The E-Sylum:  Volume 9, Number 40, October 1, 2006, Article 17

ABOLISH DIMES IN ADDITION TO CENTS & NICKELS?

Dick Johnson writes: "The Washington Post has weighed in on
abolishing the cent problem. It assigned the story to writer
Sebastian Mallaby. His report was published September 25, 2006,
titled "The Penny Stops Here."

He reported several interesting statistics. A study on the estimated
time handling just pennies at each cash transaction is 2 to 2.5
seconds. This should save the average customer 730 seconds a year,
or about a $3.65 annual saving.

He also puts to rest the argument that rounding off -- up or down --
would lose shoppers serious money. A Wake Forest University study
of 200,000 transactions stated the difference would be four cents
in a citizen's purchases over a year.

It really gets serious when he employs the Sharpe Ratio, named
after Nobel Prize winner, William Sharpe. This measures risk divided
by the size of the risk. Abolishing the cent is a Sharpe Risk Ratio
of 13.5. Read the article to see what THAT means. He also reports
on the Sharpe Ratio for nickels, but it drops to 1.2 for abolishing
dimes. Hardly worth the effort!"

To read the Washington Post article, see: Full Story

  Wayne Homren, Editor

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