That is my latest column for Bloomberg, here is the method:

Uber calculates figures for surge pricing at times of high demand, but it rounds off. So a computation of market conditions that might lead to a surge price that is 1.249 times higher than normal fares is rounded down to 1.2, but 1.251 would be rounded up to 1.3. Yet the initial, unrounded 1.249 and 1.251 estimates represent almost the same underlying market tightness.

Using data from Uber, the authors therefore could see how the demand for Uber varied with surge prices that vary (say from 20 percent to 30 percent above normal fares) even when market conditions are roughly constant.

Here is the source:

A new paper by Peter Cohen, Robert Hahn, Jonathan Hall, Steven Levitt…and Robert Metcalfe…

They conclude UberX produces about $6.8 billion in consumer surplus a year.  My caveat:

If anything, this method underestimates the worth of Uber, as it doesn’t capture what economists call “option value.” Let’s say you walk home with a guy or gal late at night, hoping something nice will happen. But you’re not quite sure, as he or she might make the wrong noises about a particular political candidate, and then you would wish to bail out quickly. Uber would be the safety net. Most of the time you don’t end up using the service or recording a transaction that would count for this study, but you can start making plans because you know you have Uber as a fallback.

Or consider those urban residents who have ditched their cars altogether. They know they can take Uber to the local market if they need to, even if most of the time they have not run out of milk and dog food. Similarly, the existence of Uber is helping some localities economize on mass transit expenditures.

The study also doesn’t measure how Uber might help get the U.S. to the next level of market innovation, which in this case might mean a network of on-demand, self-driving vehicles.

Do read the whole thing.

In the four years that Ayanna Chisholm has worked collecting tolls out of tiny glass booths at the Holland Tunnel and elsewhere in New Jersey, there have been several constants. There are familiar commuters, malfunctioning toll arms, occasional scofflaws — and an incessant barrage of come-ons, sexual comments, lecherous stares and crude gestures from male motorists.

Some of Ms. Chisholm’s colleagues say they have been subjected to drivers exposing themselves. The fusillade is especially menacing because it is inescapable, the workers confined to small hutches on the highway.

Like other women in her profession, Ms. Chisholm, who works for the Port Authority of New York and New Jersey, has learned to wear little makeup, crack her booth’s window open as little as possible, and drop change into waiting hands to avoid drivers who try to stroke her palm.

That is from the NYT, and of course the same was true decades ago.  No one from New Jersey should be surprised at how most internet comments have turned out.

Lima, Peru bleg

by on August 27, 2016 at 2:18 pm in Food and Drink, Travel | Permalink

Your assistance is humbly requested, noting that the shortness of the trip will prevent any significant excursions outside of the city.  Do note I have been there twice, though not in the last nineteen years or so.

I thank you all in advance for your suggestions.

Singapore’s nuTonomy, founded by two researchers from the Massachusetts Institute of Technology, said Thursday it began testing a free taxi-hailing service in a small business district in Singapore called one-north, a campus-like space dominated by tech firms and biotechnology companies. Other tech companies including Chinese internet giant Baidu Inc. have been testing self-driving cars on the roads for years, but this is the first time the vehicles have been open to public use.

…Mr. Parker said the Singapore government had laid out a series of milestones for nuTonomy to achieve before it is allowed to extend its trials to other areas of the city. He declined to provide details on those milestones, but said the next stage would be to expand the service to a neighborhood adjacent to one-north.

Here is the WSJ piece, here are other articles.  I recall predicting about a year and a half ago that Singapore would be the first to do this.  A Singaporean countered me, and interjected they were very worried that their plans were falling behind.  I said: “That is exactly my point.  You are worried that you are falling behind.  Congratulations.”

Worry.  Singapore.  Think about it.

Uber passengers in Pittsburgh will be able to summon rides in self-driving cars with the touch of a smartphone button in the next several weeks. Uber also announced that it is acquiring a self-driving startup called Otto, co-founded by Israeli Lior Ron, that has developed technology allowing big rigs to drive themselves.

Via Mark Thorson, here is more.  And in Finland:

Residents of Helsinki, Finland will soon be used to the sight of buses with no drivers roaming the city streets. One of the world’s first autonomous bus pilot programs has begun in the Hernesaari district, and will run through mid-September.

Finnish law does not require vehicles on the road to have a driver, making it the perfect place to get permission to test the Easymile EZ-10 electric mini-buses.

So perhaps Finland can become a market leader in this area.

While only 25% of the Swiss population hiked regularly in 2000, today the figure is 44%.

That is from Dina Pomeranz, original source here.

Should you go?  I give the place high marks for food and scenery, but the total population of about 48,700 limits  other benefits.  It is like visiting a smaller, more unspoilt Iceland.  There is a shop in the main city selling Faroese music and many shops selling sweaters.  They will not tell you where the sweaters were knitted.

