Month: May 2014
Which are the most expensive American airports?
Per mile traveled, the new list is this:
1. Cincinnati
2. Birmingham
3. Memphis
4. Dallas Love Field
5. Charlotte
A few points strike me. First, not too long ago Cincinnati was rated as the very best U.S. airport by global standards. At the time I thought that was silly and now we can see further reason why. We should rate airports by consumer plus producer surplus, not by whether they scare away enough customers to make the experience a more pleasant one for the remaining diehards.
Second, these airports may have relatively high proportions of business travelers, as cited by the original article linked above at the top.
Third, theories of market power and fixed costs might predict that the most expensive airports, in per mile terms, should be found in the middle of the country or at least clustered near a lot of other airports. Let’s say a consumer has to pay for (at least) two items in a fare. The first is the marginal cost of the fuel and the labor, which will vary with distance in traditional fashion. Second, consumers must pay to cover the fixed costs of “flying at all,” which would include for instance upkeep on airport facilities, maintenance, meeting FAA regulations, teaching the pilots how to land, and so on. A lot of these costs do not vary proportionally with the length of the flight and you have to incur them for even very short flights. Airports with a lot of very short flights thus will be more expensive on average, in per mile terms. We also can expect these airports to be clustered in the middle of the country near a lot of other airports.
Which is the cheapest American airport in per mile terms? It’s not in the fifty states at all — San Juan, Puerto Rico.
Assorted links
1. Will you hire someone to do your grocery shopping for you?
2. New DSGE blog.
3. The Philadelphia Eagles are now targeting college graduates. Educational signaling comes to NFL football.
4. Can conservatives be funny?
5. Bill Gates on Jeffrey Sachs.
*The Impossible Exile: Stefan Zweig at the End of the World*
That is the new and truly excellent book by George Prochnik, think of it as a selective biography focused on themes of exile, perversion, Brazil, and suicide. Excerpt:
Martin Gumpert shared Zweig’s sense of depletion amid New York’s incessant activity, likening the exhaustion that befell almost every newcomer to a “magic spell.” When Bruno Walter first arrived in New York, the heat of his hotel room drove him out onto the street though it was still before dawn. On his initial promenade down Manhattan’s avenues, he imagined “wit a shudder of horror” that he was “walking at the bottom of immensely deep rocky canyons.” As the sun rose, his eyes caught sight of an enormous billboard on top of a building displaying the words “U.S. Tires.” In a daze he thought to himself, “Yes, it does — true enough — but why is this fact being advertised to me from the rooftops?”
And:
Even New York rain, Camus observed after his own first encounter with the city in the mid-1940s, was “a rain of exile. Abundant, viscous, and dense; it pours down tirelessly between the high cubes of cement into avenues plunged suddenly into the darkness of a well…I am out of my depth when I think of New York,” he acknowledged. Camus wrote of wrestling with “the excessive luxury and bad taste” of New York, but also with “the subway that reminds you of Sing Sing prison” and “ads filled with clouds of smiles proclaiming from every wall that life is not tragic.”
This is one of my favorite books of the year so far. (You will find here an interesting review.) And Zweig’s own The World of Yesterday is one of my favorite books period.
How much it costs to hire your favorite band
Craig Richardson sends me this story with some interesting numbers.
Los Lobos and George Clinton and Bone Thugs and Harmony and Toots and the Maytals charge in the 20-35k range for appearances; that’s not so much considering what you get. Fountains of Wayne (remember them?) goes for 20-30k.
De la Soul goes for 15-20k, as do the Indigo Girls, and for Jefferson Starship it may go up to 25k. The English Beat and PM Dawn (still underrated, apparently) cost only 5-10k.
Bruce Springsteen is a million dollars and up. Many artists I have never heard of go for 200k and up.
Dave Matthews tribute band is 10k, while Dave Matthews is $1 million.
Assorted links
1. Claims about taking action (speculative).
2. Are psychopaths utilitarian?
3. Ben Casnocha has a new book out, on managing talent. And selfish play increases during high-stakes NBA games.
4. Which 69 words are General Motors employees not supposed to say?
5. Every country’s most highly valued export.
6. Mice run for fun.
Financial Literacy
Consider the following three questions (from Lusardi and Mitchell):
1. Suppose you had $100 in a savings account and the interest rate was 2% per
year. After 5 years, how much do you think you would have in the account if you
left the money to grow.More than $102. Exactly $102,. Less than $102? Do not know. Refuse to answer.
2. Imagine that the interest rate on your savings account was 1% per year and
inflation was 2% per year. After 1 year, would you be able to buy.More than, exactly the same as, or less than today with the money in this account? Do not know. Refuse to answer.
3. Do you think that the following statement is true or false? ‘Buying a single
company stock usually provides a safer return than a stock mutual fund.’T. F. Do not know. Refuse to answer.
Sadly, most Americans rate themselves high on financial acuity but they cannot answer all three questions correctly.
