Travel

You need to look at ticket prices inclusive of fees, not just fares. Those have continued the long run trend of falling in inflation-adjusted terms, although not every year.

Airline products across carriers have become less variable/more standardized. Price is only one element of competition. There are significant barriers to entry in the airline industry, not least of which is the prohibition on foreign ownership of US airlines. However that is hardly the only one.

The major reason Alaska Airlines purchased Virgin America was access to gates and in some cases slots at major congested airports. You not only have government-owned airports entering long-term leases with incumbent airlines, you frequently have capture of the bureaucrats running those airports by their major incumbent airline tenants. And where you have multiple airports in a metropolitan area, they’re frequently jointly run by the same bureaucracy rather than competing.

Airlines are highly profitable, though not nearly as profitable as two years ago, the biggest delta has been fuel cost tied to the price of oil. Consolidation allowed airlines to capture much of the gains of lower fuel prices for a period of time, but the smaller number of carriers returned to expansion and competition on the basis of price competing away some of those savings-driven prices.

All that said the only monopoly air routes in the US are the ones no one wants to fly and that require government subsidies in order to entice carriers into the market. Which isn’t to say that consumers wouldn’t benefit from more competition than we have today.

That is from Air Genius Gary Leff.

I frequently see airlines cited as an example where the American economy is obviously more monopolistic.  By some metrics, yes, but what about the final deal?:

For more than three years, the average one-way fare between Detroit and Philadelphia never dipped below $308, and sometimes moved higher, topping $385 at one point.

But then, early in 2016, fares suddenly started to fall, according to data from the Bureau of Transportation Statistics. By the end of the year, the average one-way ticket between the two cities stood at just $183.

What changed? The primary factor was Spirit Airlines [a budget carrier].

…Even as a wave of mergers has cut the number of major carriers to four and significantly reduced competition, lower-cost airlines continue to play a role in moderating ticket costs.

…The cost of a round-trip domestic ticket averaged more than $490 in the first half of the year, up slightly compared with 2016, according to Airlines Reporting Corporation, a company that settles flight transactions between a number of carriers and booking services like Expedia.

The jostling, however, has left airline investors skittish. As the publicly traded airlines in July reported earnings for the second quarter, shareholders sold off their shares, worried about the fight over fares and capacity increases.

That is from Micah Maidenberg at the NYT.  In other words, the market still has a fair amount of contestability.

Or consider some more aggregated data.  As for output restrictions, here is the DOT series on aggregate miles flown.  No doubt, there are problems around the time of 9/11 and also the Great Recession, with 2008-2012 being a period of slight quantity contraction.  But in 1985 there were 275,864 [million] total miles flown, in 2006 it was 588,471, and 641, 905 in 2015.  I’ll ask again: if there is so much extra monopoly, where are the output restrictions?

Or look at the price index.  Overall prices are down considerably since 2008, and from about 2000 to 2016 they run from about 250 (eyeballing) to about 270, noting 1998-2010 saw a huge run-up in oil prices.  Since 2005, the U.S. went from having nine major airlines to four.

Maybe you’re upset about quality, but baggage lost each year — one of the easier quality variables to measure — is going down steadily.

Is this perfect competition?  No, of course not.  Is this ideal performance?  No.  Will looking at concentration ratios help you understand the industry very well?  Even more no.  And this is one of the worst cases of changing concentration ratios I can find.  Tomorrow, shall we do booksellers?  Or do I not even need to bother?

*Love, Africa*

by on August 27, 2017 at 3:22 pm in Books, Travel | Permalink

The author is Jeffrey Gettleman, the subtitle is A Memoir of Romance, War, and Survival, and this travel romance of East Africa has taken a beating on Twitter and elsewhere, for its apparently “neo-colonial” approach.  I bought the book, wondering if I might find a contrarian take to offer.  I’ve only browsed it, but here was one random passage I ran across, noting the scene will culminate in the two making out (and perhaps intercourse?):

As my eye traveled across the faces, I kept coming back to the same one.  It belonged to a girl with high cheekbones, wide-set eyes, heavy eyelids and dark hair; her features looked Eurasian, maybe even Eskimo.  She was wearing a red dress that showed off her back; she was lithe and freckly.  As she danced, the blacks of her eyes shone.  There was something in them that I had seen before.  She seemed deeply, freely happy, like those kids on Lake Malawi.  I could tell she really dug dancing.

