Economic Questions

**Economic Questions** collect economic questions for 5 XP points. 10 XP for when the questions are answered and accepted.

## Clan Finance

1. **Who owns our home loan?**
	* The creditor of Orochimaru's estate is the tower, who sold the estate to Jiraiya to recover part or all the debt.
2. **How much does the Tower have for seals/month?**
	* According to Rihaku's estimate, the sealing budget is 29.9 million ryo per month.
3. **When does the monthly seal budget refresh? (To have someone camping out.)**
	* First of every month, for simplicity.
4. **How many hours (and what other things) did we get as part of Keiko’s bride price?**
	* The conservative bride price for Keiko is 42.8 million ryo. This is excluding the value of summons.
	* Given that a Nara hour is quite valuable, we assume an hourly rate of 1875Rbased on a pay of 15,000 ryo per day using the low end of jounin pay. That gives us about 22,826 divided by 2(Assuming half of the price is Nara favors) to get us 11,413 Nara hours, which is about 285 weeks, which is about 5 years.
	* The other half can be calculated using the same basic framework once we calculated the prices for things like teaching jutsu, mathematics, and so forth.
	* If we use the optimistic value of 121 million ryo for bride price, the amount of Nara hours and other favors can start to become rather absurd.
5. **Shikaku died before the wedding, so are a large portion of the hours worthless (because they would have been his)? Or would they be hours from “The Nara head,” so as to prevent problems like this from arising?**
	* We got the dowry once the marriage went through. Once the deal had been made and followed through, the Nara won't screw us over due to counterproductive harm to their reputation.
6. **How much money Naruto has from his inheritance and ongoing management of that wealth?**
	* All this information is based on Rihaku's modeling work. See Rihaku's analysis on Naruto's finance.
	* We begin by assuming Minato's reign as hokage last a short two years and that all his income before his kageship are insignificant. Him being the greatest sealmaster in the world also add to his income. This gives him 250 million ryo instead of the 500M ryo used in Rihaku's analysis. Adding the Uzumaki wealth, which is estimated to be 360 million ryo, giving Naruto's estate an estimated 610 million ryo. The Kyuubi's rampage destroyed 8% of the city, so Naruto's wealth took a proportionate hit of 85 as well. Assuming Jiraiya and/or Hirzuen gave Naruto a competent money manager, his wealth will have an assumed 5% compound interest growth.
	* 610,000,000 \* 0.92 = 561,200,000
	* Using the formula: A = P(1 + r/n)^(nt): 561,200,000(1 + 0.05/1)^(1\*13) = **(1,058,226,298.67 ryo, best case estimate)**
	* Thus, Naruto's fortune should be worth about 1 billion ryo.
	* If we assume that reparation is paid out for the damage, let's assume 24%(Triple of 8% damage).
	* 610,000,000 \* (1 - 0.24) = 653,600,000
	* 463,600,000 \* (1 + 0.05/1)^(1\*13) = **(874,186,942.381 ryo, reparation/donation estimate)**
	* For an even more pessimistic estimate, let us assume that the Uzumaki are flat broke, giving Naruto only 250 million ryo. Perhaps the interest rate isn't as great as we think it is. Instead of 5%, it's 3%.
	* 250,000,000 \* (1 + 0.03/1)^(1\*13) = **(367,133,428.363 ryo, pessimistic estimate)**
	* For liquid cash, use 5% of whatever we think Naruto have. For pessimistic estimate: 18,356,671.4182 ryo is available(1.5 million ryo per month). For middle of the road estimate: 43,709,347.1191 ryo is available(3.6 million ryo per month). For best case estimate: 52,911,314.9335(4.4 million ryo per month).
7. **How much money is Naruto getting from missions?**
	* Since he is part of a genin team, he should be paid for doing genin missions, including D-ranked. For the sake of simplicity, we assumed that he's being paid genin rate for the first two years, and then chunin once he won in the exam. However, given that Naruto is also an S-ranker, we can assume he also take an S-rank mission every once in a while. We assume the price for such mission as 10 million ryo.
