Month: June 2008

More Sex is Safer Sex

In More Sex is Safer Sex Steven Landsburg famously argued (based on work by Michael Kremer) that if more people, especially more sexually conservative people, had sex the AIDS epidemic could be reduced.  Landsburg wrote:

Imagine a country where almost all women are monogamous, while all men
demand two female partners per year. Under those circumstances, a few
prostitutes end up servicing all the men. Before long, the prostitutes
are infected; they pass the disease on to the men; the men bring it
home to their monogamous wives. But if each of those monogamous wives
were willing to take on one extramarital partner, the market for
prostitution would die out, and the virus, unable to spread fast enough
to maintain itself, might well die out along with it.

In The Wisdom of Whores (see also my earlier post) Elizabeth Pisani says that such a country exists, it’s Thailand, and the results of more sex was safer sex – exactly as Landsburg argued. Here’s Pisani’s story:

Thailand used to fit the the classic ‘virtuous girls, philandering boys’ model.  At the start of the 1990s, 57 percent of twenty-one-year-old men in Northern Thailand trooped off to the brothel to do their philandering.  More than half the sex workers who soaked up their excess energy were HIV-infected….

Then…the Thai economy boomed.  Girls were getting better educations than ever before…Educated girls were waiting longer before getting married, but not before having sex.  By the end of the 1990s, 45 percent of girls aged 15-21 in northern Thailand admitted to having sex with boyfriends before marriage, compared to less than a tenth of that in a nationwide survey in 1993.

…So at the end of the decade, we have a lot more premarital sex and not all that much condom use with girlfriends.  But now that these young, cash-strapped guys can have sex without paying, they’ve stopped handing over cash for sex.  By the end of the 1990s, only 7 percent of young men were paying for sex, and HIV prevalence in sex workers had come down too.

….In short, more women having premarital sex equals less HIV.

Pisani cites neither Landsburg nor Kremer so I believe her account is independent.  Note that Pisani also credits Thailand’s successful condom program.

Size Matters

Beijing has more modern architecture than perhaps any other city and more of it is going up every day.  Judging by the buildings you would think China is a rich country and it is but China is a rich country composed of poor people.  What China loses in per-capita terms it makes up for in volume.  We are used to thinking of total and per-capita wealth as highly correlated – the EU and the United States being key examples.  We need to rethink some issues such as inequality, power and foreign policy when they are not so correlated.

By the way, the architecture is great but hard to see!  Visibility is limited to 3 or 4 blocks after which everything is a grey haze.  I haven’t seen the sun for days. 

Also, I found a way to access Marginal Revolution using an anonymizer.  This is good since the thought that one billion could not access the wisdom at MR was deeply disturbing.

Who is the greatest modern-day thinker?

Stephen Dubner asks, his readers answer.  I say dead people don’t count and give your answers in the comments.  Can I consider Tim Berners-Lee for my nomination or Marc Andreessen — you used a browser to read this post — or whichever single person is most responsible for Google or search more generally?  I don’t intend any slight to Richard Dawkins or the others but I just don’t see how they stand up to these guys.

Addendum: Arnold Kling nominates Vinton Cerf.

Fly to Japan and ease your environmental conscience

Remember the question about the environmental impact of flying?  Air Genius Gary Leff puts it nicely:

If you’re pulling inventory out of a low fare bucket, the strong
expectation is that there’s little effect at the margin on your buying
the ticket because the airline expects to operate a flight that doesn’t
come close to filling up.

If you’re pulling inventory out of a high fare bucket, for coach
fares at the extreme end if you’re traveling on a Y fare, you can
pretty much expect that the flight will be close to sold out and that
the airline is willing to risk displacing another passenger in the
short term in exchange for your higher fare… or at least that the
ticket cost is high enough to potentially influence behavior on the
part of the airline…

Reality is even a little bit more complicated than that. Cargo has
to come into play, too. Regardless of what you pay and what fare class
you’re booking in, your travel on United between San Francisco and
Nagoya, Japan is going to have almost no effect whatsoever on United’s
decision-making. They’ve got a very large contract with Toyota and they
fill up their 747 with cargo and the flight goes out with very low load
factors yet is still profitable for them to operate.

Getting a frequent flyer seat also means that your environmental impact is likely very small.  I am pleased, of course, that I often have Gary booking my seats for me, all in the interests of a cleaner Earth.  The bottom line is that if you get a good deal on price, you should feel doubly good about it.

At the Beijing Airport

At the Beijing airport as the customs official questions you, you get to rate them – there is an electronic box, hidden from their view, that asks for your rating of service.  Damn, this is better than democracy!  I was "extremely satisfied."

On the other hand, MarginalRevolution is blocked but I can still access Typepad.

Why do we touch our mouths so much?

Seth Roberts asks:

The photo shows the full faces of 22 men; 7 of them are touching
their mouths. I have noticed something similar at many faculty
meetings. I started to notice this after I read about its observation
in a study designed to measure something else.

I’ve known about this for many years but have never read an
explanation. Do we enjoy touching our mouths – or is the absence of
touch for a  long time unpleasant? If so, why?

Here is one poker player’s answer.

The Price of Everything

Here is Ezra Pound’s Usura Canto, here is a link to Russell Roberts’s The Price of Everything: A Parable of Possibility and Prosperity, available for pre-order.  Can you guess which one has the better economics?  In fact Russ’s book is the best attempt to teach economics through fiction that the world has seen to date.

