Month: July 2007

My favorite things Colorado

These do not spring easily to mind:

1. Public building: The new Denver art museum, by Daniel Liebeskind.

2. Fiction: I reject Kesey and Michener, so I’ll go with Connie Willis’s Doomsday Book, an excellent piece of fantasy/science fiction.

4. Movie, set in: The Shining comes to mind. 

5. Music: I can’t pick John Denver and while I enjoy big band, I think that Glenn Miller, once you get past a few tunes, is overrated.  Jello Biafra, of The Dead Kennedys, is an obvious pick here; don’t forget "Holiday in Cambodia." 

6. Wild card: Ted Mack, remember his amateur hour?  It was a favorite show of my father’s.

The bottom line: Eh.  Toss in Lon Chaney and Douglas Fairbanks and it is still Eh.  I hope the green chili is good.

What’s actually annoying about bad customer service?

Jane Galt posts her thoughts on Sony Vaio customer service.  I bought a Sony Vaio a few months ago, at the recommendation of a friend.  Fortunately [it now seems] it arrived at the Best Buy with a broken drive and I never had the chance to lay my hands on it.  It was only last week that they gave me my money back.   Best Buy wouldn’t give me the computer, and Sony wouldn’t accept the damage claim from Best Buy rather than from the customer.

I see two especially frustrating elements in bad customer service.  First, the reward/pleasure centers of the brain are already turned on, anticipating that a longstanding problem — lack of a computer — was going to be solved.  The resulting disappointment is especially acute, much worse than before you try to fix the problem.

Second, we don’t like the tension of not knowing when the problem will be solved, or when being put on hold will end.  Going to the dentist with certainty stresses me less than some chance I might have to go.

I try to manage the former problem by not getting excited until the product has been working for at least a day.  That means I remain a bit emotionally flat in some spheres of commercial life and I don’t go out shopping enough or with enough gusto.  I try to manage the second problem by mentally capitalizing the worst case customer service outcome I can imagine.  That means when something goes wrong I toss in the towel too quickly.  Sometimes I just buy a new item rather than solving the problem with the old one, or working to get a refund.

On this matter, Natasha believes I am crazy, yet I persist in my ways.

Alumni economics

Alumni with kids are 13 percentage points more likely than alumni without kids to give in any year.  The tendency to give rises slowly–by three more percentage points total–through kids’ early teens.  At about age 14, as mom and dad see their kid’s algebra and composition grades, they decide whether he or she will apply to the alma mater.

Here is much more.

An early start in life is a good start

A’la James Heckman, the importance of early life for economic outcomes seems only to grow:

Is lifetime inequality mainly due to differences across people
established early in life or to differences in luck experienced over
the working lifetime?  We answer this question within a model that
features idiosyncratic shocks to human capital, estimated directly from
data, as well as heterogeneity in ability to learn, initial human
capital, and initial wealth — features which are chosen to match
observed properties of earnings dynamics by cohorts.  We find that as of
age 20, differences in initial conditions account for more of the
variation in lifetime utility, lifetime earnings and lifetime wealth
than do differences in shocks received over the lifetime.
  Among initial
conditions, variation in initial human capital is substantially more
important than variation in learning ability or initial wealth for
determining how an agent fares in life.  An increase in an agent’s human
capital affects expected lifetime utility by raising an agent’s
expected earnings profile, whereas an increase in learning ability
affects expected utility by producing a steeper expected earnings

The emphasis is mine; here is the whole paper.  Here is a non-gated version.  In other words, treat your kids well, invest in them, and realize that determinism is not altogether crazy.  Here is a related paper about how mental health problems in childhood plague later life and earnings.

Testosterone economics

Remember the ultimatum game?

In this game, one player divides a pot of money between himself and another.  The other then chooses whether to accept the offer.  If he rejects it, neither player benefits.  And despite the instincts of classical economics, a stingy offer (one that is less than about a quarter of the total) is, indeed, usually rejected.

Here is the latest result:

…the responders who rejected a low final offer had an average testosterone level more than 50% higher than the average of those who accepted.  Five of the seven men with the highest testosterone levels in the study rejected a $5 ultimate offer but only one of the 19 others made the same decision.

