I’m currently reading Scarcity by by Sendhil Mullainathan and Eldar Shafir. At this stage, I’m inclined to sympathise with the unnamed colleague who commented “There’s already a science of scarcity. It’s called economics”. So far, it’s mostly straightforward applications of the observation that time and attention are scarce resources, combined with some fairly familiar observations from behavioral econ on how people fail to optimise either the first-order problems of allocating a tight budget or the second order problem of allocating time and attention to the first-order problem (my terms here, not theirs). However, I’m only part way through, and the authors promise to show how their approach differs from the way in which economists would normally think about this kind of problem.
This post is about a specific and well known observation cited by Mullainathan and Shafir. Faced with paying $100 for an item that could be had elsewhere for $50, most people are willing to put in a fair bit of effort (say, driving for an hour) to get the lower price.[^1] On the other hand if the item costs $1050 and could be had for $1000, people with reasonably high incomes mostly pay up, instead of driving to the other store. This is obviously inconsistent with standard opportunity cost.
It’s safe to say that, little as I expected of the Newman government, the reality has generally been worse. Still, I’m going to give them credit on whenever it seems due, and here’s the first thing they’ve done that I can happily support. Following the recommendations of a study commissioned by the previous Labor government, it’s planned to drop the reverse parking component of the Queensland driving test. Ever since I failed my first driving test on this score 40 years ago, I’ve regarded it as a piece of utter stupidity. Why should anyone else be concerned whether I can reverse park, any more than they should care whether I can change my own oil? If anything, the worse I am at parallel parking, the better for everyone else – not only do I leave more spots for them, but they don’t face the risk of being jammed in a spot by someone who has skilfully parked their car with millimetres to spare.
This seems absolutely obvious. But, to give the contrary view, I turn the mike over to Paul Turner from motoring body RACQ, who manages to ignore the obvious contradictions in his statement.
“What we want is safer drivers, so we think the more it leans to a strengthening of the licensing system, the better,” Mr Turner said.
He said although reverse parking did not carry a high crash risk, it was still a “technical skill” that deserved a place in the driving test.
I’d suggest that a more relevant “technical skill” would be a stiff test in formal logic. That would clear an awful lot of bad drivers off the road.
With the exception of an unnameable region bordering on the Eastern Mediterranean, posts on diet and exercise seem to promote more bitter disputes than any others. So, in the spirit of adventure, I’m going to step away from my usual program of soft and fluffy topics like the bubbliness of bitcoins, the uselessness of navies and the agnotology of climate denial, and tackle the thorny question of running vs walking.
Happily, and unlike, say climate science, this is a question on which you can find a reputable scientific study to support just about any position you care to name, and even some that appear to support both sides, so I’m just going to pick the ones I like, draw the conclusions I want, and invite you all to have it out in the comments thread. I’m also going to attempt the classic move of representing the opposing positions as extremes, relative to which I occupy the sensible centre.
Like many of us, I’m engaged in a constant struggle to maintain a healthy weight and fitness level, and being an economist, I naturally like to think about this in quantitative terms (I’m not alone in this).
The basic equation is simple: Energy used – energy consumed = fat burnt. But to make sense of this equation, we need units, and that raises the immediate questions:
Calories or kilojoules? and
How much do I have to burn to lose 1kg of fat?
The short answers are: Calories and 9000 Cal
More over the fold
My essay in (the new and exciting) Aeon magazine looking at Keynes’ suggestion that we could achieve decent living standards for all with an average of 15 hours a week of market work has had mostly favorable responses. But Kevin Vallier at the Bleeding Hearts Libertarian blog has now written a lengthy response and he doesn’t like it. Unfortunately, that’s about all I can say, since he throws a lot of adjectives (sectarian, morally impoverished and so on) at me without actually spelling out an objection.
Vallier’s response is in three parts. The first is a lengthy and fairly accurate, though hostile, summary of my general political position. He doesn’t offer a substantive criticism, but snipes about semantics Vallier objects, for example, to my “derisive” use of the term “market liberalism’ to describe “the sum total of pro-market economic thought that has had some influence over the last fifty years”. In fact, as I said in Zombie Economics, I picked the term precisely to avoid the pejorative connotations of the more commonly used “neoliberalism”. What does Vallier propose here? I can’t spell out “the sum total of pro-market economic thought that has had some influence over the last fifty years” every time I want to refer to the ideas I’m criticising. In essence, I think he is upset that, by giving any name to the dominant ideas of recent decades, I am pointing out that they represent an ideology, with a history, rather than a set of timeless truths.
