Slate has an ingenious interactive tool that fills in your NCAA bracket based on various criteria, including the schools’ academic rankings, distance to the area (nearer team wins), SAT scores (higher winning, inexplicably), and my personal favorite, dog friendliness.
But, as market economists, perhaps we should just let the market speak by looking at the most handsomely paid coaches!
Not surprisingly, these look a lot like many of the actual “expert” picks for much of the tournament, including Michigan State reaching the Final Four as a four seed.
Although I like the idea of picking based on coach salary — what better measure of quality than willingness to pay for a coach?! — one suspects we can actually measure performance, so I tend to lean on the Logistic Regression Markov Chain model to inform my picks.
Every two years sportscasters around the nation and around the world keep track of Olympic glory by reporting the medal count. Currently, the Netherlands leads the pack with 17 medals, with the U.S. and Russian Federation close behind at 16.
But is that really a fair comparison? The U.S. has almost 20 times as many people as the Netherlands and therefore 20 times more citizens who could potentially excel in dancing on ice, skeet shooting, curling, or bandying (?). It would be like measuring economic development by total GDP rather than per-capita GDP (wait, we do that, too).
That’s why it’s refreshing that the good folks at www.medalspercapita.com are keeping it real for us, taking the total medal count and dividing by the population. “Olympic Glory in Proportion” is their motto, and I couldn’t agree more.
With that adjustment, tiny Norway with just 5 million people (fewer people than in Wisconsin!) is in the lead, with the Netherlands falling to fourth. Slovenia, with a mere two million people, has racked up five medals and is in the second spot. The U.S. is a distant 22nd place. Owie.
They also weight medals based per dollar of GDP, which really shakes things up. With this adjustment, Latvia, Slovenia, and Belarus are completely dusting the competition.
In case anyone was wondering, Hungary has yet to medal in these Olympics, so the per capita adjustment doesn’t do much in this case. Indeed, the proud Hungarian nation hasn’t had a medal in the Winter Games since the indomitable Krisztina Regőczy and András Sallay took silver in the ice dancing back in 1980.
I guess since it was a silver medal they were somewhat domitable.
Assuming you shop, that is. Why would you shop when you know that cash transfers are always preferred?
Or are they?
Yes, it’s time once again for me to re-post a post that I worked on pretty hard once upon a time, but now just mail it in.
And away we go:
It’s that time of year where we bid you Happy Holidays from the Economics profession.
Up first, we have a truly heroic figure, Joel Waldfogel, author ofScroogeonomics.* I don’t know your preferences as well as you do, so whatever I give you is probably sub-optimal, unless you tell me exactly what you want. And even then, wouldn’t you rather just have the cash anyway? For those of you who are intermediate micro students, you know that the kids (a.k.a., utility-maximizing agents) always prefer cash over any in-kind equivalent.
Kudos to Professor Waldfogel for willing to be “that guy.”
In this whole world, there is nobody more generous than the miser–the man who could deplete the world’s resources but chooses not to. The only difference between miserliness and philanthropy is that the philanthropist serves a favored few while the miser spreads his largess far and wide.
If you build a house and refuse to buy a house, the rest of the world is one house richer. If you earn a dollar and refuse to spend a dollar, the rest of the world is one dollar richer–because you produced a dollar’s worth of goods and didn’t consume them.
Ah, I just feel all warm and fuzzy inside.
Moving on to The Atlantic, where we have “The Behavioral Economist’s Guide to Buying Presents.” Now this is some truly indispensable advice. Like Waldfogel above, the money point is to just give money. But, for the true romantics who feel compelled to give a gift, the behavioralists recommend this:
Buying for a guy? Get him a gadget. Buying for a girl? Get her something expensive and useless.
The gadget I get.** The expensive and useless? That’s from Geoffrey Miller’s, The Mating Mind. Here’s a brief explanation of courtship:
The wastefulness of courtship is what makes it romantic. The wasteful dancing, the wasteful gift-giving, the wasteful conversation, the wasteful laughter, the wasteful foreplay, the wasteful adventures. From the viewpoint of “survival of the fittest” the waste looks mad and pointless and maladaptive… However, from the viewpoint of fitness indicator theory, this waste is the most efficient and reliable way to discover someone’s fitness. Where you see conspicuous waste in nature, sexual choice has often been at work.
This presents something of a conundrum because “expensive and useless” seems to be at odds with Waldfogel’s hyper-utilitarian cold, hard cash suggestion.
Shockingly, it turns out that kids and the critics don’t always see eye-to-eye on movie ratings. The biggest divergence seems to be with A Bug’s Life, a charming tale of a bug’s life featuring the voices of Dave Foley, Kevin Spacey, and Denis Leary (what kid doesn’t love Denis Leary?). More than 90% of critics rated this one fresh, whilst the kids covered the screen with maters, with an approval rating in the mid-30s.