In other words, irrationality isn’t just a deviation due to imperfection, we are programmed to be spiteful.  Here is information on how high testosterone levels are correlated with urges to compete and be dominant.  Here are some other correlations; should we make a few leaps and infer that women in "sheer" clothing are more likely to be spiteful?  Should you prefer to undertake joint projects with men of slight build and women in flat shoes?  Should you deliberately seek out non-hot mates, in the realization that long-run cooperativeness is of more value than short-run hotness?

The pointer is from Daniel Akst.

Today’s happiness research, part II

January entodontist: "You’ll need surgery either right now, or within a few months.  We cut open the gum, clean out the inflammation, and sew your mouth right back up.  Only sometimes do we have to eliminate the tooth."

July 5 entodontic surgeon, 10:31 a.m.: "We can cancel this morning’s surgery, it seems OK for now, just keep an eye on it."

Hail Seth Roberts, hail flaxseed oil!

Dr. Yang didn’t even know that he is a character in a forthcoming book about how to motivate your dentist…

Money can’t buy you love but in Illinois it can compensate

Arthur Friedman asked his wife to have sex with other men.  She said yes and fell in love with the third wheel.  Art then sued the invitee and won $4,802 under Illinois’s alienation of affection doctrine.

Aside from voyeurism the case raises some interesting issues.  Friedman surely does not have a right to his wife’s affection – he can’t sue her if she doesn’t love him – so if another man steals what Friedman does not own how can Friedman have a claim against the other man?  It’s cases like this that push me towards Murray Rothbard’s position that you don’t have a right to other people’s thoughts.  As a result, there can be no just laws against alienation of affection but also since you do not have a right to your reputation (it is in other people’s heads) there can be no just laws against libel.

Thanks to Monique van Hoek for the pointer.

What happiness research means for optimal taxation

Not that much.  Here is some neglected wisdom from David Weisbach:

This simple intuition [about status] does not tell us anything about the likely effects of status on the tax rate schedule.  For example, increasing progressivity would move everyone closer together.  This might decrease status competition, because the gains from competition are smaller – it would be harder to separate yourself from the group.  On the other hand, it might increase status competition.  If you are closer to beating someone in a status race, you might try harder.  Thus, we can imagine status considerations leading to either a more progressive tax system or a less progressive tax system.

The paper basically combines the substitution effect and the threshold or portfolio effect to argue we should not be too quick to infer particular policy conclusions from considerations of relative status. 

Furthermore a consumption tax doesn’t necessarily limit status games through consumption (e.g., buying a bigger yacht), though it may postpone them.  A consumption tax encourages savings, which ends up converted into future consumption.  The status/consumption game will be all the more intense in the future.  The only way to lower the total amount of these status games is to…umm…lower real gdp.  Which is not a good idea.

Electronic tolls mean higher tolls

After an electronic system is put in place, tolls start rising
sharply. Take two tollbooths that charge the same fee and are in a
similar setting – both on highways leading into a big city, for
instance. A decade after one of them gets electronic tolls, it will be
about 30 percent more expensive on average than a similar tollbooth
without it. There are no shortage of examples: the Golden Gate Bridge,
the George Washington Bridge and the Tappan Zee Bridge, among them.

“You may be less aware you’re paying the toll,” said Ms. Finkelstein, now an associate professor at M.I.T., “but you’re paying a higher toll than you used to.”

Here is the full story.  One thought is the Brennan-Buchanan government rapaciousness angle, layered on top of behavioral imperfections.  This result is also why electronically extracted tolls might reduce congestion less than we would expect; they’re not sufficiently noticed.  Mark Thoma suggests some other interpretations of the data, namely that the electronic toll, by lowering traffic, inconvenience, and queuing to pay tolls, allows the highway authorities to raise the monetary fee to restore the previous net price.

My review

Things I Can’t Do: Use gmail properly, insert a non-distorted TextBox diagram into a Word document, drive a stick shift, attach a zip drive, explain the distribution of prime numbers, set up a directory in a Verizon cell phone.

Things I Can Do: Blog, order books on, drive and parallel park on the left side of the road, set up, use, and type on an iPhone.

Enough said.