Bad Design Within Reach
Warning: this post is about furniture. Fast Company has an article on the decline of the furniture company Design Within Reach. The article focuses on how in an effort to cut costs DWR "copied" designs it had earlier sold as a distributor. A look at the before and after, however, shows that the real problem is that the copies are nowhere near as aesthetically pleasing as the originals.
Take a look at these credenzas. In the DWR version where is your eye first drawn?
Is the eye not drawn first to the stodgy feet? The thick and heavy feet of the DWR version combined with the shorter width give it a weighted down, stolid feel. The original in contrast is light and airy, it almost floats above the floor, an effect which is aided by the shading with its subtle look of fluffy clouds.
Now take a look at the bookshelfs.
The DWR version has a clean look but it's boring–you see it once and you are done. Now look at the original. Does it not draw your attention? In the original the middle shelves do not align vertically with the side shelves and the top and bottom middle shelves are open, not closed. I think the result is a much more interesting and entertaining piece of furniture.
We now return you to your regularly scheduled dose of economics.
Arthur Goldberger passes away at 79
On December, 11, I have not been able to find an obituary. One reader wrote me the news, plus it appears on a blog, in Gary King's tweet, and on Wikipedia.
Chris Blattman on why aid seems to fail
Aid, if it achieves the UN’s goals, is often saving the lives of the poorest. In this respect, we can say aid has been successful. And it is this very success that could explain why we don’t see any effect on growth. In fact, for the first few decades of aid, it’s conceivable that it would appear to reduce per capita income growth.
If aid saves the lives of millions of poor infants, or mothers in childbirth, at roughly the same rate a country can industrialize, then we’ll see an increase in the number of poor people at about the same rate that we increase GDP per person. Unless aid is also spurring faster industrial growth, the growth figures essentially won’t change. The things that aid does well–increasing primary education, saving lives, and leading to a demographic transition (essentially lower population growth–may reasonably take a generation or two to impact industry.
So if aid has been good at saving lives now, but not (in the short term) at spurring industry, then we shouldn’t be surprised that we don’t see take-offs. Rather, in most countries aid might actually lower the short term, measured number.
But by almost any measure, though, aid would still be a huge success. Maybe the “failure of aid” is really a failure to industrialize, disguised.
The link is here. Lately I've been trying to think through the opposite point. How many uninsured do they have in China? Over a billion? Letting a lot of sick people die, or simply not treating them much, can help your per capita growth statistics. If you don't take individual preferences to have value in their own right, but simply wish to maximize measured growth per capita, you'll value human life at something like replacement cost.
Assorted links
1. Bhutan stocks trade twice a week, in the name of happiness, apparently.
2. Via Bookslut, 1986 interview with Thomas Bernhard.
3. Does travel have cognitive benefits?
4. Does beauty have a Darwinian downside?
5. Profile of Daniel Lippman (he supplies public goods and he is also an MR reader, correspondent, and link supplier).
Unethical vs. “unethical”?
None of the funky clothing or art is priced, either. Mata says she knows it's "unethical," but she sizes people up and names a price that she thinks fits the client.
The link is here and I thank Jeremy Shown (rhymes with clown) for the pointer.
Asteroid Deflection as a Public Good
I wrote this post over the weekend but given Paul Samuelson's classic contribution to public goods theory and to economic textbooks it seems to also fit today.
In Modern Principles we use asteroid deflection as our example of a public good. Aside from memorability, the example has two virtues as a teaching tool. First, asteroid deflection is a true public good for all of humanity which raises free riding issues on a worldwide scale. Second, asteroid deflection is an example of a public good that is currently provided neither by the market nor by government. Thus the example underlines the fact that public goods are defined by their characteristics–nonexcludability and nonrivalry–and not by whether they are publicly provided, a point of confusion for many students.
The example may seem fanciful but Tyler and I are quite serious about the
importance of asteroid deflection. Large asteroid hits are rare but if
a large asteroid does hit, billions will be killed. As a result, sober calculations suggest that the lifetime risk of dying from an asteroid strike is about the same as the risk of dying in a commercial airplane crash. Yet we spend far less on avoiding the former risk than the latter.
