Private Foreign Aid
The LATimes has a superb set of articles on remittances, it focuses not just on remittances from the U.S. to Mexico but also from Japan to the Phillipines, Italy to Kenya and Florida to Haiti.
Migrants have been sending money home, in one form or another, for
centuries. But only recently have economists recognized its
significance. Today, remittances are the largest, fastest-growing and
most reliable source of income for developing countries. Poor nations
reported $167 billion in receipts from overseas workers last year,
according to the World Bank, more than all foreign aid. Including
unrecorded transactions, the bank estimates that the total exceeded
$250 billion.…Mexico’s annual remittance inflow has doubled since 2002 and reached
$20 billion last year, second only to petroleum as a generator of
wealth for the country.Other developing nations also depend
heavily on their migrants’ money. Brazilian laborers in Japan send home
more than $2 billion a year, out-earning their country’s coffee
exports. Remittances bring in more than tea exports do in Sri Lanka and
tourism does in Morocco. In Jordan, Lesotho, Nicaragua, Tonga and
Tajikistan, they provide more than a quarter of the gross national
product.
Thanks to Carl Close for the pointer.
Market Approaches to Conservation
The Nature Conservancy continues to pioneer innovative, market-based approaches to conservation.
The Nature Conservancy announced today the purchase of six federal
trawling permits and four trawling vessels from commercial fishermen in
Morro Bay as part of a collaborative effort to protect a vast swath of
ocean off the coast of central California and help reform a troubled
fishery. The precedent-setting acquisitions represent the nation’s
first private buy out of Pacific fishing vessels and permits for
conservation purposes.
Thanks to Monique van Hoek for the pointer.
Markets in Everything: Child Brides
Another sad one (from the NYT Magazine):
In Afghanistan, a child bride is very often just that: a child, even a preteen,
her innocence betrothed to someone older, even much, much older. Rather than a willing union between a man and woman, marriage is frequently a
transaction among families, and the younger the bride, the higher the price she
may fetch.
Repent and be rewarded
…the Yobe State Government [in Nigeria, AT] determined to curb the
spate of armed robbery in the state introduced a novel anti-crime,
social protection programme, what it termed "the repentant robbers
scheme". The objective was to encourage armed robbers in the state to
confess to their sins, and if they did and signed up for the programme,
the state offered to pay them a sum of N5, 200 per month. The repentant
robbers were only required to swear with the Holy Qu’ran that they
would never again return to their bad ways.
Either the government does not understand elasticity of supply, surely the elasticity of supply of "repentant robbers" is infinite or they believe that they public does not understand the concept of time consistency. Either way this does not seem like a good program. More on the story here.
The Coase Theorem and Parties
A conversation in Carow Hall:
Can I bring anything to the party tonight?
No thanks. I’m stopping by the store on the way home and there’s no point both of us shopping.
Ah, the Coase Theorem.
Yeah, since there are no women involved we can be efficient.
I might add that we all had a good laugh when my wife arrived at the party a little later than I bearing all kinds of gifts. The other speaker has sworn me to secrecy but let’s just say he is not the sort of person to argue without evidence.
Dilbert and the Coase Theorem
The Coase theorem fails in the presence of asymmetric information. Nuff said. (Click to enlarge.)
Random Links for the Day
Gene Expression interviews Steven Pinker.
Support for vaccine markets from two former officials in the Clinton and Bush administrations.
A real life Numbers guy, Stanford mathematician Lawrence Wein scares us with calculations, "a few grams of
botulinum could contaminate a tanker and potentially poison 100,000 gallons of
milk."
Thanks to Carl Close and Razib Khan for pointers.
Freedom to Farm (or not)
These
homes in El Campo, Tex., stand on land once used to grow rice. Because
of that, their back yards qualify for direct payments under federal
agricultural programs as long as the owner does not develop the acreage. (By James M. Thresher — The Washington Post).
Thanks to Ramin Seddiq for the pointer.
Markets in Everything
Lunch with Warren Buffett? $620,100.
P.S. Tyler and I will have lunch with you for less than half of that and we will throw in Bryan Caplan or Robin Hanson (your choice) for free.
JSTOR for People not at a University
One of the great pleasures of being a professor in recent years is that I no longer have to go the library. Trudging to the stacks, finding an article, and photocopying it are things of the past. Almost everything is available online especially at the great JSTOR in the sky, a vast repository of electronic journals some dating back more than 100 years.
Not every university has access to JSTOR, however, and individual subscriptions are costly and limited in scope. But Kevin Kelly points out that in many places you can get a digital library card which will get you access to many online databases.
