Do only smokers benefit from moderate drinking?

Richard Ippolito says yes:

This paper uses data from the Health and Retirement Survey to measure the effects of alcohol on the incidence of morbidity and death. The study is able to reproduce the implied benefits of engaging in moderate levels of alcohol consumption, even after controlling for a large number of independent variables not usually available in health data sets. In fact, the controls work in the direction of supporting the benefits of engaging in even higher dose levels than conventionally recommended. It turns out, however, that smokers and quitters enjoy most of the benefits of unusually high alcohol consumption. Non-smokers evince modest benefits that are completely captured at very low dose levels. In general, the results suggest that studies of alcohol intake on health need to pay more attention to the characteristics of users. It may be that alcohol is especially beneficial for populations that are deficient in their health for other reasons like smoking or poor eating, whereas populations who follow good diets and do not smoke benefit very little from alcohol use.

Smokers should drink even more than we had thought, or quit smoking. Non-smokers won’t benefit much from drinking. Thanks to Newmark’s Door, one of the most useful yet underrated blogs, for the pointer.

Barter clubs and monetary theory

When I was a kid my father belonged to a barter club. He sold advertising space in his magazine, published for a chamber of commerce, in return for free restaurant meals. The system involved a county-wide network, involving trading stamps and pledges to supply real-valued goods to other members. Being a Jersey boy, I had many a veal piccata this way.

More generally barter clubs expand in deflationary times. They were prominent in the 1930s, during the Great Depression, and very common after the Argentinean financial crisis.

I can think of at least three reasons for such arrangements:

1. They may offer tax advantages, not always legally.

2. They serve as a form of price discrimination. Some people won’t pay the full cash price, but you will accept a bartered service for some of your wares.

3. Barter clubs expand the real supply of money, when monetary policy is bad. This is why we see them in times of financial crisis. Prices can be sticky downwards. If the government won’t maintain the real supply of money, to some extent the private sector will issue scrip to make up the difference.

Bernard Lietaer thinks that scrip is an important monetary institution for the future. Irving Fisher had a fascination with related ideas, as did the German monetary economist Heinrich von Rittershausen.

My view: Scrip will remain limited in economic importance and may even decline in use. Scrip allows you to issue your own money, backed by the goods you sell. But the more effective financial intermediaries become, the less such monies are needed. It is no accident that scrip picks up in times of depression. As for the price discrimination motive, growing resale opportunities (e.g., ebay) should diminish this over time.

Thanks to Carnival of the Capitalists for the pointer.

Facts about lightning

1. On average lightning strikes one hundred times per second.

2. From 1959 to 1994 an average of 363 Americans are struck a year, 90 are killed.

3. The annual odds of being struck are about 576,000 to 1. The annual odds of being killed are about 2.32 million to 1. In other words, one in 87,000 bolts hits someone, one in 345,000 bolts kills someone.

4. Florida is the most dangerous state for lightning. In per capita terms New Mexico is the most dangerous state.

5. Alaska and Hawaii are the least dangerous states, with zero reported lightning deaths.

6. July is the most dangerous month.

7. 3 p.m. is the most dangerous time of day, it is five times more dangerous than 9 a.m.

8. Men account for 84 percent of lightning deaths. Can we be that stupid? Yes.

9. Golfer Lee Trevino has been struck by lightning twice.

These facts are from LIfe: The Odds (And How to Improve them), by Lee Baer.

Here is a color-coded map of where lightning is most likely to strike. Here is an association of lightning survivors. Here is a medical description of what happens to you if you are struck.

Happy golfing!

How to improve meetings

Reader Robert Ayres relates the following:

Heard about this at General Electric’s Missile and Space Division, back in the 60s. (I did not actually see it in use.)

As you enter the meeting room, you privately enter your annual salary (thousands) on the telephone dial (pad). A little computer (a one-off then, a PDA now) continually computes the total running-cost of the
meeting, in terms of (sum salaries) meeting-duration.

So the chair can at any time announce, “OK guys, we’ve spent $1500 of the company’s money, have we reached any conclusions?”

For other ideas, see my earlier post.

