China fact of the day, once more
In Beijing, dogs are not allowed outside in the daytime; those caught outdoors are confiscated and killed. They are not allowed in parks, on grass or on elevators – even when elderly owners live on the 14th floor. They may not grow taller than knee-high, on pain of death. And licenses are expensive.
The predictable result: many dogs never go outside. Thousands are confiscated each year for being in the wrong place at the wrong time, or growing a little too big. In the back alleys, where the police can’t drive, families flout the law and play with their pets outside during the day. In fancier parts of town or near any major street, nobody dares.
Now The New York Times goes out on a limb:
Many dog owners are seething, even as their pets suffer…Matters like this, as much as censorship of the press and the jailing of dissidents, may determine the fate of the Communist Party.
Here is an article on new dog regulations in China. The yearly registration fee used to start at $600 for the first year, now it is $121, read here. Here is a Chinese “man bites dog” story (seriously). Here is an article on dog deregulation in southern China.
Daniel Drezner describes my weekend
Read his witty and salacious account of a conference on Steven Pinker, attended by some of the major bloggers, including Alex. What I found most interesting was the following. The fellow bloggers (who in general had not previously met) had more to say to each other, even when the topic was not blogging. If you read (and write) blogs, you probably have different ideas what the cutting edge questions are, compared to your blog-ignorant friends.
The ten dirty secrets of classical music
Check them out. I’ll disagree with 2, 5, 8, and 9. Nonetheless the list is a useful corrective designed to jolt your thinking. I’ll add that Benjamin Britten, and indeed most other British composers besides Elgar, is simply boring. Thanks to Marc Poitras for the pointer.
New punishment for speeders
In a move unprecedented in the Bay Area, the city’s traffic engineers have created a traffic signal with attitude. It senses when a speeder is approaching and metes out swift punishment.
It doesn’t write a ticket. It immediately turns from green to yellow to red.
Here is the full story, thanks to the ever-vigilant Geekpress.com.
My take: This will succeed in reducing speeding. By making the decision calculus more uni-dimensional (time vs. time, rather than time vs. speeding ticket), individiuals are more likely to see the folly of driving at unsafe speeds.
Here is a general introduction to framing effects. Here is a short article about framing effects in Alice in Wonderland. Here is Daniel Davies on how framing effects matter.
But what about civil liberties? One commentator opined: “It’s depriving you of another one of your liberties — going fast”.
Addendum: Tim Worstall writes in:
“The anti speeder traffic light ?
Been around for years.
Here in Portugal they’re all over the place.
And they work very well, just as advertised.”
Proposition 13, anyone?
Every year I get hit by a big increase in my property taxes. I pay more and get nothing in return. I am reminded by Willy Sutton’s adage that he robs banks because “that is where the money is.” Why should local governments have more money to spend, simply because our homes are more valuable? Why should real estate appraisers have so much power over our pocketbooks?
Apparently many taxpayers feel the same way I do:
More than half the states are considering new property-tax limits or cuts, says David Brunori, an expert on state and local taxes.
States are more likely to tinker with the property tax, rather than overhaul it, he says. But the unrest may signal the start of the most extensive attack on property taxes since 1978. That’s when California voters approved Proposition 13, which capped property taxes and started a nationwide tax revolt.
“Something has to be done or there’s going to be a revolution,” says Deloria Bucknell, 86, who pays $1,200 a year on her trailer home in Topsham, Maine.
Voters in Maine and Washington are expected to vote later this year on citizen-initiated measures that would slash property taxes 20% to 50%. Elsewhere, state legislatures are considering cutting rates, adding to exemptions and limiting how much assessments can rise.
Behind the discontent: higher property values.
Property-tax collections have risen an average of 5.7% annually over the past five years to a record $297 billion nationally in 2003, according to the Census Bureau. Higher home values, rate hikes and new construction caused the increase that is about twice the rate of all other state and local taxes.
Here is the full story. Here is a related account about how the taxes are scaring off would-be homeowners. Read the attached graph on property taxes as a percentage of income; in Maine and New Hampshire the figure hits a high of 4.9 percent. Alabama is lowest with 1.3 percent.
That all being said, Proposition 13 did not work out very well for the state of California. For all their vices, property taxes are a relatively decentralized source of government support. If you don’t like how the money is spent, you can move. Replacing local property taxes by state taxes ended up gutting California schools, without saving taxpayers much money in the longer run. Stay tuned…
Education in Finland, recipe for success?
Consider the following facts:
1. Finnish children do not start school until they are seven years old. Most Finnish children do start day care from about the age of one, given that most mothers work.
