Month: March 2012

The calculus of consent?

by  Tyler Cowen in

A few years ago, two researchers, both then at Carnegie Mellon, decided to calculate how much time it would take to actually read every privacy policy you should.

First, Lorrie Faith Cranor and Aleecia McDonald needed a solid estimate for the average length of a privacy policy. The median length of a privacy policy from the top 75 websites turned out to be 2,514 words. A standard reading rate in the academic literature is about 250 words a minute, so each and every privacy policy costs each person 10 minutes to read.

Next, they had to figure out how many websites, each of which has a different privacy policy, the average American visits. Surprisingly, there was no really good estimate, but working from several sources including their own monthly tallies and other survey research, they came up with a range of between 1,354 and 1,518 with their best estimate sitting at 1,462.

So, each and every Internet user, were they to read every privacy policy on every website they visit would spend 25 days out of the year just reading privacy policies! If it was your job to read privacy policies for 8 hours per day, it would take you 76 work days to complete the task. Nationalized, that’s 53.8 BILLION HOURS of time required to read privacy policies.

That is Alexis Madrigal, the article is here, for the pointer I thank Jeffrey Deutsch.

Famous middle initials

by  Tyler Cowen in

John F. Kennedy, Michael J. Fox, Franklin D. Roosevelt, Philip K. Dick, Cecil B. DeMille, George W. Bush, George C. Scott, William F. Buckley, John D. Rockefeller, Johnny B. Goode, James Q. Wilson, and who else?

Why is it so popular with Presidents?

A whole other line of obsession is to start with J. Edgar Hoover, F. Scott Fitzgerald, and so on, and see how many others you can come up with.

Then there is J.R.R. Tolkien, H.L.A. Hart, and their successors.

I am pleased to have no middle initial.

Addendum: Angus comments.

Adam Smith on Charles Murray

by  Tyler Cowen in

From Book V, chapter I:

In every civilised society, in every society where the distinction of ranks has once been completely established, there have been always two different schemes or systems of morality current at the same time; of which the one may be called the strict or austere; the other the liberal, or, if you will, the loose system. The former is generally admired and revered by the common people: the latter is commonly more esteemed and adopted by what are called people of fashion. The degree of disapprobation with which we ought to mark the vices of levity, the vices which are apt to arise from great prosperity, and from the excess of gaiety and good humour, seems to constitute the principal distinction between those two opposite schemes or systems. In the liberal or loose system, luxury, wanton and even disorderly mirth, the pursuit of pleasure to some degree of intemperance, the breach of chastity, at least in one of the two sexes, etc., provided they are not accompanied with gross indecency, and do not lead to falsehood or injustice, are generally treated with a good deal of indulgence, and are easily either excused or pardoned altogether. In the austere system, on the contrary, those excesses are regarded with the utmost abhorrence and detestation. The vices of levity are always ruinous to the common people, and a single week’s thoughtlessness and dissipation is often sufficient to undo a poor workman for ever, and to drive him through despair upon committing the most enormous crimes. The wiser and better sort of the common people, therefore, have always the utmost abhorrence and detestation of such excesses, which their experience tells them are so immediately fatal to people of their condition. The disorder and extravagance of several years, on the contrary, will not always ruin a man of fashion, and people of that rank are very apt to consider the power of indulging in some degree of excess as one of the advantages of their fortune, and the liberty of doing so without censure or reproach as one of the privileges which belong to their station. In people of their own station, therefore, they regard such excesses with but a small degree of disapprobation, and censure them either very slightly or not at all.

A new paper on the economics of network neutrality

by  Tyler Cowen in

Nicholas Economides† and Benjamin E. Hermalin have a new paper (pdf), coming out in the Rand Journal of Economics, summarized here, here is the abstract:

Pricing of Internet access has been characterized by two properties: Parties are directly billed only by the Internet service provider (isp) through which they connect to the Internet. Pricing, moreover, is not contingent on the type of content being transmitted. These properties define a regime known as “network neutrality.” In 2005, some large isps proposed that application and content providers directly pay them additional fees for accessing the isps’ residential clients, as well as differential fees for prioritizing certain content. We analyze the private and social incentives to introduce such fees when the network is congested and more traffic implies greater delays. We derive conditions under which network neutrality would be welfare superior to any feasible scheme for prioritizing service. Extending our analysis to encompass isps’ incentives to invest in more bandwidth, we show that the ability to price discriminate increases their incentives to invest. In terms of overall welfare, we show the additional investment may or may not offset any static inefficiency associated with discrimination.

This strikes me as a funny way to put the point.  Might the authors also have written?: “A strict welfare calculation is indeterminate in the theory of price discrimination, yet the standard presumption is that price discrimination is welfare-improving.  That is all the more likely to be the case when investment in new capacity, and usage, is endogenous”?

For the pointer I thank Richard Harper.

When do macroeconomic multiple equilibria matter most?

by  Tyler Cowen in

It seems that the Greek standard of living will take a long-term tumble from its heights in the oughties.  How much?  We won’t know for a while, but maybe as much as fifty percent.

While there is clearly a significant AD channel at work, and some negative real shocks, I also see multiple equilibria.  Investors have decided that Greek institutions are not so solvent and this raises risk premia and lowers long-term investment.  In the oughties investors were guessing “Greece is a West European country after all,” and these days they are guessing “Greece is more like a Balkans country.”  Reality follows in step.

