Month: October 2022

Choosing Where to Eat

I just got back from a lovely holiday in Goa. Oodles of good food, loads of fantastic beer, hours of staring out at the sea, and not a laptop in sight for miles and miles. Just wonderful.

But if you know me at all, you’ll know that the first of these was the most important bit. Duh.

I spend a large chunk of my day thinking about food – what to make next, what to eat next, where to eat next. And today’s blogpost is about the last of these – where to eat next. How should one go about choosing where to eat?

  1. The book to begin with if you want to use economist-y principles is Tyler Cowen’s excellent “An Economist Gets Lunch”. The book is full of delightfully Cowenian advice:
    • Choose a restaurant where the patrons aren’t smiling (because that means the regulars are here to eat, not socialize)
    • When it comes to cuisines not native to the town you are in, choose a restaurant located on the outskirts of town rather than in the centre, it is more likely to have genuinely good food (lower rents, closer to recent immigrants into said town, both of which are likely to be good indicators of genuinely good food.)
    • The weirder a dish sounds relative to the rest of the menu, the more likely it is to be worth ordering (for why else would the restaurant choose to include it in the menu in the first place)
  2. Krish Ashok had a nice post on Instagram recently, where he pointed out that you should ignore negative reviews of restaurants, since the internet incentivizes one to be nasty and negative with one’s opinions.
  3. Here are my own tips, noting that your mileage may vary when it comes to adopting them:
    • Triangulate – if a restaurant has good reviews on Zomato, and on Google Maps and on blogs, it is likely to be good. A high rating only on Zomato is, to me, a worrying sign.
    • I tend to rate reviews on Google Maps higher because Google Maps seems to go out of its way to make putting up reviews more difficult (a somewhat unintuitive interface) and unrewarding (the gamification for reviewers simply isn’t good enough). So if somebody has taken the time and trouble to write a review, and that too a positive one, it is likely to be a very good restaurant.
    • YouTube reviews merit their own separate bullet point. There’s tons of stuff out there, but rely on folks who have put out a lot of stuff regularly, and tend to have a balance of 60:30:10. That is, 60% positive reviews, 30% so-so reviews and 10% negative ones. Note that this is a thumb rule! Once you find a channel you like, optimize for the very top of the 60%.
    • A limited menu and only one cuisine is a huge plus. This implies that the restaurant is focusing on what it knows best, and is not pandering to everybody. I’m even more reassured if the waiter informs me that certain items are not available, and my confidence in the quality goes up even more if they do so brusquely. I take it as a sign that they are focused on quality, and that they couldn’t care less if you leave. This must mean that there are enough “regulars”, and that can only be a good thing, right? I am from Pune, please note, so this may just be my genes having gotten used to rude service.
    • Make friends with the chef, the senior most waitstaff member, or both. I am a hopeless introvert in most social settings, but people who talk about food with passion are my people, and I have no problem striking up a conversation. Ask them to teach you how to appreciate the food they’re serving – what should you be looking out for on your palate, what details should you not be missing, and what variants of this dish are possible. Folks love to teach self-declared amateurs, and this will go a very, very long way in a restaurant.
    • I wish this weren’t true, but there is a very low bar for striking up a conversation in a restaurant in India. Politeness and a friendly demeanor are seriously underrated, use this fact to your advantage.
    • A corollary to the last point: try and visit a restaurant as early as possible. Most folks in urban India prefer to have late dinners – if you sit for dinner at 7 pm, you are likely to have fresher food and a not quite so busy staff who will be that much more willing to chat with you.
    • Avoid buffets like the plague. Unless you know the chef or the senior most staff member (or both). They will then not only recommend the best things to try, but will also give you freshly made dishes that they would like you to try. If you find such a restaurant, you’ve struck gold.
    • Avoid glitzy restaurants that are prominently located. They are more likely about signaling then about eating.
    • Well established and cheap watering holes are likely to have very good food. My favorite example in this regard is Pecos, in Bangalore, but there are lots of examples in all cities in India.

Simon Sinek on Game Theory and War

Quick update: I’ll be on leave this week, regular posts will resume on the 31st of October. Happy Diwali, everybody !

Team So What Exactly is Going on Then, Huh?

Paul Krugman responds (and also visit his Twitter profile to take a look at other threads by him on the issue).

But above all: if you think macro is tough, the good news is that you’re in excellent company!

