Tyler Cowen

Vancouver’s cheapest house?

by on April 16, 2014 at 2:42 pm in Uncategorized | Permalink

A house listed for just under $600,000 in East Vancouver sold for $643,000 after its first weekend on the market.

According to the Huffington Post B.C., Vancouver’s cheapest listed single family home attracted large numbers to open houses, with two written offers pushing the final purchase price seven per cent over asking.

The price of the 100-year-old, 1,951-square-foot, three-bedroom, detached house at 2622 Clark Dr. was set low initially due to its smaller size and half lot site.

“It’s very rare, and that’s why all the excitement,” said RE/MAX realtor Mary Cleaver.

There is more here, and I thank Michelle Dawson for the pointer.

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Assorted links

by on April 16, 2014 at 11:54 am in Uncategorized | Permalink

1. Do sex ratios affect bird behavior?  And moody lizards.

2. The Brazilian gun library.

3. The (homoerotic) culture that is Finland.  Note that the link is itself…homoerotic.  And the Indian Supreme Court recognizes transgender as a third gender.

4. Excellent Jesse Shapiro slides on how to give an applied micro talk (pdf).  It starts with: “Your audience does not care about your topic.  You have one or two slides to change their minds.”  And the short list for the Clark medal, Jesse is on it.

5. NYT profile of Peter Chang.

6. The problems of Singapore.

7. Scott Sumner on Larry Summers.

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What is a job that exists only in your country? (place-specific labor markets in everything)

by on April 16, 2014 at 7:16 am in Economics, Law | Permalink

Let us start with “Teheran markets in everything”:

I think this happens only in Tehran. Some people get paid to walk behind your car, so the traffic cameras can not capture your plate number when you enter the restricted traffic areas!

The photo alas does not reproduce, and that is from a fascinating Quora discussion on “what is a job that exists only in your country?”

The Vietnamese water bag carriers are impressive (you get into a plastic bag and they pull you across a river).  Here is some Indian arbitrage:

Disabled people get 50-75% concession on train ticket from Indian Railways. Additionally, they can take one person as escort who will be entitled to the same amount of concession.

Some disabled people earn their living with this scheme. Their only job is travelling between different cities and taking Strangers (who actually want to go to some city) as escorts. These strangers pay 75% of the fare to the disabled people. Thus Stranger saves money, Disabled person earns profit.

This also was new to me:

In China, when there are big traffic jams, you can pay a fee to have two people on a motorcycle drive to your vehicle, where one takes your place at the steering wheel, and the other will take you wherever you need to go on his motorcycle.

Nor had I known about the “pet food taster” (Simon and Marks) or the costumes of those Australian Meter Maids.  India is prominent on the list but Mexico makes an appearance as well:

In Mexico we have men who make a living by discharging electricity into the bodies of consenting drunk people (who gladly pay a couple of dollars for the experience). These men usually hang around bars and areas where nightlife abounds and yell “toques toques!”(“discharges, discharges!”) while banging the two metallic handles of their contraption together. The device is a battery-operated metal box with a voltage regulator that can increase the intensity of the electrical current depending on how much the customer can take. It is generally accepted by Mexicans that a bit of electricity will increase your buzz…

It costs about $2-$4 per jolt.  Maybe the real winner should be this one:

United States of America: Man who walks on the moon (currently on hiatus).

I believe I owe thanks to somebody on Twitter, alas I can no longer recall to whom.

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Those new service sector jobs — the world of the caddy

by on April 16, 2014 at 3:49 am in Economics, Education, Sports | Permalink

I enjoyed this piece by Sarah Turcotte:

Tour caddies are well-compensated. The winning looper this week will pocket a nice $144,000. But they earn that 10 percent. A long-running joke among caddies is that there are only three rules: Show up, keep up and shut up. Truth is, their jobs might be tougher than the players’. Well maybe not quite, but it’s close. Caddies are part pack mule, part meteorologist, part psychologist (BIG part), part mathematician, part scapegoat, part psychic and sometimes even part bartender. When I played in the LPGA’s Michelob Ultra Open a few years back, a veteran caddie suggested to the man on my bag a little Drambuie and Sprite to calm my nerves. (Full disclosure: He did have a water bottle filled with Chardonnay available at all times. We never used it, but it was a comfort knowing it was there.)