2. Educational spending is a very modest $5,000 per student per year.
3. There are few if any programs for gifted children.
4. Class sizes often approach 30.
5. “Finland topped a respected international [educational] survey last year, coming in first in literacy and placing in the top five in math and science.”
6. Finnish teachers all have a Master’s degree or more.
7. Finnish teachers all enjoy a very high social status.
8. Reading to children, telling them folk tales, and going to the library are all high status activities.
9. TV programs are often in English, and subtitled, which further supports reading skills. (This should also serve as a jab to those who complain about the global spread of American TV shows.)
Here is the full story from The New York Times. Here is a general overview of the Finnish educational system, here is another. Here is a summary of the OECD study, with additional rankings and instructions on how to get a complete copy. Here is a story on Finnish economic competitiveness.
My take: The United States performs remarkably well when it harnesses status and approbational incentives in the right direction. We have done this for business entrepreneurship, but we are not close when it comes to education. When it comes to economics, we have to move away from our near-exclusive emphasis on monetary incentives.
China fact of the day
I remain disappointed by how our media underreport the news from China. Here is one possibly major development:
China will kick off reform of its publishing system by transforming the country’s publishing houses from public service institutions into business-oriented enterprises, an official from the Regulations Bureau of China’s Press and Publication Administration (CPPA), who wished to remain anonymous, told Interfax in an interview.
All publishing houses in China, except for the People’s Publishing House, will undergo this reform. The People’s Publishing House, meanwhile, will remain a public service institution. China currently has approximately 527 publishing houses, of which 20 to 30 are private enterprises. Most of these private publishers are engaged in publishing books.
“An experimental batch of publishing houses has been selected and their reshuffling and reform will be finished by the end of 2004,” the CPPA official explained. “Related information will not be publicized before the publishing system reforms are completed.”
Here is yet some further good news:
According to China’s WTO obligations, the retail book market will be open to foreign investment without any restriction after December 1, 2004. Foreign investors will have the final say in investment proportion, business fields and sales locations. Private investment will also be encouraged.
Here is the full (albeit brief) story. No, I don’t expect Chinese censorship to go away, but many restrictions are easing:
In 2003, the Party ordered reform for the whole cultural system. Some magazines and newspapers were no longer offered government and Party support to aid in distribution and revenue earning. As a result, over 600 newspapers and magazines folded, with some 400 more still facing challenges.
Here is more on opening up the Chinese publishing market. Milton Friedman, of course, was right to point out the strong connection between economic and political freedom. Here is a previous installment of “China Fact of the Day.”
Markets in everything, yet again
The new cinema in the Norwegian town of Kautokeino is somewhat out of the ordinary. Not only is it entirely made out of snow – it is a drive-in. For snowmobiles.
“We always wanted to create a different film experience,” explains Anne Lajla Utsi, the leader of the Kautokeino Sami film festival.
“As far as we know, this is a world first.”
Here is the full story.
And that’s not all. You sit on reindeer skins, you can buy reindeer meat and hot drinks at the snack stand (no ice cream!), and yes the screen is made of snow also.
Short art
The higher the wage rate, the more valuable is time. Some people will use their greater wealth to consume more leisure, others will run around and look harried.
Surely the arts should adapt to serve this second category of customer. We are all familiar with channel-surfing, or the two-minute pop song, but how about “high culture” in bite-sized portions?
“There’s no hard and fast reason why an opera has to be colossal or epic in scale,” says director David Pountney. “An opera is simply a narrative idea expressed through music. Length is immaterial – I have seen several successful operas that are barely 10 minutes long.”
In fact, 10 minutes sounds Wagnerian in comparison with Peter Reynolds’s Sands of Time. At three minutes and 34 seconds, it is listed in the Guinness Book of Records as the world’s shortest opera. “The librettist, Simon Rees, came up with the idea of an opera whose duration should match the boiling of an egg,” says Reynolds. “So we created a domestic scenario of a couple having an argument over breakfast. It starts with the sand-timer being turned, and ends with the egg coming out of the saucepan.” [I’ve added the link to this quotation]
Then there is always Samuel Beckett:
…the shortest of all Beckett works, the notoriously ephemeral Breath, consists of a set of printed instructions that take longer to read than to perform. Richard Gregory, of the company Quarantine, recently produced the work at Newcastle Playhouse, and came up with an ingenious solution for extending its 30-second duration. They did it twice. “I think we spent about a fortnight, all told, preparing a piece that was over in under a minute,” says Gregory.
And here is a nice short (truly short) story:
Augusto Monterroso’s El Dinosaurio reads in its entirety: “Upon waking the dinosaur was still there.”
