Friday, April 30, 2010

Education as Accountability

Economists have modeled education as serving no purpose besides providing graduates a credible signal of their intellectual ability. Some employers have trouble assessing the quality of potential workers, but at least they can deduce something about the candidates based on their ability to get into and graduate from top schools, even if academic success is not perfectly correlated with workplace success. It doesn't matter what the students actually learned, as long as they had the follow-through to graduate. The most famous paper on this topic is Michael Spence's "Job Market Signaling," published in 1973.

Another function of education is accountability. As one professor pointed out to our class last year, we could have all found the syllabus online and read all of the course's books ourselves, so what's the point of doing it in a classroom setting? By enrolling in school (especially if you're paying your own way), you're setting up a situation with bad outcomes if you don't succeed. Whenever you hit a rough patch in the material, these consequences motive you to get through it, whereas otherwise you might have given up, if you were just learning on your own. And if we concede that being around a teacher and fellow students really does help you learn, this increasing your chances of success ever further.

I recently started taking a course in linear algebra (not at George Mason). The professor does nothing more than walk us through the textbook, page by page and sometimes word for word. He has other annoying habits, such as writing whole paragraphs on the white board or telling us about how he keeps getting fired. My classmates complain about his teaching methods, and he's definitely one of the worst teachers I've ever had. But if nothing else, I'm going through the textbook to answer his homework questions (or rather, the textbook author's homework questions), something I would have had a hard time motivating myself to do if I had just bought the textbook and put it on my coffee table, promising myself that I would get around to studying it someday.

Tuesday, April 27, 2010

Sports Standings and Sample Sizes

Are MLB standings more "accurate" than NFL standings, because of the larger sample size?

In the NFL, 16 games are enough to round out the season and decide which teams make the playoffs. Luck may play a factor in deciding a game or two, but rarely do people argue that horrible teams routinely finish with fluke records like 10-6.

In baseball, the standings after 16 games are pretty meaningless (here's what they were this year). This year, the Dodgers and Red Sox--both perennial powers--had losing records after 16 games, while the abysmal Padres shared the best record in the National League. Of course, 16 games only make up 10% of the baseball season, so it's no wonder why people often disregard statistics from the first month or so of the season (when there are also several players hitting above .400 and several pitchers with ERAs of zero).

Football is a brutal sport, impossible to play at the NFL level every day. But if there were some way to have the teams play 162 games instead of 16, would the final standings differ much from what they are now?

The variance is winning percentages are much wider in the NFL. In 2009, the best baseball team won 63.6% of the time, and the worst won 36.4% (standings). In the NFL, the analogous figures were 87.5% and 6.2% (standings). With enough repetition, would the St. Louis Rams eventually have a winning percentage around 35%? Or does football have inherently less parity than baseball? Or maybe football is played differently because there are so few games; i.e., if the baseball season were only 16 games, I doubt we'd see five-man starting rotations.

For those unfamiliar with statistics, see this page for more on sample sizes. The basic idea is making inferences about the underlying "true" quality of a league's teams. The more games, the better idea we should have about this underlying quality. This requires the rather dubious assumption that the team's quality hasn't fundamentally changed over the course of the season, such as a key player getting injured or a rookie blossoming into a star.

Monday, April 26, 2010

Teachers' Appreciation Day Saves Taxpayers Money (Probably)

A Twitter colleague of mine opines about why she doesn't like Teachers' Appreciation Day:

And, just on a personal note, I think I’d rather be the person who I would have been in the absence of about 1/3 of the teachers I had in K-12. Surprisingly many of them were not only incompetent, but petty, power-hungry, and even vindictive. I remain angry and bitter about those damaging years, and it’s part of why I’m so interested in education now (Maybe I’ll write a whole post on my anger and bitterness another time). But, because it was a wealthy area, most of the students did just fine academically – despite these bad teachers, not because of them. And, every year, the parents were coughing up expensive gifts and gift certificates for the poor, underappreciated teachers. I reckon that many of the teachers who truly deserve some extra appreciation – those who work with severely underprivileged students, those whose schools are unsafe, those who don’t make a decent living – are those who are, sadly, the least likely to receive it, holiday or not.
I agree that it feels gross to systematically honor certain people, especially entire professions. But maybe society is better off because of it?

