How happy is Iceland?

by  Tyler Cowen in

Highest birth rate in Europe + highest divorce rate + highest
percentage of women working outside the home = the best country in the
world in which to live…Iceland, the block of sub-Arctic lava to which these statistics apply,
tops the latest table of the United Nations Development Programme’s
(UNDP) Human Development Index rankings, meaning that as a society and
as an economy – in terms of wealth, health and education – they are
champions of the world.

Here is much more, interesting throughout, and I have been an admirer since I visited the country in the mid 1990s.  The author emphasizes that Icelandic women have kids when they want to, often at young ages, and they accept that the father may not be around much but the whole family steps in to help out.

I was wondering whether the proclivity of Icelanders to leave their country (many are highly educated and speak fluent English and thus pursue opportunities elsewhere) somehow counts against these happiness claims.  But oddly I think not.  In part it is their intelligence and balance that makes them want to explore other locales.  In percentage terms, hardly any Japanese leave Japan but this counts against the happiness of the country rather than for it.  Country-specific capabilities can in the long run be stunting or reflect stuntedness.

I’ve not yet thought through what this means for the economists’ tendency to use revealed preference as a measure of value.  There are perhaps two margins of rejecting: the people who are not very good at enjoying something or not able to enjoy it because it is bad, and the people who are very good at enjoying something wonderful and thus wish to build upon that strength and move on to something else.

It is perhaps a Buddhist idea to suggest that the happiest country in the world is a totally empty one.

Pointers are from Seth Roberts and Nadav Manham.

Had I mentioned…?

by  Tyler Cowen in

That Tokyo is the best food city in the world?  That’s by an order of magnitude; Paris and others aren’t close.  At this point my best guess is that Osaka is number two. 

I thank Yan Li for the pointer to the link, which is interesting on another topic as well.  We visited a quite amazing toilet shop here, which was impressive most of all for its seriousness, not just for its product.  It was I believe on the 26th floor (L-Building, Shinjuku), so there is no walk-in trade for them.  They play stormy Beethoven and offer talking toilets, toilets that perform lab tests on your ****, and toilets that can be programmed to do things I hadn’t even thought of before.

Economists Know the Price of Everything

by  Alex Tabarrok in

In other disciplines to leave your
university because another offers to pay you more entails personal humiliation
and status degradation to a not inconsiderable degree: you are supposed to value
ideas and colleagues and students, not cash. In economics, however, the thrust
of the discipline makes a failure to respond to market forces a moral fault in
itself.

Brad DeLong explaining why public universities are having an especially difficult time hiring and keeping economists now that the privates are boosting salaries to a tremendous degree.  Experience at GMU is consistent.  See David Warsh (here and here) for the backstory.   

The economics of vending machines

by  Tyler Cowen in

Japan has so many, but why?  You can cite love of gadgets, etc. but I want something more general.  After all, Japanese retailing has a very high ratio of small stores serving a local clientele; surely Japanese vending machines are another example — albeit an extreme one — of that more general trend.

First we must look to the shortage of storage space in homes.  I suspect few Japanese want to buy big piles of stuff at Costco.  So buy smaller "portions" and in the meantime the inventories are stored in the vending machines, where they are more or less at your disposal. 

Cars of course are another means of storage and also a way to transport goods in bulk (NB: you carless people have a hard time pigging out at the public library, you poor souls).  But most Tokyo residents don’t use cars so again they buy goods in smaller numbers which again points us to the vending machine.  Buy one disgusting sweet fizzy juice, drink it on the spot, and walk to your nearest vending machine when you need another one.

You’ll notice that vending machines are especially popular for canned and bottled liquids, where the ratio of storage and carry costs to per unit value is relatively high.

This article associates vending machines with the nomadic lifestyle.

The “afternoon effect” for artworks

by  Tyler Cowen in

One resilient puzzle identified in the literature is the “declining
price anomaly.” This effect was identified by Ashenfelter (1989) and is
an obvious repudiation of the law of one price. It refers to the
observation that as an auction proceeds, the prices of the lots
decline, even for identical goods (e.g., wines). Beggs and Graddy
(1997) established the existence of the “declining price anomaly” for
heterogeneous goods using data for Contemporary and Impressionist art
auctions. This has generated great interest and a number of papers now
report somewhat conflicting results in this respect, although the
majority still seems to find evidence in favor of this anomaly (see
Ashenfelter and Graddy 2003, and Ginsburgh and van Ours 2007.) In light
of this controversy, it is of interest to investigate whether or not
Latin American art auctions are also subject to the declining price
anomaly or the so-called “afternoon effect” (“morning after effect”
would be a more appropriate name in this context as Latin Art auctions
occur in two parts, the first starting late in the day, say 7pm, and
the second starting earlier the following day, usually 10am.) In line
with previous research (Beggs and Graddy 1997), we find strong evidence
that the “declining price anomaly” holds for Latin Art data, even after
controlling for auction and artist unobserved characteristics (dummies)
and a huge array of paintings characteristics, including reputation and
provenance.