In a similar vein, the critics fell all over themselves praising Finding Nemo, whereas kids were split down the middle in their approval of this mother-killing fish tale.
The critics were not thrilled with Cars (just over 70% approval), but kids loved it even less (just under 50%). I’m not sure I believe those numbers, actually, given the pervasiveness of Cars stuff (though the little girl quoted in the post title does make a compelling point). I do believe the second set of numbers, however, regarding Cars 2. The critics panned this hyper-violent Bond-esquey schlock (40%), whereas more than 70% of kids gave it a fresh rating (12-year old girls notwithstanding). My boy walked out of the theater laughing about “all the guns”. Huh.
Back in the day, Modigliani and Brumberg (from their perches in Urbana-Champaign!) posited that individuals smooth out their consumption over the course of their lifetimes. In other words, total individual consumption expenditures are pretty stable, or smooth, from year-to-year, rather than having individuals curb consumption in one year to pay for big expenditures in the next. The big-picture implication is that individuals base their consumption spending on their expectations of lifetime earnings. So, if I expect to make a lot of money years from now, I will spend at higher levels now, even if I don’t have it yet. As a result, the young and the old spend more than they make, whereas the middle aged make more than they spend.
The Modigliani and Brumberg work is now known as the Life Cycle Hypothesis, and it is a seminal contribution for a number of reasons. First, it is a micro model that has significant macro implications –aggregate consumption depends on (expected) lifetime income, not current income. It also implies that government deficits are a source of fiscal “drag” on economic growth. You can check out more on Modigliani and his contributions at The New Palgrave Dictionary of Economics (available at campus IP addresses; otherwise, Google it).
Even if people spend the same total amount of money every year, however, they will probably be some variation in the items they actually spend it on. And empirically, of course, this turns out to be the case. Exhibit A: The Atlantic Monthly has a fascinating set of figures showing how U.S. consumer spending on various goods and services ranging from booze and smokes to law and garden services to men’s furs vary by the age of the consumer.
The figures are instructive.
First off, it appears that men pour increasing amounts of money into their undergarments as they age, reaching “peak underwear” at around age 50. The average male aged 45-54 will drop about $120 on his drawers during that ten-year stretch. After that, underwear spending falls like a stone, and by age 75 or 80 it appears that most men are only spending a couple bucks a year on those closest to them.
Welcome to winter break. One of the great things about returning home is that your family and friends can share not only in the new, colorful personal habits that you’ve picked up on campus, but also in the fruits of the valuable analytic skills that you have developed here at Lawrence.
Economist Jean-Jacques Dethier gets us started. Here — right on schedule — is a taste of analysis of the evil scheme of one Christopher Walken in A View to a Kill:
Plot: Max Zorin (Christopher Walken) wants to secretly trigger a massive earthquake that will destroy Silicon Valley. This will then allow him and his investor allies to monopolize the microchip manufacturing market.
Plausibility: “As far as I know, microchips aren’t actually manufactured in Silicon Valley,” says Dethier. “They’re made all over the world, in China and other places, though the guys who commission the work may be in Silicon Valley.” Therefore, while taking out Silicon Valley would obviously be cataclysmic for the tech industry, he notes, it also wouldn’t entirely remove your competitors, and wouldn’t ultimately affect manufacturing that much.
The Chronicle of Higher Education reports that the state has decided to crack down on free education, notifying California-based startup Coursera that it is not allowed to offer its online courses to the state’s residents.
Alert reader “Mr. C” alerted me to this as an example of “rent seeking,” whereby the purveyor of market power erects a barrier to entry as a means to maintain its preferred status. I wouldn’t really call this rent seeking in the conventional sense, as the state itself is simply kicking online providers in the teeth. The state itself runs several non-online operations. It would be rent seeking if one of the many fine private institutions went to the state to enforce the policy.
As for the policy itself, Slate online has a comical clarification.
It later was clarified that online education was okay, but the provider had to register with the state, and have its registration renewed annually.
So, what is the rationale for this?
George Roedler, manager of institutional registration and licensing at the Minnesota Office of Higher education, clarifies that his office’s issue isn’t with Coursera per se, but with the universities that offer classes through its website. State law prohibits degree-granting institutions from offering instruction in Minnesota without obtaining permission from the office and paying a registration fee…
The law’s intent is to protect Minnesota students from wasting their money on degrees from substandard institutions, Roedler says. As such, he suspects that Coursera’s partner institutions would have little trouble obtaining the registration. He says he had hoped to work with Coursera to achieve that, and was surprised when they responded with the terms-of-service change notifying Minnesota residents of the law.
The thing is, no one is wasting their money on Coursera courses, because they’re free. (Yes, says Roedler, but they could still be wasting their time.)
So the state is in the business of protecting its citizenry from wasting its time.