	* We're using Rihaku's work on earning per day as our assumptions for earning.
	* Genin pay is about 600 ryo per day. Assume that 100 days per year is spent in the field, Naruto can expect to earn 120,000 ryo for two years pre-tax.
	* As a chunin, he will hit 1500 ryo per day. Thus for the third year, he can expect to earn 150,000 ryo.
	* We don't know how rare S-rank missions are for Naruto, but we already know he took an S-rank mission. It could be very well he took an S-rank mission every year. His earning from S-rank missions could be anywhere from 10 million to 30 million ryo per year, which far outweigh any earning he may have done with his genin squad.
	* Using a conservative estimate with taxation rate of 80% with no tax rebate, we can expect that Naruto earning 10,270,000 ryo x 0.20 to have made 2,054,000 ryo.
8. **How much money does Naruto have from Jiraiya's stash?**
	* How old is Jiraiya anyway? Let's assume 50. 50 - 18 = 32 years of earning. We will consider his pre-jounin earning irrelevant. Let us assume 50% tax rate for earning of 10 million ryo per year, giving Jiraiya five million per year. This is barely greater than an estimated earning of roughly four million ryo for jounin pre-tax.
	* Multiply 5 million by 32 and we get his lifetime earning of: 160,000,000 ryo. I have no idea how much his spy network cost, so let us assume 80,000,000 ryo, leaving Jiraiya with 80,000,000 ryo. That means 2,500,000 ryo per year is free for Jiraiya to invest or spend as he like.
	* Because I am a lazy naked mole rat, I plugged the numbers into an online calculator: 141,632,310.09 ryo, with 2,500,000 ryo initial principal and same amount of principal added every year.
	* If I used a more optimistic interest rate at 5%, the wealth of Jiraiya is 209,571,780.77 ryo. Plus, 10 million ryo earning for Jiraiya is probably very pessimistic. As we can see, just by living a really long time, Jiraiya should have a shitload of money.
	* Maybe Jiraiya's earning at 10 million ryo per year is too little as befitting a man of Jiraiya's position. Very well, let us assume Jiraiya earned 26,250,000 ryo, a quarter of the hokage's salary. Divide by 2, we get his earning post-tax: 13,125,000. Half is spent on operational expense, so Jiraiya is left with 6,562,500 ryo. Thus, his wealth should be with interest at 3%: 371,784,813.97 ryo. 5% at 550,125,924.53 ryo.
	* Perhaps Jiraiya get a budget from the hokage, in which case we can simply double everything(probably).
9. **Income/expense from Jiraiya's spy network and business connection.**
	* For the sake of simplicity, we assume that Jiraiya's spy network usually don't make money back however how much money he spent. Business deals and other connections can be filed as income from investments.
10. **How much money are we getting From Kenta's business?**
	* Rihaku indicated that a prosperous and very successful civilian can make 50,000R. We believe that based on our scant observation of Kenta's living standard that he is probably a moderately successful businessman, so he makes abut 30,000 Ryo with his wife's skills adding an additional 5-10K.
11. **How much did we invested or plan to invest in Kenta's business?**
	* Kenta and his wife are planning to move to a bigger storefront, presumably to a higher end district. They were also hiring more employees. We don't know the specific cost of each components, but it's probably safe to say that they don't need more than 300K ryo, ten years worth of income for Kenta's business. 3 years worth of income seems reasonable to us for capital expenditure, so 30K ryo will be invested.
12. **How much would it take to invest in Kenta expanding into construction and hiring the necessary skilled labor?**
	* We guesstimate it will cost 30K ryo for Kenta to expand into a new business section, same as investing in Kenta's existing business.