The second part of Vallier’s response is a summary of the main argument of my essay, but so brief that a reader who didn’t follow the link would have a very limited idea of what I was saying. The third part criticises me for advocating “coercion” against people who want to work hard and make money. Vallier doesn’t say what he means by this. The obvious incorrect inference, drawn by quite a few of his readers, is that I’m advocating statutory limits on hours of paid work. However, he doesn’t seem to mean that. Rather, he seems to object to high income earners being required to pay taxes to support people who don’t work.
But this raises a puzzle. The only policy proposal I discuss in any detail is that for a guaranteed minimum income. But Vallier supports this – in fact, it’s pretty much the central distinction between Bleeding Heart Libertarians and the regular Republican+legal drugs kind. So, is he inferring (correctly) that I’d propose a higher minimum than the BHLs? Or something else? I really don’t know.
A quick post to wish my readers all the best for 2013. I’ll put up some substantive posts and open threads soon, but in the meantime, feel free to express your wishes for 2013. Just for this post, I’d like everyone to accentuate the positive and avoid conflict with other commenters. Normal service will resume soon.
I don’t have anything to say, other than to express my grief at the loss suffered by so many. Others may have more insights to offer
The Noosa Triathlon is coming up on Sunday, and there’s still time to give to Heartkids, the charity I’m supporting. Just click on the picture in the right-hand sidebar. Or, if you’d prefer a different charity, why don’t you give now, and (if you like) post a comment announcing it. Either way, it’s a great chance to help others.
Back before many readers of this blog were born, there was a TV ad campaign “Life, Be In It“, encouraging us all to be more active. It featured a jolly, middle-aged, mildly overweight character called Norm (as in Norm Everage), and a jingle on the merits of “Thirty Minutes a Day” of moderate exercise.
I think of myself as a lot more energetic and exercise-oriented than Norm, and being a data fan, I record most of my exercise using Runkeeper. So, I finally got around to checking the duration stats and was surprised to find that I do only about 20 hours of running, cycling and swimming in the average month. That’s just 40 minutes a day. You can take from that what you will, but my thought is that, unless you’re aiming to qualify for the Boston Marathon, or, like me,you just enjoy exercise, Norm was right. 30 minutes a day is all you need.
fn1. That doesn’t including walking, short cycle trips to work and the shops, and occasional gym workouts, but those things wouldn’t add more than 20 mins a day.
Since long before I started blogging, I’ve been planning a big article on the prospects for Utopia, starting off from Keynes’ essay Economic Possibilities for our Grandchildren. While I procrastinated, lots of others had the same idea, most recently Robert and Edward Skidelsky. But, with encouragement from Ed Lake at Aeon Magazine, I went ahead anyway and the article has just appeared.
This is also a good time to announce that our long-promised book event on Erik Olin Wright’s Envisioning Real Utopias is going ahead, with a target publication date of March 2013.
This article by fellow-MAMIL Michael O’Reilly makes an argument I’d been meaning to post. Whatever the merits of bike helmet laws in general, the costs clearly outweigh them in relation to bike-share schemes like CityCycle in Brisbane.
We clearly need a category of exemptions that lets people hire a slow bike for touring around our cities. Having done that, I’d extend it to anyone willing to take the trouble to apply for exemption, while maintaining the helmet rule as the default. I certainly wouldn’t seek an exemption – I like my head the way it is – but I can imagine there are people who would make the choice, and it’s not so obvious that their judgement should be over-ridden.
I seem to be back on air for the moment, so I’m taking the chance to appeal for doantions to the HeartKids appeal. My team partner Flavio and I have committed to raise $2000, but we are still $130 short. Please help to push us over the line, and we will push to get ourselves over the line in Noosa. Just click on the link and give money!
Some good news! I’ve just been awarded an Australian Laureate Fellowship to work on uncertainty and financial crises. That means five more years of funding. I’ve been stringing various ARC Fellowships, Federation Fellowships and so on together since the mid-1990s, and there’s always an anxious wait when one is about to run out, and the new ones have not been announced – there’s no guarantee, or even presumption, that winning one means you will get another, and there’s plenty of competition, so it’s a matter of starting from scratch every time. The really nice time, starting now, is the last few months of the old grant, when I get to wrap things up and contemplate the start of something new. I’m very grateful to the Australian government for supporting me in my research over all these years.
