Month: February 2004

When Affirmative Action Kills

The United Network for Organ Sharing says that “justice refers to allocation of organs to those patients in the most immediate need.” As such, skin color should be irrelevant in deciding who gets a transplant. But although proponents are loath to make race an explicit factor in transplant policy they are surreptitiously redesigning the organ allocation system in order to increase the number of blacks who receive transplants. The system is being redesigned to meet the ideals of the social planners despite the fact that such “affirmative action” will result in more deaths overall. As a proponent of financial incentives for organ donors I have often been accused of being immoral. But my conscience is clear – I have never advocated killing people to serve my idea of social justice.

From the Wall Street Journal (Friday, Feb. 6).

New rules for allocating scarce kidneys will result in 6.4% more blacks getting transplants, while slightly increasing the number of unsuccessful transplants, a study finds.

Blacks and other minorities have long been disadvantaged on transplant waiting lists — in part because the scoring system gave strong priority to compatibility between a recipient and the donated organ. Although blacks donate organs as often as whites, they have an extremely wide variety of protein markers on the outside of their cells — making an exact match much harder to find than for whites.

Making matters more acute, kidney disease in blacks is very common, owing to their higher rates of high blood pressure, which takes a toll on the urine-filtering organs. Blacks make up 12% of the U.S. population, but account for 36% of the 56,544 people in the U.S. waiting for a kidney. Prior to the scoring system overhaul, they were 33% less likely to get a kidney than whites.

The new rules, implemented in May by the United Network for Organ Sharing, stop giving priority for a certain type of immunological match known as HLA-B.

The report on the new system, in Thursday’s New England Journal of Medicine, used a statistical method to predict what will happen under the new rules. It finds that, had the new rule been in effect in the year 2000, 2,292 blacks would have gotten kidneys, up 6.4% from the actual number of 2,154 blacks. Meanwhile, 3,954 whites would have gotten the organs, a decrease of 4%. Hispanics would have seen a 4.2% increase. Asians would have seen a 5.9% increase.

Critics feared the new rule could reduce the success rate of transplants, effectively wasting precious organs on people whose bodies were likely to reject them. About 2% more organs will be rejected in people of all races, resulting in the need for another transplant, the study predicts.

Outsourcing medical care

More Americans and other nationals are traveling to Thailand for health care. A heart bypass costs 8-15K instead of 25-35K in the U.S. and arguably the service is better. In addition to a good doctor they will give you limo pick-up and convalescence time in a hotel. You can get a nose job for less than a quarter of the price. If you are uninsured, lightly insured, or stuck in a Canadian queue, why not go abroad for your care? Some Thai hotels are helping to organize care services, in conjunction with medical providers. In 2002 Thai hospitals treated 308,000 patients from abroad.

Are you interested? Check out this site and hope they learned more medicine than English grammar. Nonetheless the doctors are promoted: “Asians often seem to do well in high tech academics… not that well in football, but often very well in the class room / laboratory… pretty good in baseball & gymnastics..”

The suppliers offer their own caveat, however: “I probably wouldn’t have Siamese Twins separated in Siam!”

Worry all you want, the bottom line is that one root canal pays for a luxury vacation.

Singapore and India also are taking in foreign patients, 200,000 and 10,000 accordingly, with predicted growth for the future. Medical products are being outsourced to Asia as well, with significant cost savings.

In an age of skyrocketing medical costs, and pressing fiscal problems, surely this is good news. The thing is, other forms of outsourcing are also good for both your wealth and your health, and for the same reasons.

Some of the information in this post is from the recent Business Week article “Sand, Sun, and Surgery,” not yet on-line.


The New York Times notes that RSVP rates seem to be declining, here is another account with a similar conclusion. One executive notes that last year’s invitation response rate ran about 63 percent. A variety of wedding and event planners note that people are ignoring invitations to an increasing degree. At the last minute they decide whether or not to show up, but in the meantime you do not hear a peep from them

Perhaps people are experiencing a kind of invitation fatigue. Imagine receiving ten or fifteen invitations a week. The value of time is higher than ever before, and many people wait to see what else will come along. Ironically the service may be part of the problem. You can see who else has been invited, and who else has already accepted. You also know that it is especially easy for other people to invite you to other events. In other words, you gain by waiting and sampling more information.