A new report from the National Academy of Sciences discusses efforts to detect near earth objects (NEOs). Progress is mixed:
The United States is currently the only country with an active, government-sponsored effort to
detect and track potentially hazardous near-Earth objects (NEOs)…
Congress has mandated that NASA detect and track 90 percent of NEOs that are 1 kilometer in diameter
or larger. These objects represent a great potential hazard to life on Earth and could cause global
destruction. NASA is close to accomplishing this goal.Congress has more recently mandated that by
2020 NASA should detect and track 90 percent of NEOs that are 140 meters in diameter or larger, a
category of objects that is generally recognized to represent a very significant threat to life on Earth if
they strike in or near urban areas….The administration has not requested and Congress has not
appropriated new funds to meet this objective….[Thus] the current near-Earth object surveys cannot meet the goals of the 2005 NASA
Authorization Act…
Moreover, detection is only the first step towards deflection.
As a classroom discussion starter I like the video embedded below. The jovial attitude of the announcers contrasts amusingly with the topic while subtly illustrating some of our biases in perception yet the video does cover the main points about the worldwide risk, the fact that asteroid deflection is a public good and it hints at the free rider problem. I do doubt the bit about the riches available from asteroid mining. Enjoy.
Why is there a glut of extra-large clothing?
Edward Casabian writes:
I'm a mostly loyal reader of Marginal Revolution and have a question for you.
Why is it that the vast majority items on sale in a clothing store are almost always XL or XXL? I was in Old Navy last weekend and wanted to pick up a few t-shirts, but virtually all of them were too big for me. The same went for shorts and jackets. I am average size, about 5'9"
I would think that there would be more small, medium and large size clothing as these items would cost less to produce and seem to have a higher demand as evidenced by the inordinate amount of large clothing that is always on sale at department stores.
I believe the same goes with footwear. The most popular sizes (9-11) always seem to be out of stock.
I can't vouch for these stylized facts but I do have the same casual impression.
One simple hypothesis is that the less common sizes have more unpredictable demands, relative to inventory, and so they are more likely to end up in surplus. They're also more likely to be unavailable when you need them, though perhaps that latter state of affairs is less noticeable.
I also question whether you will find an equivalent overrepresentation of XL at Banana Republic (I guess no) and what that means about the clientele of Old Navy. The company which owns both may be pursuing a market segmentation/price discrimination strategy and Mr. Casabian is expressing his preference for more search and lower prices instead of reading MR all the time.
The most general question is which clothes sizes should be most likely to experience oversupply. My guess is that occurs when branding is least important and the possible durable goods monopoly breaks down. Maybe people buying XL are less interested in brands (or brands are less interested in them) and thus their market is more likely to be flooded.
These are just my guesses; maybe Kathleen Fasanella would know the answer.
Quotations by and about Paul Samuelson
You'll find a bunch here. Here is his seminal piece on public goods, three pages long. Here are quotations in appreciation of Samuelson, from Summers, Bernanke, and others. Lucas offered the following:
“Samuelson was the Julia Child of economics, somehow teaching you the basics and giving you the feeling of becoming an insider in a complex culture all at the same time. I loved the Foundations. Like so many others in my cohort, I internalized its view that if I couldn’t formulate a problem in economic theory mathematically, I didn’t know what I was doing. I came to the position that mathematical analysis is not one of many ways of doing economic theory: It is the only way. Economic theory is mathematical analysis. Everything else is just pictures and talk.”
It's mesmerizing to watch the rate at which the Twitter feed is adding messages.
You'll find free pdfs of some of his major articles here.
Paul Samuelson’s proof that properly anticipated prices fluctuate randomly
You'l find the paper here and it is one of the best introductions to Samuelson's method and writing style. The caveats at the very end, as to what an efficient markets hypothesis might mean, and what the probability distributions might mean, remain valuable reading to this day.
Paul Samuelson passes away at 94
Here is one obituary. Here are previous MR posts involving Samuelson. Here is Krugman's post. Here is the Twitter feed.
Samuelson once said: "I don't care who writes a nation's laws, or crafts its treatises, if I can write its economics textbooks."
Joseph Rago on health care
This passage (full article here) strikes me as something Arnold Kling would link to:
Take the nearly $47 billion in stimulus cash the White House has budgeted to prime the pump for health IT adoption. Mr. Bush says he's glad his industry is getting more attention from the bully pulpit, but that "It is kind of too bad that all these software companies that we're really close to putting out of business, these terrible legacy companies, with code that was written in the '70s, are going to get life support. That's why I call it the Sunny von Bülow bill. What it is, basically, is a federally sponsored sale on old-fashioned software."
