Month: April 2005

Experimental economics, African style

This settlement in western Kenya, where Ms. Odera lives, has become
a giant test tube, and Ms. Okoth’s instruction is one part of that
experiment. Eventually there will be 10 such test villages, scattered
across the world’s poorest continent.

Led by Jeffrey Sachs,
director of the Earth Institute of Columbia University, the project
aims to fight poverty in all its aspects – from health and education to
agriculture and energy in one focused area – to prove that conditions
for millions of people like Ms. Odera and her neighbors can be improved
in just five years.

It is an important and uncertain gambit. If
it fails, initiatives like that pushed recently by Prime Minister Tony
Blair of Britain to greatly increase foreign aid to Africa may seem
foolhardy. If a single village cannot be turned around with focused
attention, how can whole communities and even countries be revitalized?

…The researchers behind the program are keeping track of every penny
they spend, trying to demonstrate that for a modest amount, somewhere
around $110 per person, a village can be tugged out of poverty.

They
have tried to measure exactly how bad Sauri was at the start of the
project last fall. Every home was surveyed to get an accurate portrait
of the population. Blood tests were taken among a smaller group for a
nutritional analysis, because many villagers eat only once a day, and
show it.

Blood will also be tested to determine how widespread
the malaria parasite is, and then again later, to see whether the
mosquito bed nets given to every villager help keep more people,
especially children, alive.

Here is the New York Times story.  Here is my earlier post on Sachs’s plan.  Here is an on-line World Bank discussion about when foreign aid works and doesn’t; they invite MR readers to join in.

My social security debate with Jim Glassman

The most loyal of MR readers will find this old hat, but the debate at this link, originally done for Reason magazine, provides a good summary of my views. Here is my bottom line:

To the benefit caps that we really agree on, Glassman wants to add government-regulated personal accounts. The economics here are straightforward, once unbundled from benefit caps. Our government would raise taxes (or borrow) to finance further private investment in equity markets. Furthermore those investments are to be regulated by the government. I expect that Reason readers, once they hear the plan described in these terms, will be suspicious.

How does sleep compare with death?

Say that you, like me, expect to live another forty years.

Now imagine that I could learn to live with one less hour sleep each night.  The extra time adds up to almost two more years of life.  And by definition, two more years of awake life.  Which is worth about three years of life with one-third sleep.

I would give a great deal to live three more years, but I don’t try so hard to sleep less.

Nor do I enjoy sleep.  I enjoy "the feeling of having slept."  The best sleep is the sleep I don’t notice at all, and I would do without sleep if I could.  It appears that I find death much worse than sleep.

Might I have negative time preference for time (a non-storable) itself?  I would rather have an extra year in the distant future than many extra hours — adding up to a year — in the interim.

Much of my negative time preference for time stems from plain curiosity.  If I were single at the time, I would give up my last year of life for a year in 2250, if only to see how things turn out (I also would have a chance of trying some neat new goods, but for me that is a lesser attraction). 

I would rather be born later than earlier.  Even if I did not expect economic growth, I could learn more history.  So how much life would I give up for a true and comprehensive account of the future of the human race?  How much money?

Say that "deep-freeze" worked and the future were secure.  How many people would deposit a penny in the bank and wake up much later as billionaires?  Would you have an extra child — one more than you want — in order to freeze her and pre-arrange future care in this manner?  Is there a free-rider problem, and if so what must we do to keep people going in the present, thereby maintaining real rates of return for future "sleep astronauts"?

Addendum: Here is Shakespeare’s take, thanks to Robert Schwartz for the pointer.

China fact of the day

"There are maybe 9, 10 million young pianists in China now," says international piano phenom Lang Lang. There, young classical artists like himself are treated like rock stars.
    "It is different from the U.S.," he explains. "Everyone goes to [classical] concerts and CD signings. They have to have police to hold back the crowds, and to have this life is the dream of many young Chinese people."

Here is the story.  From those in the know, I have heard horror stories of badly tuned and badly maintained pianos rotting in humid climates.  Still, I cannot help but feel that the future of contemporary classical music composition lies in Asia.  Where else are so many young people passionate about the genre?

Electing a Pope

After the Athenians, Catholic scholars were among the first to analyze problems of voting (what is today called social choice theory).  The potential for chaotic elections was certainly familar to the Cardinals who after many disputes over who should be Pope settled on the current two-thirds rule for election in 1179.  And while I wouldn’t go so far as  Pope Pius II  who in 1458 said (after his own election (of course!) "What is done by two thirds of the sacred college, that is surely of the Holy Ghost, which may not be resisted," it is interesting to note that 2/3rds does have a number of special stability properties (see the difficult paper of Saari here and the earlier link).

For more on the history and practice of Papal elections you can listen to two free historical lectures from The Teaching Company.   

Rate your date

…you can pop over to TrueDater.com and find out whether your prospective date is anything close to what the profile suggests.

TrueDater, not to be confused with True.com, is a database of reviews written by people who met through online personals. It’s like Amazon.com, only instead of books, you’re reviewing people. More specifically, you are reviewing their ability to represent themselves online.

Here is the story; the prescient Michelle Boardman suggested this idea some time ago.

Addendum: Here is a sample review.

Markets in Everything

The Whizzinator is a fake penis, urine bag and syringe designed to beat drug tests.  It is said to be "foolproof" although according to the May Atlantic "actor Tom Sizemore" [insert joke here] "was caught using one during a drug test in February."  It also does not inspire confidence to read that "YES, WE SELL DEHYDRATED URNIE SEPARATLEY."