Only about a third of Americans answer all three questions correctly (and that figure is inflated somewhat due to guessing). The Germans and Swiss do significantly better (~50% all 3 correct) on very similar questions but many other countries do much worse. In New Zealand only 24% answer all 3 questions correctly and in Russia it’s less than 5%.
Some of the variation can be explained by experience. The Japanese, for example, don’t have much experience with inflation in recent decades and they perform poorly on that question. The questions, however, can hardly be considered esoteric and a large literature indicates that the ability to answer these questions correlates with the ability to intelligently make real and important financial decisions regarding mortgage refinancing, credit card borrowing, and retirement planning.
Most states now require that financial literacy be taught to high school students and there is some evidence that teaching financial literacy improves financial outcomes later in life but the evidence is not strong and most teachers still feel that they are unqualified to teach the basic concepts.
In my opinion, improving financial literacy is one of the areas in which principles of economics teachers can make a great contribution to their students. Modern Principles, my text with Tyler, contains extensive material on these topics including a chapter on stock markets and personal finance but more needs to be done.
Addendum: Take the quiz here (with a few more questions). Hat tip: PD Shaw and Tim Ogden for an added link.
Polling economists on information technology and automation
From an IGM/Booth survey:
Question B: Information technology and automation are a central reason why median wages have been stagnant in the US over the past decade, despite rising productivity.
Strongly agree, 0%
Agree, 33%
Uncertain, 29%
Disagree, 18%
Strongly disagree, 2%
No opinion, 11%
There are further results of interest here, via Carl Shulman.
How many times can you lose a bundle of euros?
Just before departing for Paris, I went up to the bureau drawer and found, to my surprise, a stash of unused euros. Wow, all of a sudden I am getting a few free days eating, I thought. The prospect of the trip brightened, as paying $8 for a small block of dry goat cheese no longer seemed so outrageous.
I stuffed the money into my pocket — or so I thought — and headed off to the cab. After paying the cabbie at Dulles, he gave me a big smile and said “Thank you sir for the very nice tip,” with an accent I could not quite trace.
Half an hour later, in the airport, it occurred to me that my tip wasn’t that unusually large. What was he talking about with those profuse thanks? And suddenly I could not find those euros in my pocket. They must have fallen out in the cab, perhaps while I turned around to close the distant rear window so I could hear the person calling me on the phone. Ah, so that was the very nice tip the cabbie was talking about. Very nice indeed.
While feeling vaguely (and unintentionally) charitable, I was mortified as well. Yes, I could afford that loss, but how unreliable my systems must be. What else was going to go wrong? (And I wondered whether, morally, the cabbie had in fact asked for and received my permission to keep such a nice, large tip. Perhaps he felt the need to mention the tip to avoid highly negative consequences in some future world to come.)
Upon arrival in France, I then had to withdraw an equivalent amount of euros from the Parisian ATM. Every time I spent that money I felt like I was losing it twice. It reminded me of the first loss of the euros in the cab, and then I had to pay for everything yet again. That block of goat cheese now felt like buying a diamond, and I hoped all the more that something good would come of my unintended charity.
Finally, Natasha told me that I had left a large stash on euros on the kitchen counter before departing.
But was I relieved? Not really, in fact I now felt worse yet. All that worry and psychic trouble and loss of confidence in my own economic rationality…and for what? Furthermore — and indeed worst of all — I had forgotten to take those euros with me and thus missed out on a lot of free Parisian food!
The goat cheese now seemed three times as expensive.
So how will it feel when I, during my next trip, finally end up spending those euros?
I now know how to lose a bundle of euros three times, is there any comparable algorithm for spending it multiple times?
Addendum: I learned this morning that in fact Natasha has spent the euros.
Gabriel Kolko has passed away
Dystopian science fiction is cheaper
So says Neal Stephenson:
In both games and movies the production of visuals is very expensive, and the people responsible for creating those visuals hold sway in proportion to their share of the budget.
I hope I won’t come off as unduly cynical if I say that such people (or, barring that, their paymasters) are looking for the biggest possible bang for the buck. And it is much easier and cheaper to take the existing visual environment and degrade it than it is to create a new vision of the future from whole cloth. That’s why New York keeps getting destroyed in movies: it’s relatively easy to take an iconic structure like the Empire State Building or the Statue of Liberty and knock it over than it is to design a future environment from scratch. A few weeks ago I think I actually groaned out loud when I was watching OBLIVION and saw the wrecked Statue of Liberty sticking out of the ground. The same movie makes repeated use of a degraded version of the Empire State Building’s observation deck. If you view that in strictly economic terms–which is how studio executives think–this is an example of leveraging a set of expensive and carefully thought-out design decisions that were made in 1930 by the ESB’s architects and using them to create a compelling visual environment, for minimal budget, of a future world.
As a counter-example, you might look at AVATAR, in which they actually did go to the trouble of creating a new planet from whole cloth. This was far more creative and visually interesting than putting dirt on the Empire State Building, but it was also quite expensive, and it was a project that very few people are capable of attempting.