In most states, you can get a library card from a public library
outside of your county of residence — as long as you can prove state
residence (true for the San Francisco Public Library). Often you will
have to go the actual state library in person to pick up your card, but
once in hand, you can access the library from the web. Fanatical
researchers are known to have a wallet full of library cards from
numerous public library systems within their respective states. Some
states, Ohio and Michigan being two of the better known, have statewide
consortiums of private, corporate and public libraries, which allows
you access to the combined services and databases licensing power of
them all.
Wrong On All Three Counts
From an angry editorial in FrontPageMag.Com:
The New York Times claims “500 economists have signed an open letter to Mr. Bush
arguing that immigration is a net plus for the nation’s economy.”
Doubtless, the same 500 economists believe that tax hikes are a net
plus for the economy, increases in the minimum wage are a net plus for
the economy and signing the Kyoto Treaty on so-called global warming
would be a big boost for the nation’s economy.
Obviously the author didn’t do much research, at least in regards to the author of the letter.
Price Discrimination by Search Type
Many travel websites let you order your search results by price, by travel time, by quality and other variables. Ross Parker has discovered that on at least one website prices differ depending on how you ask your search to be ordered. In particular, if you ask for prices to be listed from lowest to highest you get lower prices, on exactly the same hotels, than when you ask for highest to lowest prices. Of course, this is consistent with a very clever price discrimination scheme.
Comments are open. I am interested to know whether anyone can verify the same phenomena on other websites. Here is Ross’s data.
The site is Metro Getaways, a newspaper-linked travel site operated in the UK by Driveline. The prices are for a two-night break in Madrid on 4th August 2006, with flights from London.
Hotel Rating Price (Lowest First) Price (Highest First) Francisco 1 Hotel 2* £146.80 £169.50 Asturias Hotel 2* £147.65 £170.35 Tryp Washington 3* £174.00 £196.70 Tryp Rex 3* £174.00 £196.70 Tryp Menfis 4* £184.20 £206.90 Tryp Ambassador 4* £189.30 £212.00 Vincci Soho 4* £192.70 £215.40 Gran Melia Fenix 5* £257.30 £280.00
The Nutty Professor
Here’s an amazing piece of the life of Timothy Leary from the NYTimes book review of Timothy Leary: A Biography.
…he finally went to jail, and was likely to be kept there for years
before he would be considered for parole. Characteristically, he
compared himself to "Christ . . . harassed by Pilate and Herod." In a
twist that could have occurred only in 1970, a consortium of drug
dealers paid the Weather Underground to spring Leary from the
California Men’s Colony at San Luis Obispo – he pulled himself along a
telephone cable over the fence, then was picked up by a car – and
transport him to Algeria. He duly issued a press statement written in
the voice of the Weathermen, the money line of which was: "To shoot a
genocidal robot policeman in the defense of life is a sacred act."But
when he and his wife, Rosemary, arrived in Algiers, they found
themselves wards of the exiled Black Panther leader Eldridge Cleaver,
who was probably smarter than Leary, possibly crazier, and had little
use for him. As Leary acknowledged, rather shrewdly: "It was a new
experience for me to be dependent on a strong, variable, sexually
restless, charismatic leader who was insanely erratic. I usually played
that role myself."
Corruption
Joel Waldfogel covers an interesting new study of corruption in the motor vehicle department in India. Some eight hundred Indians were randomly assigned to one of three groups: the first group got a cash bonus for getting a license, the second group was given driving lessons, the third group was a control.
If government worked well we would expect the second group to be the most likely to get a license in the shortest period of time. Instead, the first group bribed their way to a license. In addition to taking the shortest period of time, most of the first group never even had to take a test!
Waldfogel has more details. He misses, however, what I think is the most important finding of the study. The delay in the Indian DMV is "endogeneous," i.e. it’s not due to torpor or constraint but instead is a result of corruption.
How can the Indian bureaucrats make the most of their control over licenses? First, make the line long. But that can increase the bribe-price only so much – especially given how cheap it is to hire someone in India to wait in line for you. The real value is in the license itself so the Indian examiners randomly fail many applicants, even those with good driving skills. Paying the bribe, therefore, is really the only route to a license. The net result is long lines and unsafe drivers.
Corruption like this is endemic throughout the world. Libertarians should take note, however, the problem in this case is not so much that there is too much government but that government is too weak.
Open Letter – The Signatories
My Open Letter on Immigration has been officially released by the Independent Institute. It has now been signed by over 500 economists including 5 Nobel Laureates – Thomas Schelling (University of Maryland), Robert
Lucas (University of Chicago), Daniel McFadden (University of
California, Berkeley), Vernon Smith (George Mason University), and
James Heckman (University of Chicago). Many other prominent economists are also signatories including Eugene Fama, Robert Pindyck, Jeffrey Perloff, Barry Eichengreen, and Steven Salop to name just a few of many.
My personal thanks to everyone who signed and all who helped to make this a big success. Thanks!