Here is the link and yes I do believe this is true.  I believe it is mostly neuroeconomics at work, namely that we are more excited by new offerings than by familiar offerings.  Similarly, a painting that has been "shopped around" usually goes for a lower price than a comparable picture coming on the market for the first time in many years; admittedly it is hard to segregate out the selection bias here.  So if the same Jasper Johns print is being auctioned at 10 a.m. and 1 p.m., some people just don’t want to wait with their bids.  I wonder also if there is a theorem about how an asymmetric distribution of risk-averse bidders, fearing they might not get the work at all, could generate the same price pattern,

An alternative hypothesis — likely true in part — is that even "identical" artworks differ slightly in quality and the auction houses sell the better one first, if only to create a price precedent and excitement effect for the second one later in the day.

Why do ethicists write such long papers?

by  Tyler Cowen in

I found this fascinating:

If indeed my observation that ethicists hardly write short papers is correct, this might say something problematic about us. For example, that we are less sure of ourselves than other philosophers, and thus feel that we have to go on and on. Or that there is a pro-length bias in the guidance we give to our students; or in accepting ethics papers for publication. Or that the subject makes people feel that they always have to (pretend to) be very serious, because morality is such a grave topic. Or even that ethicists simply tend to have less fun. A while ago Mike Otsuka posted here asking about funny titles for ethics papers, and we all found it hard to find examples.

OK people, the challenge is upon you: what are some funny titles for possible ethics papers?  All of my thoughts in this direction are non-funny, such as "A Good Start," or "Here’s Why None of My Papers Have an Abstract."

For the pointer I thank Saul Smilansky.

Tokyo impressions

by  Tyler Cowen in

There are more small things to notice here than anywhere else.  People elevate their cameras on long fishing poles to get better shots in a crowd.  The water container has a separate compartment so that, when you pour, the ice cubes do not spill into your drink.  Or you may wonder: why did I have to order my food by paying into a vending machine?  None of the faucets works in an intuitive manner for me.

I hadn’t been to Tokyo since 1992.  What was once futuristic has now become retro and it has made the city more charming and ultimately more convincing. 

Even with the weak dollar it isn’t that expensive here.  Hotels are cheaper than in NYC — not to mention Europe — and you can eat a great meal for $10 or less if you frequent neighborhood restaurants.  At the fish market world class sushi costs about as much as mediocre sushi in the American suburbs.  I have also ventured into the horrors of real Japanese food, including The Creamy Sauce and Worcestershire sauce.  It’s not all hamachi and gyoza, believe me.

Spot the Contradiction

by  Alex Tabarrok in

Daniel Gross’s review of Sachs’ Common Wealth was bizarre.  Consider this:

Even congenital optimists have good reason to suspect that this time
the prophets of economic doom may be on point, with the advent of
seemingly unstoppable developments like….the explosive growth of China and India.

Huh?  What kind of upside down logic makes high growth rates proof of economic doom?  Proving this was no idle slip Gross goes on to say:

Things are different today, [Sachs] writes, because of four trends: human
pressure on the earth, a dangerous rise in population, extreme poverty
and a political climate characterized by “cynicism, defeatism and
outdated institutions.” These pressures will increase as the developing
world inexorably catches up to the developed world. (emphasis added)

Silly me, I thought rising life expectancy, increasing wealth, and lower world inequality, which is what it means to say that the developing world inexorably catches up to the developed world, was a good thing.  And then there is this:

The combination of climate change and a rapidly growing population
clustering in coastal urban zones will set the stage for many Katrinas,
not to mention “a global epidemic of obesity, cardiovascular disease
and adult-onset diabetes.”

Ok, climate change will create problems but how clueless do you have to be not to understand that a large fraction of the world’s people would love to live long enough to die from obesity and other diseases of wealth?

Don’t misunderstand, I know that growth brings problems.  My dispute with Gross is not that he thinks the glass is half-empty and I think it is half-full; my dispute is that Gross thinks the fuller the glass gets the more empty it becomes.

Addendum: Dan Gross writes to say that he was summarizing Sachs’ argument.  Point noted.

My favorite things Japan, cinema edition

by  Tyler Cowen in

1. Kurosawa movie: Ran is the most impressive on the big screen, but Ikiru is a profound study of the psychology of bureaucracy.  There are many many others, including the noir masterpieces and the criminally underrated late period, most of all Dreams.