Caddies do not appear to do very much, yet most people could not hold a job as an effective caddy for a good golf professional.  This, in a nutshell, is why the transition toward the new service sector jobs will not run smoothly for everybody.

And even if you really do make the grade, “…job security for caddies is non-existent.”

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Department of Uh-Oh

by on April 16, 2014 at 12:31 am in Data Source, Economics, Medicine | Permalink

A four-year slowdown in health spending growth could be coming to an end.

Americans used more medical care in 2013 as the economy recovered, new reports show. Federal data suggests that health care spending is now growing just as quickly as it was prior to the recession.

“We’re at the highest level of growth since the slowdown began,” Paul Hughes-Cromwick, a senior health economist at the Altarum Institute, which tracks health spending. “You have to go back seven years to see growth like this.”

There is more here, from Sarah Kliff.  Note that is only from one quarter, however.  Kevin Drum remains more sanguine.

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Eduardo Porter calls me on the phone

by on April 15, 2014 at 8:53 pm in Economics, Web/Tech | Permalink

Here is what I had to say:

Tyler Cowen, a professor of economics at George Mason University, argues that the very definitions of labor and capital are arbitrary. Instead, he looks around the world to find the relatively scarce factors of production and finds two: natural resources, which are dwindling, and good ideas, which can reach larger markets than ever before.

If you possess one of those, then you will reap most of the rewards of growth. If you don’t, you will not.

There you go, you can tell I studied with Ludwig Lachmann.  The article is interesting throughout.  Here is a slightly earlier post, “Joseph Nocera calls me on the phone.”

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Assorted links

by on April 15, 2014 at 1:16 pm in Uncategorized | Permalink

1. Praying and fasting at high latitudes.  And how charismatic was Jesus?

2. A brief look at Modinomics.  And here.  And how can we reduce deaths on Indian railway tracks? (scroll down a bit to reach that discussion)

3. Modern Russian cancer ward?  The general topic of pain relief is one of the most neglected in public policy and it requires more deregulation in the United States as well.

4. Dutch “glow in the dark” roads.

5. Amazon seems to be proceeding with drone plans.  And what are the best options for regulatory reform?, by Philip A. Wallach.

6. The earnings of economics majors.

7. James K. Galbraith writes a Cambridge critique of Piketty.  A good and interesting piece, one of the best reviews.

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Dept. of pure coincidence

by on April 15, 2014 at 11:32 am in Medicine, Political Science, Religion, Science | Permalink

The Census Bureau, the authoritative source of health insurance data for more than three decades, is changing its annual survey so thoroughly that it will be difficult to measure the effects of President Obama’s health care law in the next report, due this fall, census officials said.

The changes are intended to improve the accuracy of the survey, being conducted this month in interviews with tens of thousands of households around the country. But the new questions are so different that the findings will not be comparable, the officials said.

An internal Census Bureau document said that the new questionnaire included a “total revision to health insurance questions” and, in a test last year, produced lower estimates of the uninsured. Thus, officials said, it will be difficult to say how much of any change is attributable to the Affordable Care Act and how much to the use of a new survey instrument.

“We are expecting much lower numbers just because of the questions and how they are asked,” said Brett J. O’Hara, chief of the health statistics branch at the Census Bureau.

With the new questions, “it is likely that the Census Bureau will decide that there is a break in series for the health insurance estimates,” says another agency document describing the changes. This “break in trend” will complicate efforts to trace the impact of the Affordable Care Act, it said.

Obviously with a big new law you need new questions too, I suppose, plus the old questions ought not to hang around.  You can read more here.

As a side note, I have been reading far too many blog posts about “numbers enrolled” as a metric of success for Obamacare.  That has never been a good test of the serious criticisms (and defenses) of ACA.

I thank Megan and Garett for the pointers.

Addendum: You should read this update from Vox, though I am not satisfied with the Administration’s response.

