Month: February 2013

Pictures on ethnic menus

Blake Shurtz, a perceptive MR reader, asks:

What are your thoughts on pictures, or a lack thereof, on ethnic food menus? Do you think better dishes have pictures? Why doesn’t every dish have a picture? The logic of fast food is to show pictures/numbers for non-english speakers to be better informed, but the converse doesn’t seem to happen as often.

Pictures are most likely a good sign when they are dingy and the menu plastic is peeling off.  Even then the food may be bad, but at least you know you have a mom and pop operation which is not very polished on the tech side.  “Nice” pictures are a bad sign.  Pictures are least likely to be a bad sign for Vietnamese food, when they are basically neutral and also fairly common.  Think of the Vietnamese as trying to go mainstream with their food but in any case failing.  Pictures for Thai food are becoming a worse sign over time.  As more people come to learn Yam huapli thot, the pictures are coming to signal that the restaurant is making a determined appeal to uninformed buyers.  There is a subset of cranky but excellent Chinese restaurants which offer (non-corporatized) pictures of some of their dishes, including those with tofu.  This segment of the market is dwindling but still can be found.  The choice of what gets a photo is determined by the expected quality of the image (whole fish get showcased), rather than the taste of the dish per se.

TANSTAAFL?

Love actually rings in at $43,842.08, according to RateSupermarket.ca, which has calculated the price tag of the typical modern relationship – from a one-year courtship, followed by a one-year engagement to the wedding day.

And it is itemized:

The Toronto-based independent financial products comparison website pegs the price of courtship at $6,936.74. That includes a dozen “fancy dates” (nice restaurants and theatre tickets), a dozen movie dates, 36 “casual dates” (take-out food, coffee and movie rentals), weekend getaways, a beach vacation plus random other expenses for things such as “apology flowers,” treats and new clothes.

The engagement period rings in at $9,944.34, which includes more dates, an engagement party with a price tag of $2,000 and the big ticket item, a ring with an average estimated cost of $3,500. (The popular wedding website TheKnot.com estimates that cost at around $5,000, but RateSupermarket.ca pointed that that it doesn’t consider rings purchased from lower-end retailers such as Walmart.)

Oh, and the wedding? Well that’s another $26,961.

Here is more, with the pointer from Chad R.

An EU-U.S. trade pact?

I do favor the idea, but the bottom line is more likely this:

…[it] would require Europe to open farm, service and other markets that it has been slow to deregulate.

…U.S. officials have been concerned that Europe’s complex politics — of the 27 EU nations, some are avowed free-trade supporters while some veer towards protectionist industrial policy — would make for protracted and perhaps futile negotiations.

The letter from the two senators is a reminder of just how difficult an agreement would be. Goods already flow freely between the United States and the E.U. Much of the value of a free-trade pact would come through reducing regulatory red tape so that — for example — the two sides would adopt common policies on food safety, pharmaceutical testing, patents and other complex regulatory issues.

We cannot deregulate our own country, and yet we think we can deregulate a hydra-headed, 27-nation negotiating sclerotic behemoth?  The big lure here is that the larger EU companies could access government procurement contracts in much of the U.S., but I don’t see that as a political trump by any means, most of all in the smaller countries.  And what is the chance that the U.S. wins concessions only by adopting, in some cases, tougher regulatory policies (in the inappropriate and sclerotic sense)?  Might this in some cases, through perhaps the magic of public choice theory, evolve into a regulatory cartel?

Nonetheless, as mentioned above, I’m all for trying.

What do I think of Obama’s universal pre-school proposal?

Of course there are no significant details yet, but here are a few points.

1. The evidence that this can be done effectively in a scalable manner is basically zero.  Aren’t massive policies (possibly universal?) supposed to be based on evidence?  (How about running a large-scale RCT first, a’la the Rand health insurance experiment?  And by the way, here is a quick look at the evidence we have on pre-school, and here, not nearly skeptical enough in my view.  And think in terms of lasting results, not getting kids to read nine months earlier, etc.  You can find evidence for persistent math gains in Tulsa, OK, but no CBA.)

2. That doesn’t mean we should do nothing.

3. Let’s say we have “the political will” to do something effective (debatable, of course).  Is adding on another layer of education, and building that up more or less from scratch in many cases, better than fixing the often quite broken systems we have now?  I know well all the claims about “needing to get kids early,” but is current kindergarten so late in life?  Why not have much better kindergartens and first and second grade experiences in the ailing school districts?  Or is the claim that by kindergarten “it is too late,” yet a well-executed government early education could fix the relevant problems if applied at ages three to four?  Would such a claim mean that we are currently writing off many millions of American children, as it stands now?

4. This is what federalism is for.  Let’s have an experiment emanating from the state and/or local level.

5. What should we infer from the fact that no such truly broad-based state-level experiment has happened yet?  (Georgia and Oklahoma have come closest.)  That the states are lacking in vision, relative to the Presidency?  Or that a workable version of the idea is hard to come up with, execute, and sell to voters?

