Re: Historic districts
Does anyone know of any studies on the economic impact of designating neighborhoods in big cities historic districts? Does doing this create any net benefits? Cyril Morong Do you have access to EconLit? If so, try searching there. If not, I search on historic district* and got 11 hits, the most promising of which were those below. --Robert Book Asabere, Paul K., Forrest E. Huffman, and Seyed Mehdian. 1994. The adverse impacts of local historic designation: The case of small apartment buildings in philadelphia. Journal of Real Estate Finance and Economics 8, (3) (May 1994): 225-234. http://www.kluweronline.com/issn/0895-5638 Coffin, Donald A. 1989. The impact of historical districts on residential property values. Eastern Economic Journal 15, (3) (July-September 1989): 221-228. www.csa.com Coulson, N. Edward, and Michael L. Lahr. 2005. Gracing the land of elvis and beale street: Historic designation and property values in memphis. Real Estate Economics 33, (3) (Fall 2005): 487-507. http://www.blackwellpublishing.com/journal.asp?ref=1080-8620 Coulson, N. Edward, and Robin M. Leichenko. 2001. The internal and external impact of historical designation on property values. Journal of Real Estate Finance and Economics 23, (1) (July 2001): 113-124. http://www.kluweronline.com/issn/0895-5638 Ford, Deborah Ann. 1989. The effect of historic district designation on single-family home prices. American Real Estate and Urban Economics Association Journal 17, (3) (Fall 1989): 353-362. www.csa.com Leichenko, Robin M., N. Edward Coulson, and David Listokin. 2001. Historic preservation and residential property values: An analysis of texas cities. Urban Studies 38, (11) (October 2001): 1973-1987. http://www.tandf.co.uk/journals/titles/00420980.asp
Re: paid parking a market failure?
--- Robert A. Book [EMAIL PROTECTED] 5 cars come at 1pm and SIX cars at 2pm. During that time, charge just high enough so that all who want to park, can. The last car in does get a space, if he is willing to pay. between. But there's another possible outcome -- everyone races to be the 9th to arrive and get the last free space. Everybody knows the price will go up at a particular time. Every car there will pay the price. The spaces are no longer free. Maybe I wasn't clear on your assumptions. Are you assuming that at a time X1, they price goes up to $Y per minute, and everybody whose car is on the lot at that time pays $Y per minute until either they leave, or the price goes down at time X2? And that all of X1, X2, and Y are known in advance with certainty? I think you are (inadvertently) assuming that there is some non-price way of allocating spaces taht is superior to an allocation with prices. No, that is not a correct inference. Well, I didn't think you'd assume that on purpose! ;-) Is the marginal consumer the last to get a space, or the first to be turned away? It is the next one to get a space. Nobody gets turned away, because when the lot is full, there is a positive price. Part of the problem here is that the number of spaces has to be an integer. This means that the marginal consumer, the marginal value, etc., are (strictly speaking) undefined. These concepts require continuity. Let me ask you this: When the lot is full, the price is high enough that nobody wants to pay for a space -- but at some point a car leaves, not because the price has risen, but because somebody want to go home and therefore that person's value for the space has now dropped to zero. So there is one empty space. Are you assuming that (a) the space stays empty for a while and everybody still in the lot pays zero for that time, or (b) that the price drops a bit, and somebody else immediately takes that space? If the answer is (b), then you are implicitly assuming that the parking spaces are discrete, but there is a continuous space of consumers. Which is sort of the opposite of what is normally assumed. (Aumann used a continuous space of consumers in a game theory problem, but I don't think it applies here.) This doesn't make it wrong, but this might be why our usual instincts are not working. In real life, I think uncertainty is an inherent part of the parking problem. Assume that consumers arrive (and perhaps leave) according to a Poisson Process, with a parameter (mean number of consumers per hour) that varies throughout the day. Assume that conditional on arrival, each consumer has a valuation drawn from some distribution (perhaps also varying throughout the day; perhaps the valuations are on average higher when more consumers are arriving per hour). Then you ought to be able to find a price that maximizes the EXPECTED VALUE of consumer surplus plus revenue (i.e., maximizes efficiency), subject to the constraint that the lot never has more cars than spaces. (You could then also calculate the optimal number of parking spaces, based on the price of constructing a space, by maximizing the discounted net present value of CS+Revenue-Costs, perhaps subject to a constraint that the lot is full no more than X% of the time.) If you do this, I expect you will find that the price is sometimes zero (at periods of low demand), but there will probably be times when the price is positive but there is some probability of spaces being available -- and there is some probability of people being turned away. But these probabilities will be minimized. --Robert Book
Re: paid parking a market failure?
I think the problem is, that idea that marginal cost pricing is optimal is in some sense related to the assuming that marginal cost is rising at the optimal point. Recall that many authors define the supply curve as the upward-sloping portion of the marginal cost curve. That model was conceived with factor and farm production in mind -- and those two accounted for most production in those days. There was nearly always a point at which marginal cost started to increase, and after that once it intersected marginal benefit from the bottom, it was time to stop. (Call this the U-shaped average cost curve assumption.) The trouble is, this model starts to break down when marginal costs are either zero or nearly zero, usually with lumpy capacity (e.g., movie theaters and airline seats). In those cases, if you require P=MC, you almost guarantee that the firm will go bankrupt, because MC=0 for nearly all the possible levels of consumption -- and when the last seat or parking space is taken, who pays? The last consumer, or everybody? Because when the last spot is taken, the last consumer imposes the cost, but ANY other consumer could send MC back to zero by dropping out of the market. You no longer have either symmetry among consumers, or the same MC from above and below. Nowadays, there are a huge number of industries that don't satisfy the U-shaped average cost curve assumption -- not just parking and theater seats, but long-distance or cellular phone calls (very low MC, until you need a new line or switch), plane tickets (very low MC, until you need another plane or a larger one), internet services, published music, books, or software (low and everywhere-decreasing MC), and cable TV (zero MC for each program once the consumer is hooked up). In each of these cases, requiring P=MC would guarantee that no firm could make a non-negative profit. The industries simply could not exist. They would disappear, along with the substantial consumer and producer surplus they produce at their non-optimal prices. When I was in my second year of grad school, I thought of doing my dissertation on this problem -- what is the optimal (i.e., surplus-maximizing) price when MC is decreasing everywhere? I mentioned this to my advisor, he advised against it -- he said it has to be long-run average cost and that it's not really an interesting problem. I did my dissertation on something else, but I'm still not sure it's not an interesting problem. Now, I think there are some industries with downward-sloping supply curves -- which means there are certain cost structures that exist in real life that can produce them. (Before you say I'm crazy about this, check the price of, say, Super 8 movie film and compare it to the (inflation-adjusted) price 20 years ago when demand was much higher. Also, compare the price of short-wave radios to comparable-quality radios that receive only commercial AM/FM bands. In both cases, you have similar costs, but higher prices corresponding to lower demand functions.) --Robert Book [EMAIL PROTECTED] Fred Foldvary wrote: 1. Is it the case that if the government offers street parking, given that the marginal cost of one more parked car is zero, the efficient charge is zero when uncongested and when congested, a charge just high enough to eliminate congestion? 2. If the answer to #1 is yes, then is it the case that if a private parking lot charges for parking at a time when the lot is never congested, this is socially inefficient, and a market failure? 3. Is cases #2 any different from a move theater charging admission when there are still seats available, the MC of one more viewer being zero? 4. Is it a correct proposition that government-owned parking should use marginal-cost pricing, but private parking may charge the average cost, without this being labeled socially inefficient? If so, why the difference? If not, is it socially efficient for government to own all parking lots and charge MC? Fred Foldvary This would be true if it were possible to charge different people different prices for parking based on congestion. I guess, theoretically, you could implement some sort of dynamic pricing system [...]