Teaching has all sorts of nonmonetary benefits, such as the satisfaction of influencing young lives, the favorable work schedule (summers off for most), and the various forms of recognition, including Teachers' Appreciation Day.

Because of nonmonetary benefits, fun jobs pay less, all else equal. Many people would happily choose teaching elementary school at $35,000 a year over a working a boring job at $50,000 a year.

If we cut some of these nonmonetary benefits, we'd have to increase teacher salaries, in order to keep the existing pool of teachers away from alternative professions. Teachers probably value the recognition more than it "costs" us to provide it, so paying teachers in recognition instead of cash is probably a good deal for taxpayers.

As another example: imagine how much more we would have to pay teenagers to become soldiers if there were no parades, standing ovations at public events, or other acts of respect.

Help Amazon Sell Kindle Books and Earn $0!

Many Web sites, including this one, earn commissions when they refer customers to who end up purchasing items. Last week, I noticed that I earned a 0% referral fee for helping Amazon sell a Kindle book, netting the company about $9. I wrote to Amazon, and here's the response I got back:


At this time, Kindle Books are excluded as Qualifying Products. While we don't pay advertising fees on Kindle Books, we continue to pay a 10% advertising fee on all qualifying Kindle reader sales and Kindle magazine and blog subscriptions referred to us.

We appreciate your understanding.
Kindle books are a loss leader (here's a good discussion from Newsweek). In other words, Amazon loses money on each Kindle book it sells in hopes of getting people to buy Kindles at a hefty markup. Maybe the economics of ebooks will change someday, but for now, it's understandable that Amazon doesn't want its partners to push sales of Kindle books to people who already own Kindles, hence the 0% referral fee.

However, Amazon partners can't control whether the customer will buy the Kindle or the print version. If 50% of the people you refer end up buying the Kindle version, then the nominal 4% referral fee you earn on book sales effectively becomes 2%. (This is ignoring some pricing differences and the fact that the existence of the Kindle increases overall demand for books, securing some sales that otherwise wouldn't have been made.) This decreases the expected returns to hawking Amazon's wares, which should in turn reduce the number of referrals for Amazon books, both print and Kindle versions.

UPDATE 5/4: Apparently Amazon has changed course.

Sunday, April 25, 2010

Could Any NFL Player Be Had in Exchange for Draft Picks?

CC image from ian_ransley on Flickr.

In the NFL, teams can trade players, cash, and draft picks. The value of future draft picks depends on many things (more on this later), but these picks unambiguously have positive value.

Because of this, is no NFL player untouchable, as his value can be exchanged for draft picks? For instance, say that we could compute a value of 100 points (on some scale) for Peyton Manning. In theory, a team could send 100 points worth of draft picks (maybe that's two picks next year, or maybe that's three years' worth of picks) to the Colts in exchange for Manning, and both sides would be happy.

The value of a draft pick many years down the road has a wide variance. The trading team's record the year before (which determines its draft position), the receiving team's needs, and the overall strength of the draft class are all unknown. Additionally, draft picks in the far future are worth less than draft picks today, because of greater uncertainties and the pressure to succeed today. But presumably teams could discount the value of future picks accordingly and be able to trade gobs of picks for today's star players.

Perhaps star players usually stay put because of the endowment effect. In other words, people put higher value on things they already have. A good example is something like tickets to a big game. If you already have the tickets, it might take $200 for you to part with them, but if you don't have tickets, you might only be willing to pay $100 to purchase them. Your valuation of the tickets is inconsistent, as it depends on whether you already have them. In this case, perhaps the Colts value Manning at 200 points while the rest of the league only values him at 100 points.