## Business

1. **Our salt production rates, sale price, and other major factors in the enterprise.**
	* Historical price for salt is about 650 to 700 ryo per kilogram.
	* Akane's cost must be calculated as an opportunity cost of 3,000 ryo per day \* 0.50 tax, thus 1500R per day.
	* Salt production rate is a physics question which I do not know how to solve, so I'll give a low-ball assumption. Let us assume 15,000 ryo of salt is made everyday. This means we will only have to deal with about 21 kilogram of salt per day.
	* Equation for salt production rate minus cost of production is 15,000 - 1,500(Akane's salary) = 13,500 R per day.
	* Apply 10% distributor fee to our potential profit everytime we decided to sell to distributor. 13,500 - 1,350 = 12,150 Ryo. As you can see, it's not difficult for Akane to make money that exceed the opportunity cost of not doing missions.
2. **Ditto with ice.**
	* This is partly a physics question. It also seems likely that we can produce more ice than salt, because saltwater is composed mostly of water while salt are a tiny percentage.
	* Given the perceived lower demand for ice as opposed to salt, I am pricing it at around 100-300 ryo per kilogram, at least less than half of salt.

## Land

1. **Who owns the land around Leaf/how much/how far out?**
	* Defining 0.3 kilometer zone as landed controlled by the city of Konoha, the lands are owned by clans and/or civilian merchants, same as the rest of the city. Industries and agriculture outside the wall are still sparse, despite the zone being 'safe'. Only about under 30% of the land outside the wall are occupied.
2. **Who owns the random land farther from the major villages?**
	* Rural nobility ranging from hilltop nobility to a yeomen. Peasant don't normally own land(in which case, they will become petty nobles).
3. **How is land valued?** (Both closer to Leaf and farther)
	* Using Rihaku's calculation, rich and secure land, closest to Leaf is worth 15-30 million ryo per square kilometers.
	* Rich chakra land is 2.5x of the value of normal land.
	* Farmlands that required patrol missions will lower the value of land, in according to ranked missions. For example, an estate that required 12 C-rank missions per year will cost 120 thousand ryo per year. Rihaku used the equation C - I where C stands for capital value of the land, and I the investment needed to make land safe for farming. Thus, if the estate is valued at 1 million, then the cost will lower by 120K ryo, then the estate is worth 880,000.
	* For farmland without access to river for transportation of grains and other crops, we could apply a plenty based on how much the crops will rot or be lost before reaching the market but may be irrelevant to Hazo and crew.
4. **Is land ownership transferred around much?**
	* No. Land are usually inherited for the rural nobility. Land sale only happened when there are no claimant or the remaining claim are too weak before such land could be auctioned.
5. **Between which parties, in what volume, at what frequency? (trying to determine how much new supply the market can bear)**
	* The eldest son usually inherit the land, while the other sons find new vocations or new farmland, or simply married off. As such, the usual party is the Fire daimyo doing firesale of lands from wiped out rural nobles, usually to other rural nobles who wanted to set up their 2nd sons and beyond with their own farmlands. During peacetime, it is expected that volume are low. Only after war do land sale volumes pick up.
6. **What are Akatsuki's going rates again? Was that 23 milion ryo for land clearing mission figure pure profit or was it just the income?**
	* It can't be a simple C-rank as clearing the area around the town is probably much more intensive than that. We think it's a B-rank mission, possibly around 100K to 200K ryo, which makes it very worthwhile for Akatsuki who probably have techniques that can clear it within a day, mainly thinking of Deidara. This is assuming that the radius from the town is relatively small, like 0.3 kilometer. If it is something like 1-5 kilometers, which might means something north of 500K as an A rank mission.
7. **What is the savagery zones surrounding Konoha that determine how many chakra beasts and danger level as measured distance from Konoha.**
	* Note that is a 'reasonable' guess. The further away the wilderness is from civilization, the more dangerous beasts are. Below are the distances of danger are defined only in the context that Konoha exists and nothing else, which obviously isn't true, but serves as a good guideline for how dangerous things get when away from civilizations.
	* .3 kilometer: Safe. Savagery is low. Careful civilians should be able to survive and operate industries outside the wall without much fear.
	* 5 kilometer: Slightly dangerous. Savagery is low to medium. It is recommended that civilians should arm themselves with weapons.
	* 20 kilometers: Dangerous. Savagery is medium. Regular C-rank patrols are needed to keep savagery down.
	* 100 kilometers: Very dangerous. Savagery is high. Megabeasts lurk. B-rank or higher will required to bring this zone down a notch, but is likely far from civilization.

## Socioeconomic

1. **What is the lifespan of settlements:**
	* Fresh settlements need to make it to at least five years before they can be considered hamlets. They are otherwise more likely to perish than hamlets in the same period due to lacking supports.
	* Hamlet lasts around 10-30 years since while they have the support of their landowners/rural nobles, they are the second to last for support from said nobles and ninja.
	* Towns have lifespan of around 50-100 years.
	* "Cities" like Tanzaku Gai are likely to have lasted centuries. Hidden villages should have the same lifespan for having the same or larger population, but there's not enough time since the village system began.
2. **What has historically motivated civilians to resettle?**
	* Famine, destruction of settlements by chakra beast, sometime ninja for the same reason. Very rarely, population growth pressure(the 7th son getting the boot). If peasants are lucky, rural nobility supporting land expansion for more farmlands, sometime resettling abandoned settlements.