Markets in prediction, revisited

You can now bet on future developments in the tech sector. The questions include the following:

1. When will Google have an IPO?

2. Will SCO be awarded damages? [in its lawsuit against IBM at the District Court in Utah]

3. When will there be a commercially available electronic device using ultrawideband technology?

4. Will Oracle acquire PeopleSoft Inc?…before March 31st, 2004.

Here is the website. There are no cash prizes, but it is not just for pure play either. The top ten winners receive prizes from Circuit City. If you are wrong about everything, you lose nothing.

My take: I’ve long been intrigued by the idea futures concept. One central question is whether they can perform some function that current asset markets do not already satisfy. I’ll say no for this version of the idea. For instance some of the other predictions involve the future value of the NASDAQ index. Many of the others can be satisfied, albeit with noise, by betting on the relevant companies. Note also that Circuit City wins publicity for sponsoring the contest, which points to another truth about idea futures. In financial terms they are a zero-sum game for the investors, so a sponsor may need an external incentive, such as publicity value, to market the idea. If idea futures have a breakthrough use, it may well be within companies, such as to evaluate competing R&D proposals.

Thanks to Daniel Akst for the pointer to the link.

The evolution of proverbs

First-graders were asked to complete the first halves of proverbs and they came up with the following:

“Better to be safe than punch a fifth-grader.”

“Don’t bite the hand that looks dirty.”

“A penny saved is not much.”

“Don’t put off till tomorrow what you put on to go to bed.”

“You can lead a horse to water, but how?”

All, I might add, appear to show a familiarity with economic reasoning, with the possible exception of number four, which to my mind makes no sense whatsoever.

Here is the full story. My colleagues David Levy and Daniel Houser have recently started designing some economic experiments about the evolution of proverbs. Proverbs, like prices, aggregate information. One question is whether proverbs evolve to demonstrate the wisdom embodied in some weighted notion of “average opinion”, the opinion of the median member of the language community, or the most frequently expressed opinions at the mode.

Electronic newspapers and human electronic billboards

…after years of unabashed hype and dashed hopes, truly flexible displays are at last being ramped up to commercial production. Among the uses that manufacturers foresee are electronic newspapers that can be folded or rolled when not in use and then opened to display the latest news; flexible strips for store shelves that display constantly updated price and product information; and watch bands or bracelets that offer streaming news or other information.

Some companies are even considering working the technology into lines of clothing. Forget those low-tech embroidered Gap or Gucci logos on your shirts, said Barry Young, vice president and chief financial officer for Austin-based DisplaySearch, a market research company that tracks the flat panel display industry. We’re talking about a Times Square-style news crawl moving across your chest: G . . . U . . . C . . . C . . . I.

“Now we’ll have to pay to be a billboard,” Young quipped.

Flexible-display blouses are still some years off. But a more modest rollable display — the first to be truly mass-produced — is now being churned out at the rate of 100 per week and may reach production levels of 1 million a year by the end of next year…

Here is the full story. Just think, you could read your favorite blogs on your MarginalRevolution T-shirt.

Thoughts on steroids

Professional sports face the unusual problem of trying to manufacture dominance and competitive balance at the same time. On one hand, the race to the title cannot be too lopsided, or fans of the lesser teams will lose interest. Revenue-sharing and salary caps are common (but not universal) in major league sports. On the other hand, stars and superlative performances draw fans. Most NBA fans look back with nostalgia to the days when the Lakers and the Celtics were the dominant teams, meeting each year in a dramatic showdown at the end of the season.

On net, it appears that leagues would prefer to have more superstars and outstanding performances. NBA fans eagerly embrace high school phenom LeBron James, in the hope he will be the next Michael Jordan. Home runs have been good for baseball attendance.

Now steroids can have one of two possible effects. First, steroids may make it easier to produce spectacular performances. It is commonly charged, for instance, that some of the superlative home run seasons (Barry Bonds?) are the result of steroids and related drugs. If this is so, steroids may make a sport more fun for fans and more lucrative for both stars and non-stars.