"It's designed like a box-buying campaign," he continues. "You get this fixed chunk of money for a few years, you get to pay off your EMR, like its a thing. People in Washington think in terms of things that we'll buy and then they'll be there. Buildings. Roads. Tanks. What Lockheed Martin makes. Things.
"And this isn't that. This is a market: its a set of agreements, it's a language. What's needed is a way of exchanging value and making choices, that's ethical–and, you know, nobody, nobody, not nobody, has said a word about that.
Here is Rago on Medicaid:
State Medicaid programs, by the way, are easily the worst payers, according to Athena's annual ranking. In New York, for instance, claims must be tendered on a dead-tree form instead of electronically and in blue ink–black is grounds for rejection–and then go on to spend a full 161 days, or almost a half year, in accounts receivable.
I thank Yana for the pointer.
Civil war exposure and violence
That's a new paper by Edward Miguel, Sebastian Saiegh, and Shanker Satyanath and here is the abstract:
In recent years scholars have begun to focus on the consequences of individuals’ exposure to civil war, including its severe health and psychological consequences. Our innovation is to move beyond the survey methodology that is widespread in this literature to analyze the actual behavior of individuals with varying degrees of exposure to civil war in a common institutional setting. We exploit the presence of thousands of international soccer (football) players with different exposures to civil conflict in the European professional leagues, and find a strong relationship between the extent of civil conflict in a player’s home country and his propensity to behave violently on the soccer field, as measured by yellow and red cards. This link is robust to region fixed effects, country characteristics (e.g., rule of law, per capita income), player characteristics (e.g., age, field position, quality), outliers, and team fixed effects. Reinforcing our claim that we isolate the effect of civil war exposure rather than simple rule-breaking or something else entirely, there is no meaningful correlation between our measure of exposure to civil war and soccer performance measures not closely related to violent conduct. The result is also robust to controlling for civil wars before a player’s birth, suggesting that it is not driven by factors from the distant historical past.
One question is whether such behavior occurs because the player's psyche has somehow been brutalized or whether it is a deliberate affect aimed at a violence-expecting audience back home. It's related to which variables might best predict the propensity of an NBA player to pick up technical fouls; would that be correlated with urban upbringing, the nature of the audience (home vs. away, TV vs. live crowd, etc.) or perhaps correlated with early brushes with the law?
If you wish to skim the results, start with p.25. The Colombian players pick up a lot of yellow cards.
*The End of Influence*
The subtitle is What Happens When Other Countries Have the Money and the authors are Stephen S. Cohen and Brad DeLong. Here is an excerpt:
The Asian export-led growth model must — over time — transform itself to domestic consumption and prosperity models. The American borrow-and-import model will also have to shift — again, this takes considerable time — to a model of consumption-at-the-level-you-produce. And the need to keep the confidence of those who have the money that their money is well placed in the United States serves as a constraint on U.S. policy in a way that it has never been before.
In the last three paragraphs of the book the authors describe the various stimulus attempts as something that will "buy time," but will not be sufficient to alter this basic trajectory.
Assorted links
What’s the IQ of the enemy planner?
I know that not everything reported in the newspaper about terrorist sting operations is reliable information, but still this passage struck me as noteworthy:
Pakistani authorities on Saturday zeroed in on the alleged mastermind of a plot to send five Northern Virginia men to Afghanistan to kill U.S. troops,
Is that how you would allocate the five men? Yet even that was not allowed:
Saifullah was unsuccessful in convincing al-Qaeda commanders that the men were not part of a CIA plot to infiltrate the terrorist network. As a result, they were marooned for days in the eastern city of Sargodha, far from the forbidding mountains of the northwest that have become a terrorist haven.
I'm not pretending to know the real story, but "remove them from proximity to packed U.S. shopping malls, send them to Sargodha" is a strategy I can live with. Alternatively, you can take this as evidence that they really were CIA plants. In which case you can ease up about all the media stories today on homegrown U.S. terrorists, etc.
One of them was an accounting student at GMU; I wonder which one of us he had for Principles?