Tyler Cowen's Blog, page 317
August 14, 2013
The future of higher education in Alabama?
The video that was posted online appeared to be a tour of the spa area at some swanky new hotel.
There were cascading waterfalls into hot and cold pools. There was an arcade section. A smoothie bar. Flat-screen TVs adorned every open space. There were lockers the members at Augusta National would find acceptable.
This was luxury, no doubt. But it was not at a hotel.
Instead, this shaky video tour was of the inside of a college football team’s training and lounge area. Specifically, it is the training, weight room and lounge area within the Mal Moore Athletic Complex on the campus of the University of Alabama.
Pricetag: $9 million. (And that’s just for the upgrades. The original facility, which opened in 2005, cost about $50 million.)
The host school, the University of Alabama, raised tuition seven percent last year.
Elon Musk’s hyperloop
I cannot speak to the technical issues (a very critical and very interesting take is here) but I wonder where the real gain is (there is a Musk pdf overview of the hyperloop here). You can already fly LA to San Francisco in about an hour. Is saving that time so important, noting that in the best case scenario the hyperloop still takes 35 minutes?
You might object that such a plane trip takes far more than an hour, all things considered. But a hyperloop trip also will involve getting to the station, parking, waiting for departure, and perhaps TSA security as well. What is supposed to be the net time gain, all things considered? It would be cheaper to let up on the TSA procedures a bit, and even if we don’t do that surely there is no “regulatory arbitrage” case per se for building a hyperloop (“the TSA won’t budge, so I have this new and easy-to-implement idea…”).
Flying is carbon-negative, but of course building and running a hyperloop would be too. In any case, it is hard to believe that a hyperloop is the marginally cost effective way to reduce carbon emissions, compared to say shutting down some more dirty coal or pricing traffic congestion.
How about putting working wireless, or maybe cable TV, into all LA to SF plane flights? That would make time in the plane a lot more like time on the couch and in essence lower the time cost of flying. We could even teach people to read books or let them keep their Kindles on during take-off, a rumored change which may even be in the works.
In other words, the whole Hyperloop thing seems to me like a publicity stunt. I’m still waiting on that 24-7 Kindle access thing.
The binding constraint for a lot of transport improvements is getting the land rights (can it all be on top of I-5? how much do pylons cost?) and overcoming local opposition. I say the hyperloop proposal only makes that harder.
When it comes to transportation at least, There is a Great Stagnation.
p.s. under the counterfactual where the thing is built, what would the price be? Here is some skepticism from Brad Plumer.
Handbag-backed loans
Say hello to the handbag-backed loan, a unique Hong Kong phenomenon. While money lenders typically ask for cars and homes as collateral, Hong Kong’s Yes Lady Finance Co. seeks its customers’ beloved handbags.
The four-year-old company accepts handbags on the spot, assesses them for their condition and authenticity and then procures loans within half an hour, as long as the bags are Gucci, Chanel, Hermès or Louis Vuitton. Occasionally, they’ll consider a Prada.
Until you repay, you have to give up the bag:
One customer, Ms. Chu recalls, brought in 40 or 50 Gucci purses at once. The client received an advance of roughly US$38,000, and later returned to reclaim the bags which he sold in his own store.
Almost all clients at Yes Lady pay the loan back quickly and reclaim their bags, Ms. Chu says.
Here is more, Google “Riva Gold handbag-backed loans Hong Kong” if need be for an open link.
August 13, 2013
Assorted links
2. Do measures of policy uncertainty have predictive value?
3. Ricardo Reis endorses a version of Austro-Portuguese business cycle theory (pdf).
4. Good and bad pragmatism, by Scott Sumner.
5. 1946 Alcatraz menu. I liked the second comment too.
6. New book on the Singapore health care system.
7. The cash transfers idea is picking up steam.
Great Economists class
We now have up all the videos and also the final exam for our class on The Great Economists. The class includes coverage of the entire Wealth of Nations, as well as a section on economic history, which covers the Bullionist debates, the Irish famine, the debt and sinking fund controversies, living standards in the Industrial Revolution, and other topics from economic history which influenced the classical economists.
You can find the iTunes downloads here.
Our next class will be International Trade and it will be available late August/very early September.