Some of you are aware that the summer Olympics have been taking place over the past few weeks, with athletes all around the world convening in London to kick each other, swim and dive in perfect synchronicity, throw balls into nets, and perform other feats of strength. As a way of monitoring each country’s progress, it is customary for the IOC and the media to keep a tally of how many medals each country has accumulated and then talking about it as if it had some great import. This year the United States amassed a whopping 104 total medals, with the People’s Republic of China coming in a distant second with 88 and Great Britain with a mere 65.
That metric never seemed quite right to me, though, because many events seem kind of like made up sports, and others involve teams, yet the team victory seems to just count as one medal.
Those issues aside, there is also the more fundamental issue that a country like, say, Grenada doesn’t have very many people in it. Indeed, it might be the case that the Chinese sent more athletes to London than the entire population of Grenada combined. Yet, Grenada and China are set on equal footing in the ubiquitous Medal Count competition.
That’s why we’re fortunate to have Medals Per Capita dot Com keeping it real for us. The site does what you’d expect, adjusting the medals count based on population to produce the coveted “population per medals” metric.
And, on that score, the rankings change dramatically. Indeed, tiny Grenada, with only 110,821 people, leads the way with one medal and a population per medal score of 110,821. This bests second-place Jamacia’s score of 225,485 by a lot. But Jamacia did come in with an astonishing 12 medals despite having a population slightly larger than the Pittsburgh metro area. Trinidad and Tobago and the Bahamas are also among the top five.
I should also mention — before somebody does it for me — that Hungary is an impressive 8th with 17 medals for a population of 10 million, which is about one medal per 600,000 inhabitants.
What about the “medals count winners”? Well, the mighty US with its 104 medals is only about one medal per three million people, good for a measly 49th place, while China is way down in 74th on a per capita basis, with only a medal per 15 million people.
So, to put things in perspective, a simple linear extrapolation suggests that if Grenada had China’s population, it would have amassed more than 12,000 medals. In contrast, with 84 medals per 1.3 billion people, if China had Grenada’s population, it would have netted only 0.0068 medals.
On the one hand, this illustrates why it is probably a good idea not to put too much stock in linear extrapolations, but on the other hand, these types of comparisons are important, as any sort of comparative analysis needs to have some reasonable baseline or measure of perspective.
The Medals per Capita dot Com page has a whole menu of metrics for you to play with, so with the fall term at least a week away, go ahead and start playing.
As you may have heard, the Supreme Court of the United States (SCOTUS) has upheld the constitutionality of the recent health care legislation. I won’t attempt to delve into the legal issues on which the opinion pivoted (see here maybe), though I will tell you that Chief Justice John Roberts in writing for the majority seems to have sent a Bronx cheer in the direction of the economics profession.
Congress already enjoys vast power to regulate much of what we do. Accepting the Government’s theory would give Congress the same license to regulate what we do not do, fundamentally changing the relation between the citizen and the Federal Government.
To an economist, perhaps, there is no difference between activity and inactivity; both have measurable economic effects on commerce. But the distinction between doing something and doing nothing would not have been lost on the Framers, who were “practical statesmen,” not metaphysical philosophers.
Funny, I’ve always placed myself in the practical statesman camp. I’ll have to think about that one.
On the heels of the wildly successful Monday Quiz, it’s time for the big Tuesday Quiz. As you know, or should know, most people in the real world do not write as if they are texting their BFF, so keeping track of subject-verb agreement, it’s v. its, and the like could prove to be important in your future career trajectory. In that spirit, there was a nice piece in the Wall Street Journal this past week bemoaning the poor grammar and language skills of the workforce, including this nice interactive feature.
Now should the tag be “get off my lawn” or “get off of my lawn”?
And should that be in italics instead of quotations?
And should that question mark be inside or outside of the quotation mark?
Jaroslav Flegr is no kook. And yet, for years, he suspected his mind had been taken over by parasites that had invaded his brain. So the prolific biologist took his science-fiction hunch into the lab. What he’s now discovering will startle you. Could tiny organisms carried by house cats be creeping into our brains, causing everything from car wrecks to schizophrenia? A biologist’s science- fiction hunch is gaining credence and shaping the emerging science of mind- controlling parasites.
Is Black Friday a day to give thanks for low prices, or a symbol of the gross excesses of retail capitalism? Robert Frank discusses:
In recent years, large retail chains have been competing to be the first to open their doors on Black Friday. The race is driven by the theory that stores with the earliest start time capture the most buyers and make the most sales. For many years, stores opened at a reasonable hour. Then, some started opening at 5 a.m., prompting complaints from employees about having to go to sleep early on Thanksgiving and miss out on time with their families. But retailers ignored those complaints, because their earlier start time proved so successful in luring customers away from rival outlets.