Are macro multiple equilibria “most fierce” for countries hovering over a dilemma of mixed identity or a cultural chasm?  No one doubts the cultural identity of Sweden and, if they have multiple equilibria, they may be quite close to each other in output space and also in cultural space.

Which other countries may incur especially high risk premia from multiple equilibria?  Brazil?  China?  Where else?

Not a joke

by  Tyler Cowen in

…as far as I can tell.  From a quite reputable newspaper, here goes:

For 150 years, no country has expressed interest in adopting the Canadian dollar — the poor cousin to the coveted greenback.

But now tiny Iceland, still reeling from the aftershocks of the devastating collapse of its banks in 2008, is looking longingly to the loonie as the salvation from wild economic gyrations and suffocating capital controls.

And for the first time, the Canadian government says it’s open to discussing the idea.

In brief remarks to be delivered Saturday in Reykjavik, Canadian ambassador Alan Bones will tell Icelanders that if they truly want the Canadian dollar, Canada is ready to talk.

But he will warn Icelanders that unilaterally adopting the loonie comes with significant risk, including complete loss of control over their monetary policy because the Bank of Canada makes decisions only for Canadians and the Canadian economy.

Kudos to all of you who had been predicting that.

For the pointer I thank M Kaan, maybe someone is playing an elaborate joke on Bob Mundell here.

James Q. Wilson has passed away at 80

by  Tyler Cowen in

He was one of America’s leading social scientists, here is one appreciation.  Here is his Wikipedia page.  Here is a 1995 interview with Reason magazine.  Here is Wilson on scholar.google.com.  Here is his address on the moral sense (pdf).  Here is one of his famous essays on police behavior.  Here are some remarks in praise of Wilson.  Here are many more links.

I think of him as one of the few people who had a truly famous and memorable middle initial.

What is your most surprising prediction?

by  Tyler Cowen in

That is the new lunch time question for visitors.  This week we asked Michael Mandel and Megan McArdle.

The old question was “What is your most absurd belief?” (Initiation here, and some answers here).

When should you ask about inputs and when should you ask about outputs?  Someone might believe that planet earth is built upon “turtles all the way down,” and still expect 2.2 percent yearly growth in gdp and a lot of pennants for the New York Yankees.

It can be hard to judge how surprising various predictions are.  Nonetheless I expect median real wages to continue to decline, over the next ten years, in the non-resource-rich wealthy countries of the world, no Norway please.  TGS means that we cannot so readily outrace factor price equalization by keeping one step ahead, the exciting innovations are mostly labor-saving, educational stagnation will just be kicking in, and otherwise American workers really aren’t that much better than the competition.

Do I also expect another outbreak of conflict in the Falklands?  The prediction of fascism in Hungary is no longer a surprise.

Readers, what is your most surprising prediction?

Addendum: Angus comments.

There is no great stagnation

by  Tyler Cowen in

The drone of speakers who won’t stop is an inevitable experience at conferences, meetings, cinemas, and public libraries.

Today, Kazutaka Kurihara at the National Institute of Advanced Industrial Science and Technology in Tskuba and Koji Tsukada at Ochanomizu University, both in Japan, present a radical solution: a speech-jamming device that forces recalcitrant speakers into submission.

The idea is simple. Psychologists have known for some years that it is almost impossible to speak when your words are replayed to you with a delay of a fraction of a second.

Kurihara and Tsukada have simply built a handheld device consisting of a microphone and a  speaker that does just that: it records a person’s voice and replays it to them with a delay of about 0.2 seconds. The microphone and speaker are directional so the device can be aimed at a speaker from a distance, like a gun.

In tests, Kurihara and Tsukada say their speech jamming gun works well: “The system can disturb remote people’s speech without any physical discomfort.”

Their tests also identify some curious phenomena. They say the gun is more effective when the delay varies in time and more effective against speech that involves reading aloud than against spontaneous monologue. Sadly, they report that it has no effect on meaningless sound sequences such as “aaaaarghhh”.

Kurihara and Tsukada make no claims about the commercial potential of their device but  list various aplications. They say it could be used to maintain silence in public libraries and to “facilitate discussion” in group meetings. “We have to establish and obey rules for proper turn-taking when speaking,” they say.

Here is more, and for the pointer I thank Michelle Dawson, here is her recent dialogue.

New results on the missing women question

by  Tyler Cowen in

This paper (pdf) came out about two years ago, by Siwan Anderson and Debraj Ray, in the highly esteemed Review of Economic Studies, yet I haven’t seen it discussed in the blogosphere, so here goes:

Relative to developed countries and some parts of the developing world, most notably sub-Saharan Africa, there are far fewer women than men in India and China. It has been argued that as many as a 100 million women could be missing. The possibility of gender bias at birth and the mistreatment of young girls are widely regarded as key explanations. We provide a decomposition of these missing women by age and cause of death. While we do not dispute the existence of severe gender bias at young ages, our computations yield some striking new findings: (1) the vast majority of missing women in India and a significant proportion of those in China are of adult age; (2) as a proportion of the total female population, the number of missing women is largest in sub-Saharan Africa, and the absolute numbers are comparable to those for India and China; (3) almost all the missing women stem from disease-by-disease comparisons and not from the changing composition of disease, as described by the epidemiological transition. Finally, using historical data, we argue that a comparable proportion of women was missing at the start of the 20th century in the United States, just as they are in India, China, and sub-Saharan Africa today.

That is a very different interpretation from what one usually hears.