A second possibility is that steroids level relative performance. They make all players bigger and stronger, but make it harder for any single player to stand out. In that case a league may seek to ban steroids. The profit-maximizing set-up, of course, is probably a general ban but only loosely or selectively enforced. Some players get the steroids and others do not. Arguably this is what we see. A league will try to ban steroids, but not too hard. Steroids are a relatively cheap way of manufacturing stars.

Note that the Olympics probably prosper more from competitive balance than from a single dominant country. Was it really so much fun for the rest of the world to watch the Soviets win all those medals? This would predict that the Olympics should take special care to ban performance-enhancing drugs, which is indeed the case.

By the way, if you don’t think that economists will apply their discipline to everything, read this, thanks to Roger Meiners for the pointer though don’t expect it to convince your wife.

Do football teams punt too much?

Economist David Romer says yes. Teams would enjoy higher returns if they would try for the first down more often. Furthermore his work has influenced how professional football is played.

The real question is why this mistake was made in the first place. Could it be the economist’s well-known distinction between the seen and the unseen? If you punt, no one sees the first down you didn’t make. If you don’t punt and fail to make a first down, you feel bad and are easily blamed. For agency-related reasons, we might expect coaches to be more risk-averse than players. The coach wants to hold onto his job, whereas a superstar player captures upside returns to a greater extent. The variance of player salaries, especially if you include endorsements, is typically much higher than the variance of coach salaries. So the coach plays it safe to a greater extent, and of course a punting decision is usually in the hands of the coach.

Addendum: Here is further discussion from Nick Schulz.

The evolution of language

On Wednesday, the Agence France Presse news service reported that author Phil Marso has published (on paper) an antismoking novella for teenagers called “Pa Sage a Taba” (Not Wise to Smoke), composed in the jambalaya of abbreviations, slang, and neologisms that teens worldwide use to send each other text messages online and via cellphone. In English, for example, 2moro is “tomorrow” and YYSSW is “Yeah, yeah, sure, sure, whatever.” So in Marso’s book, when a detective asks the villain, “6 j t’aspRge d’O 2 kologne histoar 2 partaG le odeurs ke tu me fe subir?”, what he’s actually saying (in translation) is, “What if I spray you with cologne so you can share the smells you make me suffer?” A glossary of terms is included.

Marso, who admits that his book may “annoy the guardians of the French language,” says he wrote the book as a public service announcement.

Here is the original link. The constraint, of course, is that you wish to send and receive information as rapidly as possible, given your limited typing or punching speed. If you are interested, why not try some Shakespeare?

“Luv Loks Nt Wiv T iis
Bt wiv T Mnd”

Translation: “Love looks not with the eyes
But with the mind,”

William Shakespeare

Or this one?

“2 b or nt 2 b, thts de qn”

r v upset now? I think it’s pretty neat. And to keep you busy, here is a short glossary, TMMV stands for “Your Mileage May Vary,” which refers to different luck, POS stands for “Parents Over Shoulder,” B4N.

New sports and technology blog

Nick Schulz, of TechCentralStation.com fame, has started a new blog on sports and technology, part of the Corante.com group. At the blog you can read Nick on the true meaning of sports, whether better equipment improves your golf game, how to solve the steroids problem, and why sports fans seem to enjoy a lack of competitive balance. John-Charles Bradbury addresses this same topic as well. From Nick’s own TCS, read this account of how NFL Films has driven the popularity of football in America. Here is a related story about how to better measure value in football, using a Bill James-like approach.

My own major sports interest, the NBA, has just started its own blog, though this consists largely of celebrity comments, presumably ghostwritten for the most part. Try also this sports and law blog. Did you know that relocating the New Jersey Nets to Brooklyn might push at least 800 people out of their homes and require eminent domain?

By the way, Nick says the smart money is on the Panthers for today’s game.

The Economics of Orgasm

I’ve been an economist for so long that I don’t flinch when the paper abstract starts as follows:

“This paper models love-making as a signaling game. In the act of love-making, man and woman send each other possibly deceptive signals about their true state of ecstasy. Each has a prior belief about the other’s state of ecstasy. These prior beliefs are associated with the other’s sexual response capacity…”

Or if that is not enough for you: “In this paper, love is formally defined as a mixture of altruism and possessiveness. Love is shown to alter the man and the woman’s payoff functions in a way that increases the equilibrium probability of faking, but more so for the woman than for the man.”

