When should the Christmas decorations go up?

Tim Harford asks whether it is efficient to have the Christmas decorations go up earlier each year.  Partly for traditional and aesthetic reasons, he would prefer a shorter Christmas season. 

In my basic model, suppliers with P > MC put up decorations to stimulate more buying and gift-giving.  Bringing on Christmas early is a form of associative advertising.  A shorter Christmas season would mean less overtime work, less spending (more saving), and spending spread more smoothly throughout the year.

What’s the benefit of having all that consumer spending clumped together at Christmas season?  I can think of three hypotheses:

1. It yields "thick market" externalities, such as allowing people to do most of their shopping when inventories are highest.

2. It yields a "do or die" season, in which new products can be rapidly and ruthlessly evaluated.  Don’t we already have the verdict on Zune?

3. Suppliers are inefficiently "fishing" for early "capture" of consumers as part of a common pool problem.  If a given supplier doesn’t grab that consumer’s attention now, someone else will.  Of course there can be no property rights in "the attention of consumers," so that attention is consumed inefficiently early.

I believe in #1, #2, and #3, but I suspect #3 is the operative force, leading me to side with Tim.  Christmas is fun, but perhaps we have just a little too much of it.

Markets in everything, postal edition

Have cards sent to atheists after the Rapture.  "The Postal Service of the Saved," it works like this:

Just write your letter and it will be hand-delivered immediately
following the exodus of the pure from the Earth. But you must be
thinking to yourself, "How can the letters be delivered after the
Rapture?"  The answer is simple.  The creators of this site are Atheists.  That’s right, we don’t believe in God.  How else would we be able to deliver your correspondence after the Rapture? 

What would America be without garlic farmers?

For decades, the fiercely independent fruit and vegetable growers of
California, Florida and other states have been the only farmers in
America who shunned federal subsidies, delivering produce to the tables
of millions of Americans on their own.

But now, in the face of tough new competition primarily from China,
even these proud groups are buckling.  Produce farmers, their hands
newly outstretched, have joined forces for the first time, forming a
lobby group intended to pressure politicians over the farm bill to be
debated in Congress in January.

Most of the current $15 billion in direct subsidies goes to five commodities: corn, cotton, rice, wheat and soybeans.  Now Chinese garlic sells for about half the wholesale price of American garlic.  One garlic manager commented:

“The Chinese garlic totally caught us off-guard and knocked us down,”
Mr. Mantelli said recently as he checked on newly planted garlic bulbs.
“I think our industry has hit rock bottom.  Maybe now we can figure out
how to make it a level playing field.”

Here is the full story.

What’s the secret of a successful blog?

Why not ask, um….me?  That’s what Seth Roberts did:

When I visited George Mason University recently, I asked Tyler
Cowen, “What’s the secret of a successful blog?”  Cowen and Tabarrok’s Marginal Revolution is the most successful blog I know of.

His answer: “Three elements: 1. Expertise. 2. Regularity. 3.
Recurring characters, like a TV show.”  By regularity he meant at least
5 times/week.

Here is my previous post on Seth Roberts.  Here Seth makes a cameo appearance with Alex.

Silly guessing games

I like to wonder how many of the travelers in an airport are from the local area.  And what features of a city suggest a high proportion of locals in the airport?

For instance do small cities have high percentages of locals in their airports?  There are fewer locals to fill the place with, but not many New Yorkers fly to Greensboro, North Carolina.

At a given airport, it should matter whether the people of that area like to travel, whether no one else wants to visit that area, and whether that airport is a hub for switching flights.

It is easy to pick Chicago, Atlanta, and Denver as airports with many non-locals.  But which airports have high percentages of locals?  That means travel-hungry people from a boring, non-touristy, non-hub city.  Minneapolis anyone?

How to get started with opera

First I assume we are talking about recorded opera (most opera on DVD bores me, too static, though many swear by it), but of course go live when you can.  My core view is that people "do well" with culture when they feel they are in control, and tune out otherwise.  So pick one area and master it, or at least get intrigued, rather than trying to survey all of opera.  Those "introductory" books are probably counterproductive, if only because they let you know how much ground there is to cover.  Who could possibly master five different recordings of Parsifal?

Here are a few areas to start with:

1. Mozart: Get Abbado’s Magic Flute (a new recording, truly splendid, one of the best of 2006 or any year), the Rene Jacobs Figaro, and the Colin Davis Don Giovanni.  If you love those, move on to Cosi Fan Tutte and then Beethoven’s Fidelio.

The Ingmar Bergman film of Magic Flute is perhaps the single most inspiring introduction to opera, even if they are singing in Swedish.  It is cinematic in conception, rather than a mere film of a performance, thus avoiding the DVD problem.

2. Italian opera: Start with Rossini’s Barber of Seville, Gobbi/Callas, then either Verdi or Puccini, in the former case La Traviata (many good versions) or Aida (Karajan), in the latter case start with La Boheme (Beecham).  Move out into Donizetti (The Elixir of Love, bubbling and playful erotic fun) and the rest of Verdi, culminating in Otello and Falstaff, his greatest and deepest works, no organ grinder music there.

3. Wagner: Go for some extended excerpts, most notably Kempe’s one-disc condensation of Das Rheingold (better than the full-length version), this four-disc set of scenes, or Act One of Tristan und Isolde, by either Karl Boehm or James Levine.  Work up to Parsifal or Valkyries, but in my view Act One of Tristan was his peak and this remains music’s greatest erotic/death-wish experience, so good it is dangerous, maybe you should just stop reading this blog.

