Month: June 2005

Thanks to Daniel Strauss Vasques for the pointer.  And yes you read that last line correctly, you get paid to attend if you can bring five women with you.

The state House of Representatives gave preliminary approval yesterday to a bill intended to crack down on private parking lot operators around Fenway Park who illegally charge exorbitant fees on big game days.

Mayor Thomas M. Menino sought the legislation, which would raise the fine for price-gouging from $300 to $1,000, after hearing that some lot operators were charging fans as much as $100 to park on opening day.

”The prices are so high, it’s hard for the average person to afford them," said Thomas J. Tinlin, the city’s acting transportation commissioner. ”If these open-air lot parking providers don’t want to do right by the people visiting the city and violate the terms of their license, we need to make them pay for that, and obviously $300 wasn’t getting it done."

Here is the story, courtesy of Michael Costello.  And here is a bit from the rock star who runs our development policy:

Scores of free tickets for the 2 July concert in London – won through a text contest – had been put up for sale [on ebay].

Live 8 organiser Bob Geldof branded the attempted sale of the tickets as "sick profiteering" and welcomed the move.

He said people had realised that "the weakest people on our planet" were being exploited and they were "sickened by that".

The minister for music, James Purnell, said he "wholeheartedly shared" Geldof’s annoyance and had asked the site to halt the sales.

Thanks to David Nishimura for that story; see also Lynne Kiesling.

…most of the country is still denied access to free markets and all the advantages they bring. India opened its markets in 1991 not because there was a political will to open the economy, but because of a balance-of-payments crisis that left it with few options. The liberalization was half-hearted and limited to a few sectors, and nowhere near as broad as it needed to be.

One would have expected India’s growth to be driven by labor-intensive manufacturing but, almost by default, it instead came in the poorly licensed area of services exports. The manufacturing sector, ideally placed in terms of labor and raw material to compete with China, never took off. India’s restrictive labor laws, a remnant of the socialist infrastructure that India’s first prime minister, Jawaharlal Nehru, put in place in the 1950s and 1960s, were politically impossible to reform. It remains excruciatingly difficult for most Indians to start a business or set up shop in India’s cities.

This is painstakingly illustrated in “Law, Liberty and Livelihood”, a new book edited by Parth Shah and Naveen Mandava of the Center for Civil Society in New Delhi, which documents the obstacles in the way of any Indian who wishes to start a business in one of India’s big cities. Messrs. Shah and Mandava write: “Entrepreneurs can expect to go through 11 steps to launch a business over 89 days on average, at a cost equal to 49.5% of gross national income per capita.” Contrast the figure of 89 days with two days for Australia, eight for Singapore and 24 for neighboring Pakistan.

That is from The Asian Wall Street Journal, read more here.  Do not forget that "outsourcing jobs" are about one percent of the Indian labor force.  Most of the country is agriculture, and while the Green Revolution fed millions, agricultural productivity has made few other strides into the modern age.

Not the gains the U.S., I wish to know how much the migrants are better off.

Typically a rural Mexican goes from earning two dollars a day to ten dollars an hour.  Over a year’s time this could amount to a difference of about $25,000.  Multiplied by many millions of immigrants, this is a considerable sum.

But other economic arguments point to lower numbers.  First, it costs about $1500 to cross the border illegally. (N.B.: That’s not $1500 a year, that is $1500 for the entire crossing, which may keep you in the U.S. for years.)  After all, life in Mexico is more fun and keeps you closer to your family.  The illegal migrants I have known have mixed feelings about life in the U.S. and many have returned to Mexico. 

So is that the value of a marginal crossing?

The $1500 figure does not measure the option value of crossing.  You might not pay $1500 to cross now, but the ability to cross in general is worth more.  But even an option value of 10x use value only gets us up to $15,000.

Consider another argument.  Transactions costs aside, in equilibrium the average returns to being a rural Mexican in Mexico should equal the average returns to being a rural Mexican illegally in Texas.  If not, migration will bring about equalization.  Those average returns cannot differ by more than $1500 per person, no? 

A further question is where — rural Mexico or El Paso — you find greater economic congestion.  To me the answer is not obvious, but this could lower the social value of illegal Mexicans in Texas.  If another Mexican crosses, the greatest costs are imposed on the Mexicans already present in the U.S..

Could it be that the greatest gains are reaped by those back home who get the remittances?   

How about infra-marginal values?  Some pay $1500 to cross but value the experience at much more.  Still, if we are considering marginal shifts in border policy, the $1500 figure still seems relevant.

Might credit constraints matter?  The difference between willingness to pay and willingness to be paid?

How about the next generation?  Perhaps we should use a very low social discount rate to evaluate these future benefits.  If you will be born in El Paso in 2019, you are not, in the meantime, sitting around feeling costs of impatience.  And since you will not have grown accustomed to life in Mexico, you are much better off in the United States.

I conclude that we do not have a very good handle on this question.