Now, I am not here to offer him a deserved bad writing award, nor to shame him, but still I consider this data and I am puzzling over what this data means.  In a mere minute of browsing, I found several similar passages, and with a few more minutes they seemed to multiply endlessly.  Nor was it easy to stumble across pages with lots of information about Africa on them.  And yet he is a Pulitzer winner and a foreign correspondent for The New York Times, East Africa Bureau Chief for a decade.

But exactly which views do I need to revise?  The NYT writers and journalists I have met are uniformly impressive.  It is not easy to win a Pulitzer Prize.

Here is a review from Laura Seay, she is harsh but it seems to me probably fair.  Is Derek Parfit right about the self after all?  At the very least, my opinion of the political correctness scolds went up a bit today.  And I once again ask myself whether I should spend more or less time writing negative reviews of books (mostly I don’t, though this week’s reading was pretty meh).

Please advise.

Local governments spend roughly $1.6 trillion per year to provide a variety of public services ranging from police and fire protection to public schools and public transit. However, we know little about public sector’s productivity in delivering key services. Public bus service represents a standardized output for benchmarking the cost of local government service provision. Among the top twenty largest cities, there exists significant dispersion in the operating cost per bus mile with the highest being more than three times as high as the lowest. Using a regression discontinuity design, we estimate the cost savings from privatization and explore the political economy of why privatization rates are lower in high cost unionized areas. Our analysis suggests that fully privatizing all bus transit would generate cost savings of approximately $5.7 billion, or 30% of total U.S. bus transit operating expenses. The corresponding increased use of public transit from this cost reduction would lead to a gain in social welfare of $524 million, at minimum, and at least 26,000 additional transit jobs.

That is from Rhiannon Jerch, Matthew E. Kahn, and Shanjun Li, forthcoming in the Journal of Public Economics.

In a recent study by researchers at Stanford University, Indonesia, the world’s fourth-most-populous nation, came in last among 46 countries and territories for the number of walking steps its citizens take, averaging only 3,513 a day.

By comparison, Hong Kong was first with 6,880, and China second with 6,189. Ukraine, Japan and Russia rounded out the top five. The study tracked 717,000 people in 111 countries, who voluntarily monitored 68 million days of activity using an app on their smartphones and watch devices that was designed by Stanford researchers — the largest such tracking study ever, the researchers said. Each place needed to have at least 1,000 participants to be ranked in the report.

Jakarta, an urban sprawl of approximately 10 million people, with a metropolitan region of about 30 million, is the poster child of the nation’s walking woes.

Only 7 percent of the capital’s 4,500 miles of road have sidewalks, according to local government data.

That is from Joe Cochrane at the NYT.  Those results are consistent with my intuitions, noting that I sometimes find India difficult to walk in. By the way, the two countries with the highest “Activity Inequality” are the United States and Saudi Arabia.

Here are data on the walkability of various American cities.  The estimable Chug refers me to this short piece on the walkability of the Jersey shore.

I will be doing a Conversation with Tyler with her.  On the off chance you don’t already know, here is a brief Wikipedia summary of her work:

Mary Roach is an American author, specializing in popular science and humor.[1] As of 2016, she has published seven books,: Stiff: The Curious Lives of Human Cadavers (2003), Spook: Science Tackles the Afterlife (2005) (published in some markets as Six Feet Over: Adventures in the Afterlife), Bonk: The Curious Coupling of Science and Sex (2008), Packing for Mars: The Curious Science of Life in the Void (2010), My Planet: Finding Humor in the Oddest Places, Gulp: Adventures on the Alimentary Canal (2013), and Grunt: The Curious Science of Humans at War (2016).

But there is much more to her than that.  Here is the full Wikipedia page.  Here is her own home page.

So what should I ask?  I thank you in advance for your inspiration.

Theme-based restaurants and parks are passé. A theme-based crematorium is the latest talk of the hour, both online and offline. Antim Udan Moksha Airport in Gujarat, the first of its kind in India, puts the departing souls of the dead cremated here on international flights to the heaven for ultimate salvation or moksha: freedom from the cycle of birth and death.

Located in Gujarat’s Bardoli on the banks of Mindhola River, the crematorium is modeled on an airport and equipped with two giant replicas of aircraft. The airplane replicas at Antim Udan Moksha Airport in Gujarat are named Moksha (salvation) airlines and Swarga (heaven) airlines which seem to transport the souls from the earth to the heaven on cremation of dead bodies here.

What’s the most interesting about Antim Udan Moksha Airport in Gujarat is the airport-like announcement which is made to guide funeral parties on entry into the crematorium and instruct them where to keep the body, how to proceed for cremation, etc. There is very little difference between the announcement made at the crematorium and that at airports as well as in planes.