…That [dystopian] environment also works well with movie stars, who make a fine impression in those surroundings and the inevitable plot complications that arise from them. Again, the AVATAR counter-example is instructive. The world was so fascinating and vivid that it tended to draw attention away from the stars.
There is more here, via Morgan Warstler.
We can now charge devices deep within living bodies, by wireless
A Stanford researcher has discovered a way to charge devices deep within living bodies, potentially opening the gates to embedded sensors and “microimplants” that weren’t possible before.
More immediately, the development, published Monday in the Proceedings of the National Academy of Sciences, promises pacemakers, nerve stimulators and other existing medical devices that can be smaller, longer-lasting and implanted more deeply within the brain and body.
Currently, many of these devices run on big, long-lasting batteries that still eventually die, generally requiring another round of surgery. Others are equipped with rechargeable batteries that require large receiving coils on the implant (at least a centimeter in diameter) that strictly limit where and how they can be used.
The new approach, dubbed “mid-field wireless transfer,” could allow doctors to rely more on electronics and less on drugs to treat various diseases, according to the researchers.
There is more here, via Samir Varma.
Assorted links
1. Man comes out 89 cents richer after a year of penny-rounding, a Canadian tale.
2. What if you could read the notes of your therapist?
3. The Cambridge economics fellow who wants to show “women as they truly are.”
4. Claims about who really runs North Korea (speculative). And David Brooks on democracy and The Fourth Revolution.
5. A Touch of Sin is an excellent Chinese movie, big screen required of course.
MIT’s rise to prominence in economics
There is a new paper (pdf) by Andrej Svorenčík on this topic:
The core question of MIT Economics Department’s history – why has MIT economics risen to prominence so quickly – requires an approach to history of economics that focuses on the role of the networks within which economists operate, their ideas diffuse, and gain scientific credit. By reconstructing the network of MIT economics Ph.Ds. and their advisors, this paper furnishes not just evidence of how MIT rose to prominence as documented by the numerous ties of Nobel Laureates, Clark Medalists, elected officials of the AEA or the Council of Economic Advisors to the MIT network. The MIT Economics Department is also revealed as a community of self-replicating economists who are to a large extent trained by a few key advisers who were mostly trained at MIT as well. MIT exhibits a large share of graduates who remain in American academia that is disproportionate to the number of graduates it has produced. It is hypothesized that this has been an important factor in MIT’s rise to prominence. On a methodological level this paper introduces prosopography or collective biography, a well-established historiographic method, to the field of history of economics.
When I was at Harvard in the 1980s, we typically thought of the MIT students as:
1. Smarter and harder working than we were
2. Better focused and better trained, and benefiting from a more collegial environment
3. More narrow
4. Somewhat less…um…modest, and thus you might prefer to have a Harvard student setting your economic policy.
Fortunately we all have moved on to broader and less prejudicial judgments.
The pointer is from @UdadisiSuperior.
Which are the greatest dissertations?
Robert Saunders writes to me:
Thanks for posting the Joseph Stiglitz dissertation. It’s always great to see the dissertations of Nobel winners.
For a future post, I thought a good topic might be “best dissertations ever” across fields. Obviously, you’ll know most about economics (assume Nash and Arrow are contenders here?), but I wonder about physics, biology, chemistry, history, etc. Not sure what an English dissertation looks like except in writing (a novel? collection of short stories?), but them, too. Would make for an interesting comments section.
And thanks for the never ending stream of great posts across the years,
In economics Michael Spence on job market signaling comes to mind, as does Frank Knight’s Risk, Uncertainty, and Profit. (Paul Samuelson’s renowned dissertation was mostly a wrong turn for mathematical economics, even though it got the ball rolling.) In English there is Harold Bloom’s doctoral dissertation on Shelley and surely much more. Elsewhere, Marie Curie did something on “radio-active substances” and Jane Goodall covered the chimpanzee. There is Claude Shannon on information, Max Weber on the Protestant Ethic, and Wittgenstein’s Tractatus. How about Gauss and Turing? Might de Broglie come in first overall?
I’ll say no to Marx’s “The Difference Between the Democritean and Epicurean Philosophy of Nature.” But how about some of those Russian mathematicians in the mid to late 20th century? They came up with their key contributions quite early in life and I suspect some of those were in their doctoral dissertations.
Markets in everything
Danieal Cormier of Quispamsis, N.B., is hoping to revolutionize the men’s underwear industry with a new design that provides pockets for cellphones and other gadgets.
Cormier, 20, came up with idea while sitting around alone at home in his boxers one day.
“I had my cellphone and I kept doing the hand motion to put my cellphone in my pocket, but my underwear didn’t have any pocket,” he said.
“So that’s when it kind of sparked in my head — ‘Why don’t underwear come with pockets?'”
The story is here, via Michelle Dawson.