Fly to Japan and ease your environmental conscience
Remember the question about the environmental impact of flying? Air Genius Gary Leff puts it nicely:
If you’re pulling inventory out of a low fare bucket, the strong
expectation is that there’s little effect at the margin on your buying
the ticket because the airline expects to operate a flight that doesn’t
come close to filling up.If you’re pulling inventory out of a high fare bucket, for coach
fares at the extreme end if you’re traveling on a Y fare, you can
pretty much expect that the flight will be close to sold out and that
the airline is willing to risk displacing another passenger in the
short term in exchange for your higher fare… or at least that the
ticket cost is high enough to potentially influence behavior on the
part of the airline…Reality is even a little bit more complicated than that. Cargo has
to come into play, too. Regardless of what you pay and what fare class
you’re booking in, your travel on United between San Francisco and
Nagoya, Japan is going to have almost no effect whatsoever on United’s
decision-making. They’ve got a very large contract with Toyota and they
fill up their 747 with cargo and the flight goes out with very low load
factors yet is still profitable for them to operate.
Getting a frequent flyer seat also means that your environmental impact is likely very small. I am pleased, of course, that I often have Gary booking my seats for me, all in the interests of a cleaner Earth. The bottom line is that if you get a good deal on price, you should feel doubly good about it.
Why do we touch our mouths so much?
Seth Roberts asks:
The photo shows the full faces of 22 men; 7 of them are touching
their mouths. I have noticed something similar at many faculty
meetings. I started to notice this after I read about its observation
in a study designed to measure something else.I’ve known about this for many years but have never read an
explanation. Do we enjoy touching our mouths – or is the absence of
touch for a long time unpleasant? If so, why?
Here is one poker player’s answer.
The Price of Everything
Here is Ezra Pound’s Usura Canto, here is a link to Russell Roberts’s The Price of Everything: A Parable of Possibility and Prosperity, available for pre-order. Can you guess which one has the better economics? In fact Russ’s book is the best attempt to teach economics through fiction that the world has seen to date.
Here is Russ’s summary of the book. Here is Arnold Kling on the book.
Who is the happiest-looking economist?
A group of researchers showed photographs, taken from economists’ home pages, to the public and the winner was Edmund Phelps; here is the paper. Will Wilkinson, source of the tip, summarizes further (with photos) and offers this quotation:
…advice for young academics is: if you seek happiness, become a macro-economist and research happiness; a Nobel Prize does not make you happier; if you want to be popular with the ladies, take lessons from Edmund Phelps, Bruno Frey and Richard Easterlin; if you are looking for the ability to age like a red wine, Joseph Stiglitz and Jean Tirole have the trick, but not Richard Easterlin.
I thought that Milton Friedman usually looked very happy though he was not included in the poll.
O Economista Que Há Em Si
That’s the Portuguese-language version of Discover Your Inner Economist, the Amazon link is here. Here are various Portuguese-language web sites about the book. I am pleased to be represented in the Lusaphone world, as Portuguese is a very beautiful language, even when the topic is economics. Oddly Natasha insists that, heard at a distance, Portuguese sounds a great deal like Russian.
And of course the English language paperback edition of Inner Economist, just out and only $10 on Amazon, can be found here.
The one hundred item challenge
Could you live with no more than one hundred possessions? A group of Americans have accepted this challenge. I found this passage insightful:
Walsh isn’t surprised that decluttering is so popular these days.
Between worrying about gas prices and the faltering economy, people’s
first reaction, he says, "is often, ‘I need to get some control over my
life, even if it is just a tidy kitchen counter.’"
And of course there are cheaters:
One of the trickier questions is what counts as an item. Bruno
considers a pair of shoes to be a single entity, which seems sensible
but still pretty hard-core when you’re trying to jettison all but 100
personal possessions. Cait Simmons, 27, a waitress in Chicago, takes a
different approach. Although she has pared down her footwear collection
from 35 to 20 pairs, she says, "All my shoes count as one item."
The pointer is to Jason Kottke.
The environmental cost of flying
Minderbender, a loyal MM reader, asks:
How should we think about the environmental costs of commercial flying?
It seems as though the average cost is high, but the marginal cost is
quite low. When I fly across the country, it doesn’t cause any extra
flights, it just makes the one I’m on slightly heavier. Yes, the
increased revenues might give the airline an incentive to increase the
number of flights, but this effect seems very weak – much lower than
the average cost of my flight (the consumption of fuel divided by the
number of passengers). Maybe I’m just miscalculating?
I think about this every time I fly. A simple model of route expansion is that higher demand increases the number of total flights by some probability. For the system as a whole, the decisive flying unit has to come somewhere and there is no reason why, on average, it can’t be you. In other words, at least in stochastic terms you can’t escape the blame.
A second simple model of route expansion is that gates and other airport facilities are scarce and underpriced relative to demand. When demand goes up, supply is not very elastic and mostly they raise price rather than increasing output. Those who feel very guilty should prefer this second model.
The more they cut back on flights, as they have been doing, the more likely the first model is true. The second model is most likely true if you are flying into regulated foreign markets although I believe the Europeans are now opening up for U.S. carriers.