The natives seem to think Denmark is an excessively competitive, violent, harsh and hurried place.  The norm here is to leave your door unlocked.  It is a “self-governing archipelago,” but part of the Kingdom of Denmark.  In other words, they get a lot of subsidies.

But they are not part of the EU, so they still sell a lot of salmon — their number one export — to Russia.

You see plenty of pregnant women walking around, and (finally) population is growing, the country has begun to attract notice, and the real estate market is beginning to heat up.  But prices remain pretty low, and it would be a great place to buy an additional home, if you do that sort of thing.

In the early 1990s, their central bank did go bankrupt and had to be bailed out by Denmark.  It is a currency board arrangement, and insofar as the eurozone moves in that direction, as it seems to be doing by placing Target2 liabilities on the national central banks, a eurozone central bank could become insolvent too, despite all ECB protestations to the contrary.

Every mode of transport is subsidized in the Faroes, including helicopter rides across the islands.  Often the bus is free, and there is an extensive network of ferries.  I wonder how many population centers there would be otherwise.  There is now the notion that all of the communities on the various islands are one single, large “networked city.”

The Faroes are a “food desert” of sorts, with few decent or affordable fruits or vegetables.  And not many supermarkets of any kind.  Yet the rate of obesity does not seem to be high.  And they have a very high rate of literacy with little in the way of bookstores or public libraries.

The seabirds including puffins are a main attraction, but I enjoyed seeing the mammals too, with pride of place going to the pony:

The domestic animals of the Faroe Islands are a result of 1,200 years of isolated breeding. As a result, many of the islands’ domestic animals are found nowhere else in the world. Faroese domestic breed include Faroe pony, Faroe cow, Faroese sheep, Faroese Goose and Faroese duck.


The country receives a great deal of negative publicity for killing whales, but overall they seem to treat animals better than the United States does.  Fish consumption is very high and there are no factory farms.

If the Faroes had open borders, but no subsidies for migrants, how many people would settle there?

In 1946 they did their own version of Faerexit, from Denmark of course:

The result of the vote was a narrow majority in favour of secession, but the coalition in parliament could not reach agreement on how this outcome should be interpreted and implemented; and because of these irresoluble differences, the coalition fell apart. A parliamentary election was held a few months later, in which the political parties that favoured staying in the Danish kingdom increased their share of the vote and formed a coalition.

Overall I expect this place to change radically in the next twenty years.  It is hard to protect 48,700 people forever.  In part, they are killing those whales to keep you away.

I am told KOKS is a Faroese word for “adding something excellent,” though there are varying accounts of the translation.  In any case, in terms of originality, purity of concept and vision, execution, service, and also view — taken as an integrated whole — I can’t think of any restaurant experience that comes close to this one.  Noma in Copenhagen is a pale memory in contrast, as are the Michelin three-stars in San Sebastian.  KOKS is still unspoilt and on the way up, and the guiding star is the very young and extremely personable Poul Andrias Ziska.

It has been written up in the New York Times and Guardian for its innovative take on Faroese cuisine, though both articles are now out of date.   The dining room seats only 20, and Ziska is also the pastry chef, with no loss of quality.  You’ll find photos and food descriptions on their Facebook page.  Here is the shaved horsemussel on dried cod skin:


Here is one recent review:

Its cuisine style is earthy and refined, ancient and modern. Instead of the new, it emphasizes the old (drying, fermenting, pickling, curing and smoking) with a larger goal of returning balance to earth itself. At KOKS, the cuisine is about seasonality, seriously engaging with agriculture and history and of making age-old food delightful to modern palates…

Poul continues to simply enjoy the uniqueness and richness of the Faroe Islands. Fan of ræst, (local preservation method) he supports and defends this technique that captures and boosts flavour.

I can agree with this assessment:

And finally (and I have to say the best dessert I’ve ever had), dulse seaweed served with chocolate crumble, fermented blueberries and dulse mousse. Sweet, a bit tangy, a bit crunchy, silky-smooth on the mouth and simple heavenly. My marathon reward ended on a very special note.

I am willing to go out on a limb here: it is probably the best restaurant in the world right now.  It alone justifies a trip to the Faroe Islands.

Addendum: Ethika, also in the Faroes, has some of the best sashimi I’ve eaten, recommended as well.

That is my latest Bloomberg column, and here is just one bit from it:

Third, Brazil’s political history has been an odd mix of dictatorship and extreme decentralization. Until the late 1980s, a series of autocratic leaders took power but failed to govern outlying regions successfully. Governance remained based on a colonial model with an authoritarian leader at the center and autonomous power blocs throughout the regions — a system that, for all of its periodic dynamism, proved ill-suited for modern times.

