Month: September 2005
Addendum: Scroll down Alina Stefanescu for much more, including Joss Whedon’s endorsement of Stephen Sondheim as the greatest living genius.
"Private governments,” such as homeowners associations and condominium cooperatives, provide all manner of collective consumption goods, from road maintenance, trash collection, and snow removal to transportation, policing, and medical care. These organizations were practically unheard of in 1960, but today some 54.6 million people in the United States live in various neighborhood associations.
That’s from my latest paper, What are Private Governments Worth? written with Amanda Agan. Despite the explosion of private governments, very little research has been done on measuring their value. Thus, Agan and I compare the value of homes within HOAs (home owner associations) with the value of homes outside of HOAs. After controlling for a wide variety of housing characteristics including age, size, style and so forth we find that homes within HOAs sell for a whopping 5.4 percent or $14,000 more than similar homes outside of HOAs. Put differently a 3 bedroom home within an HOA is worth about as much as a 4 bedroom home outside of an HOA. This result is robust and continues to hold even when we look at similar homes inside and outside of HOAs but within the same subdivision.
For more on HOAs see The Voluntary City (which I edited) and especially Robert Nelson’s excellent new book from the Urban Institute, Private Neighborhoods And the Transformation of Local Government.
Donald Pittenger offers some observations on how to visit or walk through a museum. Here are my tips:
1. In every room ask yourself which picture you would take home (if you could take just one) and why. This forces you to keep thinking critically about what you are seeing. More crudely, you have to keep on paying attention.
2. Almost all museums (MOMA is one exception) hang large numbers of second-rate paintings by first-rate artists. Try to find them. Don’t think it is all great, it isn’t.
3. You are probably better trained at shopping than looking at pictures. Do some basic research on prices and pretend you are shopping for pictures on a budget. This will improve the quality of your viewing.
4. Go with a variety of people (but not all at once). It forces you to see the art through their eyes.
5. If you are visiting a blockbuster exhibit, skip room number one. There is too much human traffic, as the people have not yet admitted to themselves they don’t care about what is on the wall.
A key general principle is to stop self-deceiving and admit to yourself that you don’t just love "art for art’s sake." You also like art for the role it plays in your life, for its signaling value, and for how it complements other things you value, such as relationships and your self-image. It then becomes possible for you to turn this fact to your advantage, rather than having it work against you. Keeping up the full pretense means that you must impose a high implicit tax on your museum-going. This leads you to restrict your number of visits and ultimately to resent the art and find it boring.
Comments are open, in case you have further suggestions for how to visit a museum.
My macro class should read this blog post. Here is another good paper on the topic. If you want my view of the equity premium paradox, we have to ask whether Bryan Caplan is stupid. Choice is context-dependent, and we should not be too worried if no single utility function can account for all of our investment decisions.
The initiative was inspired by the discovery that there is no better way to master an idea than to write about it. Although the human brain is remarkably flexible, learning theorists now recognize that it is far better able to absorb information in some forms than others. Thus, according to the psychologist Jerome Bruner, children "turn things into stories, and when they try to make sense of their life they use the storied version of their experience as the basis for further reflection." He went on, "If they don’t catch something in a narrative structure, it doesn’t get remembered very well, and it doesn’t seem to be accessible for further kinds of mulling over." Even well into adulthood, we find it easier to process information in narrative form than in more abstract forms like equations and graphs. Most effective of all are narratives that we construct ourselves.
The economic-naturalist writing assignment plays to this strength. Learning economics is like learning a language. Real progress in both cases comes only from speaking. The economic-naturalist papers induce students to search out interesting economic stories in the world around them. When they find one, their first impulse is to tell others about it. They are also quick to recount interesting economic stories they hear from classmates. And with each retelling, they become more fluent in the underlying ideas.
Many students struggle to come up with an interesting question for their first paper. But by the time the second paper comes due, the more common difficulty is choosing which of several interesting questions to pursue.
The paper is not a complete substitute for the traditional syllabus. But the lasting impact of the course comes mainly from the papers. When students come back to visit during class reunions, the equations and graphs long since forgotten, we almost always end up talking about the questions they have posed and answered during the intervening years.
Having written this blog for over two years now, I feel qualified to agree completely.
Estimated wealth of African wealth held in foreign accounts, expressed as a percentage of African GDP: 172
That is from Harper’s Index, October 2005 issue, p.11, the figure is based on UN sources.
Arnold Kling criticizes National Review magazine, but don’t bother working through the argument. It will only make your head hurt. Perhaps you have read Brad DeLong on NR as well. Arnold suggests that:
NRO clean out its stable of economics writers and instead choose from some of the other bloggers around. James Hamilton or Andrew Samwick or Russ Roberts or Don Boudreaux or Tyler Cowen or Alex Tabarrok.
I have not been reading NR, so I will not offer an independent assesssment. But consider the basic economics. Most popular political magazines live and die by direct mail. The "burn rate" of non-renewals is very high, and either advertisers or donors will care about subscription numbers. So new subscribers must be found frequently (NB: the real culprit is lack of loyalty of previous subscribers). Given their natural constituencies, that makes it hard for a right-wing magazine to come out against George Bush. The tendency is toward boosterism and taking sides. That is one reason why I — a "small l" libertarian who preferred the economic policies of the Clinton years — am unlikely to receive some particular writing assignments.
On average "out of power" magazines (Reason, American Prospect) should be better than "in power" magazines. But if NR, or NRO, wants a piece on how the Bush years have eaten into our economic, political, and institutional capital, I would be happy to oblige.
"Fairfax Maps Tourist Gems"
Fairfax County rolled out a new slogan yesterday — "FX Marks the Spot" — designed to help tourists discover its "buried treasures" of historic sites, museums, art centers and other destinations.
The soon-to-be ubiquitous brand — a play on pirates’ tradition of drawing an X on their maps to indicate stashed gold — is the centerpiece of an unprecedented $1 million campaign, presented to the County Board of Supervisors, to promote Fairfax as a tourist attraction.
The emphasis should be on "buried." Very buried. Here is the story, and yes this will involve them spending the money I cough up for property taxes.
Historic Russian admiral Fyodor Ushakov — a hero of Russia’s wars against Turkey and Napoleon Bonaparte — was designated the patron saint of nuclear-armed, long-distance Russian bombers by the Orthodox Church…
"I am sure he will become your intermediary as you fulfil your responsible duties to the fatherland in the long-range air force," the patriarch said.
"His strong faith helped Saint Fyodor Ushakov in all his battles," the religious leader said, reminding his audience that the famous admiral of the 18th and 19th centuries never lost a battle.
Check out the photo. Thanks to Dave Wells and Yana for the pointer.
Want to get off the phone? Buy these sound effects. There are many good options, such as "Deposit 25 Cents" or "I Can’t Hear You (Helicopter Noise)". But I don’t think "This fly is bothering me" will do the trick. There is also a new section for responding to telemarketers, how about "I am Listening"?
Here is the link, and thanks to Joseph Weisenthal for the pointer.
What could be a better name than AdamSmithLives? The writer is Sandra Peart, professor of economics at Baldwin-Wallace College and sometimes visitor at George Mason. My colleague David Levy will be guilted into contributing as well. Here is a post on exaggerated reporting about New Orleans, and its parallels in the history of economic thought. Here is the mission statement. Welcome to the blogosphere!
1. Nobel prize in environmental economics to Weitzman, Nordhaus
2. Nobel prize in trade theory to Bhagwatti and Dixit
3. Nobel prize in President Bush praising to Krugman and David Brooks
4. Nobel prize in behavioral stuff to Richard Thaler
5. Nobel prize in contracts to Hart, Holmstrom, and Oliver Williamson
6. Nobel prize in development economics to Dasgupta and Deaton
7. Nobel prize in finance to Fama
8. Nobel Price in mechanism design to Milgrom, Myerson and Maskin
9. Nobel prize in family economics to Mincer and Pollak
10. Prize in Political Economy to Alesina, Persson and Tabellini
11. Prize in Modern Macro to Barro and Sargent
These demand curves are the exception rather than the rule, but nonetheless they appear to exist:
One sex worker…explained why she no longer offered her favorite clients free sex or cheaper rates: "They pretend to be flattered, but they never come back!…There was one client I had who was so sexy, a tai-chi practitioner, and really fun to ****. Since good sex is a rare thing, I told him I’d see him for $20 (my normal rate is $250). Another guy, he was so sexy, I told him "**** for free." Both of them freaked out and never returned…They don’t believe they can have no-strings-attached sex, which is why they pay. They’d rather pay than get it for free."
That is from The Purchase of Intimacy, by Viviana Zelizer. I take the main point of this book to be yes you can love your prostitute and perhaps you can like your maid as well. A commercial transaction is compatible with holding deeper feelings for the other party.
Try this question:
"Simon Grant and John Quiggin argue that taking the equity premium seriously–-the well-known fact that the average annual historical return of stocks is seven times that of government bonds and other debt-–has many implications, the most robust of which is that recessions are extremely costly even if they don’t lower average consumption and that macroeconomic stabilization policies are more important than has been thought."
True or false, and why? Under what conditions is your answer wrong (always the proper query)? Here is a relevant link, though registration is required.
I won’t call Bryan Caplan stupid:
By way of analogy, consider these two scenarios:
1. You lose $1000 in some unforeseen way.
2. You lose $1000 in a way your spouse specifically warned you might happen.