ExcelFormulaBot

This was only a matter of time, of course:

The formula in the pic above is one that I use to generate a simple Cobb Douglas production function (if you don’t know what this is, don’t worry) while teaching Excel, introductory micro, or both. Here is the file, if you’re interested.

But if you think this is doomsday writ large for programmers, please also watch this video (you should watch the whole video, but clicking on the phrase will take you to the “relevant” bit):

Hat-tip for the ExcelBot: Shashank Patil, former student and now a very good friend.

Good Visualizations Are Underrated

Constructing a good chart to tell a story is a vastly underrated skill, even among those of us who work (or have worked) in the corporate world. But in the econ community, I’d argue this skill is even more underrated.

A wonderful resource to follow to try and get better at this skill is Jan Schultink’s blog. I’ve been following him for over a decade, and while his blog may not have helped me become a better creator of effective charts (I think I still have a long way to go), it has certainly made me a better consumer of charts. Let me be clear: the fact that I’m not good enough at creating great charts is my fault, not Jan’s! His blogposts are an invaluable resource if you want to become a student of creating better charts.

His latest post is a good example:

Jan asks if there is a better way to tell this story, and comes up with this answer:

https://get.slidemagic.com/blog/2022/10/20/chart-template-for-a-macro-economic-tree

I know economists who will say that this doesn’t pass the cost-benefit test, and spending that extra time to create this chart isn’t worth it. But I would disagree: effective dissemination of research, especially to the general public, is an equally important part of the process, and we need to do a better job of it. Especially so in our brave new world of far too much information and not enough time to process it.

A simpler, clearer color scheme, and simple bar charts help in telling this story better than the original chart in the embedded tweet. Spend the time it takes to build a better chart, because we need all the help we can get in communicating our community’s research better.

Two final points:

  1. If you are a student, Jan offers free access to his awesome software, and I would recommend that you try it.
  2. There is a way to make Jan’s chart shown above even better, and it is by making use of a concept from my favorite Jan Schultink post, ever. I’ve copied this idea, except I apply it to concepts I teach in class, not only to charts that I create.
    What would your “So What?” title be for the chart that Jan has created? Go ahead and try and answer this question for yourself, and the chart will become clearer still.

Chart of the Day: Incentives Matter

https://www.economist.com/graphic-detail/2022/09/29/a-study-of-lights-at-night-suggests-dictators-lie-about-economic-growth

Incentives matter:

The explanation is probably simple: opportunity and motive. Part of what makes dictatorships dictatorships is that questioning the official line is dangerous. At the same time, autocratic regimes have a strong incentive to report healthy growth: its absence may be taken as a sign of incompetence or weakness, which dictators can ill afford.
Autocrats’ subordinates face similar incentives. In a related study Jeremy Wallace, a researcher, found misreporting by Chinese provinces, too. As he notes, a leaked American diplomatic cable from 2007 revealed the view of Li Keqiang, the prime minister, then a provincial party secretary. He had said, with a smile, that gdp figures were “for reference only”: he relied instead on proxies, such as electricity use.

https://www.economist.com/graphic-detail/2022/09/29/a-study-of-lights-at-night-suggests-dictators-lie-about-economic-growth

Incentives matter is the very first slide in my presentation on Principles of Economics (as it should be). But there’s always more to learn and think about where this deceptively simple idea is concerned, and this chart and the accompanying article from the Economist are a great example about the deceptive bit.

Once you understand the incentives associated with a particular entity in a particular context, you should then learn the art of being appropriately sceptical about their statements. One shouldn’t assume that they’re lying, nor should one assume that they’re telling the truth – one should understand what the incentives are of the person reporting a particular claim, and adjust one’s expectations accordingly.

Incentives matter, and understanding a person’s incentives matters at least as much, if not more.

Like their leaders, citizens in dictatorships often assume they are being lied to. Outsiders should be similarly sceptical.

https://www.economist.com/graphic-detail/2022/09/29/a-study-of-lights-at-night-suggests-dictators-lie-about-economic-growth

I’d go one step further, and recommend that while reading, listening or viewing anything, one should keep the incentive of the creator in mind. It makes for a more interesting experience while consuming said content, and you are, at the margin, less likely to be taken for a ride.

Is The Indian Economy Slowing Down?

That is a bit of a misleading title, because the focus of this blogpost isn’t about answering the question. It is, rather, about how to go about answering this question.

If you are a student new to economics, and someone were to ask you the question that is the title of this blogpost, how would you go about answering this question?