What makes the crematorium more like an airport is the typical noise that an aircraft makes while taking off. A similar noise is created when dead bodies are placed in furnace at Antim Udan Moksha Airport in Gujarat. The atmosphere of the airport-themed crematorium is intended to soothe the mourning family members under the impression that the dead depart for salvation in the heaven.

Here is more, via the excellent Samir Varma.

Is this convenience, or a new front in the signaling and counter-signaling wars?:

On the surface, it could be your typical trailer park, with its boring rows of modular mobile homes squeezed onto tiny plots of land.

But Montauk Shores features something other trailer parks don’t: million-dollar views — and billionaire residents.

Owning a trailer at the park has become the ultimate status symbol for the tony Long Island town’s summering rich and famous, many of whom use their relatively modest mobile digs as a second pad to escape with the family or even as a glorified changing room after a long day of romping in Montauk’s waves.

There’s also the indescribable cachet that comes with shabby chic.

“All you own is the box of air above the land,” noted a former Montauk Shores trailer owner. “Whoever buys here is essentially buying a 24-foot-wide-by-50-foot-long box of air.”

But for some deep-pocketed denizens, that’s all they want. So many wealthy people have infiltrated the trailer park that it now has its own “Billionaires’ Corner,’’ a local Realtor told The Post.

Here is the full story, with photos and details.

Even if the traveller hasn’t pre-selected her seat before the flight, the airline claims it will “ensure only a window or aisle seat is assigned at check-in” to its female passengers.

Here is the full piece, via the excellent Samir Varma.

I am in Delaware only briefly.  I have not covered the state before, so here are some of my picks:

1. Chemicals manufacturer: I think that one has to go to the Duponts, I enjoyed the Gerard Zilg biography of the Dupont family and history.

2. Economic historian: Alfred Chandler.

3. Monetarist who studied policy instruments and uncertainty: William Poole.

4. Semi-libertarian journalist: Dave Weigel.

Hmm…music?  I don’t like George Thorogood.  A quality novelist?  How about a painter or sculptor?  Some big time NBA star?  Biden is my favorite of Obama’s VPs.  It is claimed that the movie Fight Club is set in Delaware.  So many special dishes too, in the local cuisine.

The bottom line: Small wonder it is!

1. Especially outside the immediate center of town, it feels as if something wacky is always happening.  Someone is screaming, backslapping, bumping fists, or screaming while backslapping and bumping fists.  Interactions appear to be random, highly intense, and short in duration.  The following interaction is more intense yet.  It reminds me of that old Humphrey Bogart movie “Beat the Devil.”

2. Every cabbie seems to know a random person standing on a street corner, who somehow mysteriously signals to that cab to be picked up, even if said cab already is delivering a Western passenger to some other location.  Shouting ensues, the random person is moved along in the cab only a short distance, always along the Westerner’s route, and then the person is let off again.  With a shout.  Rinse and repeat.

3. It is a better city for street food and stall food than is Chengdu.  The tastes are stronger and spicier, though I believe the peaks of Chengdu are higher and more subtle.

4. Don’t just stick to “the peninsula,” also travel to the alternate sides of the city’s two rivers, the Jialing and the Yangtze.

5. Haagen-Dazs is much more popular in China than in the United States, at least at the retail level.

6. “Sun Zhengcai, the former Communist Party chief of the Chinese city of Chongqing, is under investigation by authorities, the Wall Street Journal reported Saturday, citing people it didn’t identify.”  He had been considered a possible successor to Uncle Xi.

7. On my flight from Kunming to Chongqing, I witnessed my first “facial surveillance” arrest.  Just as they were about to let us off the plane, two policemen appeared at the entrance, with a copy of a facial surveillance photograph.  (Before you board any plane in China, they photograph your face plenty, and match it to various databases.)  They walked down the aisle, turning left and right, looking for the passenger who matched the photo.  They found him and escorted him off the plane, with the crowd watching nervously.  He showed neither surprise nor did he protest his innocence.

8. An excellent room in a five-star luxury Chongqing hotel, with view and upgrade to a larger suite, costs $70 a night.

9. Nearby is “the world’s longest cantilevered glass skywalk.

The city’s “mind-blowing overpass has five layers, 20 ramps and eight directions,” good photos at that link.

Here is Wikipedia on Chongqing, by one measure it is China’s most populous metropolitan area.  “Its population is already bigger than that of Peru or Iraq, with half a million more arriving every year in search of a better life,” and that was written eleven years ago.