Re: paid parking a market failure?
I seem to recall learning that rather than demonstrating an inefficiency, the presence of inventories represents a form of insurance against uncertainty in demand. David Levenstam Right, but suppose that the parking lot is an evenly rotating economy, and the parking use is the same day after day. The parking lot is full at particular times and not full other times. There is no uncertainty. It is known how many cars will park at particular times. Unlike produced goods, the number of parking places is fixed. Now, is it efficient to charge for a parking place when the lot is not full? Fred Foldvary Depends on your assumptions. If the asphalt or concrete deteriorates at a rate dependent on how often a car is parked there, the charge should be related to rate of deterioration and the cost of replacement (repaving). And as long as there's no uncertainty, we can even set different rates for different spaces, since they are different distances of people's destinations, and therefore of different value. High-value parking spaces will be more desirable and therefore deteriorate faster (in calendar time, if the same amount per use), or perhaps slower, if deterioration is related to sun exposure. (In that latter case, perhaps people should be paid to park there!) :-) OK, I'll be serious now: One characteristic about parking is that people park for particular time intervals. Suppose you know that there are 10 spaces, and 5 cars come at 1pm and another 5 at 2pm. In this case, the marginal cost-- even when the lot is full -- is zero, since no one else wants to park there. Now, suppose 5 cars come at 1pm and SIX cars at 2pm. Now, someone doesn't get to park. So what do you do? Start charging when there is only one space left? If so, the 10th car when you arrive has to pay, and the 11th doesn't get to park (unless the 10th declines to pay and the 11th is willing to pay). This sounds efficient when the 10th and 11th drivers have different valuation being able to park there, and the price in somewhere in between. But there's another possible outcome -- everyone races to be the 9th to arrive and get the last free space. This is costly in time, since you have to come (say) at 1:55pm when really you don't want to be there until 2:00pm. If there's not uncertaintly in anybody's schedules, whoever has the lowest time value wins -- that is, the 4 drivers with the lowest value attached to the minutes before 2:00pm get the free spaces, and the next two bid for the 10th space. This is a deadweight loss, since the value of that time is dissipated rather than collected by somebody. You could get rid of this by charging anybody who arrives earlier than they would otherwise need to for the purpose of getting a parking space. But this requires assuming away far more uncertainty (not to mention assuming far more omniscience!) than I think is reasonable. And in any case, these lower-value-of-time folks could line up outside the entrance to the parking lot and come in at the last minute anyway. I think there are three problems with your question: First, uncertainty is an inherent part of the problem. Assuming it away makes the problem intractable. Second, I think you are (inadvertently) assuming that there is some non-price way of allocating spaces taht is superior to an allocation with prices. For example, allocating by arrival order. Third, the way you've set things up, it's never clear what the marginal cost is, or who the marginal consumer is. Is the marginal consumer the last to get a space, or the first to be turned away? Or some person who parked in the middle when there were plenty of empty spaces, but values the space at less than the first person turned away? --Robert Book [EMAIL PROTECTED]
Re: paid parking a market failure?
--- Xianhang Zhang [EMAIL PROTECTED] wrote: This would be true if it were possible to charge different people different prices for parking based on congestion. It is possible, and is done in practice. Many parking lots charge more during peak times than in other times. There is predictability, because the typical usage does not vary much. Yeah, but it's weird pricing. In Chicago, there are early bird rates where you get in by a certain time and get a cheap fixed price for as long as you want that day -- if you come in later, you pay by the hour, which could result in a higher or lower charge than the fix price, not to mention a higher or lower rate per hour. And after a certain time, you get the evening rate, which is fixed as long as you get in AFTER a certain time. There is clearly more going on than simple congestion, or the people who get in at 7am and stay the whole day would pay more than the people who come in for two hours in the middle. (It is quite possible to have something like 7am-7pm for $12 and 11am-3pm for $25.) cost of admitting an extra person is NOT zero because it requires you to drop prices which means you lose the revenue from all the other parkers/theatre goers. I don't follow this. Why does charging zero at some times require a drop in price when the lot is full? Fred Foldvary I think he was assuming that the ticket price had to be the same for everybody. That may not be necessary, but you didn't assume the opposite. --Robert Book [EMAIL PROTECTED]
Re: Laffer Curve (fwd)
[EMAIL PROTECTED] wrote: Congress imposed something like a 100% tax on luxury boats (as I recall, as part of the tax hike of 1990), and found that they collected zero revenue from the tax. So we do have empirical evidence that higher marginal tax rates can produce less revenue. It was only a 10% tax. See http://differentriver.com/archives/2005/01/28/call-it-the-botax/ and http://www.fee.org/vnews.php?nid=2842 --Robert Book [EMAIL PROTECTED]
Re: Laffer Curve
I'm just wondering if it is even possible for the supply and demand curves to be shaped shaped in such a way that the Laffer curve does not apply to some market. Since you asked... Take an income tax and the very standard constant elasticity formulations for demand and supply (they are called constant elasticity because a one percent increase in the wage always causes the same percentage increase in labor supply (b) and the same percentage decrease in labor demand (a) no matter what the wage is): Ld=D w^(-a) Ls=S [w(1-t)]^b Doesn't this allow labor supply to be unbounded? And isn't this a problem since, for example, you can't supply more than 24 hours of labor per day per person? --Robert Book [EMAIL PROTECTED]
Re: Exogenous Policy
Jason DeBacker writes: If we look at empirical evidence, it seems that people do not vote in a self interested way, but rather vote based on group-interest. Given this fact, is policy really endogenous? It seems that the most important characteristics in the liberal/conservative divide are age, race, gender, ethnicity, religion- things not easily influenced by policy. Income, education, and employment status matter little relative to these other personal characteristics. So (ignoring any effects of the social choice mechanism), is policy determined only by these exogenous characteristics? -- As opposed to policy being shaped by characteristics that are in turned shaped by policy outcomes. I'd interested in hearing thoughts on how policy influences the ideological distribution. I think you are mixing up correlation and causation here. On what basis do you say that most important characteristics in the liberal/conservative divide are age, race, gender, ...? Perhaps on the basis that we have polling data that can be broken down by these categories? As for Income, education, and employment status -- how are these any less group characteristics than personal characteristics? All you seem to have found is that people's votes are not easily changed by changes in their fortunes -- in other words, if you believe X while you are poor and/or unemployed, you tend to still believe X after you get a job and get rich. Why is that surprising? Do you think people should always vote based on their current short-term self-interest, without regard to what situations they may otherwise find, or have found themselves in, let alone what they might believe is right morally? What counterfactual are you imagining here? --Robert Book [EMAIL PROTECTED]
Re: senior discounts
Robert A. Book wrote: First, for off-peak movies and the like, the idea is to fill the seats that would otherwise go empty; in other words, convince the seniors to see movies int he afternoon, so seats are available for full-price customers at night. . . . So why do movie theaters have *both* an off-peak discount, available to all comers, and a senior discount at all times? To get both effects at once -- fill the seats with people who can come off-peak, not all of whom are seniors, and also give a break to seniors who are more likely to be price-shopping. (How many teenagers call movie theaters to ask their prices?)