Additionally, general managers have an incentive to win now. Maybe it would be smart to trade Manning for three years' worth of picks, but the Colts would immediately suffer in the short term, and the GM might be fired long before the team sees the value of these future picks come to fruition.

Thursday, April 22, 2010

Asinine TV Dinner Instructions

Two things jumped out at me from the instructions on the back of my Healthy Choice Cafe Steamers: General Tso's Spicy Chicken TV dinner.

CAREFULLY remove film from top as PRODUCT WILL BE HOT.
This is pretty standard, but it's still amusingly over-the-top. Anyone with the least bit of life experience knows that items placed in the microwave tend to heat up. (Also, why does CAREFULLY deserve to be in bold, but not PRODUCT WILL BE HOT?)

CHECK that product is cooked thoroughly. Internal temperature needs to reach 165 degrees F as measured by a food thermometer in several spots.
Wow. Some people are too lazy to cook, so they make TV dinners. Other people routinely check the temperature of their meals using a food thermometer in several spots. It's doubtful that there's any overlap between these two groups.

These extremely cautious directions are no doubt a result of the 1994 McDonald's coffee lawsuit. Now, consumers have no one to blame but themselves. You can almost sense the committee of lawyers that oversaw the process. Why else would the directions always refer to your food as "product" instead of "food" or "meal"?

The most litigious among us are ruining it for the rest. There are tradeoffs between how useful and how legally thorough a set of directions can be. For the sake of an extremely small group of people, companies now have to err on the side of caution, sacrificing brevity and clarity for the majority of their customers.

Wednesday, April 21, 2010

Invest in Stocks or Housing?

This is an oldie but goodie, pointed out by many other economists.

Which investment performs better over the long run, housing or the stock market?

Without even looking at the data, the answer has to be the stock market. That's because a home provides you a place to live, or a place that you can rent out to other people, earning rental income.

Stock ownership has no such auxiliary benefits. If the average annual rate of return for housing was, say, 5%, then the average return for stock ownership must be higher, to compensate for the fact that it doesn't directly provide you warmth and shelter. If the average return to stocks were lower decade after decade, there would be no point in investing in them.

(Of course, sometimes the whole thing gets blown out of whack, as it has the past few years. But over the long haul, the above holds true.)

Tuesday, April 20, 2010

Why Is MLB Attendance So Low?

From Yahoo's Big League Stew:

Eight games were played in the major leagues Monday night. Three of the venues being used announced all-time attendance lows. Three out of eight — in one night!
I'm a bit mystified. Bad weather doesn't seem to be the culprit. It could be that the honeymoon effect of new stadiums are starting to rub off (this seems plausible in Seattle, at least). Or perhaps, as I've written before, there's just so much more out there to occupy people's attention these days.

Perhaps baseball has hit a point where it should start lowering prices. Revenue is price times quantity, so if prices drop 20% and attendance increases 30%, the team is better off (not to mention more money from concessions, parking, merchandise, etc.).

On the other hand, Mondays have the worst attendance historically. Baseball already acts accordingly, with most off days on Mondays and Thursdays (indeed, 14 of the league's 30 teams were idle yesterday). Also, demand for Monday games can still fluctuate wildly, depending on the weather and whether the Red Sox are in town.

Why I Don't Like Rating Movies or Books

I would probably be the world's worst critic. For most movies or books, my reaction is either "absolutely love" or "absolutely hate."

George Mason economist Tyler Cowen is somewhat famous for his proclivity for walking out in the middle of a movie, if he feels the rest of the movie isn't the best use of his time against whatever else he's doing that day. While I'm not quite this extreme, I like to think I'll give up on movies or books sooner than most.

(In fact, I think this is the main reason many people don't read books anymore. They get stuck with a bad one and aren't willing to give up on it and start another. Instead, they keep with the bad book, and soon enough reading is associated with pain.)

My polarized view of media seems like optimal behavorial, in terms of personal enjoyment. I overlook the flaws of good movies and remember only the good parts. I might end up dismissing some average movies that are better than I think, but after all, they're just average movies. So what if I miss out on a few three-star films?