Addendum: If your tastes run in the other direction, here is a version of Beethoven’s 9th symphony, slowed to down to last twenty-four hours. And go to the Hirshhorn Museum in Washington, where you can see Douglas Gordon’s “24 Hour Psycho”, the classic Hitchcock movie but at much slower speed.
An impossibly crude theory of museums
The ever-insightful David Nishimura asks why museums are so strongly discouraged from selling works in their inventories. I have seen (informal) estimates that U.S. museums display no more than five percent of their collections over a few years. Nishimura asks:
In fact, museums often end up with stuff that they cannot exhibit or that is of little or no relevance to what they are all about (it’s not only relatives who end up receiving gifts that are better intentioned than chosen!). Storage space is another issue, as is the cost of insurance.
Museums also evolve over time. Nearly all older American museums, for example, started out with collections of European paintings of decidedly mediocre quality. Skip forward a few generations, and those museums’ galleries are at an entirely different level — the legacy of wealthy patrons, vastly improved connoisseurship, and the dispersal of so many old European collections. And so what was once exemplary is now the stuff sold in bulk by third-rank auction houses. Is it so bad that such works be sold off, especially if the proceeds can be used to acquire better items not well represented in the collection?
In practice, museum directors who “deaccession” artworks come under heavy criticism. Why? Here is where a very crude theory, too crude to possibly be true, comes in.
Stop thinking of visitors as the museum’s customers. Instead the customers are the donors. Donating a picture is like spending money. The donor gives a Picasso to MOMA, in return purchasing the feeling of “having given a Picasso to MOMA.” This yields tax, networking, and other privileges in this life, as well as a long-term legacy. Museums, in turn, take some care to attract viewers, so that their real customers — the donors — have greater feelings of satisfaction about the whole enterprise.
In this “model,” selling off artworks makes customers (donors) nervous. “How do I know they won’t sell off my [sic] Picasso once I’ve died?” It is only a slight reassurance to respond: “We only sell off the second-rate pictures in our inventory.” So museums sit on their huge and growing stashes of art. In this manner they signal their trustworthiness to future donors.
Under some assumptions this outcome is roughly efficient. Donating a picture to a vault is how that donor wishes to “spend” her resources. The donor may self-deceive into thinking that the donated work is a masterpiece. By the time the truth is revealed, she has passed away. Subsequently selling the work to a museum in Topeka would damage future donors more than it would benefit Kansas viewers. The museum community, of course, does not like to admit that its donors are the primary customers (how would viewers and government funders feel?), so it must present other reasons why deaccessioning is bad. At the same time the museum faces a “time consistency” problem, and would like nothing more than to sell off its dross.
The policy bottom line: Government funding eases museum needs for funds, and makes it easier for museums to keep pictures in vaults. The funding subsidizes the legacies of dead donors, eases time consistency problems for future donors, and limits the real supply of art, to the detriment of viewers. That’s just in this fantasy model of course, not in the real world.
The world’s highest suicide rate
The highest suicide rate in the world has been reported among young women in South India by a new study. The research is of major importance, according to the World Health Organization, as it brings to light Asia’s suicide problem.
The average suicide rate for young women aged between 15 to 19 living around Vellore in Tamil Nadu was 148 per 100,000. This compares to just 2.1 suicides per 100,000 in the same group in the UK.
The global suicide rate stands at 14.5 deaths per 100,000, with suicide the fourth leading cause of death in the 15 to 19 age group. However, in the Tamil Nadu study, suicide was the number one cause of death among these adolescents.
Notably, young women were much more likely to kill themselves than young men – the reverse of the rest of the world. In Western countries, men are three times more likely to commit suicide than women.
Here is the full story. Here is an NBER paper on the determinants of teenage suicide in the United States. Earlier Alex wrote about suicide as a social phenomena involving tipping and multiple equilibria.
Can this be true?
Here is a surprise:
So far there appears no evidence whatsoever of the “tax cut for the rich” charge. Changing regulations have reduced the burden of each income quintile except that at the very top. From the standpoint of all federal taxes, 2001 represents increased income progressivity as compared with the previous decades.
That’s Econopundit and here is the full post and data, thanks also to Bruce Bartlett for publicizing these results. The original source, I might add, is the non-partisan Congressional Budget Office. Note that the figures include the effects of excise, payroll, and corporate taxation, not just income taxes.
My take: We have to be careful how we interpret the figures. If “the rich are getting richer,” the top quintile can be paying more, in relative terms, even if the top marginal rates are falling. That being said, the top quintiles still appear to be carrying their share of the burden. Thanks to Brock Sides for a useful email.
Addendum: Here is some critical analysis, I am heading to my conference and don’t currently have time to evaluate it.
Markets in everything, the continuing saga
Leading British authors have auctioned off the names of characters in their new books to raise funds for charity.
Successful bidders at the third charity auction for victims of torture included a man who paid £1,000 to see his mother’s name appear in the next novel by the Irish writer Maeve Binchy. Another secured a role in books by two authors, bidding £950 for the children’s writer Philip Pullman and £240 for Sue Townsend, the creator of Adrian Mole.
And one author was also a bidder. Martina Cole, whose own work raised £220, paid £1,000 for her name to appear in the next book by Sarah Waters, who wrote Tipping the Velvet. Tracy Chevalier, whose novel Girl With A Pearl Earring, was adapted into a film, raised £300.
Adi McGowan, a City trader, paid for his mother, Muriel, to appear in the next Binchy book as a surprise birthday present. He said his mother was a fan of the author, whose novel Circle of Friends was adapted into a Hollywood film.
“I usually give a book as a birthday present,” he said. “Maeve’s a favourite. My mother has been waiting eagerly for her next book – now she’s actually going to be in it.”
Here is the full story. Here is a blog post about buying personalized romance novels more generally. Here is a related story of a couple who tried to auction off the naming rights for their baby. No company was willing to pay $500,000, so they named him Zane.
My take: To get mentioned on this blog, all you have to do is send us a useful link, failing that try $100 or more.
The stock market prices presidential candidates
…[political] platforms are capitalized into equity prices: under a Bush administration, relative to a counterfactual Gore administration, Bush-favored firms are worth 3-8 percent more and Gore-favored firms are worth 6-10 percent less. The most sensitive sectors include tobacco, worth 13-25 percent more under a favorable Bush administration, Microsoft competitors, worth 15 percent less under a favorable Bush administration, and alternative energy companies, worth 16-27 percent less under an unfavorable Bush administration.
This result was generated by correlating firm-specific equity returns with the Iowa Electronic [Presidential] Market forecasts. In other words, when Bush’s electoral fortunes went up, “Bush stocks” rose as well.
Here is the full paper. Here is the home page of the researcher, Brian Knight.
The bottom lines: 1) Overall the market did regard Bush as “better for business” than Gore. 2) Equity markets moved more rapidly than did the Iowa markets. 3) If the outcome of a Presidential election truly matters to you, your position can be hedged fairly easily. 4) Presumably there are “John Kerry stocks” right now.
Thanks to Eric Crampton for the pointer.
Why can’t you choose your cable channels?
I don’t ever watch Bravo but still I must pay for it:
In the dream world of some television viewers, they would pay their cable or satellite companies only for the channels they want. Some might not pay for MTV, because they don’t want their 8-year-olds watching it. Others would turn down ESPN Classic, because they’ve already seen the 1975 World Series. Others would eschew TeleFutura, because they don’t speak Spanish.
Reality is far different.
No U.S. cable or satellite company offers what are called “a la carte” plans. In order to get the Discovery Channel from Comcast Corp. cable company, for instance, Washington viewers have to pay for an “expanded basic” package that includes MTV, FX, MSNBC and 33 other channels.
Here is one relevant article.
Why are consumers forced to buy a bundle? Cable companies claim that choice would require expensive boxes, but few observers believe this claim.
More plausibly, price discrimination is at work. Consider a simple example with two individuals. John values Disney at $100 a year and FoxNews at $10 a year; Sally has the reverse valuations. Without bundling, the cable company will offer each channel for about $99, and sell a channel to each consumer, reaping $198 in revenue (N.B.: I am assuming that the cable company has a good idea of demand in general, although it cannot identify which consumer is willing to pay how much for what.)
In lieu of this set up, sell the bundle for $109 to each consumer, reaping a greater revenue of $218. The company makes greater profit.
More importantly, aggregate welfare is higher. In this case each consumer receives two channels instead of one.
Monopolies, regulated or otherwise, tend to bundle commodities when demands are scattered and the marginal cost of additional service is low. In this context, once the program is made, you can sell it cheaply to additional customers. So why not try to get the entire package into everyone’s hands?
You can spin your own numbers, with varying results, but the overall lesson is clear. While there is a general problem with monopoly in the cable market, bundling can make that problem better rather than worse. So don’t complain next time you have to “click-remote” through those Farsi and exercise channels.
Thanks to Curtis Melvin and Robert Saunders and James for relevant pointers. The ever-excellent Arnold Kling offers useful remarks on bundling as well.