  1. Note that GDP data comes with a lag of about two months. You really should be looking at more recent data. But that being said, a good place to begin will be by tracking India’s quarterly GDP growth for the past (say) twelve quarters or so. This is actually bad advice for this specific time period, because of the pandemic, but under usual circumstances, not a bad place to start.
  2. Take a look at electricity generation numbers for the country. Check if there has been an increase, and if so, by how much.
  3. Check the trends in GST collections.
  4. Check trends in freight movement.
  5. Take a look at the Index of Industrial Production data.
  6. Take a look at India’s foreign trade data. Note that I have not used the word trend for these two points. That’s not because trends aren’t important (they are!) but because I want to lament the fact that India – the country that makes software for literally the entire world – isn’t able to come up with better ways to represent its own government’s data. Why does this not improve?!
  7. Take a look at the “Quarterly Financials of Listed Companies” on the CMIE website. Take a look at the trends for Net Profits and the PAT margins. This is usually on the right hand side of the website, you’ll have to scroll down a bit.
  8. Use the same website to take a look at the employment data.
  9. Take a look at the inflation data.
  10. Take a look at the bank credit data.
  11. Finally, note that this list is by no means complete. Other economists might well have more indicators they would like to recommend, and please don’t hesitate to show this list to them, and ask what they might like to include.
  12. Then, and only then, should you start to read opinion pieces about how well/badly the Indian economy is doing. See if your assessment matches with what is written or being said by others. If it doesn’t, ask yourself why. Check if you should look at other data sources, or other opinion pieces.
  13. But as an economist, remember: data comes first.

Economics in One Sentence

Robin Hanson wrote a blogpost the other day about a book called Fossil Future. I haven’t read the book, and given my infinitely long to-read list, I don’t think I’ll get around to it anytime soon. But the blogpost is worth a read, and for many more reasons than just learning more about the book itself:

My main intellectual strategy is to explore important neglected topics where I can find an original angle to pursue. As a result, I lose interest in topics as they get more attention.

https://www.overcomingbias.com/2022/10/fossil-future.html

It’s good advice in general, I would argue. Do stuff that other people are ignoring, and do it by picking up on something that others haven’t thought of. There’s some causality at play here, in the sense that other folks are ignoring this (whatever this may be) precisely because there’s a way to do it that they haven’t thought of.

Epstein is right that our elite academic and media systems focus on a few celebrated and quoted climate expert/activists, who are not that representative of the larger world of experts. And these activists are opposed to nuclear fission, nuclear fusion, and hydroelectricity, all of which avoid CO2 warming. They even tend to oppose new solar and wind energy projects, and any land development, that have substantial environmental impacts. It seems that, thought they may deny it in public, what they really want is a smaller human world, with fewer people using less material and energy.

https://www.overcomingbias.com/2022/10/fossil-future.html

Other people have written on this topic, with varying degrees of exasperation. But I think Robin Hanson latches on to an important point: the key issue is a fundamentally different worldview. It’s not so much about the opportunity costs of more materials and energy – there is no price at which the trade-off is worth it is the opinion of some climate experts/activists. “OK fine, where do you lie on the spectrum of trade-offs when it comes to more energy being generated?” is a question that doesn’t make sense, because they wouldn’t want to be on the spectrum altogether. As Robin Hanson makes clear in the blogpost, it isn’t about painting one side of this debate as being “right” or “wrong”, it’s about folks on both sides not willing to think about the world in opportunity costs:

He doesn’t really distinguish the marginal value of more energy from that of more other kinds of modern inputs and capital. And he doesn’t seem to want to admit that CO2 emissions might have mild negative externalities which could justify mild taxes.

https://www.overcomingbias.com/2022/10/fossil-future.html

And Robin Hanson then comes up with one of my favorite sentences ever:

“As an economist I’m sad to think we can’t make a more reasonable choice in the middle, where everything we value gets traded off via conscious calculation mediated by mundane prices.”

Who defines what is reasonable? Where is this “middle” to be found? Do we all value everything equally? How do we set up markets and institutions that allow for these trade-offs? How do we get prices to become mundane? What does that even mean? What if certain things don’t have prices, mundane or otherwise?

Start thinking about these questions, and whether you like it or not, you’ve enrolled yourself in an econ course. And in my opinion, the world would be a much better place if everybody did just that: enrolled in an econ course.

Opportunity costs matter.

What Are You Optimizing For, the Hollywood Edition

An Econ-Resource Rich Twitter Thread

Knock yourself out: