Month: October 2012
Our food and agriculture videos are up at MRU
Here is the description from the site:
The Food and Agriculture Productivity section of the Development Economics course is now available.
Early economics was largely the economics of agriculture, and these days food supply remains a critically important topic in development economics, especially in the poorer countries. Take India for instance — currently about half of the Indian labor force works in agriculture.
We cover some of the most fundamental questions about food supply and offer some optional videos on food as well. It’s not just about fighting hunger and starvation — agricultural surpluses are part of the path toward industrialization.
Particular topics include micronutrients, GMOs, the recent rice price spikes, garlic, watermelon, and “Yams, a Man’s Crop,” among others.
Truth Bounties
The Truth Market is an interesting combination of prediction markets, bounty hunting and crowd funding that aims to separate the wheat from the chaff of truth claims. Here is how it works:
You hear a statement that you think is bogus (or you hear the denial of something that you think is true). You open a challenge in which you offer to pay a truth bounty of $x if someone can prove that the bogus statement is true (or prove false the statement that you think is true). Other people can join your challenge, adding to the bounty. If the total bounty exceed a significant threshold the challenge goes live.
Once a challenge is live, anyone can earn the bounty if their evidence for or against the claim meets the standards of a neutral, professional, scientifically trained group of adjudicators (provided by TruthMarket). If within a given time-frame no one wins the bounty the bounties are returned to the contributors minus 20% which goes to the initial sponsor of the challenge. The initial sponsor can now also trumpet that despite significant cash no one was able to prove the bogus claim (or refute the true claim).
Thus, there are incentives to offer challenges, incentives to answer challenges, and incentives to pay attention to the results. TruthMarket has some serious people on its management team and advisory board. There are already challenges about global warming, cell phones, defensive gun use and other issues.
Will the Truth Market work? In order to work, TruthMarket will need a track record of significant money bounties and adjudicated claims. As of yet, I don’t see many (any? the site is unclear although this is the most important part of the process).
Most important, people have to regard winning a bounty and the failure to win a bounty as informative. My experience, however, is that the people who regard betting as informative are already rational and well-informed about other issues so the bounty isn’t necessary to prosecute the truth claim.
The Amazing Randi’s one million dollar prize for “evidence of any paranormal, supernatural, or occult power or event,” was first offered in 1964 but has never been claimed. In theory, that tells us a lot. In practice, the failure of the prize to be won does not seem to have changed many people’s beliefs.
All those years ago
That is from The Economist, via Michael Mandel and Paul Graham.
Arvind Subramanian is pessimistic about Indian growth prospects
“The Indian state is increasingly unable to provide a range of basic services: health, education, physical security, rule of law, water and sanitation. The writ of the Indian state, for example, covers only about 80% of India, with the tribal belt essentially contested by Maoist insurgents. The private sector can substitute for some of these deficiencies but never completely. – In the long run, growth is determined by effective state capacity: that is India’s weakness compared with China.”
Here is more, in the form of a debate. Hat tip goes to Tom Murphy.
Assorted links
My favorite things Korea
1. Movie. If I had to pick one, I might opt for Old Boy. The deeper point is that you should watch them all. If it is a Korean movie, and you can get your hands on it (as a non-Korean), it is probably excellent. This is a remarkable regularity and a good selection filter for exploring. This list is one place to start but not to stop. The Host is a fun spoof of monster movies and Shiri is a gripping thriller. Watch any Korean movie which Scott Sumner recommends. Even some of the clunkier Korean movies, such as The Housemaid, are better than most Hollywood fare.
2. Actress: Grace Park from Battlestar Galactica, and there is also Shin Eun-kyung.
3. Actor: John Cho, of Harold and Kumar fame. It is unlikely he is the best.
4. Video artist: Nam June Paik.
5. Classical pianist: Kun-Woo Paik, I find he is better represented on disc (Ravel, Liszt, Scriabin) than on YouTube. For violinist there is Sarah Chang, YouTube here.
6. Economist: Ha-Joon Chang comes to mind, although I disagree with most of his work. Here is my podcast interview with him.
7. Poet: Ko Un is the only one I have read. It is hard to judge any poet outside of his or her native language, but I definitely had the feeling something was there.
8. Novelist: Kyung-sook Shin is alas the only one I can name.
9. Movie, set in: Korean movies aside, you might consider Pork Chop Hill.
10. Painter: Contemporary art is a rich vein for South Korea. This catalog is one good place to start.
The bottom line: This is an impressive showing and it is improving rapidly. The killer categories is movies.
The making of K-Pop
Standing beside me was Jon Toth, a twenty-nine-year-old white guy, a computer scientist who had driven twelve hours straight from New Mexico. Toth is a fan of Girls’ Generation, a nine-member girl group in the process of recording its American début album, with Interscope Records. At the time he stumbled across the Girls, on YouTube, Toth was an alt-rock guy; he loved Weezer. “I was definitely not the kind of guy you’d expect to get into a nine-girl Asian group,” he told me. But before long Toth was studying Korean, in order to understand the lyrics and also Korean TV shows. Then he started cooking Korean food. Eventually, he travelled all the way to Seoul, where, for the first time, he was able to see the Girls—Tiffany, Sooyoung, Jessica, Taeyeon, Sunny, Hyoyeon, Yuri, Yoona, and Seohyun—perform live. It was a life-changing experience.
“You think you love them, but then you see Tiffany point directly at you and wink, and everything else that exists in the world just disappears,” Toth wrote on Soshified, a Girls’ fan site. “You think you love them, but then you see Sooyoung look you dead in the eye and say in English, ‘Thank you for coming.’ ” Toth concluded, “I might not know how much I love these girls.”
Here is much more, interesting throughout. How about this?:
Double-fold-eyelid surgery, which makes eyes look more Western, is a popular reward for children who get good marks on school exams. The popularity of the K-pop idols has also brought Chinese, Japanese, and Singaporean “medical tourists” to Seoul to have their faces altered to look more like the Korean stars. Some hotels have partnered with hospitals so that guests can have in-house procedures; the Ritz-Carlton Seoul, for example, offers an eighty-eight-thousand-dollar “anti-aging beauty package.” Women come to have their cheekbones shaved down and undergo “double jaw surgery,” in which the upper and lower jawbones are cracked apart and repositioned, to give the whole skull a more tapered look.
For the pointer I thank Viktor.
Sentences to ponder
Starting January 1 of 2013 the top tax rate on dividends in the US will officially become the highest in the developed world. If you live in NY for example, the top rate on stock dividends will be close to 50% – which is significantly higher than France.
…According to JPMorgan, this dividend tax will reduce mature firms’ valuations by $1.5 trillion. That’s going to hit private and state pensions as well as IRA, 401K, and 529 accounts.
And JPMorgan adds:
Capitalizing this foregone capital income generates a $1.5 trillion reduction in equity market value, or about 6% of the $24 trillion value of corporate equities at the end of 2Q. Standard wealth effects suggest this will reduce consumer spending by a little over $50 billion, or about 0.5%.
A German icon moves on
After 63 semesters spanning nearly 40 years of studying, German engineer Werner Kahmann finally managed to get his university diploma. In an interview with the Süddeutsche Zeitung he explained why it took him so long.
Here is one part of the story:
The first time Kahmann put his diploma on hold, he broke his leg playing football. The second time, it was 1984 and his daughter was born so he took time out to help raise her. “Then in 2004 when student fees were introduced, I de-matriculated again.”
In 2011, the fee system changed and Kahmann found himself with his nose in a book one again. But this time, it was for real – he earned his diploma a year later, even though the university did not even run the course anymore.
There would be downsides to being a graduate though, he said. “Paying for public transport and not getting reduced tickets for the zoo,” being two of Kahmann’s complaints.
For the pointer I thank Chris Reicher.
Assorted links
Study of investment diversification on the UC-Berkeley campus
That’s a header from the excellent Mark Thorson. Here is an excerpt:
“Think of them as little bankers depositing money and spreading it out in different funds, and doing some management of those funds,” said Mikel Delgado, a doctoral student in psychology who heads the squirrel research team in the laboratory of UC Berkeley psychologist Lucia Jacobs.
