- “As a program adapts and serves more people and more functions, it naturally requires tighter regulation. Software systems govern how we interact as groups, and that makes them unavoidably bureaucratic in nature. There will always be those who want to maintain the system and those who want to push the system’s boundaries. Conservatives and liberals emerge.”
Here’s a useful thumb-rule. Read anything written by Atul Gawande. In this article, he speaks, nominally, about the difficulty of adapting to a new computer system that is being foisted upon the medical community. But there’s much more to unpack here! Adapting to systems, mutations within systems, the difficulty of scaling, substitutes and complements, opportunity costs – and much, much more. - “Pig facial recognition works the same way as human facial recognition, the companies say. Scanners and software take in the bristles, the snout, the eyes and ears. The features are mapped. Pigs don’t all look alike when you know what to look for, they said.”
The intersection of technology, pork and the culture that is China today. Some might call this dystopian, others might fret at how slow progress is – but the article is fascinating. - “The level of u* is not fixed. It changes over time, driven by changes in labor laws, the minimum wage, government benefit programs, demographics and technology. For instance, u* might decline if workers, on average, are older; older workers are less likely to be unemployed. The level of u* might rise if unemployment benefits become more generous and this leads unemployed workers to be more picky about taking jobs.”
NAIRU – or the Non-Accelerating Inflation Rate of Unemployment, was one of the more nerdy acronyms I learnt when I was a student. This article does a good job of explaining exactly what this is, and why it matters. And most importantly, it does so in a way that isn’t confusing for the layperson. - “These calculations make clear why economists so often argue against light rail and subway construction projects. They are so expensive that ridership can only begin to cover construction and maintenance costs if the systems operate at close to their physical capacity most of the time; that is, if there are enough riders to fill up the cars when they run on two- to three-minute headways for many hours per day. Since most proposed projects do not meet this standard, economists generally argue against them. Buses can usually move the projected numbers of riders at a fraction of the cost.”
I am, and probably always will be, a huge fan of buses over other forms of public transport. And I will always be a big fan of public transport over private transport. This article explains why not just I, but other economists will also tend to favor buses over other forms of public transport. - “The principle that you are presumed to be innocent unless and until you are convicted, after a fair trial, turns out, in practice, to be a different principle altogether: for the purposes of compensation, once you are convicted your conviction is deemed to be correct. You are presumed guilty for the rest of your life, irrespective of whether your trial was fair or unfair. It makes no difference that your conviction has been quashed. It makes no difference that new evidence – which ought to have been obtained by the police before your trial – shows that you are probably innocent. Those acting on behalf of the state may have bungled the investigation, and possibly even bent the rules to get you convicted. None of that is of any consequence. All that matters is whether you can prove that you suffered a “miscarriage of justice:” ”
I teach statistics, and would happily spend an entire semester explaining how to frame the null, and more importantly, hot to not frame the null. This article does an excellent job of providing an all too important example of the latter.
Tag: urbanization
Links for 26th March, 2019
- “The rising cost of textbooks, then, is a sign of one of the greatest paradoxes of higher education: As everything from tuition to housing to books gets more expensive, the people who are tasked with making sure students receive a good education are being forced to do more work for less money. The result is a world where students and professors alike struggle to get by.”
Full of interesting snippets, this article helps you understand how expensive education can be abroad. Not just the cost of tuition though, which is large enough as it is – but the cost of textbooks. Just buying your textbooks for the academic year can set you back by around INR 40,000/-. - “What is the traditional lecture? It is a model of learning in which a teacher possesses the knowledge on a given topic and disseminates it to students. This model dates to the beginning of education, when it was the only way of sharing information. In fact, you occasionally still see the person presenting the lecture called a reader, because way back before the internet and even the printing press, a teacher would literally read from a book so students could copy it all down.”