Re: Arthur Laffer
In a message dated 2/7/05 11:46:21 PM, [EMAIL PROTECTED] writes: There's an interesting (to me, anyway) interview with Arthur Laffer here: http://pittsburghlive.com/x/tribune-review/opinion/columnists/steigerwald/s_3 00457.html --Robert Oh, thank goodness! When I saw the subject line I thought you were goign to tell us that he'd died. Gosh, I didn't even think of that! Sorry, didn't mean to scare anybody. I see the basis of his optimism, but still I feel pessimistic. Marginal federal income tax rates have fallen (although they fell lower than they are now and rose again, and actually rise about the statutory 35% Laffer mentions) and we've had little inflation, but the federal register continues to grow by leaps and bounds, federal spending grows faster than at any time since the 1960s, and Bush gave us our first new entitlement since the 1960s, while the old entitlements continue to grow out of control. Didn't the 1996 welfare reform act get rid of the AFDC entitlement? So they aren't ALL growing Also, lots of industries have been deregulated since (say) 1970. Airlines, some types of telecommunications, trucking, etc. I know, we've got a long way to go, but let's not pretend that the past was some unregulated Eden, either. --Robert
Re: Regulating Positional Goods
Ron Baty writes: Given that there is little intrinsic value to being tall, but rather it is to being taller than others, would not the wide spread use of genetics to enhance height decrease the value of being tall. Are you sure about that? When I'm trying to reach the high shelf, I want to be as tall as the shelf, not taller than my neighbor. You could argue that shelf height depends on population height, and that's true, but if you can put shelves higher, you can store more in the same amount of floorspace/land, and that's a real economic benefit. You can also see farther, pick fruit higher up on a tree without a ladder, and (if height is correlated with leg length) walk faster -- or at least, farther per step, which I imagine is more efficient. There are trade-offs, sure -- you need bigger clothes, bigger cards, etc. But these are also real costs, not costs due to relative height. --Robert Book
Re: personal finances survey
In a message dated 11/12/04 1:42:43 PM, [EMAIL PROTECTED] writes: What's up with question 32? 52% male and 52% female? Well maybe 4 percent of them were hermaphrodites. I see that at the university where I'm teaching (NOT GMU) they're having a seminar on people who aren't 100% male or female. I'm sure 4% is *MUCH* higher than the rate of (biological) hermaphrodites in the general population. Probably 100 times higher!
Re: Krugman on Rep and Dem virtue
Oh, I see that Mass doesn't have even one Republican county! I likewise see that Oklahoma (where the wind goes sweeping down the lane) and Utah don't have even one Democratic county. David You could use the percentage vote for each candidate in each county in those states. Actually it would probably be better to use that for every state. --Robert
Re: Now Bush to win 1.5:1
At 5:33 EST Robin wrote: Tradesports, IEM, Betfair give Kerry a 71 to 74% chance to win. At 10:02 EST, Robin wrote: Tradesports now gives Bush a 62% of winning. Doesn't this big swing undermine the theory that markets are consistently good predictors of elections? --Robert Book [EMAIL PROTECTED]
Re: another use for idea futures (fwd)
On Wed, Oct 20, 2004 at 02:13:23AM -0400, Robert A. Book wrote: I think what you want is the Banzhaf Power Index, developed by Banzhaf (surprise!) in the 1960s. I forwarded your post to a friend of mine who's done some work on this, and discovered he's giving a talk on this very topic on Friday at the GWU math department. His summary, with a link to a more detailed web page, is below. I read his web page quickly, but did not find it particularly relevant. The Banzhaf Power Index is apparently about figuring out how much power each voter has in a block voting system, where everyone is not equal in the sense that your vote has a different probability of influencing the election depending on where you live. But he starts off by assuming that every voter has an independent .5 probability of voting for each candidate. That makes the analysis useless for the purpose of computing the expected utility of voting, because it ignores all of the relevant information that we actually have about the likely outcome of the election, such as the IEM market data. Funny you should mention that -- I thought of the same thing after I posted Mark's message to the list, and I think I have a solution. The Banzhaf model could be tweaked to take this into account by weighting each coalition by (p^i)*((1-p)^(n-i) where p is the probability of a given voter being for candidate #1, n being the number of voters, and i being the number voting for candidate #1 in the particular coalition. This is the binonmal distribution with parameters (n,p), which for large n (and p not too close to 0 or 1) (or more precisely, when np(1-p)5) can be approximated very well by a normal distribution with mean np and variance np(1-p). The result should be that the power of an individual vote should drop as p gets farther from 0.5, in either direction. That is, an individual vote in Nevada is more likely to be decisive than one in Utah even though both have 5 electoral votes -- because in Utah Bush is ahead by 37 points (in some poll anyway) and in Nevada Kerry is ahead by 1 point (again, in some poll). So a vote in Utah will not be decisive at all, but a vote in Nevada might be. I would suspect that a vote in Florida (25 electoral votes, 1 point difference) is more powerful than a vote in California (55 electoral votes, Kerry leading by 8 points). I think that in real elections, a model that takes current polls into account would be more useful -- it would tell candidates where to campaign. They should campaign where the poll-adjusted Banzhaf index is higher. Who knows, maybe they have figured this out already --Robert
Re: Cost-plus financing
On Mon, 11 Oct 2004, Robert A. Book wrote: What, no postings on the Nobel Prize? Is this list still functioning? ;-) We are all still in mourning for Tullock's yet again having been passed over by the Committee. Please, leave us in our grief. Eric How 'bout if I join you instead? --Robert
Re: Nobels
http://www.nobelpreisboerse.de/stocks.aspx?stc=6 A fun-money stock market in economics nobel prize winners. Barro's currently in the lead, followed by Krugman, Prescott, Williamson, and Fama. I'm keeping my fingers crossed that my stock in Tullock pays off Krugman? Egads --Robert
Re: lotteries and elections
Dimitriy V. Masterov writes: If my memory serves me, when no one has a winning ticket, the pot gets rolled over to the next round. When you have several large states that run a joint lottery, the sum can get really enormous when this happens, so that the expected gain is positive even with a minuscule probability of winning. Right. Economic intuition will predict that when this happens, lots of people will rush to buy tickets, Right. so that the the probability of winning will fall, eliminating any gains. However, this does not always seem to be the case in real life. Not quite right, but sort of. With these games, the player picks numbers, the lottery picks numbers, and the player wins if his/her numbers match the lotteries. The probability of a given ticket winning does NOT depend on the number of tickets purchased -- after all, how else could you have a round when no one has a winning ticket? The size of the pot in the NEXT round (if no one wins) might depend on the number of tickets sold in this round, depending on the lottery rules, but that doesn't affect the expected gain on THIS round. The only thing that does impact the expected gain on this round is the fact that more people buying tickets means there's a greater chance someone else picks the wining numbers also. Since the pot is split among all players who pick the winning numbers, this affects the expected gain, but not the probability of a win. --Robert
Re: insanity vs. irrationality
On Mar 24, 2004, at 8:33 AM, Wei Dai wrote The paper makes the point that what psychology views as mental diseases in many cases can be interpreted simply as extreme or unusual preferences, and in those cases involuntary psychiatric treatment can not be justified as a benefit for the patient. Stephen Miller: It seems to me that a clear exception may be where there's an extreme preference to harm others. Depends on where you put the emphasis in Wei's last sentence. This might be an exception to the can not be justified part, but not an exception to the as a benefit for the patient part. In other words, in the case of a preference to harm others, involuntary treatment might be justified as a benefit to others even if it is not a benefit (i.e., is a cost) to the patient. One thing I think is missing from all this is a discussion of how these extreme preference -- or indeed, any preferences -- arise. Normally in economics we tend to take preferences as given and view the formation of preferences as outside the scope of economics. But we also normally assume preferences to be stable, when clearly they can change. Why is this relevant? Well, many psychiatric illnesses appear in previously normal people. If we are going to interpret psychiatric illnesses as extreme or unusual preferences then the onset of the illness has to be interpreted as a change in preferences. So we are necessarily dropping the usual assumption of stable preferences, and it's worth thinking about why these preferences change radically and suddenly. Likewise, for some of these illnesses there are treatments -- in other words, drugs or something that change preferences back to normal, or at least appear to move them back to normal range. Again, it is worth thinking about why these preferences change. --Robert
Re: new paper
As a neutral party who's not mentioned in the acknowledgements and has never even met Bryan, I highly recommend this paper. It's fascinating! --Robert My new paper on the economics of mental illness, entitled The Economics of Szasz can now be downloaded from my webpage at: http://www.gmu.edu/departments/economics/bcaplan/szaszjhe.doc -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] I hope this has taught you kids a lesson: kids never learn. --Chief Wiggum, *The Simpsons*
Re: Bank Closings
Why do banks close at noon on Saturday? Almost any bank I have ever been a member of has been closed on Sunday and closes at 12 on Saturday, sometimes turning away customers who are waiting in an ungodly line outside the store in order to cash or deposit their checks before the bank closes. Also, every time you want to go, they're closed due to some holiday - President's Day, Christmas, St. Crispin's Day, what have you. How can banks afford to be closed so much? Couldn't a bank attract a lot of business keeping normal business hours? On that same note, how can Chik-fil-A afford to be closed on Sundays? Fast food seems like a very competitive industry - very similar goods being sold, prices constantly changing, menu items constantly changing... and yet Chik-fil-A closes an entire day out of the week. Can this make business sense? Do a lot of people eat at Chik-fil-A because they feel good about a company that closes on Sunday? I don't think the banks and Chik-fil-A are analogous. The key difference is, with a bank you have an ongoing relationship -- you need to make deposits/withdrawals are YOUR bank, not just any bank that happens to be open when you want to make a deposit (ATMs chnage this somewhat, but not entirely). With Chik-fil-A, there is no ongoing relationship -- you just go whenever you want the food. If Chik-fil-A is closed, you just go on to the next fast food place; you can still go to Chik-fil-A next time. In other words, the cost to Chik-fil-A is just whatever profit they lose on Sunday; the cost to banks could well be higher. If the owner of Chik-fil-A is maximizing utility, not merely profit, it's obvious why closing on Sunday might be entirely rational based on his utility function, even if NOBODY eats there on the other days because they feel good about a company that closes on Sunday -- and I'm sure at least SOME people do. As for banks, there are exceptions -- I have accounts at not one but two banks that are open not only in Saturday but also on SUNDAY. One of them is in a supermarket, and is open every day the supermarket is open (but not every hour; the supermarket is open 24 hours six days a week and just closes for inventory for a few hours on the weekend). The other is in a neighborhood with a lot of Orthodox Jews (who wouldn't go to the bank on Saturday); I suspect for them being open on Sunday is an important competitive advantage. --Robert
Re: spamonomics
In a message dated 1/21/04 3:34:42 PM, [EMAIL PROTECTED] writes: I was so ignorant, until last month I thought Paris Hilton was a hotel in France ;-) Paris Hilton is both a hotel in France AND desert topping! (from an old Saturday Night Live skit it's both a floor wax AND a desert topping!) Is a desert topping what they put on the Mojave and the Sahara? Seriously though, I had no idea who she was when I first started getting emails offering to let me see her private activities. Not until I caught an episode of that reality how called (I think) The Simple Life featuring Paris and her buddy, Nichole Richie (Lionel Richie's daughter) did I know who she was. And people wonder why I don't watch TV ;-) --Robert
Re: Oscar Political Business Cycle
Bryan Caplan [EMAIL PROTECTED]: The Political Business Cycle story has not fared well empirically in recent years (though Kevin Grier has done interesting work on Mexico's PBC). But it seems overwhelming in the Oscars. It seems like roughly half of the big nominees get released in December. What gives? Is there any way to explain this other than Academy voters' amnesia? Quite possilby -- but why is that not a suitable explanation? I guess there is a small intertemporal benefit - if you could win Best Picture of 2004 with a January 2004 release, or Best Picture of 2003 with a December 2003 release, the present value of the latter prize would presumably be higher. But can that one year's interest (presumably adjusted for a lower probability of winning due to tighter deadlines) explain the December lump? That one year's interest all accrues to the decision-maker at one time. If that decision-maker is not taking into account revenues from other movies, it doesn't have to be big to sway the decision. Furthermore. Dan Lewis: I think that's a bit backward. It's more likely that those who choose whatis released when want the ability to say nominated for six Golden Globes or ride the Oscar nomination of an actor/actress. Movies like Cold Mountain, Mystic River, and Lost in Translation aren't going to get the viewers that an epic like Lord of the Rings will, and critical acclaim doesn't go as far in June as it does in December-February. I think you're on to something here ... if the main value (in a revenue sense) of an Oscar is increased ticket sales, you want to have a movie that's still in theaters when the nominations and awards are announced. How long does the average movie stay in theaters? Is a movie released in January 2003 likely to still be in theaters in February and March 2004? --Robert
Re: Real wages constant since 1964?!