Chris Anderson's "The Long Tail" discusses how the task of filtering books and movies for quality has shifted from shop owners and distributors to algorithms and the masses of consumers. Before the Internet, it made sense for corporations to decide what we should read or watch, because of the economics of limited shelf space. Now, the availability of movies and books is essentially limitless online, so many sites rely on user ratings to separate the good from the bad.

But does this constant rating make us worse off? When I saw "The Invention of Lying" in theaters, I throughly enjoyed it. My fiancee was pretty shocked by my reaction. Eventually, after further thought, I was forced to admit that the movie was rather flawed in parts.

I often find myself enjoying movies only to receive the Netflix e-mail asking me to rate it, so that future recommendations will be better tailored to my tastes. Then I begin to weigh the movie's pros and cons, and suddenly I like the movie less than I initially did.

Monday, April 19, 2010

In Which I Plead to Watch Commercials

I have mostly positive feelings toward MLB's iPhone app, but I do have one gripe.

It's great to be able to watch live games on your phone. But once commercials hit, you get the screen above. No commercials, no music, nothing for two minutes.

This is because MLB is giving you the local TV feed of the game (for example, the Dodgers broadcast as seen on Prime Ticket in Los Angeles). The local advertisers are paying to reach the local audience, not a national one.

Of course, one could close the app or switch to a different game, but the network lags involved in doing so make it not worthwhile.

There are many content models that involve a free, ad-supported version and a premium, ad-free version. For instance, you can buy the DVD boxset of your favorite TV show if you don't want to sit through the commercials. Sports differ from scripted shows because they are best enjoyed live, and the frequent commercial breaks come with the territory. The MLB app is one of those rare exceptions in which paying customers would probably prefer commercials, or something else of visual interest, instead of a blank screen.

Perhaps MLB isn't getting the kind of revenue offers it would like for such ads. But any additional revenue, however small, is always good for the bottom line, assuming that the ads would generate more money than they would cost to solicit and stream.

Saturday, April 17, 2010

Sorting Search Results by Speed

Reports TechCrunch:

A week ago, Google announced a change to how its search rankings are calculated. This change will affect every business with a web presence. At the highest level, the change means that a website’s Google ranking will now be influenced by its speed. Faster websites now feature higher in search results, and slower websites drop down in the search results.

Google knows more about the search business than I do, of course, but I have to agree with the TechCrunch writer that this move is a little puzzling. While it would be nice for all Web pages to load faster, the Web is a heterogeneous place.

The writer cites the Web sites of local mom-and-pop stores, which are still likely to be your desired destination despite slow load times. I can think of a few other search queries that I wouldn't want influenced by page load times: when I was looking for grad schools, I wanted the school with the best program, not the one with the fastest Web servers.

On the other hand, if I'm searching for a current event such as the death of a celebrity, I might prefer the faster-loading pages, as I would expect the story to be much the same no matter where I read it.

Friday, April 16, 2010

A Downside to Niche Culture?

Chris Anderson's "The Long Tail" has some stunning implications about how falling costs to create, distribute, and search for media have changed our world from a "hit-based" culture, where everyone mostly reads the same books and watches the same TV shows, to a "niched-based" culture, where an ever-growing list of interests can be pursued in film, music, and literature.

He notes that, because of competition from cable and the Internet, the top TV show today doesn't draw a big enough audience to make it into the top 10 a few decades ago, even though the population has exploded in the time since. Also, the proliferation of Amazon has made orders of magnitude more books available in one place than anyone could have ever perused at a single brick-and-mortar store, yet 98% of the inventory sells at least one copy every quarter.

Now, we have less to talk about around the water cooler and more to talk about with Internet groups that share our increasingly diverse interests. I have much praise for richness of experiences that these niches allow us, but I wonder if we are putting too little emphasis on another important margin for entertainment: sharing and discussing it with others we care about.