Here is another good squirrel sentence:
“Despite her disability, she’s great at caching,” said Delgado.
And this:
…squirrels shake their heads to assess the quality of the nut, and that this “head-flicking behavior” increases when they plan to store the nut rather than eat it.
Finally, unlike many of us:
While Delgado hopes to crack the mystery of which cognitive navigation skills squirrels use to find their personal stashes, one thing’s for sure: “They’re saving for the future,” she said, “and they’re really smart about it.”
The story is here.
Shared Creation
From Joshua Gans’s Information Wants to be Shared.
Economic theory has not quite caught up with this interesting area of
shared information. I can speculate on future business models for books and
the news because they fall within baseline economic motives. But when
it comes to shared creation, nonmonetary motives loom larger and the
economist’s toolkit is harder to rely upon. Wikipedia is a prime example.
More than just a content platform, it is built on and maintained by an army of anonymous volunteers. Back in 2001, when it started, economists would
not have predicted Wikipedia’s success; nor can they really explain it now.Other social scientists have not waited for economists to catch up. But
perhaps no person has examined the notion that broad, shared creation can
be effective more than MIT professor Eric von Hippel. One of the great
facts from his research is this: a vast number of useful innovations come
not from some scientist and engineer tinkering in a lab, but from users
solving their own problems. Examples abound, from scientific instruments,
to mountain bikes and, of course, to open source software. In some cases,
the innovations were the work of lone innovators, while for others, local
communities together produced advances. It is the latter that interests us
here.
Economists thought that Wikipedia couldn’t work because of problems of motivation but what turned out to matter most was not motivation but transaction costs. With 7 billion people and low transaction costs what other forms of shared creation become possible?
China’s Solyndra Problem
The NYTimes reports that China has a much bigger Solyndra problem than the United States ever did:
…China’s strategy is in disarray. Though worldwide demand for solar panels and wind turbines has grown rapidly over the last five years, China’s manufacturing capacity has soared even faster, creating enormous oversupply and a ferocious price war.
The result is a looming financial disaster, not only for manufacturers but for state-owned banks that financed factories with approximately $18 billion in low-rate loans and for municipal and provincial governments that provided loan guarantees and sold manufacturers valuable land at deeply discounted prices.
China’s biggest solar panel makers are suffering losses of up to $1 for every $3 of sales this year, as panel prices have fallen by three-fourths since 2008. Even though the cost of solar power has fallen, it still remains triple the price of coal-generated power in China, requiring substantial subsidies through a tax imposed on industrial users of electricity to cover the higher cost of renewable energy.
This bit also seemed familiar:
Mr. Li said in an interview that he wanted banks to cut off loans to all but the strongest solar panel companies and let the rest go bankrupt. But banks — which were encouraged by Beijing to make the loans — are not eager to acknowledge that the loans are bad and take large write-offs, preferring to lend more money to allow the repayment of previous loans. Many local and provincial governments also are determined to keep their hometown favorites afloat to avoid job losses and to avoid making payments on loan guarantees, he said.
New Videos: Leading Thinkers on Development
At MRUniversity we just released over 30 new videos on leading thinkers on development. We cover Amartya Sen (who gets three), Bela Belassa, Karl Polanyi, Adam Smith, Paul Romer, William Easterly and many others. In terms of the course these videos are optional, they are for dipping into as per one’s interest. In these videos, we sometimes provide a second perspective on issues we discuss in greater detail in forthcoming topic videos.
On Monday we will be releasing a new section of the Development Economics course, Food and Agricultural Productivity.
Can mobile phones boost educational outcomes?
From Jenny C. Aker, Christopher Ksoll, and Travis J. Lybbert:
The returns to educational investments hinge on whether such investments can improve the quality and persistence of educational gains. We report the results from a randomized evaluation of an adult education program in Niger, in which some students learned how to use simple mobile phones (Project ABC). Students in ABC villages achieved test scores that were 0.19–0.26 standard deviations higher than those in standard adult education classes, and standardized math test scores remained higher seven months after the end of classes. These results suggest that simple information technology can be harnessed to improve educational outcomes among rural populations.
An ungated copy is here.