I'm sorry to bother you with this. I just looked up the time series for total private average hourly earnings, seasonally adjusted, in 1982 dollars on the BLS web site. It comes back that they've been more-or-less constant since 1964. I'm floored. Is this right, or am I doing something wrong. I thought that real wages were generally higher today than in the past, ups downs notwithstanding. Why are we better off today? (Better products two wage households would be a start, I guess.) If you measure wages in desk calculators instead of dollars, I'm sure they've gone up substantially! ;-) --Robert
Re: Why is local currency good or bad or neither?
Quoting john hull [EMAIL PROTECTED]: It seems that there are a number of schemes to create currencies, on top of extant national currencies, that will be accepted only locally. Under such a program, a unit of currency, let's call it a Local, will be created by a group in the community. The currency may have a more-or-less arbitrary value associated to it--one group I've read about sets their equal in value to ten dollars as well as one hour worth of effort. Presumably, then, if someone rakes your lawn for one hour, you pay that person one Local, and that person can exchange the Local for $10 worth of goods or services from participating merchants or individuals. ... Can you provide an exampe (or two?) please? Thanks. -- Susan Hogarth The only example I know about is Ithaca Hours used in Ithaca, NY. See these links: http://csf.colorado.edu/forums/essa/may97/0081.html http://www.ithacahours.com/ Quoting from one: One Hour is worth $10. That's roughly the average wage in Tompkins County, NY. The idea is that one person's time is as valuable as anyone else's There is nothing to prevent professionals from charging several Hours per hour, of course, and a babysitter might accept a quarter-Hour per hour. But Hours are a leveling force, raising the minimum wage, allowing peole to buy things they couldn't afford before, and stimulating everyone's business. The system's founder, Paul Glover, explains that we printed our own money because we watched federal dollars come to town, shake a few hands, then leave to buy rainforest lumber and fight wars Hours help us hire each other to get what we need. I'd guess there is a substantial correlation between support for this sort of currency and listening to NPR. ;-) I should point out that in theory income taken in these Hours should be taxable like any other income at the given exchange rate. --Robert
Re: Economics and E.T.s
On Thu, 21 Aug 2003, Bryan Caplan wrote: That seems to water down the Principle to complete irrelevance, doesn't it? Well, the notion that life is very unlikely, but happened on earth through sheer chance, does not require that earth is special in any fundamental physical sense. What's the basis for the principle in the first place? --Robert Book
Re: Economics and E.T.s
Right. It's another reason why I think there isn't any basis for it. Selection comes to mind. On uninhabited planets, sentient beings don't ponder this question. Quoting Robert A. Book [EMAIL PROTECTED]: On Thu, 21 Aug 2003, Bryan Caplan wrote: That seems to water down the Principle to complete irrelevance, doesn't it? Well, the notion that life is very unlikely, but happened on earth through sheer chance, does not require that earth is special in any fundamental physical sense. What's the basis for the principle in the first place? --Robert Book
Re: Greider
Greider also has interesting material on the Democrats' connection to the SL industry. I'd never heard about any of this, but he seems to have his facts straight on this point. Wrong hasn't been so much fun in years! -- Bryan, if he's wrong about the material you know a lot about, what makes you think he has his facts straight on the subjects you know less about? Shouldn't his obvious errors on cost/benefit, risk analysis, and corporate accountability reduce the prior probability (to you) that he's right on anything? --Robert Book
Re: fertility and government
But in a dictatorship, while my child-rearing opportunities suffer, my business opportunities suffer even more. But what if you live under a capitalist dicatator, like Chile's General Pinochet or South Korea's General Park [is this name right?]? If my understanding is correct, in a lot of those places you have to know someone to take advantage of the capitalism. There are probably not enough such people to change the data, in any (reasonable) income bracket. Even if that's not the case, business opportunities is just an example. Substitute political opportunities if you like. The point I was tryign to make is that it's possible for a dictatorship to depress child-rearing opportunities less than other opportunities, thus making child-rearing relatively more attractive. I was under the impression that fertility in the USSR and the Warsaw pact countries was very low, and I think it's still very low in Russia. Yes. In fact, it's even lower since Russia and other Warsaw bloc countries adopted democracy than when they were ruled by Communist dictators! Perhaps -- but calling Russia's current form of government democracy is stretching a bit. They're closer than they were in 1991 to be sure, but right now I think oligarchy would be more accurate. --Robert
Re: Competition vs. Profits in the NBA
equally. This, of course, gives a boost to smaller market teams. The last six Super Bowl winners have been Tampa, New England, Baltimore, St. Louis, Denver (twice) and Green Bay. All relatively large markets. Green Bay, Wisconsin is a large market?
Re: Family Businesses and Licensing
In my informal experience, fathers and sons tend to work together full-time only in professions with strict licensing or training requirements. Electricians, lawyers, realtors and even CPAs - I've found more father/son teams here than in any other type of job. All of those jobs have fairly rigid prerequisites (electricians have to pass journeyman and master-level tests; lawyers have the bar and law school, etc). Why is that? I'm not sure this is actually true. Eric Crampton mentioned farming as a non-licensed procession with lots of father-son teams, and I'd add retailing -- more so in the time before chain stores, but to some extent even now. Don't you remember all the stores with names like George Johnson Sons? Also - why is it more often father/son, and not mother/daughter or mother/son? Or father/daughter? You'd have to adjust the frequency of these teams to the percentage of women in each profession and see if the percentage of such teams involving women is more or less than what you'd expect based on the percentage of women in the profession. As a sidelight, I've noticed several father/daughter teams amoung lawyers, and the hardware retailer 88 Lumber is run by a father/daughter team (and it's not because the father doesn't have sons; he does). --Robert
Re: Babynomics
On Sat, Jan 11, 2003 at 03:45:40PM -0800, Fred Foldvary wrote: --- fabio guillermo rojas [EMAIL PROTECTED] wrote: By that logic, animals are economic actors - animals seem to choose their actions. To some degree, to the degree that choice is involved, some animals are economic actors. However, most animals seem to be controlled by genetic programming (instince), so choice is not involved, but the genetic behavior does indeed adhere to economizing, otherwise the species would not survive. The fittest are also the economizing. when do humans start to engage in *sophisticated* economic behaviors not found in animals? For example, at what age are children able to understand the concept of interest? In terms of discounting the future, or what? At what age do children understand that exchange can make you better off? When they understand that theft will not. For some people, that's never!