You might ask comparable questions about eating meat and killing cows. If you’re worried about your net impact, eat animals from countries with very privileged, monopolized and highly regulated, supply-inelastic livestock sectors.
Very good sentences
Liberals tend to believe that sexual orientation is determined by
genetics but that gender-difference in behavior is not, whereas
conservatives tend to believe the reverse.
That’s Matt Yglesias.
Assorted links
1. What makes Jeff Koons great; the best parts of this insightful article come in the middle and toward the end.
2. Dani Rodrik on Samuelson-Stolper and why it might not hold.
3. Wealth of Nations board game; it seems to emphasize the imperialist reading of Adam Smith. There is more information here.
5. The cap and trade bill fails.
Best economics paper of 1958
Leonardo Monasterio asks:
Which paper/book should we celebrate its 50th year? Obviously, my vote goes to the paper that started the cliometric revolution:
The Economics of Slavery in the Ante Bellum South
Alfred H. Conrad, John R. Meyer
The Journal of Political Economy, Vol. 66, No. 2 (Apr., 1958), pp. 95-130
Is there any other contestant?
The two obvious competitors are Modigliani and Miller on financial irrelevance (AER) and Paul Samuelson on the overlapping generations model (JPE). I’m inclined to put M-M first and Conrad and Meyer second. Am I missing anything? Don’t one or two of Schelling’s famous game theory articles date from this year as well?
Postwar American economics was splendid. WWII meant that many thinkers (Friedman, Samuelson, Schelling, others) had real world experience with tackling big problems. At the same time these people were just getting their hands on quantitative thinking and some more technical tools, yet the profession still valued breadth to some degree.
What you don’t know that you don’t know
Bryan Caplan writes:
A common Austrian slogan is that "Neoclassical economists study only cases where people know that they don’t know; we study cases where people don’t know that they don’t know."
He demands a good example in support of the Austrian view. I would cite the arrival of the Spaniards during the time of the Aztecs and the subsequent conquest (see also Fabio’s comment on Bryan’s post). This was not literally an unimaginable event, since it had (in modified form) been foretold by Nahua prophecy, but still the Aztecs had no ability to respond effectively, given their prevailing mental frameworks.
More generally, look at the implied volatility embedded in options prices. Is it forecasting how much volatility is really out there? Here’s one possible quantitative measure: if you have futures on options, take the measure of "surprise" in implied volatility (the change in implied volatility not forecast by the futures price for the options contract) as the relevant measure of "what you didn’t know that you didn’t know." I’m not saying this figure is large, or even necessarily positive on average, but I do think it is a meaningful concept. Arnold Kling responds to Bryan as well. Here is my previous post on this topic.
China Op-Ed of the day
"Obama is a graduate from a first-class university," the editorial
continued. "He is a symbol of assimilation rather than a representative
of different races coming together. Obama did not break the superiority
complex of white people. On the contrary, his appearance strengthened
the superiority complex of white people."
The article is interesting throughout.
The decay of gratitude
[Francis] Flynn asserts that immediately after one person performs a favor for another, the recipient of the favor places more value on the favor than does the favor-doer. However, as time passes, the value of the favor decreases in the recipient’s eyes, whereas for the favor-doer, it actually increases. Although there are several potential reasons for this discrepancy, one possibility is that, as time goes by, the memory of the favor-doing event gets distorted, and since people have the desire to see themselves in the best possible light, receivers may think they didn’t need all that much help at the time, while givers may think they really went out of their way for the receiver.
That is from Robert B. Cialdini’s fascinating Yes! 50 Scientifically Proven Ways to be Persuasive. Cialdini’s earlier Influence remains one of my favorite social science books. Here is a link to Flynn’s paper and related work.
As goes New Zealand, so goes the world?
The land of the long white cloud has enjoyed a 10-year economic boom
driven by exports of milk, butter and cheese, a population riding a
housing market boom and tourists eager to sample the landscapes
depicted in Hollywood films such as The Lord of the Rings.But
New Zealand is on the cusp of a downturn and risks seizing the dubious
honour from the US of becoming the world’s first developed nation to
sink into recession, as measured by two consecutive quarters of
negative gross domestic product growth.GDP numbers for the January-March quarter due this month are forecast
to show a contraction of at least 0.3 per cent. TD Securities and other
economic forecasters are predicting a 0.2 per cent decline for the
April-June quarter.
Here is more information. Elsewhere in the Commonwealth, one UK supplier is now charging $14-15 a gallon ($18 for a UK gallon) for gas, he wants to make sure his customers can always get the product.
What to read on a 28-hour plane trip
Chris Blattman gives his tips. Most of all, read this blog post, which will tell you not to take a 28-hour plane trip. If you must go, and can’t break it up by feasting on chili crab in Singapore, rethink at least one aspect of your life. But if you are stuck the preferred advice is to start with a bunch of fun books you can finish quickly, move to a longer, more serious work than will command your full attention for quite a while and you won’t want to end, and then have some fun stuff left over for the end. I wonder how general this is as an optimal pattern of intertemporal consumption.