Month: July 2005

Guest Blogger: Tim Harford

As I search for enlightenment in Peru, Tim Harford will be enlightening readers of Marginal Revolution.  Tim writes the Dear Economist column for the Financial Times.  He is also an economist with the International Finance Corporation, co-author of the excellent primer on foreign aid, The Market for Aid, and author of the forthcoming The Undercover Economist.  I am looking forward to reading the Undercover Economist of which Steve Levitt says:

The Undercover Economist is a rare specimen: a book on economics that
will enthrall its readers. Beautifully written and argued, it brings
the power of economics to life. This book should be required reading
for every elected official, business leader, and university student.

MR readers are in for a treat this week!

Mike Davis on Dubai

Yes, he is the one who visits Los Angeles and thinks of labor unions.  Here is his take on Dubai.  Consider this bit:

The hotel driver is waiting for you in a Rolls Royce Silver Seraph. Friends have recommended the Armani Hotel in the 160-story tower or the seven-star hotel with an atrium so huge that the Statue of Liberty would fit inside, but instead you have opted to fulfill a childhood fantasy. You always have wanted to be Captain Nemo in Twenty Thousand Leagues Under the Sea.

Your jellyfish-shaped hotel is, in fact, exactly 66 feet below the sea surface. Each of its 220 luxury suites has clear Plexiglas walls that provide spectacular views of passing mermaids as well as the hotel’s famed "underwater fireworks:" a hallucinatory exhibition of "water bubbles, swirled sand, and carefully deployed lighting." Any initial anxiety about the safety of your sea-bottom resort is dispelled by the smiling concierge. The structure has a multi-level failsafe security system, he reassures you, that includes protection against terrorist submarines as well as missiles and aircraft…

After Shanghai (current population: 15 million), Dubai (current population: 1.5 million) is the world’s biggest building site: an emerging dreamworld of conspicuous consumption and what locals dub "supreme lifestyles."

Dozens of outlandish mega-projects — including "The World" (an artificial archipelago), Burj Dubai (the Earth’s tallest building), the Hydropolis (that underwater luxury hotel, the Restless Planet theme park, a domed ski resort perpetually maintained in 40C heat, and The Mall of Arabia, a hyper-mall — are actually under construction or will soon leave the drawing boards.

OK, that is 2010 he is writing about, but it will happen and soon.  Funny thing is, Davis doesn’t even seem to like the place.  Thanks to Boing Boing for the pointer.

Sundry observations about Dubai

1. My very chatty and friendly Pakistani barber, while holding a razor to my throat, asked me to pledge that we would continue an email correspondence for the rest of our lives.  Every sentence he referrered to me as "Very Great Boss," and repeatedly expressed his satisfaction that I was not one of those "two-assed men" who are otherwise so common.  Imagine Borat with Eric Idle-like intonations.  But you know, I still am not sure if he was weird.

2. If they promise you a "surprise desert tour," be warned it will involve scaling (and descending) a fifty-foot high sand dune with a four-wheel drive at full speed.  No matter what they tell you, this is not fun.  Afterwards the driver spoke: "We have accidents (pause)…but not so many casualities [sic].  The vehicles roll over, but the sand is soft."

3. If you want to find heavily veiled women (not hard to do), the easiest way is to visit the fancy shopping malls and head directly for the make-up counter.

4. I am told that the dowry for the average (native) Dubai woman is now running about $150,000.  Many Dubai men are substituting into foreign women.

5. The "traditional" belly dance was done by a Russian woman; Dubai women are no longer allowed to do such things in public.

The Revolution reaches Outer Space

At MR we are often told, "We love Marginal Revolution but when traveling the outer rings of Saturn downloading it takes such a long time."  We agree and in order to make our product more easily available to other life forms we now do OSS, Outer Space Syndication, courtesy of Blogs in Space.  This will require certain changes on our part as the producers of Blogs in Space are careful to make clear:

Bloggers who use this site are urged to keep their blogs devoid of any
overt language, comments or content designed to offend, taunt or
provoke alien life forms in any way. Aliens may find your lifestyle,
grammar or the picture of your girlfriend offensive, we just don’t
know. Blog In Space does not warrant that any content transmitted into
space will not be objectionable to alien life forms and will not be
responsible for alien abductions, close encounters or intergalactic

Will OSS increase the audience for MR?  I’m not sure but I do believe that one day entire alien civilizations will devote themselves to the study, appreciation and worship of the bildungsroman.  You think I jest?  Stranger things have happened.