Norwegian markets in everything
The multiple layers of deceit in this Shakespearean story are becoming increasingly strange:
Norwegian prime minister defends cab stunt as it emerges passengers were paid
An audacious election stunt where Norway’s Prime Minister worked undercover as a cab driver has backfired after it emerged that five of his passengers had been vetted and paid.
Here is more, via Yannikouts.
A Puzzle in Divorce Law
It’s easy to see why a divorce law might arise that allows men relatively easy divorce, as in the Old Testament which lets men divorce almost at will (as written, interpretations differ) but gives women no right to divorce at all. It is also easy to see why a society might adopt mutual consent under which both parties must agree in order to get a divorce or no-fault unilateral rules in which either party can get a divorce without the consent of the other. What is difficult to understand, however, is why a society would adopt divorce laws that make it difficult to get a divorce even when both parties want a divorce. Who benefits from such rules? And yet this was the common situation in England and the United States up until say the end of the 19th century. In England, for example, it took an Act of Parliament to get a divorce. One might argue that such rules benefit children but aside from the questionability of the premise this view would also have to answer how it is that children have political power?
Hat tip to Sasha Volokh for bringing the question to mind with an apropos quote on divorce from a 19th century British judge.
How much does bad Chinese data on real estate prices matter?
The excellent Christopher Balding has the scoop:
Baseline Chinese economic data is unreliable. Taking published National Bureau of Statistics China data on the components of consumer price inflation, I attempt to reconcile the official data to third party data. Three problems are apparent in official NBSC data on inflation. First, the base data on housing price inflation is manipulated. According to the NBSC, urban private housing occupants enjoyed a total price increase of only 6% between 2000 and 2011. Second, while renters faced cumulative price increases in excess of 50% during the same period, the NBSC classifies most Chinese households has private housing occupants making them subject to the significantly lower inflation rate. Third, despite beginning in the year 2000 with nearly two-thirds of Chinese households in rural areas, the NSBC applies a straight 80/20 urban/rural private housing weighting throughout our time sample. This further skews the accuracy of the final data. To correct for these manipulative practices, I use third party and related NBSC data to better estimate the change in consumer prices in China between 2000 and 2011. I find that using conservative assumptions about price increases the annual CPI in China by approximately 1%. This reduces real Chinese GDP by 8-12% or more than $1 trillion in PPP terms.
If you would like to hear what is wrong encapsulated in a nutshell, try this:
According to [official] NBSC data, the food component of the CPI in China as responsible for 99% of inflation between 2003 and 2011. Thinking of this another way, this implies that the NBSC is claiming that the only prices to rise in china between 2003 and 2011 were food prices.
Canine markets in everything
At a recent class in New York City on how to use iPads, an instructor had a remedy ready for distracted students: She smeared the screen with peanut butter.
One student, a Hungarian hunting dog named DJ Sam, ate it up.
Dog trainer Anna Jane Grossman began providing private iPad lessons to dogs last year. About 25 of her clients have signed up, and she is planning a 90-minute iPad clinic for dogs later this month, where they will learn to nose the screen to activate apps.
“People always say, ‘Oh, can you have my dog do my online banking?’ ” Ms. Grossman says. In reality, dogs don’t “necessarily do very useful things on the iPad,” she adds. “But I don’t necessarily do very useful things on the iPad either.”
Ms. Grossman is part of a nascent but growing group touting the use of apps for pets. They say the apps can entertain pets stranded alone at home, teach valuable motor skills and even promote social behavior by engaging loner animals.
Felines are involved too:
Brooklyn cat owner David Snetman intended to let his cat, Pickle, play with his iPad until he tired of it. An hour later, Pickle was still whacking at the screen. Although Pickle’s interest never flagged, Mr. Snetman hasn’t let him play again since. “It seems very frustrating for him,” Mr. Snetman says.
…He and business partner Nate Murray developed it after an app they designed for children flopped. They now have three cat iPad apps, including one that allows cats to paint on a screen and “Game for Cats,” which encourages cats to swat a laser dot, mouse or moth scurrying across the screen. Mr. Murray says the apps have been downloaded more than one million times. The basic version of the original is free; others sell for $1.99.
There is more here, interesting throughout. At first I thought this was a kind of novelty item, but there is a good deal of evidence that many of the pets are quite absorbed in these games or perhaps even obsessed with them. Is it wrong for me to think that some of these games are, using behavioral inducements, actually torturing the pet, a bit like perpetual catnip?
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