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What is the economic risk of Heartbleed?

by on April 15, 2014 at 8:06 am in Economics, Uncategorized, Web/Tech | Permalink

From a report from today’s WaPo:

No examples have surfaced of anyone actually exploiting the vulnerability.

Of course that is no longer true, as The Royal Canadian Mounted Police are investigating the cases of 900 Canadian identity theft victims.  And there are likely undetected further cases.  Still, when I hear this crisis described as “On the scale of 1 to 10, this is an 11,” I conclude that economists think about risk differently than do most people, including tech consultants.  (To flip this coin on its other side, I am not especially reassured about the web sites judged as “safe” — should we now start trusting such judgments so strongly?)

What can the deadweight loss be of a previously unnoticed crisis?  And if that is an 11, what does a 12 look like?  How many Canadian victims would be needed to get us up to 13?

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Does greater charitable effectiveness spur more donations?

by on April 15, 2014 at 6:46 am in Economics | Permalink

Well, at which margin?  At current margins, not for all donors and it seems not for “warm glow” donors.  Here is a new paper by Dean Karlan and Daniel H. Wood.  Every sentence in the abstract is interesting:

We test how donors respond to new information about a charity’s effectiveness. Freedom from Hunger implemented a test of its direct marketing solicitations, varying letters by whether they include a discussion of their program’s impact as measured by scientific research. The base script, used for both treatment and control, included a standard qualitative story about an individual beneficiary. Adding scientific impact information has no effect on whether someone donates, or how much, in the full sample. However, we find that amongst recent prior donors (those we posit more likely to open the mail and thus notice the treatment), large prior donors increase the likelihood of giving in response to information on aid effectiveness, whereas small prior donors decrease their giving. We motivate the analysis and experiment with a theoretical model that highlights two predictions. First, larger gift amounts, holding education and income constant, is a proxy for altruism giving (as it is associated with giving more to fewer charities) versus warm glow giving (giving less to more charities). Second, those motivated by altruism will respond positively to appeals based on evidence, whereas those motivated by warm glow may respond negatively to appeals based on evidence as it turns off the emotional trigger for giving, or highlights uncertainty in aid effectiveness.

How is that for a chilling final sentence?: “…those motivated by altruism will respond positively to appeals based on evidence, whereas those motivated by warm glow may respond negatively to appeals based on evidence as it turns off the emotional trigger for giving, or highlights uncertainty in aid effectiveness.”

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Coasean bird sanctuaries, with auctions too

by on April 15, 2014 at 1:52 am in Economics | Permalink

The BirdReturns program, financed by the Nature Conservancy, then pays rice farmers in the birds’ flight path to keep their fields flooded with irrigation water from the Sacramento River as migrating flocks arrive. The prices are determined by reverse auction, in which farmers bid for leases and the lowest bidder wins.

Because the program pays for only several weeks of water instead of buying the habitat, the sums are modest; the conservancy does not disclose bids because that might affect future auctions, but it says the figures were both above and below the $45 per acre that the federal government pays for bird-friendly practices.

The project’s first season ended last month, as birds headed north from newly flooded fields. Researchers said all of the birds whose numbers they hoped to improve were seen on “pop up” wetlands — a temporary steppingstone for the birds’ journey north. This happened when the field would have ordinarily been drained, an indication that the approach was working. More analysis will be done this month. The fields will be flooded again in the fall for the birds’ return journey. Eventually, using this and other approaches, the conservationists at BirdReturns hope to increase the number of shorebirds that stop in the Central Valley to 400,000, from current levels of 170,000.

There is more here, not like what you see in those movies!

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Robin Hanson on the real multiplier

by on April 14, 2014 at 2:45 pm in Economics, Philosophy | Permalink

Yes doing things now can have good side effects, but unless something changes in the side-effect processes, doing things later should have exactly the same sort of side effects. And because of positive interest rates, you can do more later, and thus induce more of those good side effects. (Also, almost everyone can trade time for money, and so convert money or time now into more money or time later.)