Re: News Coverage and bad economics
It might be worth noting that Bill's original complaint concerned not amateurs generally, but NEWS MEDIA reporters and anchors. It is quite possible that the average economics ability of news media people is lower than the average economics ability of other non-economists. This has been established with mathematics: The average math GRE scores of those entering graduate schools of journalism are lower than those for all sutdents taking the GRE. If it's true for math, it could be true for economics. As for the comment about amateurs not being taken seriously when it comes to medicine, I'm not sure it's entirely true, even if they do get more respect than economists. People take Meryl Streep seriously when she spouts nonsense about Alar, and take Julia Roberts seriously when she says more research is needed on Rett Syndrome than the doctors at NIH allocate. See, for example: http://www.acsh.org/press/editorials/rettsyndrome052102.html --Robert On Thu, Jan 09, 2003 at 08:05:06AM -0500, [EMAIL PROTECTED] wrote: Amateurs and economics? As I recall, in the General Theory, towards the end of the book, Keynes called for, or came close to calling for, nationalization of business investment. If implemented, the proposal would have quickly created an out-and-out socialist system, with disastrous consequences. Fortunately, such a decision was not in the hands of Keynes or other economists. It was in the hands of the American electorate, a bunch of amateurs. And among these amateurs, only about 2% had historically supported socialist candidates who called for what Keynes was proposing. The amateurs were right, and Keynes was wrong. Now, one can dismiss this evidence as a mere anecdote. But keep in mind that we are talking about the man who was the most acclaimed economist of the 20th century, and we are considering his position on nothing less than capitalism vs. socialism, the most important and fundamental issue in economics and perhaps all of social science. In fact, amateurs and the general public have often demonstrated a kind of intuitive and inarticulate wisdom on social issues that has eluded intellectuals, including economists. Marc Poitras
Re: questions about dividend tax cut
On Mon, Jan 13, 2003 at 01:44:59PM -0800, Fred Foldvary wrote: There is also a supply-side effect from cutting the marginal tax rate, from less uncertainty about the company as it shifts to less debt and more equity, as well as more investor confidence when the profits are sent to the shareholders rather than retained by possibly theiving executives. Any idea why the dividend tax, instead of the corporate income tax, is being proposed for a cut? If we want to end double taxation of dividends, it makes more sense to me to eliminate the corporate income tax instead of the dividend tax. My guess is politics. Cut taxes on Corporations! does not sound like a winning issues, given the level of economic literacy of the news media (as Bill pointed out).
Re: Tax cuts and US citizen responses
Koushik Sekhar wrote: Can anyone explain why ordinary Americans are not objecting to tax cuts (such as dividend tax cuts) that will only favour the top percentiles of the wealthy ? Bryan Caplan wrote: Among other things, this assumes that people's views on tax policy are driven by self-interest. Most of the empirical evidence finds that this is false. For a good summary, see Sears and Funk's chapter in Jane Mansbridge, ed., *Beyond Self-Interest*. Bryan, Could we rephrase that as, Americans are not as selfish as Democrats would like them to be? ;-) Keep in mind that a huge percentage of Americans own stock. I don't know the latest figures, but it's at least a third, maybe a half. Certainly not just the top percentiles of the wealthy. As others have pointed out, dividend tax cuts may not favor the wealthy at all. Lots of older people (including my grandmother) are not rich, but live off the dividends from stocks they or their spouses got from their employers decades ago. (Putting aside the advisability of holding stock in one's own employer... .) Generally speaking, the richer you are, the more you will prefer capital gains rather than other income, since the gap between the capital gains tax rate and the regular income tax rate is larger. Since rich people are more likely than others to sit on corporate boards of directors that determine dividends, this may results in dividends being too low for ordinary (non-rich) shareholders. On other words, taxing dividends more than capital gains makes rich people transfer wealth from my grandmother to her broker (if she has to sell stock, and therefore pay a commission, to get her money). --Robert
Re: Car safety vs. Plane safety
Here are some more factors to consider in evaluating the relative safety of planes vs. cars (maybe Saudi Arabia has the right idea?): The old wives' tale (old husbands' tale?) turns out to be true after all. Per million miles driven, women drivers have a much higher accident rate than male drivers, including drunken men! And airplane crashes are four times (!) more likely when the pilot is female. The explanation is believed to be sex differences in hand-eye coordination. http://christianparty.net/womendrivers.htm Women Drivers Are a Serious Health Risk For Men 33,696 men drivers and 20,156 women drivers were involved in the traffic fatalities of 41,967 American citizens in 1997. [...] I would be a bit skeptical of the figures presented on that web site, without independent confirmation. Check out the links from the main page at http://christianparty.net For example, the there is a link on that page to setting the standard at http://christianparty.net/standard.htm which purports to have test scores of some sort ofr various demographic groups, classified as Race Sex. The categories include, Mexican Boys, Caucasian Girls, jew boys, Nigger Boys, jew girls, Nigger Girls, etc. Other pages on that web site include a call to repeal the 19th amendment (i.e., take away the right of women to vote), claims that the Jews started World War II and How jewish Doctors Kill Christians (example: Reduced mental capacity of American students with fluoride.) and numerous other antisemitic garbage. Although the main thrust of the site is antisemitism and the next priority seems to be misogyny, there are also some other tidbits -- such as a claim that, FIGHTING CRIME COSTS 25X MORE THAN CRIME ITSELF and almost all U.S. rape convictions are based on lies. --Robert Book
Re: Foreign aid - can money buy love?
