Consumer Surplus

More than 3 months ago, I had posted about the quirky way in which my paper got accepted at a conference. Click here to revisit history. At that time, it wasn't decided if I would go and present at the conference.

It's now decided and sealed. I am going to Boston in March to present at the Urban River Restoration Conference. I talked to my project guide in December, and he indicated that there were $500 left in the project account and I could use that amount to fund my travel. In effect, there was a willingness to pay upto $500 for the travel expense.

That's when I discovered Bing Travel. You may hate Microsoft for whatever reasons, but you've got to love Bing Travel. It is the only website to offer predictions on the best time to purchase tickets. Based on historical records, it gives you a simple indicator of whether fares will go up or down in the next few days and what is your best course of action (buy tickets now/wait). I tried it, waited for more than a week, but got what I wanted - cheap fares to Boston.

I bought my tickets today for $283. Assuming that I spend $50 for checking in a bag, I still spend $333 for travel from the project account. This means that Consumer Surplus for the project account is $500 - $333 = $167. This surplus can now be used for some other project-related expense in the future. Consumer surplus is an important concept in economics and I will let you read more about it on Wikipedia.