We may be missing out on gains from trade, since the incentive to organize an event declines accordingly. Even if an event is organized, it is more costly to plan it.

Of course organizers make follow-up calls but this only worsens the collective problem in the longer run. Everyone waits to RSVP, figuring they will receive a call in any case.

The economist will wonder what alternative institutions could address this problem. could assign a “reliable response” index to each person, akin to an ebay credit rating. Or organizers could send an incomplete invitation. You receive the invitation, but not the exact address or some other critical piece of information. Only those for RSVP are sent the critical information. This proposal, however, has two problems. First, you exclude those who are simply careless rather than manipulating the process. Second, a new convention may evolve whereby you say yes no matter what, whether or not you come. It appears that this practice is already common in Washington, D.C.

Similarly, it does not work to subsidize those who respond early. (For instance lower the overall quality of your event, but promise a bonus to early respondents, such as a hotel discount or a lottery ticket for a door prize. ) You can make early response a dominant strategy, but unless you can punish non-attenders this will not solve the problem. You need to reward both an early and truthful response. Asking invitees to post a bond solves the economic problem, but probably does not help your friendships, especially if the bond is confiscated. If readers have any solutions to the RSVP problem please send them in!

How does the porn industry stop digital pirates?

Just as you can download songs, so can you download digital images. Many hackers, for instance, circulate Playboy’s photos around the web. So how do porn services make money?

Porn services will sue people who sell their images for money, but they don’t usually go after users who share files amongst themselves, read this recent story. The industry is already based on churning out large amounts of product very rapidly and very cheaply. By the time one image is being pirated, another set of images is being promoted in any case.

Furthermore many people have very particular fetishes. They don’t just want images, they want images of a very specific kind. (Use your imagination to fill in the blanks here.) Mood matters as much as the specific practice. Often there is no simple way to describe your fetish and get the proper images to download. So you go to a paid site that specializes in your “thing” and you pay them to select and present it. Free pornographic images are common, but selection and context remain as valuable, albeit cheap, services.

Might this work as a business model for the music industry? Songs without titles? How about groups without names, for that matter? Hard to imagine. Groups need monikers to spread their fame by word of mouth. Peers wish to listen to and talk about the same music, whereby most porn viewers are content to have a more private experience. Furthermore the number of popular songs is limited and fans could assign their own names to the material, thus enabling downloading. Producing a good song is harder and more costly than producing a good porn shot, which again brings us back to a reliance on names and reputation. That being said, when it comes to untried bands, which exist in great profusion, the porn model may be precisely the future direction of popular music.


I once took a seminar on film from Roger Ebert and he said “A movie is not what it is about, it is about how it is about it.” Bear this in mind when I recommend, Spellbound, a movie “about” the Scripps-Howard National Spelling Bee championship. It’s also about immigration, ambition, IQ, poverty, high school and the pressures of competition. Brilliantly edited and fascinating on many levels the film’s only weakness is the pointlessness of the core activity. But that too is part of the point.

Spellbound is just now out on DVD. Hat tip to Craig Newmark whose earlier recommendation I followed.

Should high schoolers play major league sports?

A recent court decision has struck down the NFL prohibition on drafting high school players, or players within three years of high school. While the decision may be overturned on appeal, both professional basketball and baseball already draft players right out of high school.

Why might a professional sports league seek to prohibit such draft picks? First, the prohibition is part of an overall bargain with a players’ union. Players’ unions are composed of insiders, people already in the professional sport. By banning high school players, the league extends the career of the median established player. Apparently this is a cheaper concession than paying those players more money. In essence the players’ union is redistributing money from the superstars to the average players. The very best players lose a few years off the beginning of their careers. But a comparable long-run penalty need not fall on the good (but not exceptional) high school players. Once they are drafted, they will enjoy a longer career than otherwise. The superstars, in contrast, can stick around with or without competition from high school players.

Second, banning high school players helps keep the league in competitive balance. Consider the NBA. There was once a time when the prime draft picks had played four years of college ball. The worst team picked first and was virtually guaranteed to pick a future star, usually a player with immediate positive impact (exception: LaRue Martin). Today the team that picks first takes a gamble on an unknown, with no guarantee of getting good value. So the bad teams are more likely to stay bad for a long time. When the losing Milwaukee Bucks picked Kareem Abdul-Jabbar in the 1970s, they were an immediate championship contender. The losing Washington Wizards picked Kwame Brown, a high school player, two years ago and they have gone nowhere.

Gregg Easterbrook suggests that the prohibition on high school players raises the quality of the football game and boosts attendance. I doubt this argument. If high school players drive away fans, teams would be reluctant to pick them. You can tell complicated stories about cross-league externalities, but for the most part teams try their hardest to put on a good and winning show. We should trust their decisions to internalize the relevant values of youth vs. experience.

The bottom line: The courts acted wrongly to disrupt the competitive balance of the NFL.

How do homing pigeons navigate?

They use the roads, it turns out, not just the sun.

Researchers at Oxford University spent 10 years studying homing pigeons using Global Positioning System (GPS) satellites and were stunned to find the birds often don’t navigate by taking bearing from the sun.

Instead they fly along motorways, turn at junctions and even go around roundabouts, adding miles to their journeys, British newspapers reported.

“It is striking to see the pigeons fly straight down the A34 Oxford bypass, and then sharply curve off at the traffic lights before curving off again at the roundabout,” he said.

Guilford said pigeons use their own navigational system when doing long-distance trips or when a bird does a journey for the first time.

But when they have flown a journey more than once they home in on an habitual route home.

“In short it looks like it is mentally easier for a bird to fly down a road…they are just making their journey as simple as possible.”

How much is a bathroom worth?

Economists are now applying econometrics to the time-honored questions of real estate. Based on a sample of 29,000 sales, and a proper set of statistical controls, the researchers derived an extensive set of valuations. The numbers given express the percentage change in the value of the home:

1. A full bathroom: 24 percent
2. A water view: 8 percent (I would have expected more)
3. Waterfront location: 18 percent
4. View of a golf course: 8 percent
5. A garage: 12.9 percent
6. A tennis court: 3.1 percent
7. In-ground sprinkler systems: 8 percent (surprisingly high)
8. An in-ground pool: 7.9 percent
9. A separate laundry room: 15 percent (surprisingly high)
10. An above-ground pool: minus 2 percent.
11. Is your house a “fixer-upper”?: minus 23.6 percent.

Here is a summary table of the results. Here is original research. Here is a Washington Post story.

Many of these amenities sell for more than what they cost to install. So the bottom line here supports the conventional wisdom of the trade. People don’t fix up their homes enough before selling them.

Health and education charts

The GapMinder site has some interesting charts and animations of things like income distribution over time, world health measures and so forth. The authors have obviously read their Tufte. The example below shows a child mortality statistic plotted againstGDP per capita. The sizes of the circles indicates populations, colors indicate regions of the word. Click on the image and it will open at full-size in another window.


Why Ed Sullivan is important

This coming Sunday marks the fortieth anniversary of the Beatles on The Ed Sullivan Show. We look back on Sullivan as an antiquated, somewhat quaint relic of a bygone era. In reality he was a daring market entrepreneur who promoted important music and broke down racial barriers.

Sullivan was especially important for his advocacy of African-American music and entertainment. He helped Bill “Bojangles” Robinson, Ethel Waters, Nat “King” Cole, Leontine Price, Louis Armstrong, George Kirby, Duke Ellington, Richie Havens, Mahalia Jackson, Louis Armstrong, Diana Ross and the Supremes, and Marvin Gaye, among others. At the time the major networks typically shied away from carrying such performers, primarily for racial reasons. Sullivan consistently fought with his conservative sponsors and insisted on booking these individuals.