Classroom lectures are unbelievably boring. There exist a million alternatives that can do a better job, and this article lays out some of them. But at the end of the second decade of the twenty-first century, the idea that we can teach the same way we did throughout the twentieth is just wrong. - “Whichever way one looks at it, the very public unravelling of the enterprise is reminiscent of the past, the saga of Air India and Kingfisher Airlines. There is no denying poor governance –particularly in a business with high cash flows. Equally, the sequels illustrate how vegetating policy and misplaced notions of what constitutes strategic interest left the sector episodically chasing its tail. Consider this: Passenger traffic rose from 68.4 million in 2009-09 to 103.7 million in 2013-14, and to 183.9 million in 2017-18. Clearly there is no dearth of demand and of growth in traffic. Yet three airlines have crashed into the red in the period.Can India afford three Mayday calls in less than a decade in a critical sector?”
A breezy read about an extremely serious topic. The excerpt above is a sobering read: passenger traffic in India has about tripled over the last ten years. The last ten years have also seen three airlines go under. Something, somewhere, is really and truly wrong. - “Incuriosity is not merely ignorance. Ignorance is a universal trait, people just differ in what they are ignorant about. But Americans are unique in not caring to learn from other countries even when those countries do things better. American liberals spent the second Bush administration talking about how health care worked better in most other developed countries, but displayed no interest in how they could implement universal health care so that the US could have what everyone else had, even when some of these countries, namely France and Israel, had only enacted reforms recently and had a population of mostly privately-insured workers. In contrast, they reinvented the wheel domestically, coming up with the basic details of Obamacare relying on the work on domestic thinktanks alone. The same indifference to global best practices occurs in education, housing policy, and other matters even among wonks who believe the US to be behind.”
Word for the day: incuriosity. A state of the world in not only do you not know, but do not wish to know. But that apart, the entire post – although a little long – is worth reading to learn more about the specifics of what ails subway construction in the USA. - “Structurally, it is impossible because Kim Jong-un has a very detailed network of surveilling the leaders around him. If you are of high rank, then all the high-ranking officials have to live in the same apartment. They can’t choose where to live. They have to live collectively. You are not allowed to have private time with your friends around you, so the control system of North Korean society is really unimaginable.”
An interview with a North Korean defector who now lives in South Korea about Kim Jong Un. It is difficult for any of us to understand the extraordinary life of ordinary South Koreans
Links for 25th March, 2019
- “The researchers discovered that commonly visited places, like coffee shops, can be within a few feet of each other but they can each primarily have visitors from completely different income brackets. This indicates that economic inequality isn’t just present at the neighborhood level, but it can also show up among the places people visit as part of their daily routines. It suggests that income inequality might impact not just where people live, but also where they go. ”
A great article to help you think through the following: inequality, how to measure it, how to measure it using modern methods, what is the difference between class inequality and income inequality, sampling, the limitations of sampling, the Data For Good initiative, 100 Resilient Cities and the SmartCitiesDive program. - “An experiment that the researchers arranged hinted at a possible explanation of the correlation they found. They asked participants to picture and describe what it would be like to have a certain amount of daily free time, and then report how they’d feel about that allotment. “What we find is that having too little time makes people feel stressed, and maybe that’s obvious,” says Holmes. “But interestingly, that effect goes away—the role of stress goes away—once you approach the optimal point.” After that point, Holmes says, the subjects started to say they felt less productive overall, which could explain why having a lot of free time can feel like having too much free time.”
One of my favorite Calvin and Hobbes strips has the quote “there never is enough time to do all the nothing you want to”, or words to that effect. This article tells you that having more than 2.5 hours of “nothing” time may well be too much. - “While India has 70-odd companies that are rated highest quality, only two companies in the US enjoy this distinction. No company in Germany and UK enjoys AAA rating. Among emerging countries, China has only 14 AAA-rated entities. This implies a gulf between credit standards in India and elsewhere. The exacting standards observed in other countries are missing among domestic agencies.”
Via Gulzar Natarajan, this article points out a disturbing statistic – Indian firms might well be given ratings that don’t really indicate their reliability. Rating agencies the world over took a hit to their reputation post the 2008 crisis, but this story seems to be unique to India. The article does have some caveats, but I’d say the news is, even so, worrying. - “We employ Comin et al.’s (2010) data on ancient and early modern levels of technology adoption in a spatial econometric analysis. Historical levels of technology adoption in a (present-day) country are related to its lagged level as well as those of its neighbors. We allow the spatial effects to differ depending on whether they diffuse East-West or North-South. Consistent with the continental orientation hypothesis, East-West spatial effects are generally positive and stronger than those running North-South.”