Here is the full paper. I could go on with quotations, but why don’t we look at the empirical results, drawn from an extensive data set and questionnaire:

1. 72 percent of women admit to having faked it in their current or most recent relationship, for men the number is 26 percent.

2. You are more likely to fake an orgasm if you are in love. “It was the men I deceived the most that I loved the most,” said Marguerite Duras.

3. Being in love and faking are less positively correlated for men than for women. Perhaps men want to look like studs, regardless of the seriousness of the relationship.

4. Women mind less if their partners fake orgasm. (Might some be positively relieved to have it over?)

5. Faking is correlated with age, but in complicated ways. It depends on whether you love your partner, whether you are a man or woman, and how old you are.

6. The more education you have, the more likely you are to fake orgasm. I found this to be the most interesting result.

The author, Hugo Mialon, is on the job market right now and he has a forthcoming co-authored AER piece, plus a revise-and-resubmit at the Rand Journal. His dissertation is “Five Essays on the Economics of Law and Language.”

OK, the orgasm stuff is not his most marketable side, but Hugo seems to be a guy with both ideas and good technical skills. Hire this man. If we had a slot at GMU I would be pushing for him, even though he probably fakes his orgasms.

Thanks to Newmark’s Door for the initial pointer to the paper.

How to improve meetings

I have heard of or experienced the following ideas for improving the running of meetings:

1. Make everyone stand up until the meeting is over.

2. Make everyone talk on the phone, even if you are in adjacent offices.

3. Give everyone a chess clock to limit the number of minutes they are allowed to speak for (this is a variant of an idea from Robin Hanson. Read here for some commentary.

4. Lock the door when the meeting starts on time and do not allow latecomers to enter.

Or how about this idea, channeled through Randall Parker:

Aided by tiny sensors and transmitters called a PAL (Personal Assistance Link) your machine (with your permission) will become an anthroscope – an investigator of your up-to-the-moment vital signs, says Sandia project manager Peter Merkle. It will monitor your perspiration and heartbeat, read your facial expressions and head motions, analyze your voice tones, and correlate these to keep you informed with a running account of how you are feeling – something you may be ignoring – instead of waiting passively for your factual questions. It also will transmit this information to others in your group so that everyone can work together more effectively.

So perhaps a bunch of buzzers go off when somebody says something confusing. Or the boss knows when no one is paying attention.

I’m all for voluntary experimentation, but let’s not forget what many meetings are about. Meetings are not always about the efficient exchange of information, or discovering a new idea. Meetings can be about displays of power, signaling that a coalition is in place, wearing down an opponent, staging “theater” to make someone feel better, giving key players the feeling of being insiders, transmitting information about status, or simply marking time until something better happens. It’s one thing to hate meetings. But before you can improve them, make sure you know what meetings are all about.

35 heroes of freedom

From Reason magazine.

Let’s not forget Evan Williams:

With a little luck and a lot of technology, Williams did as much as anyone in history to provide the once-scarce freedom of the press to millions of individuals, through his co-founding of Pyra Labs, which introduced easy-to-use Blogger technology and free-as-air Blogspot hosting to the masses.

Here is some critical commentary on the list. Thanks to politicaltheory.info for the pointer.

Signalling spam

I received an email message this morning with the not very promising heading “Not a scam”. The contents? Here goes:

Face it, you’re not getting paid enough for what you do

http://[email protected]/click.php?id=sicosyl

to get off our database follow this link
jdefdmu s vgkitbaqizknh bdqdwxpoav w brfpu gotwzykprljsywaonqk

From Nigeria I received the following:

I KNOW YOU MIGHT HAVE RECEIVED DIFFERENT PROPOSALS OF SUCH ASSISTANCE BUT I
HAVE ALL INFORMATIONS WITH WHICH YOU CAN MAKE VERIFICATIONS.BESIDES EVEN
THOUGH THE INTERNET IS FLOODED WITH SCAM I STILL CANNOT AFFORD TO LOOSE
THIS OPPURTUNITY OF A LIFE TIME.

If I were a spammer I might try “Not sure whether this is worth your time.”