Tyler Cowen

Abstract

In various cultural and behavioral respects, emerging market consumers differ significantly from their counterparts of developed markets. They may thus derive consumption utility from different aspects of product meaning and functionality. Based on this premise, we investigate whether the economic rise of emerging markets may have begun to impact the typical “one-size-fits-all” design of many international product categories. Focusing on Hollywood films, and exploiting a recent relaxation of China’s foreign film importation policy, we provide evidence suggesting that these impacts may exist and be non-negligible. In particular, we show that the Chinese society’s aesthetic preference for lighter skin can be linked to the more frequent casting of pale-skinned stars in films targeting the Chinese market. Implications for the design of international products are drawn.

That is from a new paper by Manuel Hermosilla, Fernanda Gutierrez-Navratil, and Juan Prieto-Rodriguez.

Tulip mania wasn’t

by on February 19, 2018 at 12:54 am in Economics, History | Permalink

Tulip mania wasn’t irrational. Tulips were a newish luxury product in a country rapidly expanding its wealth and trade networks. Many more people could afford luxuries – and tulips were seen as beautiful, exotic, and redolent of the good taste and learning displayed by well-educated members of the merchant class. Many of those who bought tulips also bought paintings or collected rarities like shells.

Prices rose, because tulips were hard to cultivate in a way that brought out the popular striped or speckled petals, and they were still rare. But it wasn’t irrational to pay a high price for something that was generally considered valuable, and for which the next person might pay even more.

Tulip mania wasn’t a frenzy, either. In fact, for much of the period trading was relatively calm, located in taverns and neighbourhoods rather than on the stock exchange. It also became increasingly organised, with companies set up in various towns to grow, buy, and sell, and committees of experts emerged to oversee the trade. Far from bulbs being traded hundreds of times, I never found a chain of buyers longer than five, and most were far shorter.

And what of the much-vaunted effect of the plague on tulip mania, supposedly making people with nothing to lose gamble their all? Again, this seems not to have existed.

That is from Anne Goldgar, there is much more at the link, including an explanation of how the myths about Tulip Mania spread, fake news basically.  Here is her earlier book on the topic, here is an earlier Peter Garber piece.

Sunday assorted links

by on February 18, 2018 at 3:28 pm in Uncategorized | Permalink

Kinshasa is the centre of Congolese cultural life and politics. Its glitzy hotels and restaurants are where the money looted from the rest of the country is spent. It boasts grandiose architecture (including an enormous Chinese-built parliament) and some of the best-dressed people in the world (known as sapeurs, or members of the Society for the Advancement of Elegant People). It is also filthy and lawless. The buses are known as “spirits of death”. The potholes are the size of buses. Traffic is regulated by gun-toting cops who will happily pull a motorist out of his car and beat him up in broad daylight.

The city is one of the least connected in the world. The airport on the English channel island of Guernsey, with a population of 63,000, handles more passengers than Kinshasa’s. Perhaps one in 20 Kinois has a formal job. Nonetheless they pay dearly to live in the metropolis. A room in a slum, without dependable electricity or clean water, can go for $100 a month.

That is from The Economist, the whole article is superb, one of the best I have read this year, with virtually every paragraph full of interesting points.  Don’t forget that the Congo War(s) of 1998-2003 were the bloodiest since the Second World War.

She referred to herself as a “hothead,” but in fact was a model of grace under fire.  She had to be, view 17:00 to 20:00:

As a besotted worshiper of Sun Ra, Octavia Butler, and Afro-Futurism more generally, I have been anticipating this one for many months.  Since I wish that one-fifth of all movies had an Afro-Futurist background, and so few do, I suppose I shouldn’t complain.  Still, I was disappointed by just about everything except some of the visuals.

The male characters were weak and most of the scenes dull, and worst of all most of the humor is mediocre.  Furthermore, I found the movie uncomfortably prejudiced.  There is such a thing as racism directed mainly at Africans (as opposed to blacks), and it seems to me this was it.