Frank is in the “race to the bottom” crowd, and while even if the bottom is economically “efficient,” it seems to me that he would disagree with the distributional implications — low-income wage earners being exploited, crass consumerism running amok, dogs and cats living together, etc…
This is portrayed as a zero-sum or negative-sum game, but I view the matter, at least in efficiency terms, more optimistically. The alternative to waiting in line and fighting the crush is to go shopping some other day, hardly a terrible fate. More analytically speaking, the average return in other endeavors limits how bad these rent-seeking games can get, otherwise just switch and stay home and read your blogs, as some of you perhaps are doing right now.
Dare I suggest that some people like waiting in those lines with their thermos cups and stale bagels. You could try to argue they are “forced to do so,” to get the bargains, but in a reasonably competitive world each outlet will (roughly) try to maximize the consumer surplus from visiting the store, including the experience of waiting in line.
First, let n be odd. We start with n=3: “Buffalo buffalo buffalo”; that is, some buffalo do buffalo buffalo, i.e., some buffalo are buffaloed by buffalo. But of course the buffalo who are buffaloing may themselves be buffaloed by buffalo, so just as some cats that watch mice are chased by dogs, or as we say, cats dogs chase watch mice, buffalo that buffalo buffalo themselves buffalo buffalo, and we can say that buffalo buffalo buffalo buffalo buffalo. Anytime we have the noun buffalo, we can add the relative clause “who are buffaloed by buffalo”, or better, instead of the noun phrase “buffalo who are buffaloed by buffalo”, we may say simply “buffalo that buffalo buffalo”, then add the rest of the sentence, yielding “Buffalo that buffalo buffalo buffalo buffalo”, or even better, “Buffalo buffalo buffalo buffalo buffalo”. To a sentence consisting of n (odd) occurrences of the word, we can produce a sentence of n+2 occurrences.
Thus for any odd n, a sequence of n occurrences is a sentence.
But just as a dog that chases cats is a dog that chases, buffalo that buffalo some buffalo are buffalo that buffalo, so from one of our sequences of an odd number of occurrences, we can lop off the final direct object, producing a sequence of an even number of occurrences that is a grammatical sentence. For any n>1, odd or even, a sequence of n occurrences of “buffalo” is a grammatical English sentence!
The relationship between the new management and the community seems to have got off on the wrong foot soon after Fujimoto left. Before long, the small local merchants were hearing reports from customers that Monterey Market was selling the same specialty products as they were, but at lower prices.
“We only have a 30% mark-up”, said Ng, adding that she doesn’t understand how Monterey Market can sell the same products so much more cheaply.
So, are they saying that Monterey Market can’t sell the same product? Not at all.
Asked why Monterey Market should not have the right to pursue a business model that includes selling what it wants, Ng said: ”Sure, but they don’t have to carry exactly the same products. It’s not that there was no competition before — we carried some of the same items — but we had matching pricing,” Ng said.
And the story doesn’t end there.
The decision by Monterey Market to stay open on Sundays, which it started to do in November last year, has also had a direct impact on sales, according to Ng and Rosales. In the days of Bill Fujimoto, opening hours used to be coordinated among the merchants, according to Ng.
Same products, lower prices, greater convenience. Sounds like competition to me. And producers still hate it.
The Chicago Reader has a short piece on my brother, who wrangled the Mayorship from the incumbent in the Champaign election yesterday. And wrangled is certainly the right word, as he has been campaigning tirelessly for the past six months.
Former Rocker Don Gerard Elected Mayor of Champaign
Don Gerard, a longtime fixture in Champaign-Urbana’s indie-rock scene, was elected mayor of Champaign yesterday. I haven’t seen or spoken to him in many years, but I remember Gerard, who played drums and bass in countless bands beginning in the mid-80s, as enthusiastic, energetic, and expertly sarcastic. His aesthetic sensibilities leaned toward punk and roots music, but his best-known group, the Moon Seven Times, was a 4AD-worshiping, goth-leaning outfit. He also played in the Farmboys, a band fronted by recording engineer Adam Schmitt; the Bowery Boys, fronted by Chicagoan Leroy Bach (Uptighty, Five Style, Wilco); and Steve Pride & His Blood Kin, which also included Jay Bennett. For a time he lived in the Champaign rock palace known as the Ten Shitty Guy House, which at one time or another housed members of the Didjits and Titanic Love Affair.
[L]et’s look ahead to what’s on the menu for this year: four adaptations of comic books. One prequel to an adaptation of a comic book. One sequel to a sequel to a movie based on a toy. One sequel to a sequel to a sequel to a movie based on an amusement-park ride. One prequel to a remake. Two sequels to cartoons. One sequel to a comedy. An adaptation of a children’s book. An adaptation of a Saturday-morning cartoon. One sequel with a 4 in the title. Two sequels with a 5 in the title. One sequel that, if it were inclined to use numbers, would have to have a 7 1/2 in the title.