The world is much more complex than this, but assume that, in 1960, you could only watch "The Andy Griffith Show." Today, in addition "The Andy Griffith Show," you could instead watch Japanese anime on your computer, or any of four other equally esoteric genres. Are we better off in a world where you can watch Japanese anime, which you immensely prefer to Andy Griffith, and can discuss it with friends online? It's now harder to strike up a conversation with a random co-worker or stranger at the bar, as your potential interests have diverged greatly. Cultural memes have a harder time catching on en masse, as only a small portion of the population will recognize a witty line or inside joke from the most mainstream shows. Is there something to be said for the era of greater in-person interaction, even if it revolved around shows that people only watched because there was nothing else on?

Wednesday, April 14, 2010

Powerless? Speak Up Anyway

I'm presenting a paper in class this week called "Voice matters in a dictator game" (gated link). It was published in Expermential Economics in 2007 and was written by four Japanese researchers, who analyzed a twist on the dictator game.

At first blush, the dictator game seems quite uninteresting: Player A gets $10 to start with, he decides how much of that to give to Player B (keeping the rest for himself), and then the game ends.

In the paper, the researchers asked each Player A to map out a payment schedule to Player B, based on how much Player B asked to receive. Some dictators acted selfishly (or rationally, depending on how you look at it) and kept all the money for themselves, no matter what the request. But on average, the Player B's who asked for 50% of the money received more than those who asked for 10% of the money, who in turn did better than those who didn't voice any request. Additionally, the dictators usually punished their counterparts if they asked for more than half of the money.

If the conclusions of the paper can be extended to broader life situations, we learn that perhaps it's wise to speak up and ask for your fair share, even when you hold no power in the negotiation.

Monday, April 12, 2010

Do Small-Market Teams Have to Outbid Big-Market Teams?

CC photo from Keith Allison.

While I was at Thursday's Nationals-Phillies game (datamine that, Nats tickets office!), a thought occurred to me.

Competition in baseball is biased in favor of the richest teams, who have more resources to bid for the services of free agents, in a sport without a salary cap. But the advantage goes even further: in some cases, a small-market club would have to offer more money than the big-market club for the offers to be equally appealing.

Two offseasons ago, Mark Teixeira signed an eight-year, $180-million deal with the Yankees. Teixeira, a native of Annapolis, MD, reportedly had similar offers from the Nationals and Orioles, who both had finished in last place in their respective divisions the season before.

Being the man for the Nats isn't nearly as cool as being the man for the Yanks. Three games into the season, half of the seats are filled at Nationals Park, and many of those are people rooting for the other team. Meanwhile, being a Yankee means playing in front of sold-out crowds at home and on the road and receiving endless media attention and frequent national television exposure.

Even if money is the only concern, there's no doubt that Teixeira could earn more endorsement money playing in the New York market than he could anywhere else. Clearly, the Nationals would have had to offer much more than $180 million to be taken seriously.

Perhaps this logic only applies to star players. A marginal player may be smart to take an offer from a small-market team, where he can play everyday and hone his skills.

Why Do Restaurants Give You Those Electronic Coaster Pagers?

Many restaurants give guests electronic coaster pagers that buzz and light up when their table is ready. The devices aren't cheap, but they do have an important role of somewhat "locking in" patrons to that particular restaurant.

If the hostess writes down your name and you get sick of waiting, you can discreetly walk out without saying a word and go in search of somewhere less crowded.

Instead, if the hostess gives you one of these electronic pagers, your only ways out are awkwardly handing the pager back to the hostess and telling her to take you off the list, walking off and basically stealing the pager, or just waiting longer than you wanted to for your table.

The hassle associated with the pager of course won't stop everyone from leaving, but it surely stops quite a few. And that can make a big difference at the end of the night for a busy restaurant.

Sunday, April 11, 2010

Should Child Labor Be Illegal in Poor Countries?