Are you familiar with vertical vs horizontal business models? Apple is vertical (controls everything, end-to-end) and Netflix is horizontal (needs to be available across multiple verticals to succeed). I was strongly reminded of that when I read this. - “He is maddening in ways they never anticipated, along vectors they’ve never seen; he is a tireless innovator in the craft of mass irritation. He can cause fans to go absolutely nuts whether he wins or loses. McEnroe himself has spent a good chunk of the past five years complaining about Kyrgios, and McEnroe is probably the greatest tennis player of all time at driving people wild. Being found intensely annoying by John McEnroe is a high honor for any exasperating person. It’s like Beethoven humming your melody.”
In which Brian Philips makes the case for the upside to Kyrgios being, well, Kyrgios. The interesting question is where else might such a contrarian philosophy work, and why?
Video for 10th March, 2019
A very short talk on an impossibly complex topic – urbanization, and how to do it right.
Links for 7th March, 2019
- “Switzerland’s two big banks lead in offshore Asian wealth management partly because of their past troubles elsewhere. UBS and Credit Suisse almost forfeited their operating licenses in the U.S. and several EU countries for abetting tax evaders on both sides of the Atlantic with secret bank accounts in Switzerland.”
There’s supply, and there’s demand. The trouble is, there is also regulation – a lot of it. An article that does a good job of showing you what the UHNW world in China looks like. - “Note that Amazon is not in the business of forecasting political shifts; nor are they strangers to dealing with challenging bureaucracies (i.e., Seattle). Still, being completely tone deaf to the shifting political winds is a bad strategy. When you have the biggest swing in House seats in since Watergate, one might expect corporate management to take notice. Especially if, say your side gig is also owning the Washington Post.Duh.”
Barry Ritholtz is less than impressed with Amazon’s decision to base their HQ2 out of NY, and then go back on the plan. As he mentions in the article, some things that have been reported as having taken place are difficult to paint as being blatantly illegal – but the problem is more political than economic. - “We are yet to receive any response to the several requests for comment sent to Colobit and to numerous websites, including Crypto365. The American WhatsApp number stopped answering our questions after two days, and we’ve been blocked by the Twitter user who first approached us.Alas, the foreseen year-end surge to $19,000 did not come to pass.”
FT Alphaville does the tedious job on following up on what was obviously (to everyone), a scam. Yet, there are enough people in the world for whom this isn’t a scam, but perhaps an opportunity – which is why FT Alphaville writes these articles, and which is why I share them! - “A core part of the urbanism canon. People refer to this book all the time, even if they don’t realize it, so it’s worth having this as a base when coming into a conversation. (Jane Jacobs’ Death and Life also falls into this category, though it’s less propagandistic than Triumph.)
This book is about how “cities magnify humanity’s strengths”. It’s city propaganda at its finest, and I say that lovingly… I clearly fell hard for it! It’s hard to not fall in love with cities after reading this.
Triumph is what started me down the path of thinking about agglomeration economies, which has since been a key model for how I think about cities.”
Devon Zuegel lists out books on urbanization that she has enjoyed reading. I haven’t read all of them, but agree wholeheartedly about Triumph of the City – fantastic book! - “Just 1 percent of U.S. single-family homes—1.8 million—are equipped with solar, and the real estate industry’s general understanding of TPO systems remains limited. Our real estate agent, a 35-year veteran, had never encountered one. The listing agents for Jug’s property also seemed uncertain. Initially they didn’t mention the system at all. Then they told us it was owned by Sunrun and that if we didn’t want to assume the lease they’d remove it. Then, apparently because they’d learned the full cost of that, they backtracked.”
A less than encouraging story about rooftop solar electricity and TPO – read the article to find out what TPO is.
EconForEverybody 