For example, if you can earn 7% interest you can convert $1 now into $2 a decade from now. Yes, that $1 now might lend respectability now, induce others to copy your act soon, and induce learning by the charity and its observers. But that $2 in a decade should be able to induce twice as much of all those benefits, just delayed by a decade.

In math terms, good side effects are multipliers, which multiply the gains from your good act. But multipliers are just not good reasons to prefer $1 over $2, if both of them will get the same multiplier. If the multiplier is M, you’d just be preferring $1M to $2M.

…I think one should in general be rather suspicious of investing or donating to groups on the basis that they, or you, or now, is special. Better to just do what would be good even if you aren’t special. Because usually, you aren’t.

There is more here.

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Assorted links

by on April 14, 2014 at 11:50 am in Uncategorized | Permalink

1. How the Japanese are reengineering (and improving) on American culture.

2. Viagra ice cream markets in everything.

3. Insights into Vox.com and how it views its competitors.  And here is Joshua Gans on Vox.

4. Philippe Legrain, European Spring, a useful and well-written popular look at the European economic mess, $2.99 on Kindle.

5. I call it the Thomas Piketty clothing line.  (The important point, however, is that Zara is much more important these days and that militates against Piketty.)  Here Diane Coyle reviews Piketty.

6. Chrystia Freeland dialogue with Larry Summers, starts at about 40:00.  It is the best Larry video I have viewed.  Here is a Sendhil Mullainathan talk on machine learning which I have not viewed.

7. Mohamed El-Arian is now writing for Bloomberg.

8. The new academic celebrity.

36 comments

Customized restaurant markets in everything privacy is dead

by on April 14, 2014 at 9:57 am in Food and Drink, Web/Tech | Permalink

A restaurant with three Michelin stars is now trying to up its customer service game by Googling its customers before they arrive. According to a report from Grub Street, an Eleven Madison Park maitre d’ performs Internet recon on every guest in the interest of customizing their experiences.

The maitre d’ in question, Justin Roller, says he tries to ascertain things like whether a couple is coming to the restaurant for an anniversary, and if so, which anniversary that is. If it’s a birthday, for instance, he wants to wish them “Happy Birthday” when they arrive. He’ll scan for photos of the guests in chef’s whites or posed with wine glasses, which suggest they might be chefs or sommeliers themselves.

It goes deeper: if a particular guest appears to hail from Montana, Roller will try to pair up the table with a server who is from Montana. “Same goes for guests who own jazz clubs, who can be paired with a sommelier that happens to be into jazz,” writes Grub Street.

Obviously, the restaurant is just trying to be better in tune with the people sitting around eating its food and drinking its wine. But it seems like a reasonable assumption to believe people posting their birthday dates online aren’t doing so in the hopes that someone they’ve never met before will know, as if by telepathy, to wish them the best on their special day.

There is a bit more here, and for the pointer I thank Donnie Hall.

I am now curious what they would do for me.  Any ideas?

Addendum: Here is what happens if you buy a scale on Amazon.

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A rigidity-based theory of executive compensation

by on April 14, 2014 at 4:37 am in Economics, Uncategorized | Permalink

There is a new paper by Kelly Shue and Richard Townsend (pdf), it is quite intriguing though note it is preliminary work. I am not linking to it but the authors appear to have distributed the abstract on the internet:

We explore a rigidity-based explanation of the dramatic and off-trend growth in US executive compensation during the late 1990s and early 2000s. We show that executive option and stock grants are rigid in the number of shares granted. In addition, salary and bonus exhibit downward nominal rigidity. Rigidity implies that the value of executive pay will grow with firm equity returns, which averaged 30% annually during the Tech Boom. Rigidity also explains the increased dispersion in pay across firms, the difference in growth rates between the US and other countries, and the increased correlation between pay and firm-specific equity returns. Regulatory changes requiring the disclosure of the value of option grants help explain the moderation in executive pay in the late 2000s. Finally, we find suggestive evidence that number-rigidity in executive pay is generated by money illusion and reference-dependent motivation, the same behavioral biases that may underlie downward nominal wage rigidity among rank and file workers.

For the pointer I thank Robert J. Shiller.

Addendum: The authors recommend this link to a new version of the paper.

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