6. In Finland government education doesn’t really touch the kids until they are six years old.  Don’t they have a very good system?  Some call it the world’s best.  Maybe the early years are very important, but perhaps pre-schooling is not the key missing piece of the puzzle.  (NB: See the comments for dissenting views on Finland.)

Addendum: Here are good comments from Reihan.  See also this Brookings study: “This thin empirical gruel will not satisfy policymakers who want to practice evidence-based education.”

The path of government spending

Matt Yglesias posts this chart, which I am happy to endorse, alternative scaling here, and related material from Veronique de Rugy here.

govtspending

The real problem comes about ten years out, due to aging. It’s still the case that, when it comes to fiscal issues, turning on a dime can be very difficult.  In the meantime, it may appear, at times, that not much is happening, but these will be a very critical ten years.

A Trapped Factors Model of Innovation

That is the new paper (pdf) by Nicholas Bloom, Paul Romer, Stephen Terry and John Van Reenen.  Here is the abstract:

When will reducing trade barriers against a low wage country cause innovation to increase in high wage regions like the US or EU? We develop a model where factors of production have costs of adjustment and so are partially “trapped” in producing old goods. Trade liberalization with a low wage country reduces the profitability of old goods and so the opportunity cost of innovating falls. Interestingly, the “China shock” is more likely to induce innovation than liberalization with high wage countries. These implications are consistent with a range of recent empirical evidence on the impact of China and offers a new mechanism for positive welfare effects of trade liberalization over and above the standard benefits of specialization and market expansion. Calibrations of our model to the recent experience of the US with China suggests that there will be faster long-run growth through innovation in the US and that, in the short run, this is magnified by the trapped factor effect.

Sentences to ponder

Data on “divisia money” (a well-known way of aggregating the components of broad money), computed by the Center for Financial Stability in New York, show that broad money (M4) was 17 per cent below its 1967-2008 trend in December 2012.

That is from Martin Wolf.  Wolf’s piece also raises the question of whether the Basil Moore/post Keynesian view of endogenous money is essentially correct in a world of IOR, but that is a topic for another day…

Bruce Caldwell emails me

The Center for the History of Political Economy at Duke University will be hosting another Summer Institute on the History of Economics this summer, June 2-21. The three week program is sponsored by the National Endowment for the Humanities and is designed primarily for faculty members in economics, other social sciences, and the humanities, though three of the twenty-five slots are reserved for graduate students. Participants will be competitively selected and successful applicants will receive a $2700 stipend for attending, out of which they will pay for their own room and board. Our line-up of discussion leaders is pretty impressive, and includes scholars from economics, political science, and history. The deadline for applying is March 4. More information on the Summer Institute is available at our website, http://hope.econ.duke.edu

This is a superb program and I recommend it heartily.

Assorted links

Why are they diluting the bourbon?

Numerous readers have requested that I cover this topic, and here is one report:

Maker’s Mark, the Loretto, Kentucky, bourbon manufacturer, has the sort of problem that every consumer-products company wishes it had: too much demand for too little product. But the company’s solution might surprise the very consumers demanding its product—adding water to its existing supply of bourbon, thereby cutting the alcohol content in each bottle from 45 percent to 42 percent.

Let me first note that I have zero institutional knowledge of bourbon.  I have never tried bourbon (I have eaten in the excellent restaurant Bourbon Steak), and even worse I have never read a book about bourbon, but here is one hypothesis.  Could it be that future buyers, who have never tried the older 45 percent will accept the 42 percent as the normal taste?  (The company might even fool some of the current drinkers.)  In that case, if the company has a large flow of future buyers, relative to the current stock of buyers, this won’t even count as a price increase/quality degradation for the future flow.  A direct price increase, in contrast, would be a price increase for everyone, present and future.

This explanation, however, runs the risk of being “too good” (read: not good).  If it is that easy, why didn’t they degrade the quality in the first place, until reaching a margin where framing effects won’t make up most of the difference?

Caveat emptor!  Ask an expert instead.

Road Fare>Congestion Pricing?

Congestion pricing sounds like something to avoid since neither term is something you want. Eric Jaffe held a contest for replacement terms. Decongestion pricing is one possibility since it at least hints at the idea that the pricing gets rid of congestion.

Tom Vanderbilt (author of Traffic) liked the phrase premium access — something to suggest “you pay for ‘peak perks.’ ..transport scholar David Levinson, suggests road fees for general road pricing (and peak road fees for road pricing aimed at heavy congestion), and urban planner Laurence Lui, recommends road fares. What’s nice about road fare is that it parallels mass transit, has an intuitive purpose, and offers flexibility. You can alter it to suit a specific situation — peak road fare, midtown road fare, etc. — without obscuring the basic meaning.

Road fare is quite good as it also suggests fair[ness] and can be used in an academic or commercial context. For a more commercial term I liked another suggestion, Pay2Go which has the great virtue of explaining what you get for your money.

Do note that death insurance didn’t sell well until it was given the less accurate but more affable name, life insurance.

Hat tip: Brandon Fuller.