Here is Russ’s summary of the book.  Here is Arnold Kling on the book.

Who is the happiest-looking economist?

A group of researchers showed photographs, taken from economists’ home pages, to the public and the winner was Edmund Phelps; here is the paper.  Will Wilkinson, source of the tip, summarizes further (with photos) and offers this quotation:

…advice for young academics is: if you seek happiness, become a macro-economist and research happiness; a Nobel Prize does not make you happier; if you want to be popular with the ladies, take lessons from Edmund Phelps, Bruno Frey and Richard Easterlin; if you are looking for the ability to age like a red wine, Joseph Stiglitz and Jean Tirole have the trick, but not Richard Easterlin.

I thought that Milton Friedman usually looked very happy though he was not included in the poll.

O Economista Que Há Em Si

That’s the Portuguese-language version of Discover Your Inner Economist, the Amazon link is here.  Here are various Portuguese-language web sites about the book.  I am pleased to be represented in the Lusaphone world, as Portuguese is a very beautiful language, even when the topic is economics.  Oddly Natasha insists that, heard at a distance, Portuguese sounds a great deal like Russian.

And of course the English language paperback edition of Inner Economist, just out and only $10 on Amazon, can be found here.

The one hundred item challenge

Could you live with no more than one hundred possessions?  A group of Americans have accepted this challenge.  I found this passage insightful:

Walsh isn’t surprised that decluttering is so popular these days.
Between worrying about gas prices and the faltering economy, people’s
first reaction, he says, "is often, ‘I need to get some control over my
life, even if it is just a tidy kitchen counter.’"

And of course there are cheaters:

One of the trickier questions is what counts as an item. Bruno
considers a pair of shoes to be a single entity, which seems sensible
but still pretty hard-core when you’re trying to jettison all but 100
personal possessions. Cait Simmons, 27, a waitress in Chicago, takes a
different approach. Although she has pared down her footwear collection
from 35 to 20 pairs, she says, "All my shoes count as one item."

The pointer is to Jason Kottke.

The environmental cost of flying

Minderbender, a loyal MM reader, asks:

How should we think about the environmental costs of commercial flying?
It seems as though the average cost is high, but the marginal cost is
quite low. When I fly across the country, it doesn’t cause any extra
flights, it just makes the one I’m on slightly heavier. Yes, the
increased revenues might give the airline an incentive to increase the
number of flights, but this effect seems very weak – much lower than
the average cost of my flight (the consumption of fuel divided by the
number of passengers). Maybe I’m just miscalculating?

I think about this every time I fly.  A simple model of route expansion is that higher demand increases the number of total flights by some probability.  For the system as a whole, the decisive flying unit has to come somewhere and there is no reason why, on average, it can’t be you.  In other words, at least in stochastic terms you can’t escape the blame.

A second simple model of route expansion is that gates and other airport facilities are scarce and underpriced relative to demand.  When demand goes up, supply is not very elastic and mostly they raise price rather than increasing output.  Those who feel very guilty should prefer this second model.

The more they cut back on flights, as they have been doing, the more likely the first model is true.  The second model is most likely true if you are flying into regulated foreign markets although I believe the Europeans are now opening up for U.S. carriers.

You might ask comparable questions about eating meat and killing cows.  If you’re worried about your net impact, eat animals from countries with very privileged, monopolized and highly regulated, supply-inelastic livestock sectors.   

Best economics paper of 1958

Leonardo Monasterio asks:

Which paper/book should we celebrate its 50th year? Obviously, my vote goes to the paper that started the cliometric revolution:
The Economics of Slavery in the Ante Bellum South
Alfred H. Conrad, John R. Meyer
The Journal of Political Economy, Vol. 66, No. 2 (Apr., 1958), pp. 95-130
Is there any other contestant?

The two obvious competitors are Modigliani and Miller on financial irrelevance (AER) and Paul Samuelson on the overlapping generations model (JPE).  I’m inclined to put M-M first and Conrad and Meyer second.  Am I missing anything?  Don’t one or two of Schelling’s famous game theory articles date from this year as well?

Postwar American economics was splendid.  WWII meant that many thinkers (Friedman, Samuelson, Schelling, others) had real world experience with tackling big problems.  At the same time these people were just getting their hands on quantitative thinking and some more technical tools, yet the profession still valued breadth to some degree.

What you don’t know that you don’t know

Bryan Caplan writes:

A common Austrian slogan is that "Neoclassical economists study only cases where people know that they don’t know; we study cases where people don’t know that they don’t know."

He demands a good example in support of the Austrian view.  I would cite the arrival of the Spaniards during the time of the Aztecs and the subsequent conquest (see also Fabio’s comment on Bryan’s post).  This was not literally an unimaginable event, since it had (in modified form) been foretold by Nahua prophecy, but still the Aztecs had no ability to respond effectively, given their prevailing mental frameworks. 

More generally, look at the implied volatility embedded in options prices.  Is it forecasting how much volatility is really out there?  Here’s one possible quantitative measure: if you have futures on options, take the measure of "surprise" in implied volatility (the change in implied volatility not forecast by the futures price for the options contract) as the relevant measure of "what you didn’t know that you didn’t know."  I’m not saying this figure is large, or even necessarily positive on average, but I do think it is a meaningful concept.  Arnold Kling responds to Bryan as well.  Here is my previous post on this topic.