So many spears and wild animals?  How about holding a referendum every now and then?  And there were so many “Africanist” tropes.  De facto, I thought the actual message was strongly pro-segregation, although wimpiness on that finally kicks in.  The visual references to Narnia and to various Star Wars installments were fine, but was it necessary to cite the colonialist Zulu?  The contrast with the resource-poor city of Busan, South Korea was almost Straussian in intent.  Is wealth based on human capital so impossible in Africa?

I would say the more you know about actual African cinema, the less you will appreciate this one.

Christopher Lebron in Boston Review has written the best review (via Hollis Robbins).

A significant part of a St. Louis block is devoted to the world of chess.  There is the Hall of Fame, the St. Louis Chess Club, and also a chess-themed restaurant, Kingside Diner, with a King on the men’s room door and a Queen on the women’s room.  The facilities are world class and very welcoming for the visitor; I am honored to have been given a personal tour (and to have eaten fish and chips there).

If you see a Slavic-looking face walking down this street, you simply assume it is a chess player.  In general, I am very interested in the idea of creating extreme mini-universes, a’la Robert Nozick’s concept of utopia.  This is what the chess utopia looks like, and it is in St. Louis.  In this world, rating matters more than race or gender or age.

Many of America’s best chess players now live in or near St. Louis, and the two best college teams — Webster and SLU — are both in or near St. Louis.

One lesson is the power of philanthropy in an otherwise under-supported domain.  I am instead used to seeing donations in “crowded” areas, such as economics or politics.  Rex Sinquefield, a former finance economist, and the developer of index investing, has been the major force behind the rise of St. Louis in chess.  The game is now played in more than one hundred of the local schools.

The strangest moment for me was reading through the plaques in the Hall.  I had known many of those individuals during the ages 13-16, but for the most part have not had contact with them since, or heard word of them.  All at once, I learned when each had died, and which of the few remained alive.

Saturday assorted links

by on February 17, 2018 at 11:04 am in Uncategorized | Permalink

1. He is more likely right than wrong on the major points of optimism and progress and science.

2. The book is very clearly written, and it would do most of the world good to read it.

3. Contrary to Pinker, inframarginally I see the Enlightenment as a strong complement to Christianity/faith, even though the two at the margin often will clash.  The same is true for nationalism.

4. The Counterenlightenment, as Pinker calls it, is intellectually much stronger than he gives it credit for.  It’s time for yet another reread of Gulliver’s Travels.

5. I am uncomfortable with statements such as “Intellectuals hate progress.”  That sentence opens chapter four.  I know that he explains and qualifies it, but it is not how I like to organize concepts.

6. It is not a good book for understanding the Enlightenment.

7. Overall my main difference with Pinker might be this: I believe there is a certain amount of irreducible “irrationality” (not my preferred term, but borrowing his schema for a moment) in people, and it has to be “put somewhere,” into some doctrine or belief system.  That is what makes the whole bundle sustainable.  It also means that a move toward greater “Enlightenment” is never without its problematic side, and that a “Counterenlightenment” can be more progressive than it might at first appear.  In contrast, I read Pinker as believing that Enlightenment simply can beat ignorance more and more over time.

The book’s subtitle is The Case for Reason, Science, Humanism, and Progress.  And here is my earlier discussion with Pinker, video, podcast, and transcript.

It is often about time, says Diane Coyle in the FT:

In many retail industries, higher productivity means faster service. There are many routine services where getting more for less requires less time to be spent performing them. This applies to parts of many sectors of the economy. There are past examples — think of the impact of the washing machine on doing the laundry or the ATM on taking money out of the bank — but now we are seeing much more automation in new areas such as legal search, scrutiny of medical tests and buying train tickets online. There is surely much further to go as artificial intelligence advances.

Of course a lot of service sector transactions aren’t so much about product quality as simply having a barrier removed from a basic enjoyment of life.  How long did it take the CVS clerk or the DMV to serve you?