That colonial legacy is being dismantled, in fits and starts.  Brazil now has a real democracy and some degree of political accountability, though it falls short of a well-functioning federalism, as illustrated by the fiscal troubles of Rio de Janeiro and many other parts of the country. Income inequality has been falling (contrary to the trend in most countries), extreme poverty has virtually been eliminated and Brazil has moved up the rankings in terms of education.

I love to visit Brazil. I have been chased by aggressive pre-teens wielding sharpened sticks and even shot at, yet I remain an unreconstructed optimist. It’s actually a major achievement to remain “the country of the future” for so long. Can you say the same about Argentina or Venezuela? If there’s one thing we know from Olympic competition, it’s that if you remain in the game through successive rounds, your chances of winning only go up.

Do read the whole thing, there is much more detail at the link.

Faroe Islands bleg

by on August 6, 2016 at 1:49 am in Food and Drink, Travel | Permalink


Your assistance is requested, thanks in advance, comments are open…

Charlotte: He’s writing a graphic novel that has superheroes in it. We have the same favorite superhero. I like Batman because his only power is being super rich. That’s more realistic than the others. And he agreed with me.

Don: She was a little less adventurous than I was when it came to food.

Charlotte: He said he was from Vienna and I was like, Austria? I had to dial that back a second to not sound completely stupid. That’s the type of thing that only a diplomat brat would accidentally say. I don’t have a car, and I don’t go to Virginia very much for anything, really. So it seems very far.

That is from Washington Post Date Lab, an object lesson in both behavioral economics and the limitations of the Coase theorem.

Over the past two years, 18 cities have reported how many bookstores they have, and 20 have reported on their public libraries.

Hong Kong leads the pack with 21 bookshops per 100,000 people, though last time Buenos Aires sent in its count, in 2013, it was the leader, with 25. New York does OK, with around 840 bookstores for 8.4 million people, but London, whose population is only slightly bigger than New York, counts only 360 stores.

Taipei and Madrid do well too.  In terms of what you actually get, I think of Buenos Aires and Madrid as standing at the top.  My casual impression is that a lot of the Asian bookstores are more vocational than useful to a reader such as myself or Michael Orthofer.

For libraries Edinburgh is #1 by more than a factor of five.


by on July 26, 2016 at 3:35 am in Economics, Law, Television, Travel | Permalink

Man faces prison for scheme inspired by Seinfeld plot where he ‘brought 10,000 cans from out of state to take advantage of Michigan’s higher deposit rates’

That is the headline, here is the story via the excellent Mark Thorson.  For the under-informed amongst us:

In Michigan you can get 10c for every bottle you give back – whereas places such as New York will only give you 5c.
But it is illegal for someone to knowingly bring them from somewhere else in order to get cash.

I very much liked yesterday’s Ross Douthat piece, and I agree with most of it, and I regard him as one of the truly great columnists writing today.  Still, there was one tiny part I disagreed with, and I see the point being repeated in varying forms elsewhere, so I thought I would pull it out and add a few comments, namely:

(There is more genuine cosmopolitanism in Rudyard Kipling and T. E. Lawrence and Richard Francis Burton than in a hundred Davos sessions.)

That is Ross, do read the whole piece for context, but here are my worries.  They may be nitpicks, but actually I feel a fair amount is at stake here:

1. It seems unfair to compare Davos sessions to some rather robust, historically important, top-of-the-line explorers.  Virtually all sessions are boring, including or maybe even especially in the 19th or early 20th centuries.  How about comparing the elites of back then to the elites of today?  Then I think the Davos set would look quite good.  Or if you compare the explorers of more recent times — say Jan Morris or Louis Sarno — to the explorers of back then, still the present day looks good and possibly even considerably superior in terms of curiosity, tolerance, and a broad outlook.

Overall, I see a lot of evidence — both cross-sectional and time series — that those qualities are what economists call normal goods rather than inferior goods, or in other words those qualities rise with income.  And do we moderns not in some ways have an overall better and more accurate perspective?  Have we not read much more, learned better social science, and developed a greater facility for spotting prejudices and logical fallacies?

2. I suspect either the elites or the explorers of today are better when it comes to understanding differing perspectives of gender, neurology, sexuality, race, age (should you beat your kids?), and a variety of other dimensions.  Maybe none of these wisdoms fall exactly under the heading of the adjective “cosmopolitan,” but still they seem relevant for whether today’s elite is wiser and broader.  How many of the earlier elite were women, and embodied that set of diverse perspectives, to pose a simple comparative question?