I know it's been Steven Landsburg hour around here lately, but I want to share an idea from his book "More Sex Is Safer Sex: The Unconventional Wisdom of Economics" (not my first choice for a book title, I'll admit).

Landsburg argues that rich nations aren't helping the extremely poor in third-world countries by limiting their choices, such as forbidding them to put their children to work:
Being poor means making hard choices, such as whether to work more or to eat less. Neither alternative is terribly palatable, but it requires more than a bit of hubris to suggest that middle-class American and European demonstrators can choose more wisely than the African and Asian families who have to live with the consequences.
He also cites studies suggesting that parents do truly care about their children and want them to have enough to eat, and he points out that child labor drops dramatically as families exit abject poverty.

I'm not sure if my drive-by synopsis did Landsburg's point justice, but it's well argued in the book.

Saturday, April 10, 2010

Mobile Reading Format Makes Novels Less Daunting

A Guardian reader recently wrote a letter to the paper to describe how reading an e-book on his iPhone is much easier than reading a printed book.
So why I had found it easier to read from my iPhone? First, an ordinary page of text is split into about four pages. The spacing seems generous and because of this I don't get lost on the page. Second, the handset's brightness makes it easier to take in words. "Many dyslexics have problems with 'crowding', where they're distracted by the words surrounding the word they're trying to read," says John Stein, Professor of Neuroscience at Oxford University and chair of the Dyslexia Research Trust. "When reading text on a small phone, you're reducing the crowding effect."
I have felt exactly the same way (perhaps I'm a bit dyslexic myself but never realized it). Additionally, I can make the words as large or as small as I want, and I can bust out a few screens between Metro stops without losing my spot.

In the world of printed books, bigger fonts equals more pages, which increases printing costs and makes the book more cumbersome to hold, carry, and fit onto a bookshelf. So the trend was to use the smallest font possible that could still be legible to most people, while jamming the pages full of text.

No such printing cost restraints exist for the delivery of an e-book, so I suspect readers will start to prefer larger fonts. Of course, frequently flipping through screens can be annoying too, but e-bookers are now free to optimize the experience however they see fit.

Friday, April 9, 2010

NYT Reports Most-Looked-Up Words

The Nieman Journalism Lab is circulating a memo from the New York Times that provides a list of the words that its readers are most frequently looking up. Of the 50 words on the list, I recognize only about half.

Although the deputy news editor somewhat addresses this point, using difficult words for the sake of using difficult words should be generally avoided, especially in newspaper copy. Of course, this writerly disease stretches into all disciplines where writing to impress is the main goal, even at the sacrifice of clarity.

While the New York Times audience is more educated than most (and sometimes snobbishly proud of it), an obscure word distracts from whatever point the writer was making. Many online readers will have their attention momentarily diverted to looking up the word, while most print readers will just be left scratching their heads. A few wordsmiths will get some pleasure out of discovering a new word (on the off chance that they, being wordsmiths, don't already know it), but is that worth the inconvenience to the rest of us? Then again, maybe the paper makes more money as a status symbol of intelligence than it would as the standard for clarity, simplicity, and straightforwardness.

Certainly, one could take my argument too far and satirize it by insisting that, by my logic, we shouldn't even use words like "satirize." There's got to be a happy medium somewhere, and I suppose that's why most newspapers aim to write at the eighth-grade level.

And of course there's a difference between using a technical economic, scientific, or medical term that can't be described any other way and using a flashier and more esoteric synonym of a common word just for show.

Thursday, April 8, 2010

Misspellings on Baseball Jerseys

It's going to be a real struggle to justify how this relates to economics, but I've been amazed at the recent trend of misspellings on Major League Baseball jerseys. Last year saw NATINALS on the jerseys of two Washington players, and yesterday a Giants player sported a SAN FRANCICSO uni.

In both cases, the rest of the team played with jerseys that had the correct spelling. I'm admittedly ignorant about the jersey production process, but it's a mystery how one or two jerseys could contain a misspelling while the rest don't. Are the letters embroidered on by hand? Are the jerseys made on an assembly line, with someone typing in the team name each time? I really don't know.