To support my fundraising appeal for HeartKids Queensland. Just click on the ad on the right and give money. It would be great to reach $2000 by the end of the financial year (30 June).
An added incentive – after the carbon tax comes in on Sunday, money will be worthless and bank balances will be confiscated by the UN, so you may as well give generously while you still can.
fn1. Unfortunately, the widget isn’t updating the total amount at the moment, but I’ll announce it soon.
fn2. Oops, not sure if I was supposed to pre-announce that, so don’t tell anyone
In comments, David Barry, winner of the previous crowdsourcing contest writes
I would be interested in seeing how much global research funding goes towards different diseases. My goal here is to see if research funding into a disease is roughly proportional to the global burden of the disease, or if there are relatively under- and over-funded areas; the former might then be the best place for individuals to donate to, if they want to support medical research.
The global burdens are on the WHO’s website: http://www.who.int/healthinfo/global_burden_disease/estimates_regional/en/index.html I don’t know where I’d find funding statistics. As a first step, I’d be happy with just US/EU government agency funding data. For instance, the National Cancer Institute has a nice table here, http://www.cancer.gov/cancertopics/factsheet/NCI/research-funding
This is a great topic, and I encourage readers to look into it. I’d offer the minor caveat that research is conditioned to some extent by the availability of researchable topics. For example, I believe (though I’m happy to be proved wrong) that the mortality rates from prostate cancer are similar to those for breast cancer, but that breast cancer research gets much more funding. As I understand it, this is mainly because there don’t appear to be as many promising avenues for research on prostate cancer.
Also, a reminder that my crowdsourcing request for a simple model-based estimate of the date at which a minority of Census respondents will identify as Christian is now open. (Minor update: The proportion claiming Christian affililation fell from 64 to 61 per cent between 2006 and 2011. Simple extrapolation gives a target date of 2031. I’m sure a model with some demography would do better than this).
I’ve seen a bunch of reports from the census saying that the proportion of Australians reporting “no religion” has increased substantially, to around 22 per cent. I’d be interested to know if this is mainly a cohort effect (non-believing younger generations entering the population) or the result of people who previously reported a religious affiliation switching to reporting none. I’d be surprised if much of it was the result of people abandoning previous religious beliefs, as opposed to nominal affiliations, but I don’t think the data allows a test of this.
I just had a brilliant idea for how to motivate this effort. The first person to give a good answer gets to nominate the next topic for crowdsourcing. As a hint, the ideal way to answer the question would be to compare responses from a given age group in 2006 with the same group, now 5 years older, in 2011, adjusting, if possible for migration effects.
Update: The evidence, collected in the comments threads, suggests that cohort and conversion effects each account for about half of the shift.
The prize goes to David Barry, with honorable mentions to Aldonius and Luke Elford. I’ll give Dave first shot at proposing a new topic (in comments), but also invite suggestions from Luke and Aldonius. Meanwhile, I’m going to suggest something a bit more challenging for crowd-sourcing. If anyone would like to use the data to develop a simple model to project likely changes in stated Census affilations over the next two decades, with a specific focus on the question “When will (Census reported) Christian affilation become a minority response in Australia”, I’ll add a write up and send it as a joint post to The Conversation, the new(ish) academic-focused website.
Thanks to some generous donations, we reached the $500 target over the weekend, though the display is not updating (at least for me). As promised, I’ve put in $500, and Flavio has done the same. With some additional donations we’re now over $1600. It would be great if we could make the $4000 target before the end of the financial year.
The counter on my fundraiser widget is not updating properly, but I’m happy to say we’ve already raised $380 for HeartKids. Thanks to everyone who has given so far – I’ll be sending individual thankyous soon. There’s still plenty of time to get your donation in before the end of the financial year, but the sooner you do, the sooner I’ll be able to show the undead hordes a clean pair of heels.
To give everyone an incentive, if I get $500 in donations by Monday*, I’ll match it.