Thanks to Jacqueline for the pointer.

Does daylight savings time kill people?

The new energy bill will give us an extra hour of daylight savings time for parts of both March and November.  But is this a good idea?  Is daylight savings time at all a good idea?  I don’t know, but here is a new argument I never heard before:

“Springing forward” is tantamount to imposing a mild case of jet lag throughout the country, with potentially unhappy consequences.

Might that mean more traffic accidents?

…following the spring shift to Daylight Savings Time (when one hour of sleep is lost) there is a measurable increase in the number of traffic accidents that result in fatalities. Furthermore, it replicates the absence of any “rebound” reduction of accidents following the fall shift to DST (when the opportunity is present for an additional hour of sleep).

Of the two competing hypotheses for this increase in accidents, namely the one that suggests that it is the increased sleep deficit that causes the change in accident rate, versus notions based upon reduced illumination levels when driving to work, or suppositions that people forget the DST time change, fail to adjust their clocks, and find themselves rushing to work to avoid being late, the sleep hypothesis seems to be the most tenable. Hypotheses based upon haste and dim morning light both predict the bulk of the increased accidents to be confined to the morning hours. The sleep loss hypothesis would predict that individuals become more tired as the day wears on and hence the bulk of the accidents will appear later in the day. It is, of course, this latter pattern which appears with most of the accident fatality increase confined to the period after noon.

If the sleep loss hypothesis is correct, then why isn’t there a reduction in the number of traffic accidents in the fall, when the shift back to standard time provides an extra hour for sleep? Although this was the pattern observed in one study (Coren, 1996b) it has not replicated in other studies. The failure of the “safety rebound” may simply have to do with human nature. Just because a person has the opportunity to sleep for an addition hour does not mean that people actually will go to sleep on time. Many may spend that extra hour socializing or watching television. In some instances, where individuals do go to bed at the appropriate time, their usual circadian rhythm may still wake them after 7 or 8 hours in response internal signals or the external morning increase in illumination. Contrast this to what happens in the spring, where an individual’s work schedule will enforce the person’s awakening on the new DST time in order to meet job commitments.

Here is a blog post (with further discussion) on the topic, here is the underlying study, the original tip is from Eric Rasmusen.  I have yet to see data on whether Indiana — which does not adopt Daylight Savings Time — is in fact a safer place to drive, at least for a part of each year.

In Defense of Mercenaries

The Gurkhas have been active in the British military since 1817 but they are not British citizens they are Nepalese hired by the British.  In recent years the Gurkha brigades have served in the Falklands, Kosovo, Afghanistan and now Iraq.  The Indian army and Singaporean police force also hire many Gurkhas.

The Gurkhas are unusual but not unique.  The United Arab Emirates, where Tyler is now, relies almost exclusively on mercenaries.  The French Foreign Legion continues to attract a small number of mercenaries from around the world.  During the Vietnam war the United States paid the South Korean, Philippine and Thai governments for the use of troops – these were mercenaries paid by proxy.

Should we hire more mercenaries today?  Our military already has hired more than thirty thousand non-citizens.  Why not bypass residency entirely and go straight to Mexico,  India and elsewhere to hire soldiers?  If outsourcing is good for US firms then surely it is good for the US government. 

Outsourcing the military has a number of advantages.  The supply of labor is nearly limitless and the price is low.  Some people will object that quality is low too but if Indians can be trained to do US tax returns they can be trained to fight US wars.   

One reason the Gurkhas are among the most highly regarded troops in the world is that the entrance exam is extremely difficult – only 1 in 30 applicants makes the cut.  The British can pick and choose because wages are high relative to the next best alternative (the Indian army picks up many of the British rejects).  Meanwhile, we are so desperate for troops in the United States that we are forcing old men and women, people who haven’t seen active duty in forty years, back into service.  At US wage rates we could easily hire many thousands of Mexicans.  Many Mexican noncitizens are already
serving honorably in the US military so there is no reason for quality to decline. 

Mercenarism may seem unusual today but in the 18th century a typical European army contained 20-30 percent
foreign troops – mercenarism was the norm.  It’s hard to see how the United States has a comparative advantage in military labor so the future may resemble the past more than it does the present.