The cynic in me would like to point out that often all publicity is good publicity. There's certainly a lot more people talking about Majestic jerseys lately than there otherwise would be.

Are Unpaid Internships Unfair?

Memoirs of an Economics Student opines:

That is when companies and organizations offer unpaid internships they are favoring students who can afford it, so there ends up being a "price" to gaining experience. So those who are already fortunate enough to have a few thousand dollars saved up or who have families that are able to support them are given privilege in obtaining experience in often prestigious corporations or organizations, that may very well influence the trajectory of their future career paths. Unfair. This crowds in students who already were more privileged (by being wealthier) and leaves the rest of students (the majority) with blank resumes and still struggling to make rent as a barista.
First, while of course the rich have an inherent advantage, unpaid internships shouldn't be outlawed. Young adults from rich families also have an easier time paying for college and graduate school without having to work a full-time job at the same time, which seems to be much the same thing, yet this does not cause widespread uproar.

Second, there is a "price" to everything, even if it doesn't involve money. Working any internship or pursuing any other activity prevents you from pursuing alternative activities (this is known as an opportunity cost).

There is a demand for the work of interns and a corresponding demand for internship experience. It's easy to see how setting a price floor that requires some minimum hourly pay would reduce the number of internships available and make both sides worse off.

This argument reminds me of a blog post arguing that journalists shouldn't work for free or for low pay. Because journalism has many nonmonetary benefits (it's pretty neat to see your name in print), many people still get enormous benefits from freelancing, even if their monetary pay works out to less than minimum wage.

Remember, it's not like anyone is being forced into an unpaid employment opportunity. People would not accept such positions if the benefits to them did not outweigh the costs.

Sunday, April 4, 2010

Building Cars out of Corn

I'm 15 years late to this discussion and don't have anything worthwhile to add to it, but I found this point from Steven Landsburg's "The Armchair Economist" quite profound:
David [Friedman]’s observation is that there are two technologies for producing automobiles in America. One is to manufacture them in Detroit, and the other is to grow them in Iowa. Everyone knows about the first technology; let me tell you about the second. First you plant seeds, which are the raw material from which automobiles are constructed. You wait a few months until wheat appears. Then you harvest the wheat, load it onto ships, and sail the ships eastward into the Pacific Ocean. After a few months, the ships reappear with Toyotas on them.
International trade is nothing but a form of technology. The fact that there is a place called Japan, with people and factories, is quite irrelevant to America’s well-being. To analyze trade policies, we might as well assume that Japan is a giant machine with mysterious inner workings that convert wheat into cars.
Any policy designed to favor the first American technology over the second is a policy designed to favor American auto producers in Detroit over American auto producers in Iowa. A tax or ban on “imported” automobiles is a tax or a ban on Iowa-grown automobiles. If you protect Detroit carmakers from competition, then you must damage Iowa farmers, because Iowa farmers are the competition.

Saturday, April 3, 2010

Say Goodbye to Calif. and Okla.

The Associated Press is changing its style for state abbreviations.

AP style, which is followed by the majority of U.S. newspapers, for decades prescribed a somewhat random set of abbreviations for states, to be used when they appeared after a city name. Now, APers will spell out the name of the state each time. So, it's now San Jose, California, instead of San Jose, Calif. The old list of abbreviations can be found here.

The change makes sense from an economic standpoint. In the early days of modern journalism, space was at a premium for text sent over telegraph wires and on the printed page. Indeed, journalism is famous for eschewing the serial comma to save space.

Now, space is less of a concern, so journalism might as well save itself the trouble of implementing AP's abbreviations. Indeed, the abbreviations were so counterintuitive that they were the basis of many a copy-editing test.

The tradeoff between conciseness and clarity has tilted in favor of the latter. Newspapers are now spelling everything out so as to not leave behind any readers, especially those who don't live in the United States and aren't familiar with state geography.