government and private transfers. This mitigating effect, together with the fact that households can use borrowing and lending to smooth income declines, causes the consumption distribution to typically move very little during recessions.
• The current recession appears somewhat unusual. So far, consumption inequality has declined sharply, perhaps because the consumption-rich have been disproportionately hurt by declining asset prices.

Why do people buy green products? A new study (h/t: Charlotta Mellander) finds that green purchases are less about energy savings or cost savings and more about image. Prius owners pay a significant premium over many conventional fuel-efficient cars. When asked about the top motivating factors behind their purchase, the comment, “makes a statement about me” was at the top of the list, while “higher fuel economy” came in third, and “lower emissions,” fifth. The authors argue that status plays a big role in green purchases.

Because biologists have observed that altruism might function as a “costly signal” associated with status, we examined in three experiments how status motives influenced desire for green products. Activating status motives led people to choose green products over more luxurious non-green products. Supporting the notion that altruism signals one’s willingness and ability to incur costs for others’ benefit, status motives increased desire for green products when shopping in public (but not private), and when green products cost more (but not less) than nongreen products.

Were you – like me – ever amazed at how so many people could afford bigger and bigger homes, New England beach houses and Florida condos, expensive cars? The answer, according to a terrific article by Ben Funnell in the Financial Times, is simple: cheap, available credit.

Debt, he says, is “capitalism’s dirty little secret.” Cheap mortgages, cheap car leases, and the use of home as veritable ATM’s created fictitious living standards for the middle class and the bulk of the population at a time of low productivity and paltry growth in incomes, and where the bulk of the gains in wealth were scooped up by the top fraction of households.

A reader writes:

Another issue that is starting to arise outside of your writing is the future of food production. I would like you to consider how your view of future urban areas would interact with increasing commodity prices for basic food stuffs. Northern to central Virgina is an interesting case in point. There is a vibrant rural community, filled with local food-growing ex-urban dwellers. In the late 90’s up to this crash, they were competing with Mc-mansions for land. Can these extended regional urban/suburban/rural areas continue? Or will the increases in prices on food commodities further separate urban and rural as the need to increase productive yield becomes the only value of rural farm land?

I asked Betsy Donald, a geographer at Queens University who has done extensive research on the creative food economy, about this.

The creative food economy has profound implications for sustainable economic development because place and providence become central to quality food making, marketing and lifestyle. Food, unlike any other commodity on the planet, is intimate: we eat it and therefore how we eat it has implications for a host of policy related issues around job creation, health, hunger, ecosystem protection, carbon footprint, labor practices, cultural awareness and diversity.

There is a huge movement toward preserving prime farmland on the urban fringes through efforts to resolarize the farm, but also a budding trend toward urban gardening. Recall during World War II that 40 percent of produce consumed in America came from private “Victory Gardens.” Now these urban gardens are making a comeback – with more attention paid to organic and diverse food production (think Michelle Obama’s White House Garden) and San Francisco’s recent veggie planting on the grounds of City Hall. In Seattle, a local program offering public gardening plots has 6,000 plots assigned and a waiting list of 700 people - an aspect of the food economy that integrates local, organic and ethnic food production.

Some of this creative food production draws on more traditional farming practices, but much of it also challenges it by calling for more sustainable forms of food production that reduces the need for both fertilizers and pesticides and cleverly used polycultures to produce large amounts of food from little more than soil, water and sunlight (as is going on in Argentina and Brazil). It calls for a more holistic vision of the food economy that views food as a prism through which we can explore the scope and complexity of many of our most pressing economic, social and ecological issues.

She’s on to something. The demand for higher-quality food – both from individual consumers and from restaurants – is already leading to a tighter, more organic, higher-quality food supply chain. Adding creativity, so to speak, to food production will increase its value; we’ll pay more for it, and that will make this kind of food production economically more viable. Who knows? Perhaps the economics will someday enable the remaking and reuse of declining ex-urbs as centers of more vital, higher-end, creative farming communities.

Andrew Sullivan points to a new Ipsos/Reuters poll about how consumers in some two dozen countries are cutting back. Makes logical logical sense, on the face of it: Consumers are cutting back most on discretionary items like entertainment and vacations. But if we’re going to someday build a new kind of economy based less on durable goods – the old housing-auto, fordist industrial complex so to speak – and more around experiences, personal development, new technology-based and creative industries, the massive slashing of entertainment spending does not bode well for the longer-run. This may simply be an issue of wording: People likely see “entertainment” as a broad catch-all category. And the fact that education is holding up relatively well is a good sign.

This map from a new NBER study by UCLA economist Matthew Kahn and Michael Cragg of the Brattle Group (using data from Purdue’s Vulcan project) shows the geography of carbon emissions by U.S. states. The study finds carbon emissions are more concentrated in poorer, more conservative locations, posing significant political obstacles for policy to limit greenhouse gas emissions.

Stringent regulation for mitigating greenhouse gas emissions will impose different costs across geographical regions. Low-carbon, environmentalist states, such as California, would bear less of the incidence of such regulation than high-carbon Midwestern states. Such anticipated costs are likely to influence Congressional voting patterns. This paper uses several geographical data sets to document that conservative, poor areas have higher per-capita carbon emissions than liberal, richer areas. Representatives from such areas are shown to have much lower probabilities of voting in favor of anti-carbon legislation. In the 111th Congress, the Energy and Commerce Committee consists of members who represent high carbon districts. These geographical facts suggest that the Obama Administration and the Waxman Committee will face distributional challenges in building a majority voting coalition in favor of internalizing the carbon externality.

The study (which can be downloaded here) includes a series of maps on industrial emissions, residential emissions, and more. Some more great maps from Purdue’s Vulcan project are here.

• Bicycle – 90 sq. m for 71 people to park their bikes.
• Car - 1000 sq. m for 72 people to park their care (avg. occupancy of 1.2 people per car).
• Bus – 30 sq m for the bus.

Robert Frank notes some belt-tightening over at Richistan.

“Fire-sale auctions of mansions, yachts, sports cars and other trappings of wealth have become increasingly common as the rich become less rich… Whether unable to pay their bills or loath to appear lavish at a time of national thrift, many millionaires and billionaires are unloading their baubles. In a twist on the estate sales of deceased celebrities, “living estate sales” have become increasingly popular.”

Sure, some members of the nouveau riche are being forced to cut back. But a quick drive around the south Florida communes Frank writes about, or Beverly Hills and its environs, will turn up no shortage of high-end automobiles, designer hand-bags, and other markers of conspicuous consumption. And the growing popularity of the “Real Housewives” franchise illustrates that the haute gauche lifestyle continues to have mass appeal, however lurid. But the social zeitgeist is shifting away from such craven materialism. That’s a broader social liquidation whose time is long overdue.