Month: May 2006

China sentence of the day

by  Tyler Cowen in

"Everybody wants a good job after university life, but God knows what a guy with a brain of strange thoughts can do after graduation," said Yuan Chunfen, mother of a local high school boy.

This is referring to the growing number of Chinese who study philosophy.  Read more here, and thanks to Yan Li for the pointer.

By the way, if you were wondering my Shanghai trip was postponed for work reasons.  But I’ll have some more travel coming up soon.

Markets in everything, NOT

by  Tyler Cowen in

New Zealand is not for sale, despite somebody in neighboring
Australia trying to offload the nation of 4 million to the highest
online bidder.

With a starting offer of just one cent, brisk
bidding for the prime chunk of South Pacific real estate quickly
boosted the price to 3,000 Australian dollars (US$2,330) before eBay
pulled the plug on the auction this week.

"Clearly New Zealand is
not for sale," eBay Australia spokesman Daniel Feiler told the New
Zealand Press Association, adding that 22 bids had been made before the
company acted.

"It is mostly household items we have for sale,
but there are the occasional quirky items put up," he added. "We have a
look at them and if they are OK we leave them, but if it is something
that can’t be sold, we take them off."

Here is the full story.

Where does Wal-Mart put new stores?

by  Tyler Cowen in

Wal-Mart has an incentive to keep its stores close to each other so it
can economize on shipping. For example, to make this simple, just think
about a delivery truck: If Wal-Mart stores are relatively close
together, one truck can make numerous shipments; however, if the stores
are spread out, you wouldn’t have that benefit. So, I think that the
main thing Wal-Mart is getting by having a dense network of stores is
to facilitate the logistics of deliveries.

There are other benefits, too. Opening new stores near existing stores
makes it easier to transfer experienced managers and other personnel to
the new stores. The company routinely emphasizes the importance of
instilling in its workers the “Wal-Mart culture.” It would be hard to
do this from scratch, opening up a new store 500 miles from any
existing stores.

…Wal-Mart waited to get to the plum locations until it could build out
its store network to reach them. It never gave up on density.                   

The placement of Wal-Mart stores has followed a spatial diffusion model.  K-Mart, in contrast, scattered its stores across the country.  Here is more.  Here is a video showing the spread of Wal-Mart, well worth watching and short.  It is the best single lesson in economic geography you will receive.  Thanks to http://kottke.org for the pointer.

On Galbraith

by  Alex Tabarrok in

Robert Frank quotes Galbraith from the Affluent Society:

The family which takes its mauve and cerise, air-conditioned,
power-steered, and power-braked automobile out for a tour passes
through cities that are badly paved, made hideous by litter, blighted
buildings, billboards, and posts for wires that should long since have
been put underground.

Frank’s take is that Galbraith was right for the wrong reasons (the correct reasons, coincidentally, are the ones that Frank pioneered.)  My take is that Galbraith had the right premises but the wrong conclusion.

Galbraith’s premise is correct.  The market does provide ever-better products at ever lower prices while the unproductive state forces us to buy its low-quality, high-priced junk.  Galbraith concluded that we need to expand the junk sector and contract the market sector.  Yeah, and Socrates is immortal.

Fortunately, Americans have been a lot wiser.  Since Galbraith wrote, for example, the number of privately owned communities has exploded.  Today some 55 million Americans live in a private community, many of which provide their own roads, garbage pickup, and aesthetic regulations. 

Greg Mankiw’s summer reading list

by  Tyler Cowen in

For his students, that is:

  • Milton Friedman, Capitalism and Freedom
  • Robert Heilbroner, The Worldly Philosophers
  • Paul Krugman, Peddling Prosperity
  • Steven Landsburg, The Armchair Economist
  • P.J. O’Rourke, Eat the Rich
  • Burton Malkiel, A Random Walk Down Wall Street
  • Avinash Dixit and Barry Nalebuff, Thinking Strategically
  • Steven Levitt and Stephen Dubner, Freakonomics
  • John McMillan, Reinventing the Bazaar
  • William Breit and Barry T. Hirsch, Lives of the Laureates

Very good picks, and here is the link.  How about a book on globalization (Martin Wolf) or economic development (John Kay)?  How about a book on China (????) or economic history (Robert Fogel)?

Addendum: Here is Arnold Kling’s addendum.

Beautiful People are Mean

by  Alex Tabarrok in

Several year ago, I read about the experiment showing that average faces are judged more beautiful than non-average faces.  In Judith Rich Harris’s No Two Alike there is an arresting figure which demonstrates.  With a little search on the web I was able to duplicate the figure, which is based on the original research.  The top two pictures are the averages of two faces, the next two are averages of 4, 8, and 16 faces and the final picture is an average of 32 faces. 

Wow, now I will no longer be upset when people say I have average looks.

Average_1

Ranking your friends on MySpace

by  Tyler Cowen in

There is a list for your top eight friends:

J.D. Funari is hoping that clarity prevents offense. A week after logging onto MySpace, the 24-year-old TV editor from Studio City posted a disclaimer above his Top 8: "Since this ‘preferred’ listing of friends can quickly become unnecessarily political, I’d like to briefly explain my sorting technique," he wrote.

"The first spot will always be my brother (for obvious reasons) and the second spot will always be my friend Katie (for reasons obvious to Katie and I). The third and fourth spots are reserved for music and movies of interest. Five and six are wild-cards which may be related to how well I know the person and/or if I’m dating them (opposite sex only) and/or if they’ve paid me for inclusion [emphasis added]. The final two spots are, to be perfectly honest, the two most attractive current female photos from my list of friends."

You also list whether you are attached or single.  The economic question is whether or not a more gradual series of categories — offered as an option — would raise or lower the value of the network.  The fraidy cats could go the ambiguous route, but of course that makes it less fun to read about them.  Here is the full story.  This week’s New Yorker (15 May) has the definitive article on the economics of MySpace and FaceBook, here is a brief summary.  The idea of constructing a broad network, but which also allows full privacy, is counterintuitive but the key to making FaceBook work.