To the extent that foreign aid money buys whatever it buys, it would also have to depend on the total GDP and per capita GDP of the recipient country. Assuming diminishing marginal utility of money, giving $1 per capita to Britain would not buy as much as $1 per capita to Malawi. Of course, it doesn't depend just on the utility of money, but also on existing attitudes toward the U.S. But still, I'm not sure what we're trying to buy is love or any other particular attitude in the population of the recipient country. I think we are trying to buy specific outcomes in some cases, and general charity in other cases. For example, Israel might be our ally anyway, but that ally is more powerful (and perhaps more survivable) with our aid. The huge aid package for Egypt is in part a purchase, in exchange for which we got the Camp David peace treaty of 1979, which both enhanced the safety of our ally (Israel) by reducing the number of its enemies by one, and enhanced our security by giving us better relations with the country in possession of the Suez Canal. Neither of these is love -- but we still have access to the Suez Canal, and Israel still has something approximating peace on its southwestern border. The same holds for other countries as well. During the Cold War, aid to some Latin American countries enabled them to resist Communist forces (which were uaully given aid by, if not run by, the USSR). Aid to Ukraine and Khazakhstan was essentially the purchase of their nuclear disarmament. With food aid to African countries, what we're buying is the same sort of thing people buy when they give money to feed the homeless. So no, we are not receiving love -- but that's not what we were trying to buy. --Robert Book I don't think money buys love. We give a lot of money to Egypt, and it isn't clear that we get any love. We also give a ton of money to Israel and it isn't really clear that they feel closer to us than they would otherwise. m - Original Message - From: fabio guillermo rojas [EMAIL PROTECTED] Date: Saturday, December 14, 2002 11:40 pm Subject: Foreign aid - can money buy love? Somebody said foreign aid might be justified if it increased the securityof the US through supporting a steadfast ally. Has anybody ever figured out foreign aid trade offs? For example, What has the greatest effect on the annual number of American deaths due to political violence (wars, terrorism, civil wars)? - $1 million spent on the army/navy/etc. - $1 million given to the government of a foreign nation - $1 million spent on covert forces - $1 million spend on pro-American propaganda Another question: how much do you have to spend to get a dependable US ally? How much do you have to spend per person before 50% of a population is pro-US? What does the curve mapping per capita US foreign aid to % population pro-US look like? Does money buy love? Fabio
Coase Theorem in action
This story is almost identical to a classic hypthetical example of the Coase Theorem! --Robert http://news.independent.co.uk/world/americas/story.jsp?story=294844 14 May 2002 19:43 GMT+1 Power firm buys town for $20m By David Usborne in New York 14 May 2002 Cheshire is a small town in south-eastern Ohio with some of the usual landmarks: a pizza parlour, a petrol station and a corner shop. Right next door, however, stands a very large power station, which is why its residents are preparing to move out. Not just a few of them -- everyone is going. The exodus has a lot to do with the vapours that rise in high columns from the stacks of the generating plant and in particular the stinging blue clouds that last summer started periodically to descend on the town. But for the 221 residents it has even more to do with money. In an unprecedented manoeuvre, the owner of the plant, American Electric Power (AEP), has found an all-American solution to the looming threat of lawsuits from the people of Cheshire who have been bothered by the blue clouds. The company is paying $20m (£14m) to buy the town. Under the deal, Cheshire's 90 homeowners will receive a cheque from the power company equal to roughly three times what their houses would be worth on the open market. In return, they must pack and leave and promise never to sue the company for any kind of damage inflicted on their properties or health. The prospect of Cheshire becoming a ghost town does not sit well with everyone. Relocation will not be easy, conceded its mayor, Tome Reese. It will be sad indeed to see our village disappear. Many residents had realised, however, that selling their homes normally might have been impossible because of the proximity of plant. Helen Preston, who is 87 and was born in the house she lives in, is among those starting to wonder out loud if she and her neighbours gave in too quickly. The village just accepted the first offer, grabbed it up. Now people are saying we sold out too cheap. American Electric is the biggest power company in the US and the coal-burning plant at Cheshire is the largest of its kind in Ohio. Under pressure from federal regulators to reduce pollution there, the company has invested heavily to cut emissions from the plant. It was the latest technology, designed to cut levels of nitrogen oxide, that gave rise to the blue haze problem. The sulphuric clouds left stains on house fronts and caused residents to complain of burning eyes, headaches, coughing and sores on the lips and inside their mouths. A federal report last year said the fogs could harm residents with asthma but were not in themselves life-threatening. Pat Hemlepp, a spokesman for AEP, said: We've become an increasing annoyance, no doubt about it. He said that while the need to pre-empt legal action from the residents did factor into the decision to buy the entire town, the company had also been motivated by a need to expand the plant. Only a few details remain to be settled. When exactly should the exodus be completed and the town of Cheshire declared defunct? And what is to happen to the local school, which lies just beyond the limits of what the company agreed to buy? Copyright © 2002 Independent Digital (UK) Ltd
Re: Grade Inflation
That's what I meant. ;-) The real problem with grade inflation is not the reduction in information that might be used by employers. As with regular inflation, the real problem is that grade inflation is not uniform - some departments and some professors are more subject to inflation than others. In particular, grade inflation tends to be much worse the softer the science: grades are almost always significantly higher in art, cultural anthropology, and english than in math, physics and economics, for example. And within departments it is well known that some professors grade easier than others. The effect of this is to draw students away from math, science and economics and towards the softer social sciences. Similarly, within departments students are drawn away from harder graders and towards softer graders. Budgets go where students go! Thus grade inflation causes a *misallocation of resources* (measured in student time or in budgets.) Alex -- Dr. Alexander Tabarrok Vice President and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621-1428 Tel. 510-632-1366, FAX: 510-568-6040 Email: [EMAIL PROTECTED] First Law of Work: If you can't get your work done in the first 24 hours, work nights.
Re: Grade Inflation
(OK, this is my third attempt in three days to get this particular post through the server... --RAB) Since grades can't get any higher than an A, doesn't grade inflation merely squeeze out information regarding graduates as the grade scale gets compressed at the high end? You would think that smart employers would know to rate a B+ student from a tough-grading school more favorably than an A- student from an easy-grading school. But there are too many schools, and most employers aren't using a national database of with statistics about each school. Grade inflation ignorance can also be seen in the several organizations which equate GPAs across schools and majors, by for example setting minimum required GPAs to apply. These include a lot of jobs on and off campus and some graduate programs. Not to mention fraternities and most honor societies, graduation with distinction, and qualification for undergraduate honors programs. (but I digress) I believe there is some evidence that grade inflation is not uniform across fields, at the same school. When I was an undergrad, the conventional wisdom among sutdents was that grades depended on the street where the class was held -- meaning, on the street occupied by the science and math departments and the engineering school, the average grade given was a full point below the average for the rest of the campus. I never personally saw the data for that claim, but it did somewhat reflect my personal experience, and I believe there is data out there someplace showing this is a general trend. It is worth noting that this could reflect either subject-biased grade inflation (easier grading in humanities and social sciences relative to science/math/engineering), or subject-biased content deflation -- grades might represent the same degree of mastery of the subject, but some departments (Hum/SocSci) teach easier material. In this latter case, there could still be subject-unbiased grade inflation also, of course. In a world in which grad schools and employers set minimum GPAs to apply, equating them across majors, the losers are those in the harder(-grading) majors. --Robert First Law of Work: If you can't get your work done in the first 24 hours, work nights.
