Oral suspension tamiflu. Adverse effects of tamiflu….

""xenonphobic" ??"

It's true! The man avoids flourescent lights like the plague! *rimshot*

Let me take that back and replace it with "it will improve the economy even if they're wrong as long as they continue to want that product". I do think the "buyer's remorse"/"multiple selves" argument that psychologists have come up with provides a convincing reason why markets may not be entirely efficient… because people's preferences are not static and over time they may come to regret an earlier purchase with more information.

Regardless, this doesn't really impact the issue of localism – presumably they're better informed than smokers who think it's healthy.

Listen to yourself!!!!! If you bought Florida grapefruit to boost the local economy you WOULDN'T prefer Texas grapefruit!!!!! And Florida growers would certainly get that message! That why it helps the local economy.

Yes, if you masochistically buy something you don't want to buy, and purchase everything locally just to "throw off" the local producers, I suppose it could distort some things. But who does that? The point is you buy it if you want that local product. If you don't, you don't purchase it (and that sends a price signal that there is less demand for it).

Don's (implicit) fallacious assumption is that people who buy locally don't really want to buy locally – a baseless assumption in my mind. That is the ONLY way you can conclude it won't help the local economy.

I disagree somewhat with Gil. If smokers think it will make them healthy or bird enthusiasts think they can grow birds, they're wrong – but it will improve the economy even if they're wrong about what exactly it is they're purchasing. Local buyers who want to improve the local economy are right, AND it will improve the local economy. So I wouldn't quite equate those examples.

RE: "I also assumed that he was talking about paying more for local only because it's local. Several people pointed out that if you pay more for a local product that is no better than a product imported from South Carolina, then you are hurting the local economy, because you now have less disposable income."

But who cares of place of origin enters your utility function? If you are willing to pay more for that, it suggests you value it more – you have less "disposable income" precisely because the marginal utility of that local product is higher than the marginal utility of anything else you can spend that income on. So where is the loss? Explain to me where the loss is.

Re: "But, now I don't have the $200 I was going to spend at the Tallahassee detail shop to have my car detailed. How is the Florida economy better off?"

The $200 is in the hands of the Tallahassee bike manufacturer, but not the Tallahassee detail shop, so there is no difference in the FL producer surplus (in terms of that marginal $200). You obviously wanted the FL bike more if you bought it voluntarily, so there is a marginal $200 increase in your utility (presumably higher than what your utility would have been if you used that for the detail shop, or else you would have used it for the detail shop!). Plus the base $300 went to the bike store in addition to the $200 margin over the SC bike. Where is the loss? You would have experienced a loss if you had to buy a bike to SC that you didn't prefer. And if you prefered that bike you wouldn't have wanted to buy local, and you would have bought the SC bike!! The market doesn't break down when people include localism in their utility function!!!!

Sam -
Re: "but as to whether it improves the local economy can only be determined if total created wealth increases as a result of that increased activity."

Right – and why wouldn't it increase if this was a free transaction? Why does the logic of the market suddenly break down here for so many people? I don't get it! And I usually have a skeptical eye for why and when markets break down… but as long as we're talking peaches and bicycles I don't see that much evidence for a market failure!