Comments are open.

Do airplanes make weird people stick out less?

When you live in a small village, or hunter-gatherer society, everyone knows that a weird person is weird.  You stick out like a sore thumb.  But when I fly to, say, Dubai, hardly anyone knows I am weird.  Perhaps I dress differently, talk differently, and spend too much time reading books, but to them I appear weird in any case.  The proverbial "Aunt Millie from Peoria" also would come across as strange.  The differences in weirdness are blurred, and the truly weird can pass for simply being "foreign."

I recall my time in Yemen: all the women wore veils, and all the men carried daggers and chewed qat.  Just don’t ask me who the weirdos were.

This suggests that airplanes lower the costs of being weird.  Of course, with enough globalization — especially mass market images — this relationship can cut the other way.  Perhaps the people in Dubai are wondering why I don’t act more like Tom Cruise.  Alternatively, we might send them some more Johnny Depp movies.

Does this mean that weird men are more likely to have foreign wives?

My favorite things Dubai

Brazil_1 No, I can’t afford to stay here, but surely this is my favorite Dubai hotel.  I am told they pick you up at the airport in a white Rolls Royce and then the bridge to the hotel spouts a burst of flame to welcome you.  Supposedly from the water it looks like a cross, which makes it a controversial structure with the local Muslims.  I am going there shortly to eat lunch, if I can believe my guidebook this adventure will involve the use of a submarine.

So far, the Pakistani food here is excellent…and, um…they have a few green median strips along the road, albeit not at social marginal benefit = social marginal cost.  As to my favorite Dubai novel or film, I’ll have to get back to you.

I can tell you one thing, my favorite Dubai blog is Emirates Economist

Addendum: Chris Masse points me to this link of Duba’s mega-projects, take a look.  Here is an overview photo.  Here is the story.  By the way, the UAE just had its first race with the robot camel jockeys.

Dubai – shareholder state?

Here are a few facts of note:

1. Dubai is expected to run out of oil by 2010.  Oil is already less than seven percent of gdp.

2. The city diversified by creating low-tax, low-regulation, free trade zones.

3. The three most trusted associates to the Sheikh are also the city’s three leading businessmen and three leading real estate magnates.

4. Dubai is constructing what will be the world’s tallest building, and perhaps also the world’s second tallest building.  The city claims to have the world’s largest shopping center (disputable).

5. The city is growing about fourteen percent a year.

6. Eighty percent of the population is expats.

7. UAE (Dubai is a part of it) is ranked 137th in the world on press freedom.

See The Financial Times, 13 July 2005.  And did I mention that I am here in Dubai now?  It is, after all, on the way to Singapore.

The economics of podcasts

We can expect

…a massive dilution in the audience size of the early entry podcasters. EVERYONE’s audience will fall as the marginal listeners find something they like better. Yes, there will be some podcasts that get more listenership than others, but most of them will be repurposed content that already has demand.

…when those formally known as podcasters do an accounting of the net dollars they earned and compare it to the time they invested, they will realize they made about 17 cents per hour all in.

All that will be left of profit motivated individual podcasters will be the few and far between and probably less than half of a percent of all podcasters (and please don’t anyone post a comment saying…if there are a million podcasters, 1 pct is 10k, half of that is 5k. That’s a ton. I’m making up these numbers to prove a point, not to be literal…Ok?).

And like personal blogs, tens of thousands if not more will stay on as labors of love that we enjoy because of their creativity.

So in about 3 years, the Podcast phenomena will have run its course and will just be a normal part of the digital media landscape.

Just like streaming.

That is Mark Cuban, read the whole post.  Here is his earlier take on podcasting.

My take: The key question is what kind of aggregators will take off.  Some people find blogs through Google, but most find them (I suspect) through other blogs.  Podcasting may not work this way.  The relative returns to "portal podcasts" will be lower than for portal blogs.  Glenn Reynolds can read and process material faster than most people, but no one can hear a two-minute comedy routine in much less than two minutes (no need to write me about speeding up the tape, cutting out the dead space, etc., you get the point).  So you won’t find good podcasts through other podcasts to the same degree, since it is harder to serve as an effective portal.  The sorting will work less well, and the categories will be harder to describe and communicate.  Advertising will matter more, and institutions such as iTunes will have more influence over selection and content.  Podcasting will be more in hock to MSM than are blogs.