Bigger than you think

The universe, that is. New estimates for its size, based on measured microwave radiation, are up to 78 billion light years. And that’s a minimum. The bad news? Given this size, it is less likely that light can “wrap around” an odd-shaped universe, allowing us to see what the earth looked like four billion years ago. And here’s more evidence that the universe is dominated by “dark energy,” causing it to expand, possibly forever.

Prof. Bainbridge answers 20 Questions

Prof. Bainbridge is the latest to undergo questioning at Crescat Sententia. When asked about law and economics the good professor had this insightful comment:

Traditional forms of legal scholarship were mostly backward-looking. One reasoned from old precedents to decide a present case, seemingly without much concern (at least explicitly) for the effect today’s decision would have on future behavior. Yet, law is necessarily forward looking. To be sure, a major function of our legal system is to resolve present disputes, but law’s principal function is to regulate future behavior [and]… law & economics gives judges a systematic mechanism for predicting how rules will affect behavior.

Health and Status

A number of studies have shown a startling connection between higher social status and better health, even after controlling for income, education and other factors. Some economists are skeptical, Angus Deaton, for example, suggests reverse causality may be a factor:

The major reason that people retire from the work force is that they’re sick. If you get sick in America, it does terrible things to your social status.

Two remarkable papers by Donald Redelmeier and Sheldon Singh cast some doubt on this explanation. In Survival in Academy Award-Winning Actors and Actresses Redelmeier and Singh compare the longevity of Oscar winners with nominees who did not win. The statistical hypothesis is that all that separates winners and nominees is the random fact of winning (random with respect to other factors influencing health). If winners and nominees are alike but for random factors then any differences in longevity can be causally ascribed to winning the Oscar. R and S find that winners live about 4 years longer than non-winners, a huge difference. The effect does not go away with additional controls.

Skeptics will posit other mechanisms but R and S have a lesser known but equally important paper on screenwriters who win the Academy Award. Surprisingly, they find that winning screenwriters die about 3 years earlier than non-winning nominees. At first, these two results appear to be quite contradictory suggesting some problem in the studies. But on second look there is a compelling logic to the findings. The difference between actors who win the Oscar and screenwriters is that even winning screenwriters get no respect. Who remembers a screenwriter’s name? I think it’s in the movie Bowfinger that Steve Martin says of the lovely ingenue something to the effect, “She’s so dumb she’s sleeping with the screenwriter to get to the top.” Winning screenwriters have longer and more successful careers (4 star movies) than non-winning writers so income and other material factors would suggest greater longevity but even a winning screenwriter is almost surely destined to have his lines mangled by a lousy but famous actor and perhaps this stress drives them to an early grave.

IPOs bring out the bloodsuckers

In the late 1930s, Edward Kasner was asked to come up with the name for a large number; as legend has it, he asked his nine-year old nephew, who said “googol,” and Kasner’s 1940 book “Mathematics and the Imagination” popularized the term for the number 1 followed by a hundred zeroes.

Can you guess where this is going….Yup, Ted Frank at Overlawyered continues:

Kasner’s great-niece, Peri Fleisher, is going public herself, complaining that her family hasn’t been compensated for Google’s choice of a name, and “exploring” the possibility of legal action.

How to persuade the rich, or Cannes update

The first German film to compete in Cannes in 11 years, it [The Edukators] tells the story of three idealistic youths who break into rich people’s villas and move around their furniture, leaving behind notes with messages such as: “You have too much money.”

Their aim is not to steal from the rich to give to the poor, but to make their targets question their privileges. When they are surprised by one of the homeowners, they kidnap him and are forced to put their ideals into practice.

“I’m really happy to present this film in the country where the word revolution was invented,” Weingartner told a news conference in this French Riviera resort.

As is often the case, the remainder of the story surpasses any comment I could offer:

Critics at Cannes clapped and cheered during scenes in which the kidnappers and their victim intelligently debate how youthful idealism eventually fades.

Weingartner avoids a simplistic ending, but leaves open the possibility that each of them is changed by the experience.

Here is the full story. Here is more information on the movie. Don’t forget that the alternative title of the film is “The Fat Years are Over.”

Supply curves slope upwards

You might think that the labor supply of the dead is fairly inelastic. Well, it is not so simple as meets the eye:

These days, the icon of Renaissance art is Florence’s greatest single brand and the global Michelangelo market is booming. You might imagine that as the years go by, the chances of finding a long-lost Michelangelo would shrink. But no. As one expert has observed, as the price tag on the world’s greatest artists keeps soaring, so, miraculously, more hidden Michelangelo gems keep being discovered.

There is more:

According to Wallace, the rate at which Michelangelo finds are turning up – including documents, drawings, and even a candlestick – has gone from one every two years a century ago to two a year on average from 1996 onwards. In the past year, he observes, three finds have been attributed to Michelangelo, most recently a small wooden statue of Christ, which went on display at the Horne museum in Florence earlier this month.