Should this point make us feel better or worse about the biases in productivity statistics?  If nothing else, traffic congestion has become worse.  On the other hand, with smart phones and iPads, waiting in line never has been better.

Friday assorted links

by on February 16, 2018 at 2:03 am in Uncategorized | Permalink

1. The anti-pitch playbook.

2. Are driverless cars overrated?

3. What is it like to run someone over with a train?

4. The micro-sociology of planning mass killings.

5. “Ms. Brewer, 33, and her understudy, Edward Barbanell, 40, are thought to be the only known performers with Down syndrome to play the lead in an Off Broadway or Broadway theater production.”  NYT link here.

That is a new paper by Gjisbert Stoet and David C. Geary, here is the abstract, noting that the last sentence is perhaps the most important:

The underrepresentation of girls and women in science, technology, engineering, and mathematics (STEM) fields is a continual concern for social scientists and policymakers. Using an international database on adolescent achievement in science, mathematics, and reading (N = 472,242), we showed that girls performed similarly to or better than boys in science in two of every three countries, and in nearly all countries, more girls appeared capable of college-level STEM study than had enrolled. Paradoxically, the sex differences in the magnitude of relative academic strengths and pursuit of STEM degrees rose with increases in national gender equality. The gap between boys’ science achievement and girls’ reading achievement relative to their mean academic performance was near universal. These sex differences in academic strengths and attitudes toward science correlated with the STEM graduation gap. A mediation analysis suggested that life-quality pressures in less gender-equal countries promote girls’ and women’s engagement with STEM subjects.

So what is the implied prediction for our future?

For the pointer I thank the excellent Kevin Lewis.

This is at Bloomberg, I think this is the most interesting paragraph:

But Noah, I have a question for you. You’ve written several columns about how the American economy is becoming more monopolistic. If true (and it is not exactly my view), that implies output could be much higher with current resources, even at full employment. A boost in demand could spur firms to produce more, rather than restricting output so much. So are you now a fan of these Trumpian deficits? They may not be your preferred form of deficit spending, but do you see them still as a net positive?

But of course there is much more at the link.

Right-wing isn’t exactly the right word, but neither is conservative nor libertarian.  Let’s put it this way: in which American city is the principle of sexual dimorphism so pronounced and so accepted and so built into the city’s most fundamental sector (Hollywood)?  In which American city is risk-taking and the resultant income inequality so much a part of the founding culture, in this case the business of entertainment?  Entertainment is also relatively free of government interference and subsidy, and has been so from its beginnings in American history.  In which city are the market outcomes — the winners and losers — so accepted as the final verdict of relevance?

Dare I say Los Angeles (and environs) is the answer to all of these questions, or at least in the very top tier of answers?

Note that defense spending also has long been a foundational sector for much of southern California.

Of course I am well aware of the actual politics of L.A., and all the more of Santa Monica.  Sometimes I toy with a “portfolio” theory of politics, namely that if your city or region’s core sector is quite capitalistic, your city’s politics will be fairly left-wing as a kind of expressive recompense against daily life.

Which American city or region is most like Denmark?  How about the Washington, D.C. area?  Very well educated, a thick middle class, job stability through government, and not many billionaires.  It is easy enough to live here and feel like a libertarian!

Thursday assorted links

by on February 15, 2018 at 9:56 am in Uncategorized | Permalink

1. Russ Roberts’s 12 Rules for Life.

2. The rise and fall of the waterbed.

3. Spy lizards? (speculative, very speculative)

4. The Posner-Weyl proposal for individual hosting of immigrants.

5. Small steps toward a much better world, Norwegian style: “The northern Norwegian city of Bodø has approved ambitious plans to literally move its airport just 900 meters, thereby opening up valuable new waterfront land for redevelopment. If also approved by Parliament, it will be the biggest land-based construction project ever undertaken in Northern Norway, and further boost a city that’s already blossoming.”

6. The fight over the Maldives.

7. What actually is the Trump infrastructure plan?