As Tyler has noted, Markets in Everything is often sad but in this case it’s the demand, or rather the reasons for the demand, not the supply that I find most sad.

Should we value human life at replacement cost?

Earlier this week I asked whether we should value human life at replacement cost.  Michael Vassar wrote me in response:

We should value human life at replacement cost, and we actually value generic human life less than that (negatively?), as demonstrated by the existance of late term abortion (there are almost certainly potential adoptees who would pay many women enough to motivate them to go through labor once late in a pregnancy in exchange for the child, especially considering the actual expenses many incur to adopt), but we should value a particular human life at the lower of total preference for the continuation of that life and replacement cost for that life.  For the latter, today replacement cost is infinite, though it needn’t be forever.  For the former, the preference varies dramatically depending on situation, but is frequently very high.  For simplicity’s sake, and because economical thinking is confusing or corrupting to people below a very high IQ threshold, we maintain a convenient fiction of infinite value.  Although we violate this fiction continuously, we do so in an extremely inconsistent manner because the cost of strict obedience or careful public analysis are greater than the costs of irrationality on particular instances.  The "ethical questions" raised by science are rather consistently actually situations where new scientific data challenges the viability of convenient fictions, but in the end it always turns out to be possible to ignore the new data and maintain these fictions, or to integrate the new data into life rather seamlessly without disruption.  However, the frequency with which these questions occur is increasing.

What will French search engines look like?

[Chirac] asked his culture minister, Renaud Donnedieu de Vabres, and Jean-Noël Jeanneney, head of France’s Bibliothèque Nationale, to…create a home-grown search-engine to browse [French texts]. Why not let Google do the job? Its French version is used for 74% of internet searches in France. The answer is the vulgar criteria it uses to rank results. “I do not believe”, wrote Mr Donnedieu de Vabres in Le Monde, “that the only key to access our culture should be the automatic ranking by popularity, which has been behind Google’s success.”

Here is the story

In-vitro meat and the animal welfare movement

I predict that the animal welfare movement will expand dramatically in the next several decades as in-vitro meat becomes widely available.  In-vitro meat is "made in the laboratory" meat – it’s real meat but grown in "vats" rather than on animals.  In-vitro meat has already been grown in thin slices, thick steaks are harder because fresh meat must be fed nutrients by a blood supply and that requires an incredibly complicated network of capillaries and veins.   But really, who is going to notice the difference in a McDonald’s patty?  I bet thin meat tastes a lot better than tofu.

I think that many people have an idea in the back of their minds that something is not quite right about the treatment of animals (see Tyler’s post) but so long as they taste good and there are few substitutes why bring the idea to the forefront when it will just make you feel bad?   In-vitro meat will change this equation.  With a ready substitute suppression will no longer be necessary and the question of animal welfare will explode into the public consciousness.

Forget PETA, animal welfarists should be sending their money to researchers working on in-vitro meat.

Aside from animal welfare, in-vitro meat could be economic.  In an article in 1932 Winston Churchill argued:

Fifty years hence we shall escape the absurdity of growing a whole chicken in order to eat the breast or wing by growing these parts separately under a suitable medium.

This quote is often put forward as an example of foolish prediction but my bet is that Churchill was off by no more than a factor of ~2.

Addendum: No, this isn’t an April Fool’s joke!

How do we know if the music industry is doing well?

To re-iterate my extremist line against even [Mark] Cuban, however, aggregate sales aren’t really all that relevant. If the music is getting made, and the music is getting listened to, well then, that’s a healthy IP environment. The creation and consumption of new works is the end, sales are merely a means to that end.

Matt Yglesias continues:

I don’t believe I’ve even heard anybody try to argue that fewer new songs are being written or recorded or that people are listening to less music than they used to. It’s the availability of new music for consumption that we’re supposed to be protecting here. P2P, through both authorized and unauthorized uses, obviously leads to an uptick in the number of people who listen to any given song. You would need a pretty huge decrease in the quantity of new music being recorded (and, as I say, no sign there is such a decrease at all) in order to make the case that the progress of musical arts was being seriously impeded here. P2P probably is a problem for the major record companies, both because infringement will reduce their sales potential, and also because it will make it easier for public domain and independent works to be distributed and publicized. This, however, simply isn’t something IP law is supposed to prevent. The health of music-production as an endeavor is not at all the same thing as the financial status of the RIAA’s membership. As I say, if there’s evidence that thanks to copyright infringement kids aren’t forming bands anymore, artists are quitting the business in droves to go to law school, or clubs are finding that nobody wants to go on tour anymore then that would be interesting and relevant, but I’m not familiar with any such evidence.

He truly ought to be an economist, albeit with more Milton Friedman driven into his blood (although here is his George Stigler impersonation). 

I’ll add two points of my own.  First, file-sharing is in the long run a greater danger for capital-intensive movies; I worry less about music.  Second, most new CD releases fail to either earn money or attract real attention, with or without file-sharing.  Furthermore most consumers listen to only a subset of what they buy.  A first best probably involves lower music sales, not higher sales.  Let’s say you sample a CD on iTunes (or illegally for that matter), don’t like it, and then don’t buy it.  The music company stops funding that kind of music.  Why is that market failure?  Admittedly we may be cutting into a cross-subsidy of some winners; the fools and their mistaken purchases help cover the fixed costs of the music company.  Still it is probably better to move closer to a better informed optimum, which again means less music not more.

Addendum: In addition to the excellent Mark Cuban link at the very top, Matt offers more data.