2. Gangster movie: Should I go with Sonatine?  I don’t know them all.

4. Sexual perversion movie: Audition has an incredible piano wire scene.

5. Hobbesian movie: It’s Battle Royale, hands down, and yes I taught the film this year in Law and Literature.  One of the students was shocked we would cover something of this nature.

6. Ozu movie: Tokyo Story is the one that sticks with me.

7. Dance movie: Shall We Dance? remains a gem.

8. Anime: Grave of the Fireflies is a knockout, an anime movie for people who hate anime (and war).  Make sure you use the subtitles, not the dub.  I love all Miyazaki, maybe my favorite is Princess Mononoke, just don’t expect a coherent Pigouvian vision from it.  Other times I think Totoro is his supreme masterpiece.  Pom Poko, from Studio Ghibli, is essential viewing as well.

9. Mizoguchi movie: First prize goes to the stunning Ugetsu.

10. Godzilla movie: There is the original Japanese first movie, the cheesy but delectable Godzilla vs. Mothra, the implicit retelling of WWII in King Kong vs. Godzilla, Ghidrah the Three-Headed Monster (my personal favorite), one of the MechaGodzilla movies (surprisingly good but don’t ask me which one), and the sadly unheralded Godzilla Final Wars.  I’m not sure any of the others are worth watching.

The bottom line: I’m not sure I’ve ever covered a category with so much quality and depth as this one and I’ve just scratched the surface.  And yes, I like Tampopo too, but not as much as most of these.  Gammera deserves a mention too.

The Uncanny Valley

by  Tyler Cowen in

Yet the humans’ skin could not be too realistic.  It was well known that as depictions of humans became more lifelike, audiences would perceive them as more appealing — until the realism reached a certain point, close to human but not quite, when suddenly the depictions would be perceived as repulsive.  The phenomenon, known as the "uncanny valley," had been hypothesized by a Japanese robotics researcher, Masahiro Mori, as early as 1970.  No one knew precisely why it happened, but the sight of nearly human forms seemd to trigger some primeval aversion in onlookers.  Thus, the minute details of human skin, such as pores and hair follicles, were left out of The Incredibles’ characters in favor of a deliberately cartoonlike appearance.

That is from David A. Price’s very interesting The Pixar Touch.  Here is Jason Kottke on The Uncanny Valley.

Local Bounties

by  Alex Tabarrok in

One benefit of the economic downturn is that the number of people hoping to earn a reward by calling the police with a tip has increased, especially in regions with a lot of home foreclosures. 

For tips that bring results, programs in most places pay $50 to $1,000,
with some jurisdictions giving bonuses for help solving the most
serious crimes, or an extra “gun bounty” if a weapon is recovered…

“We have people out there that, realistically, this could be their
job,” said Sgt. Zachary Self, who answers Crime Stoppers calls for the
Macon Police Department.

The success of these local programs suggests similar international programs could also work.

Network Power

by  Tyler Cowen in

Indeed, while this convergence in ways of thinking and living may extend to influence cultural forms like music or food, it need not necessarily do so.  It is striking that in this moment of global integration producing massive convergence in economic, linguistic, and institutional standards, we should be so worried about restaurant chains and pop music, neglecting much more significant issues.  Famously, Sigmund Freud argued that nationalist rivalries between neighboring countries reflected the "narcissism of minor differences," a pathological focus on relatively trivial distinctions driven by the desire to keep at bay an anxiety-provoking recognition of fundamental sameness.

That is from David Singh Grewal’s Network Power: The Social Dynamics of Globalization, one of the most interesting books on cultural globalization in recent years.  He uses the ideas of social networks and peer effects to argue that widespread cultural convergence is occurring, most of all in ways of life.  Here is the book’s home page.

There is much wrong in the central thesis.  "Ways of thinking" may be less diverse across countries (France is more like Germany than it used to be) but ways of thinking are now much more diverse within countries and in fact within the world as a whole.  What’s so special about having diversity distributed according to geographic or political criteria?  Once you get over the geography fetish, many of the author’s main mechanisms don’t hold up as accounts of growing sameness of ways of life and thinking.  Has the author spent much time poking around Second Life?

Nor is he capable of simply coming out and saying that lots of countries in the world *ought* to be doing more to emulate Anglo-American ways of thinking.

The following claim is also questionable:

To reshape or reduce the power that the social structures we create have over us, we can only summon the organized power of politics.  The large-scale voluntarism of sociability, by contrast, has always delivered the most varied and elaborate forms of individual subjugation.

Cranky Tyler is about to come out of his shell, so maybe it is time to end this post.  It’s still a book worth reading and thinking about.

On a not totally unrelated topic, here is a good post on babies and globalization.