*You can also donate to Flavio’s part of the effort, which is tallied separately
Just in time for the end of the financial year, another fundraiser! I’m planning to run in the Noosa Triathlon in November. My friend Flavio Menezes and I have set up a charity fundraising team, with the hopeful title “Faster Than Zombies #2″, and you can give money through the Everyday Hero widget on the sidebar. We’re aiming to raise $4000 between us. A few points which I hope will help to get the credit cards out:
* We’ll be supporting HeartKids Queensland which helps children born with heart disease and their families. I know it’s always hard to choose which charities to support, but this one does a lot of good and scores really well on the “warm inner glow” scale
* Last time around, some commenters expressed concern about the cost charged by Everyday Hero. I raised this with HeartKids and got the advice that, for a small charity like theirs, going through Everyday Hero is more cost-effective than handling donations directly
* This blog is free and always will be. The only financial return I ask for is support in efforts like this one.
* For those in paid work, donations are tax deductible. That means you can give more!
I know not everyone can afford to give much to charity, and many of you will have made your own choices already. But for those with a bit of spare cash, here’s a chance to put it to good use.
A little while ago, I got a message from the Fin to tell me they wouldn’t be running any more columns from me, as they are bringing in some new commentators. Given my run-in with Michael Stutchbury (then at the Oz, now Editor-in-Chief of the Fin) last year, and other changes at the Fin since he came on board, I wasn’t surprised. Still, it’s the end of a long-running association, which started, ironically (at least in the Alanis Morrisette sense of the term) when Michael was opinion editor there. My first column, advocating the exclusion of food from the GST, ran in 1992. I wrote occasional pieces after that, and I was a regular columnist for 15 years, which is a very long stint by Australian standards, at least for someone who isn’t a full-time journalist.
I’ve enjoyed it a lot, and I think I’ve made a useful contribution, but now it’s time to move on. I’ll certainly continue to take part in public debate, through this blog and other media, but this gives me a chance to stop and think more clearly about where I want to go with this part of my life.
We’ve raised over $4000 for the East Africa appeal, more than $8000 after the Australian government’s matching contribution. That’s enough to make a real difference to the lives of hundreds of people living in the most desperate conditions. But there’s still time to reach the appeal target of $5000. I started things off with a contribution and now I’ve done the half marathon as promised, finishing in a time of 1:57:16, more than three minutes below my previous best time. Surely that’s worth the effort of clicking the link and putting in whatever you can afford for this truly worthy cause.
I haven’t used any gimmicks for this appeal so far, but if we reach $5000 I’ll buy and post the after-race photo, which should provide much innocent amusement for readers, what with my special race gear and generally depleted condition.
Update The $5000 target has been reached! Thanks so much to my readers who have, as usual, given generously to help others.
I’m not going to close off the appeal for another couple of days. If you haven’t given already, put in whatever you can afford.
I haven’t heard from the race photographers yet, but presumably they will be in touch, so that I can post the evidence.
Finally, I have just learned that two runners died during the event, the first time this has happened in the 13 years it has been run. My condolences go to their families. Remember, if you are thinking of taking up any strenuous sport ,to build up slowly, have regular medical checks and stay within your limits on race day.End update
The East Africa appeal has less than a week to run, that is, until I have to run. There have been some generous donations, but the need is so great, I hope everyone who can afford it will dig deep, and contribute what they can.
Remember that donations are tax-deductible for Australian readers and that the Australian government will match all donations dollar-for-dollar, so every dollar you actually give translates into 2-4 dollars of desperately needed assistance.
You can donate with a credit card, cheque or Bpay by clicking on the “sponsor Me” link below the image on the right.
I’m in the US at present, visiting Johns Hopkins University. This kind of visit usually involves plenty of opportunities for eating and drinking, not so many for exercise. To push myself into activity, I’ve signed up for a half-marathon to be run in Philadelphia on 19 November.
That seems like a good occasion for a fundraiser. I know it’s not long since the last one, but I’ve picked a really good cause, namely relief efforts for the East Africa Famine. I’ve set up a fundraising page on Everyday Hero, with a convenient link to the left. The money goes to CARE, and I’ll write to them to ask them to put it towards their East Africa Appeal. But if you prefer to give to another charity engaged in the same effort, or even some other cause altogether.
I’ve put some thoughts about the famine over the fold. However, I’d prefer to keep the comments thread for posts regarding contributions to the appeal, other ways to help and so on. Negative comments will be deleted with prejudice. I’ll open a sandpit soon for people who want to argue about the issues hopefully as well as, and not instead of, contributing to the appeal.