Now here is the clincher:

Some of the most highly publicised finds have subsequently “been shot down in flames” as they fail to withstand the scrutiny of the world’s experts, says Timothy Clifford, Michelangelo expert and director of National Galleries of Scotland.

Here is the full story. Most Renaissance artists did a wide variety of anonymous small commissions, especially in their early years. So there probably are “unknown Michelangelos” out there; it is less clear that we will ever know what came from his hand.

Markets in everything: Google edition

At lunch recently, Tyler expressed concern about how well the Google auction would work given that no one knew what the stock would open at. Robin Hanson, famed for his role in the Pentagon “terror market,” chimed in that “we could have a market in that.” True, but not necessarily helpful – surely, the regress must end somewhere? Helpful or not, Robin has been proven correct as a descriptive matter. We now have something of a market, or at least a contest, in predicting the Google IPO price. See The Google IPO Swami.

Thanks to Eric Crampton for the pointer.

Patents for everything

While browsing at Barnes and Noble this last week, I picked up the interesting title Patently Absurd: The Most Ridiculous Devices Ever Invented, by Christopher Cooper.

What struck me was how appealing many of the inventions sounded.

OK, I’m not ready to put up venture capital for “Bird Diaper” or “Dust Cover for Dog“. And it was scary to read about “Firearm Mounted in a Shoe Heel,” patented in 1971.

But how about a combined fork and chopsticks? A “Night Light for a Toilet,” attached directly to the seat, would come in handy. I like the fork that warns when you are eating too fast. It is now well-known that slower eating is healthier and keeps your weight down. Some may prefer a wind sail for your bicycle.

The sociologist will be interested in “Interpersonal-Introduction Signaling System.” Using a small hand-held device, you broadcast a signal indicating that you are interested in meeting someone. You can be rejected without (major) embarrassment on either side.

No, contrary to the impression you might sometimes get from this blog, there are not markets in everything. If you wish to be woken by light corks falling on your face, well…they tried this idea in 1882 and it did not take off. But if there is no market, at least there is a patent. Read this short article on the recent proliferation in patents in the United States. Here are some other web sites with descriptions of absurd patents.

The book, appropriately, had been remaindered. And there is always hope for the future, as at least one of their examples has come true. Amphibious motorcycle anyone?

Addendum: Check this out, maybe there really are markets in everything.

Haiti quote of the day

So much drug money was at stake in the power struggle that culminated in Mr. Aristide’s departure that Bruce Bagley, a professor at the University of Miami who has studied drug trafficking in Haiti, called the rebellion “basically a narco-coup.”

“The battle was over who is going to control the drug trafficking and the profits of the drug trade,” he said.

In fact it is possible that Aristide himself will be indicted for drug trafficking. Here is the full story. Here is more on Aristide and drugs.

The bottom line: Haitian politics no longer has a viable state at all, just various gangs, mostly in hock to the drug trade.

What makes a painting more valuable

Many of the results are not surprising. Light colors sell better than dark colors, happy portrait subjects sell better than widows, and horizontal pictures are easier to hang over the fireplace. Here are a few other points of note:

1. Landscapes can as much as triple in value when there are horses or figures in the foreground. Evidence of industry usually lowers a picture’s value.

2. A still life with flowers is worth more than one with fruit. Roses stand at the top of the flower hierarchy, chrysanthemums and lupins (seen as working class) stand at the bottom.

3. There is a hierarchy for animals as well. Purebred dogs help a picture more than mongrels do. Spaniels are worth more than collies. Racehorses are worth more than carthorses. When it comes to gamebirds, the following rule of thumb holds. The more expensive it is to shoot the bird, the more it adds to the value of a painting. A grouse is worth more than a mallard, and you had better show the animal from the front, not the back.

4. Water adds value to a picture, but only if it is calm. Shipwrecks are a no-no.

5. Round and oval works are extremely unpopular with buyers.

6. A Boucher nude sketch of a woman can be worth ten times more than a comparable sketch of a man.

The bottom line: Buyers prefer artworks which in some manner reflect high status.

For the full story, see “Why some Pictures Go For More Than Others,” in the May 2004 issue of The Art Newspaper.

Do deficits boost real interest rates?

Traditional economic theory says “yes.” Deficits require governments to borrow more in capital markets. The increased demand pushes up real interest rates; this effect should be especially pronounced when we are at or near full employment.

But for a long time standard empirical work said “no.” Significant real interest rate effects from deficits are hard to find in the data.

A puzzle, no? More generally there are few propositions about real interest rates that I find convincing.