Re: Grade Inflation
--- Robert A. Book [EMAIL PROTECTED] wrote: Isn't this what the GRE, MCAT, etc., are for? Granted, they don't apply to all post-graduate plans, but it's a start. Fred Foldvary ([EMAIL PROTECTED]) responded: How many employers require applicants having a BA/BS to have taken the GRE etc. before they are considered for hiring? If few do, then it shows the degree and grades are still a sufficient criterion. Good point. I'm sure few if any do, which raises an perhaps even more interesting question: Most graduate schools are part of universities which also have undergraduate programs, and most graduate schools require some standardized tests. Does that mean they put less confidence in the degrees and grades they themselves give, than the employers do? There are two caveats to taking that question the way I'd like to. First, I suspect employers use personal interviews much more than graduate schools do; perhaps interviews produce more, or more relevant information than a standardized test. Second, I wonder how the standardized testing community would react to employers wanting to use existing tests for hiring purposes. Surely there is nothing to stop job applicants from taking the GRE, but I don't believe there is any existing mechanism for employers to receive score reports directly from ETS. (Schools seem to want scores from ETS, not from the applicant, probably to prevent forgery.) The absense of such a mechanism may mean there is no demand for the service from employers, or it could mean the suppliers refuse to supply for some reason. --Robert
Re: entropy and sustainabilityt
--- Anton Sherwood [EMAIL PROTECTED] wrote: John Perich wrote: . . . here's a thought: in six billion years, the sun will burn out, making all research into sustainability and environmental / resource economics a waste of time. . . . But what is the present value of something 6 billion years in the future? Fred Foldvary Depends on your discount rate! ;-) I suspect radical environmentalists, to the extent that they are time-rational at all, do not discount very steeply. They might well have a zero discount rate, or even a negative one -- meaning a pristine environment 6 billion years from now might be worth more to them than one now. After all, by then the human race, the cancer on the planet might be gone and the environment will be truly natural according to some points of view. --Robert
Re: Grade Inflation
It seems to me that an effective remedy to grade inflation would be standardized exams on the subjects taught, prior to graduation. There would be, for example, a standard exam for econ majors, similar to what is done in grad schools. If many universities used the same exams, then that would serve as a signal of knowledge, and also reveal the grade differential relative to test results. That, of course, is why such exams are not being implemented. Fred Foldvary Isn't this what the GRE, MCAT, etc., are for? Granted, they don't apply to all post-graduate plans, but it's a start. First Law of Work: If you can't get your work done in the first 24 hours, work nights.
Re: The Economics of Military Stop-Loss Policies
Armchairs, The military's current stop-loss policy prevents certain service members from leaving the service at the end of their normal enlistment contract. This policy is affecting specific skills and grades deemed critical for the war on terrorism. In econimic terms, what are the similarities and dissimilarities between stop-loss and a conventional draft? If people don't want to be stop-lossed, won't this make it harder to to convince them to enlist in the first place -- and won't this problem be worse for exactly those people likely to be placed in specific skills which are scarce? Of course, for those who know in advance they want a long-term military career, this will not be an issue. It will be an issue for those who know at enlistment they want a brief career. The misallocation will occur for those who decide after enlisting that they would rather get out -- but that missallocation is there to some degree in a fixed-length contract also. --Robert Book[EMAIL PROTECTED] University of Chicago
Sale of Organs
This topic seems to be near-and-dear to the heart of free-market economists everywhere It seems the U.S. might actually allow the sale of human organs for transplant in the near future. This raises some interesting issues. On the one hand, obviously we should expect the quantity of organs supplied to increase if payment is allowed, and this is clearly good for recipients who are willing to pay. The story is at: http://story.news.yahoo.com/news?tmpl=storycid=594u=/nm/20020214/hl_nm/wannabuyanorgan_1 (I'm appending the text below.) On the other hand, there are some disturbing agency issues involved. For example, family members expecting payment for organs might authorize less-aggressive medical treatment than the patient might prefer, at a time when the patient may not be able to speak for him/herself. Essentially, this would be people stealing the organs when the owner is unable to prevent theft. This is probably already a problem for people with large estates and relatives who like money more than people; alloing organ sales will expand this problem to more people. Also, organs might be removed before people are really dead; after all, if there is profit in declaring people dead, there will be more erring on the side of declaring death in cases where there is room for debate. This is already a problem with organ-donation of the type authorized on driver's licenses; allowing payment will simply expand the class of people with such motivation to include relatives as well as doctors, and will increase the overall incentive to declare people dead. So, despite the fact that I am generally a free-market advocate, I think allowing this particular market raises all sorts of complicated ethical issues which can be boiled down to property rights issues -- in other words, who owns a person's organs? That person, or his/her relatives? Who owns a person's life, in the sense of having the right to declare someone dead in questionable cases, and/or authorize treatment in questionable cases? If I write an advance directive that says I want all possible extreme measures to save my life, can someone else over-ride that, let me die, and then sell my organs for profit? --Robert Book[EMAIL PROTECTED] University of Chicago http://story.news.yahoo.com/news?tmpl=storycid=594u=/nm/20020214/hl_nm/wannabuyanorgan_1 Doctors, Government May Allow Payment for Organs Thu Feb 14,10:18 AM ET NEW YORK (Reuters Health) - The medical community and the federal government are edging closer to allowing payment for body parts needed for transplants, the Wall Street Journal reported on Thursday. Such compensation was outlawed by Congress in 1984, but with 79,000 people awaiting transplants, a committee of the American Medical Association has begun designing a pilot program to test the effects of various motivators, including payments for organ donations from cadavers, the Journal said. The committee, the AMA's influential Council on Ethical and Judicial Affairs, is already convinced that any moral concerns about payments for organs are outweighed by the needs of patients, the Journal said. The AMA's governing house of delegates is slated to vote on whether to support such a pilot in June, the Journal said. An advisory committee to US Health and Human Services (news - web sites) Secretary Tommy Thompson is also considering whether to recommend that the ban on payments be lifted for organs from cadavers and live donors as a way to alleviate the organ shortage, the Journal said. The American Society of Transplant Surgeons has already endorsed payment for cadaveric organs to the families of the deceased, the Journal said.
Re: Photographers
Sorry for posting on a stale topic, but I can't resist .. I actually *DID* discuss this with a photographer once (who said armchair economics isn't a contact sport? ;-) for the negatives - but the photographers always react with horror to this suggestion and refuse. Alex Ask them how much is the least they would accept in payment for the negative, before you have the picture taken. Go and ask several photographers. If they say I don't sell negatives, offer $10,000. He will probably say OK. Then tell him you will be asking other photographers, and so, what is the least he would accept? I asked. At $5,000 PER NEGATIVE he said he might consider it. You could also mention that if you can't get the negative, you will scan the photo into your computer. The quality won't be as good as with a negative, and folks might think it is the fault of the photographer. He said that scanning the image was a violation of his copyright, and if he found out any of his customers did this, he would definitely sue them. I asked how much he would charge for the right to scan the picture -- after all, I pointed out, the scanned image is a different product than the print. He said he would consider giving permission for a very low resolution scan, for no additional charge, but would not consider allowing high resolution scans at all. As far as having people think the low quality associated with a scan was the fault of the photographer ... well, if people were dumb enough to reveal he was the photographer, they'd get sued for copyright infringement! I asked him if he would consider a photo contract which, in advance, included selling the copyright to the customer, and he was extremely horrified I had even thought of such an idea. It was as if he considered it immoral to sell the copyright. Note that this fellow mostly does weddings, and he said that photographers often help each other out when more than one individual photographer is needed at a wedding. The helpers are paid a fixed fee, and it SEEMED to me that the copyright on all photos went to the guy who got the contract. --Robert