3. I’ve never been to Davos, but I know some people who have.  They’re weird!  And I mean that in a (mostly) good way.  I am reluctant to overgeneralize about them, and I suspect they are more diverse than is often thought to be the case.  Almost by the virtue of having been invited, they are some pretty extreme outliers, consider for instance Bill Gates or Elon Musk.  I’d also like to see data on how many of them have spent serious time in say poor rural villages in less developed nations, or had other strange or diverse experiences.  The answers might surprise us.

Who amongst us knows this about CEO and billionaire Patrick Byrne of Overstock?:

“30 years ago in China I contracted Hep C.  I got a bad head wound and a ‘barefoot doctor’ they called him, sewed me up.  I’ll give you the facts, I went stage 4 last summer, seemed to have gotten through the treatment but it’s been quite harsh on me and it’s on top of a long, I’ve actually had 106 surgeries, 51 times they stopped my heart electrically, another 50 times chemically,”

Isn’t that a kind of cosmopolitanism?  And the medical treatments also have given him some pretty novel perspectives.  Patrick by the way is fluent in Mandarin and has spent years in strange and unusual parts of China, and during a time when it was far less safe and comfortable than today.

Or how about what Jeff Sachs does?  Whether or not you agree with all of his economics, it’s not easy, and I mean on both the mind and the body.  How about those Harvard MBAs who are Mormons and have done missions in exotic locales and gone door to door for two years?

Muhammad Yunus was born in a Chittagong Muslim village into a family of nine children, circa 1940.  Later “From 1969 to 1972, Yunus was assistant professor of economics at Middle Tennessee State University in Murfreesboro.”  Isn’t that a pretty incredible diversity of life experience?

Thomas Friedman, a classic exemplar of the globalist mindset and whipping boy for many, in fact spent serious time in Beirut covering the civil war, and doing original reporting in situations of very real danger, winning Pulitzers and a National Book Award for the quality of his work.  During one later four-year period, he traveled over 500,000 miles.  Nicholas Kristof is another good example of someone who really “gets out there,” in his case often in Africa but not only.

If you are curious, here’s a basic list of Davos attendees.   Note also that the very real increase in segregation by income in America — mostly a bad development and which Ross mentions — seems to be centered around the upper middle class, not the Davos set, as the very wealthy and the elites always have lived somewhat apart.

Overall I think Ross and many others are somewhat underrating Davos.  I do understand that Davos attendees may, as a whole, suffer from excess hubris, excess complacency, or be excessively fond of technocracy.  And the fact that many (by no means all) of them have not suffered very much does limit some of their perspectives.  But are they not in fact actually about as cosmopolitan as we might hope for?

Addendum: Rob Howse offers some useful remarks, and also notes the connection of the “genuine cosmopolitan” idea — a tricky concept — to Leo Strauss.  Here is his closing bit:

Is it so that the cosmopolitans Douthat despises merely retreat into comfortable and familiar neighborhoods in global cities?…[many are] working in a combat zone with Medicins sans frontiers; or persisting as a foreign correspondent in a country where journalists’ lives are threatened; or setting up a truth commission to heal wounds in a conflict-ridden nation; or soldiering as a social entrepreneur to empower women’s small business in an African village; or confronting traditional community leaders about female genital mutilation.  These are all quintessentially cosmopolitan roles, which involve real risks, real sacrifice, and often wrenching encounters with otherness.

I agree with Ross’s description that the Davos set is very often “liberal Christianity without Christ.”  But maybe that’s the most cosmopolitan philosophy going these days.  The bigger question of course is, given slow economic growth and institutional rigidification, how much that really helps us.

…the surveys also revealed a lack of enthusiasm for buying or using a driverless car programmed to avoid pedestrians at the expense of its own passengers. One question asked respondents to rate the morality of an autonomous vehicle programmed to crash and kill its own passenger to save 10 pedestrians; the rating dropped by a third when respondents considered the possibility of riding in such a car.

Similarly, people were strongly opposed to the idea of the government regulating driverless cars to ensure they would be programmed with utilitarian principles. In the survey, respondents said they were only one-third as likely to purchase a vehicle regulated this way, as opposed to an unregulated vehicle, which could presumably be programmed in any fashion.

That is from an MIT press release, here is the background:

The paper, “The social dilemma of autonomous vehicles,” is being published today in the journal Science. The authors are Jean-Francois Bonnefon of the Toulouse School of Economics; Azim Shariff, an assistant professor of psychology at the University of Oregon; and Rahwan, the AT&T Career Development Professor and an associate professor of media arts and sciences at the MIT Media Lab.

The abstract notes that if drivers are required to purchase “utilitarian-programmed” vehicles, they may be less willing to buy at all, thus postponing the adoption of what is likely to be a much safer technology.

For the pointer I thank Charles Klingman.