If you are putting on four discs of Flying Dutchman, Tannhaeuser, or Goetterdaemmerung, and hoping to make sense of it, your planning has gone badly wrong.

4. Twentieth century: Start with the fun, accessible works, like Glass’s Einstein on the Beach, Robert Ashley’s Improvement, or Michael Nyman’s The Man Who Mistook His Wife for a Hat.  Over time head to Stravinsky, Schoenberg, Ligeti, Messiaen, Lachenmann, Mercury/May and many others.

If you want to leap into the unique and the complex, consider Monteverdi’s Orfeo, Tchaikosvky’s Queen of Spades, Strauss’s Capriccio, or Debussy’s Pelleas and Melisande.  Liszt fantasies and transcriptions are a good entry point into opera, that is how I got my start, his Robert de Diable Meyerbeer transcription (played by Earl Wild, among others) has to be heard to be believed, same with his Norma fantasy, after Bellini.

Arguably Bach’s St. Matthew’s Passion is the greatest opera of them all, but that is another story.

By the way, few of the libretti are worth knowing beyond a plot overview; Don Giovanni is a notable exception, Der Rosenkavalier is another.  Keep in mind that a lot of opera simply isn’t very good.  The biggest problem is too much filler, even in the true classics.  Don’t let these boredom traps keep you away from some of music’s highest peaks.

The free lunch

Ours and yours, forget about the theory of tax incidence.  Just type in /marginalrevol-20 after any Amazon link, and we get a small chunk of the proceeds.  Alternatively, go to the Amazon box on the right side of this blog, just above the site meter.  It costs you nothing, and we thank you in advance. 

We do get some review copies, but most of the books we cover we buy with our own money.  The small extra income we get from Amazon referrals allows us to buy many more and give you a better sense of what is going on in the world of ideas.  I do collect CDs, but not books, which I treat as a burden.  If you are wondering, most of the books reviewed end up donated to the Harper Library at The Institute for Humane Studies, itself a worthy cause.

How did Friedman differ from Keynes?

Brad DeLong and Greg Mankiw offer insightful comments on Friedman and Keynes.  On macroeconomics, what does the difference boil down to?  I can think of a few possibilities:

1. Keynes thought a horizontal LM curve ("the liquidity trap") was possible, but Friedman did not.  This was Friedman’s own view, at least as expressed in Milton Friedman’s Monetary Framework.  Without a horizontal LM curve, monetary policy can always pull the economy out of a downturn.

2. Keynes emphasized volatile flows, Friedman emphasized stocks of wealth; a stocks view should imply greater macro stability.

3. Keynes challenged the assumption of gross substitutability, and therefore thought that price and wage flexibility could lead to a downward spiral of falling prices and incomes.  Wage and price stickiness was not so much an assumption for him as a policy recommendation.  Friedman viewed stickiness as a necessary evil, stemming from the general imperfection of the world.

4. Friedman thought that the liquidity premium on money was unlikely to keep interest "too high"; for Friedman the interest rate is determined solely in the loanable funds market by time preference and productivity, a’la Irving Fisher.

5. For Keynes the demand for investment was inherently unstable, for "beauty contest" reasons.  Friedman viewed expectations as "adaptive," and tracking the world with a lag, rather than tracking the expectations of other people.

6. Friedman simply had more faith in the self-adjusting nature of the market, and #1-#5, and other possibilities, were mere epiphenomena of this broader philosophical difference.

The Price is Right

One of the most bizarre aspects of the organ shortage is that it is illegal to pay for cadaveric organs for use in transplants but it is legal to pay for cadavers.  That’s right, it’s illegal to pay people to donate their organs for the purpose of saving lives but medical schools can pay people to donate their bodies so that plastic surgeons can practice their nip and tuck.   

In a remarkable paper forthcoming in Cato’s Regulation and reported in the Washington Post, economists David Harrington and Edward Sayre take the argument one step further.  Medical schools regularly offer to pay funeral expenses for whole body donation.  So does the offer of payment deter altruistic donation and decrease the supply, as we have been told could occur if we were to compensate organ donors?  Of course not.  In fact, Harrington and Sayre note that the offer to pay funeral expenses is worth more in states where the funeral industry is heavily regulated and thus prices are high and, just as predicted in Econ 101, the supply of whole body donations is higher in those states.

It’s time to lift the price control on human organs, relieve the shortage and save lives.

What I’ve been reading

1. Michael Crichton, Next. Yes it is "writing-by-numbers," yes it is better than his recent work, but no, it is not nearly as good as Jurassic Park, Sphere (my favorite), Congo, or for that matter his book on Jasper Johns.  Some critics like it.  The start is OK but it falls apart as it proceeds.  By the way, here is my previous post on human-chimp hybrids

2. Robert BolaƱo, Distant Star.  A minor masterpiece.  He is another of those first-tier Latin writers, along with Asturias and Rulfo, who for mysterious reasons no one in the United States seems to read.

3. Richard Powers, The Echo Maker.  A deserving winner of a National Book Award, plus I am interested in the neurology theme.  I find many of Power’s earlier books too intellectualized, but this one held my attention throughout.  By the way, I also tried the non-fiction National Book winner, the book about the Dust Bowl years, but it didn’t hold my interest.

4. The Poor Always Pay Back: The Grameen II Story, by Asif Dowla and Dipal Barua.  A very good look at the micro-credit movement.

Addendum: The NYT picks its ten best books of the year.