## Taxation

1. **How are craftsmen/merchant civilians taxed? (e.g. that luxury clothes shop owner. Still subsistence?)**
	* According to Rihaku once again, Urbanites are taxed 70% above subsistence level at R4,240.
2. **How are civilian clan members taxed?**
	* Once again, Rihaku came to the rescue. Easiest answer is that the civilians clan members are effectively untaxed.
	* Next easiest answer is that they are taxed like regular civilians.
	* There may be gaming law and complication in the tax code that could be exploited. In which case, clan civilian are probably taxed at 50%.
	* Note: The model does *not* suggest how taxation is done. There is probably no income tax or any complicated taxation scheme.

## Leaf (The City)

1. **Has the encircled territory of Leaf ever expanded/contracted?**
	* Expansion of the population and economy of Konoha did mean additional industries outside the wall of Konoha, but not enough to warrant annexation of additional lands under the direct control of the city since Konoha was initially overbuilt to accommodate future growth.
2. **How many taverns can Leaf support?**
	* Google suggested an extremely variation from 2 to 400 bars per 100,000 for modern cities. However, there's no such statistics that we can find for medieval era bar per capita.
	* Leaf is obviously not a dry town, but we lack a sense of 'scale'. However, we can do estimates for various level of alchool consumption.
	* 10 per 100,000 individuals. 10 \* 30,000 / 100,000 = 3 bars. Very low.
	* 50 per 100,000 individuals. 50 \* 30,000 / 100,000 = 15 bars. Moderate?
	* 100 per 100,000 individuals. 30 bars. High.
	* And so forth.
3. **How do loans and defaults work in Leaf?**
	* Loans are a contract, you get something in exchange for repayment. Standard loans work like modern loans, with compounding interest (amount variable) which you pay off along with the principal over the lifetime of the loan.
	* Defaults get you thrown in debtors prison (you are forced to work in slave conditions until the debt is paid off); for ninja this will mean being forced to take missions for no pay until the debt is paid off. This is also why loans are typically only given by the Tower/Major clans to other clans: It is unlikely the entire clan will die in the process of being forced to repay the loan. (Sealmasters can instead be pressed into a seal production factory that obviously doesn't exist.)

## Sealing

1. **Tower classifications for Air Domes, Usumatsu's, explosive seals**
	* All genin? If Hazo can infuse those seals, then it is genin level.
2. **Open market value for explosive seals**
	* Tower price is 250, so increase it a little for incentive; 300 each. In a pinch people will pay more, but it is generally not worth it.
3. **Typical sealmaster tendencies before skywalkers became a thing and how that changed with skywalkers (relevant for, at least, talk about how many skywalkers we can sell to the tower before they run out of money for it)**
	* The highest grade seal they can produce (if multiple choose one, it doesn't matter for our purposes) or whatever the tower asks/wants them to via increased bounties for said seals, if multiple make the most valuable.
	* Skywalkers made all of them adjust to researching skywalkers, due to a major disparity between difficulty and price.
4. **The number of sealmasters at each rank (generalities are fine, but at this level of granularity we probably care about the specifics too)**
	* Via Rihaku there are 3 Jounin, 10 Chunin, 17 Genin Sealmasters within Leaf. We are down either a Chunin or Genin due to the recent sealing failure.
5. **Sell skywalkers to the Tower on credit?**
	* If the tower is desperate or hungry enough for more seals, they will. However, that required sealmasters to exhaust the budget for sealing, which is an unlikely scenario.
6. **If the Tower owns the loan will they accept payments on the loan/principal in skywalkers?**
	* See selling skywalkers on credit.

## Mission

1. **Mission pay.**
	* 500-2k for D rank (genin/genin teams learning to cooperate. Not meant to survive on.)
	* 5k-20k for C rank (genin squads/single chuunin. Missions outside the village with minimal real combat expected)
	* 50-200k for B rank (chuunin squads/lone special-Jounin, Combat with enemy ninja possible/expected. No higher-tier enemies expected.
	* 500-2mill for A rank (This is the catch all for things that involve real, serious risk to the ninja taking them. Primarily higher-chuunin and Jounin mixed teams, with the hardest A's being entirely Jounin.)
	* Variance inside a rank being based primarily time, except A rank where time and difficulty are both major factors.
	* S rank are special enough their pay probably varies wildly from standard A rank to 10m+ per missions, so were left out of this analysis.
2. **Do clanless non-jōnin sealmasters receive tax payments the same as the jōnin?**
	* The following is tentative:
	* They are rare, and would certainly catch on to the tax scheme, so once they officially graduate to sealmaster they receive the tax payments.
	* This is mostly an academic question, as they rarely collect meaningful amounts of their non-cash reimbursement, preferring to spend the time on seals.