Sullivan was a musical visionary more generally. In addition to the Beatles, he promoted The Rolling Stones, Elvis Presley, and Barbra Streisand. In comedy he showcased Woody Allen, Richard Pryor, and Jerry Lewis, among many others. In each case the performers had not yet established their later significance.

Sullivan’s show, of course, was an institution. At its peak it regularly commanded an audience of over 50 million Americans and it ran for 23 years. Here’s a hat tip to Sullivan, who exemplified the best of entrepreneurship and cosmopolitan vision.

It hurts more from a man

For a given amount of pressure, it hurts more when a man is making you feel bad:

Participants placed a finger in a clamp which was tightened using a pressure gauge until they reported feeling pain. Both men and women appeared to feel pain more quickly if the person turning the clamp was a man.

Previous studies have shown that men report feeling less pain in front of a female experimenters – but this was put down to their wanting to appear more macho.

David Williams, who carried out the study at the University of Westminster in the UK, says his findings contradict this assumption. Williams suggests that the subjects of his study may be socially conditioned to expect men to be more likely to inflict harm. The effect, “is likely to be a result of what participants subconsciously expect, based on socially acquired gender stereotypes,” he says.

We are susceptible to the power of suggestion in other ways as well:

The study also shows that a person’s surroundings can affect their sensitivity to pain. Objects that might be associated with suffering – such as a chart showing wounds or a poster related to blood donations – were found to make the participants report feeling pain more readily.

Here is the full story, here is the researcher.

The bottom line? No, it is not all in your head. Nonetheless a stoic attitude may help you endure discomfort. Furthermore we seem programmed to think that men are the bad guys. They usually are.

Loan markets in grades

A school in China is allowing students who don’t do well in tests to borrow a few extra marks as long as they pay them back with interest.

The scheme was recently introduced by Penglai Road No 2 Primary School in the Huangpu District of Shanghai, reports Xinhua.

Students who do poorly on a test can ask their teachers to lend them a few points to improve their grade, but twice as many points must be paid back on the next test, assuming they achieve a better mark.

If they don’t, interest on the loan continues to run at 100% per test until it is paid off.

It is reported that about 40% of students at the school have taken out such loans.

Why the monopoly provision? If you are going to do this at all, allow students to trade and lend points among themselves, thereby establishing a competitive equilibrium price.

From Ananova, thanks to Mitch Berkson for the pointer.

Can a market beat the market?

Marketocracy is a game where investors are given $1 million in virtual money to build a mutual fund, much like fantasy baseball. Currently some 55,000 players manage 65,000 fantasy mutual funds. But at Marketocracy fantasy becomes reality (I ought to be paid for that line) because the sponsoring firm monitors and ranks the performance of all the traders using an algorithm incorporating short and long-term analysis, market sector, risk and so forth. The stock picks of the top 100 portfolios are then used to create a real portfolio of stocks, the M100 (MOFQX). In addition to fame, the players have an incentive to trade carefully because top managers are paid a percentage of the assets in the fund!

Efficient markets theory says that the idea shouldn’t work but it also says that if transactions costs are low (the fund does have relatively low costs) then it shouldn’t hurt either. In fact, the M100 mutual fund has beaten the S&P 500 over the past several years and it has done so at lower risk.

Addendum: My friend Dan Klein recommended this mutual fund to me when it first appeared. I demurred based on efficient market theory and bought Webvan instead. Ugh.


The APA (American Philosophical Association) is looking for stories about how valuable philosophical training has been to people other than professional, full-time philosophers.

Here is the full story. And here is an excerpt from an accompanying letter:

We might also use some of these names later in a fund drive we are now planning.

Good luck is all I can say. If you can think of anyone since Alcibidiades and Alexander the Great, let them know. Queen Christina did study with Rene Descartes, and John Stuart Mill sat in Parliament, but no U.S. example comes to mind. Might philosophy be best suited to advising an autocrat?

Addendum: Astute reader Brock Sides offers the following link to famous philosophy majors. The list includes Woody Allen, Iris Murdoch, David Foster Wallace, Bill Clinton, the Pope, Harrison Ford, Bruce Lee, and Mike Schmidt.