While the debate remains unsettled, some recent research, published by the Federal Reserve Bank of Philadelphia, offers a new spin on the problem. The claim is that expected future deficits have a significant impact on real interest rates, even if current deficits do not. Announcements that future deficits will be high, for instance, appear to raise real interest rates. If correct, this theory would allow us to resurrect a classical view of the macroeconomy. Relative price effects would reign supreme and the case for fiscal responsibility would be cemented.

I would welcome these conclusions but nonetheless I have my doubts. Once you postulate that individuals are so forward-looking, should not Ricardian Equivalence hold? Then it is the level of government spending that should matter, not the level of the deficit. And doesn’t the entire hypothesis rest on the expectations theory of the term structure of interest rates? Yet the expectations theory otherwise appears to be falsified. If you don’t know those technical terms, the bottom line is the following. The basic model relating deficits to other macroeconomic variables is murky, yet this hypothesis assumes a fairly simple set of relationships.

So where are we left? I’ll suggest a macroeconomic law. When in doubt, opt for moderation. This holds for both deficits and future expected deficits. And I suspect Alex assents as well.

Thanks to Bruce Bartlett for the pointer. His blog is an excellent place to follow developments on fiscal policy and supply-side macroeconomics. Supply-side economics has a bad name in this country. In part some of the Reagan advisors oversold the idea that tax cuts would increase total revenue. Let’s not forget that supply-side ideas, when applied in the proper context, have proven successful in many other countries.

Economist accused of treason

If Daniel Sumner’s actions be treason, as some of his critics contend, then he is glad the most has been made of it.

Sumner, an agricultural economist at the University of California at Davis, played a key role in an international trade case that is shaping up as one of the most significant defeats the United States has ever suffered on the trade front. An analysis that he wrote helped frame a preliminary decision issued two weeks ago by a World Trade Organization panel, which held that the federal subsidies paid to U.S. cotton farmers violate WTO rules because they cause overproduction, drive down world prices and impoverish farmers in developing countries.

Since Sumner served as a paid consultant for Brazil, which brought the case against Washington, he is being reviled as a traitor by some U.S. farmers. Leaders of some farm groups, furious at Sumner for helping a foreign government win a victory that could end agricultural subsidies in their current form, are vowing to retaliate by cutting off funding for other work that he does.

Here is the full story.

The cotton lobby has called the research “unethical,” noting that it was produced in a state university. Sumner’s Dean questioned his judgment in doing the work. And Sumner himself?

“What is this, the mafia or something? Think of it as a criminal case, and one side says, ‘We’ll put pressure on this guy not to participate.’ That’s not right, is it?”

Here is a brief bio of Sumner, to whom I offer my plaudits.

Is a bad American image bad for American products?

Some evidence indicates yes:

“It’s not like there’s a massive boycott,” said Miller. “Instead, it seems to be an erosion of support. It’s not falling off the face of the earth, but it is clearly a warning sign for brands.”

NOP found the popularity and consumption of US products had declined for the first time since the research programme was launched in 1998.

Until 2002, NOP found that brands such as McDonald’s and Coca-Cola were notching up healthy annual growth in terms of use and familiarity in international markets.

However, last year NOP discovered that the growth in popularity of all major consumer brands – including those from Europe and Asia – had stalled. Over the past 12 months the positive trend has gone into reverse, with US products hardest hit.

NOP found that the number of non-American consumers who “trust” Coca-Cola had fallen from 55% to 52%, while McDonald’s rating had slipped from 36% to 33%, Nike’s from 56% to 53% and Microsoft had fallen from 45% to 39%.

When people were asked about brands associated with “honesty”, Coca-Cola was found to have declined from 18% to 15%, McDonald’s from 19% to 14%, Nike from 14% to 11% and Microsoft from 18% to 12%.

The total number of consumers worldwide who “use” US brands was found to have fallen from 30% to 27%, while non-American brands remained stable at 24%.

The NOP annual study covers 30,000 people in markets around the world, and the latest survey was conducted between January and March – a period marked by the growing crisis in Iraq.

It also found the decline in interest and respect for US products was reflected in consumers’ view of American cultural values.

The percentage of consumers that believed honesty was an important attribute of American culture was found to be below 50% in a number of major markets such as France, Italy, Germany, Spain and Turkey.

In Germany, only 31% of consumers believed honesty was an American cultural attribute and in Saudi Arabia just 23% thought so.

While consumers in Muslim countries such as Egypt, Turkey and Saudi Arabia were found to be least likely to share American cultural values, NOP also found people in a number of major European markets felt their own values were significantly different to American ones.

Compared with consumers in countries such as Venezuela, Taiwan, the Philippines, Brazil and Australia – over 75% of whom say they share American values – just 65% of UK consumers say they share US values.

If a bottle of coke is branded by the Coke name, we should not be surprised if “Coke” is branded by the international reputation of the United States. Above a certain level of income, at least half of our discretionary consumption is driven by the desire to affiliate and the stories we tell ourselves about who we are and what we are doing.