Update As pointed out by commenter Peter Rickwood, the Australian government will match our contributions dollar for dollar. And all Australian donations are tax deductible. So, for someone lucky enough to be in the top tax bracket, you can give $4 worth of help for every $1 of post-tax income you forgo. A dollar a day is all it takes to feed a hungry child, so $100 of consumption forgone is enough to feed a child for a year. You don’t get an offer like that every day! It’s such a good deal, I’ve put some money in to start the ball rolling. End update
… to everyone who sponsored my half-marathon run for the Queensland Cancer Council, which raised over $3000. My race performance was ordinary, but the generosity of my readers, on this and previous occasions, has been extraordinary.
I’ll be taking down the banner ad shortly. I’ve tried to thank all those who gave money, but some were anonymous, and my disorganisation is such that I’ve surely missed others. So, thanks again for a great effort.
Tomorrow is the day for the Brisbane Running Festival, and my wonderful readers have donated $3020 to the Queensland Cancer Council. My preparation hasn’t been all it could be, but I’ve had a big boost from the support I’ve received during #quiggingate controversy with News Limited and others. So, I’m going to do my best to meet the original target, which was to do a minute under 2 hours for each $1000 raised, that is, a time of 1:57. I hope to stay with the two hour pace runner for the first half, then, lungs and legs permitting, make my big break. How likely it is that this will actually work, I don’t know, but I’ll report back tomorrow.
Update Haven’t got final results, but failed to break 2 hours. I was a little behind the pace at 18km, but planning a big burst. Instead, I tripped over an uneven bit of footpath (I’m starting to think someone is out to get me this week!) and went face first into the pavement (photos coming). That took away a lot of energy and it was all I could do to jog to the finish line. If the race time was a bit disappointing, the good news is that our collective fundraising effort for the Queensland Cancer Council was the second best overall , with $3020. That’s a marvellous effort, of far more value than a few minutes more or less taken to finish 21.1km.
Not exactly, but Paul Krugman, writing in his NY Times blog, has backed me up in my latest stoush with the Murdoch Press, as has Brad DeLong. As Paul says, this kind of attack is a badge of honour.
The Brisbane Running Festival is on Sunday, and I’ll be attempting the half-marathon. Thanks to the generosity of readers here, we’ve raised $2320 for the Queensland Cancer Council. It would be a great encouragement to me to get the total up to $2500 or even $3000.
As I mentioned a while back, my preparation has been disrupted, so I’m not confident of breaking the two-hour mark as I originally planned – my original funding gimmick was a minute below that mark for every $1000 raised. But I will be trying hard to run the entire race, and do the best I can as regards time.
I’ve tried to thank all the donors individually, but I’ll offer a collective thanks to you all now, in case I missed anybody
As usual on such occasions, I haven’t had much to say about the horrific events in Norway. It’s generally better, in such circumstances, to pause for reflection, and certainly some who rushed to judgement have gone badly wrong in doing so, here as on previous occasions. This is not the time for judgement, but that time will come.
My training for the half-marathon has been badly disrupted by illness, so I really need some encouragement. Click on the link to the left and put some money in to the Queensland Cancer Council. I’m going to a conference now, which is going to disrupt things further, but I’ll commit to putting in 20km on the treadmill while I’m away if you guys can bring the total donations up to $2500 by Sunday.
I’m still going to do my best to beat two hours, but it’s looking quite a bit harder now
We academics love nothing better than to give each other awards. The Australian Conference of Economists is being held in Canberra this week, and the big social event was the conference dinner on Monday night, where blogger-economists were (as usual) well represented when the gongs were handed out. The “Best Young Economist” award (it says something about the pace of academic life that “Young” = “under 40″) previously won by econbloggers Joshua Gans and Paul Frijters, went this time to Andrew Leigh, who left ANU last year to become MP for Fraser in the ACT. Academia’s loss will be the nation’s gain if Andrew gets to exert some influence over public policy.
I also scored, being chosen for the Distinguished Fellow Award. Looking at the list of previous recipients, it’s a big honour to join them and I’m very grateful to my colleagues in the profession, especially since I’ve argued pretty vigorously with most of them at one time or another. The economics profession has its problems (as I argued in Zombie Economics, we haven’t been too good at learning the lessons of the Global Financial Crisis), but all things considered, it has been a force for good in Australian public policy debates.