It has just that right mix of exotic and comfort, and is mostly unfrequented by Western tourists.  You can spend a day in the center of town and not see ten of them.  Here are a few points:

1. Except for the rainy season, the weather is perfect pretty much every day, all year round.  Unlike much of China, there is virtually no air pollution.

2. The town is set on a gorgeous lake, backed by lovely green mountains.  Dali has about one million people, and so it feels very manageable.  Yet it offers virtually every amenity and convenience.

3. Driving to the local villages around the lake is highly worthwhile.  Track down the local ceremonies and rituals.

4. The town and the surrounding region is full of ethnic minority groups, most prominently the Bai.  You can eat their food and buy their crafts.  There are other minority groups too, including various kinds of Muslims.  This is where Han Chinese and southeast Asian and Tibetan influences intersect.

5. The local cuisine features fish soups, cured ham, flowers, lotus root, and mushrooms mushrooms mushrooms.  For breakfast, bread is served with honey.  You can’t get these dishes anywhere else, not even in other parts of China, and yet none of this food is expensive.

6. You can stay at a luxurious five-star Hilton for $130 a night, or spend less and still do well.

7. The old town has crafts and curios and clothes shopping at very good prices.

8. The level of crime and other mishaps is extremely low.

For a good treatment of all of Yunnan, I recommend Jim Goodman, The Exploration of Yunnan.  Here is Wikitravel on Dali.

That is the title of my latest Bloomberg column; I love Chinese megacities, don’t you?  Here is the first and most general point:

Chinese megacities are associated with the greatest migration in human history, namely the movement of several hundred million people from the countryside into urban areas. This has created over 100 cities with a population of more than one million. And while Westerners tend to see only the harmful effects of that transformation, it’s gone fairly smoothly. Wages and living standards have risen to create the biggest rapid boost in prosperity the world has seen, ever. Surely it’s worth taking a closer look at that.

Here is the most important point:

If you spend a few days in these places, they will stand out as quite distinct. To suggest otherwise is actually to repeat a common Western imperialist meme about the Chinese, namely that they “are all the same” in some underlying manner. Observing and understanding diversity is a skill, and the Chinese megacities are one of the best places for cultivating this capacity.

By the way, the cameo appearance in the opening bit is Dan Wang.

*Paths of the Soul*

by on July 10, 2017 at 5:07 am in Film, Religion, Travel | Permalink

That is the title of an extraordinary Chinese-Tibetan film (with English subtitles, even in Kunming), here is one description:

A birth, a death, a pilgrimage. A film about the 1,200-mile journey of a pregnant woman, a butcher who wants to atone for his sins and a rag-tag band of villagers who go on foot from their small village in Tibet to the sacred Mt. Kailash has become a surprise winner at the Chinese box office.

It is doing better here per screen than Transformers 5 (or is that 6?).  Here is more about the plot premise;

They travel wearing thick aprons made of yak hide and wooden planks tied to their palms. Every few feet, they raise their hands high above their heads in respect for the Buddha, then lower their worshipping hands to their forehead and then to their chest before diving into the ground, touching the earth with their foreheads. To an outsider, the ritual looks like bodysurfing on solid ground. While they chant a simple mantra, devotees lie flat on their stomachs with their hands bent at their elbows, pointing toward the heavens in a sign of prayer. Then they stand up and repeat these steps as the summer’s scorching asphalt roads turn into slippery ice-covered tracks in the winter.

It turns out this is a real thing, as they say back in The Great NJ, and they keep it up for 1200 km over the course of a year (really).  Strapped babies and small children partake as well.  And this isn’t a pure outlier, as my Yunnanese friend Jimi tells me he has seen it many times in Tibet on the open road.

You may think it all sounds silly, but by the end of the film you realize that what you are doing with your own life isn’t actually so different and is perhaps in some ways less valuable.

 

I’m calling this as one of the two or three best movies of the year, or indeed of any year.  Highly recommended on the big screen, though here you can find it on Amazon.  It goes without saying that the film is full of social science.

Deterrence

by on July 7, 2017 at 12:59 pm in Law, Travel | Permalink

She told Hawaii News Now that she considered protesting, but was scared to make a scene. “I started remembering all those incidents with United on the news. The violence. Teeth being knocked out,” she said.

Here is the full story.  Basically the two-year-old toddler did not have his boarding pass properly scanned, the seat was given away to someone else, and he had to sit on his mother’s lap for a three-hour flight.