Feb

8

A randomised trial of mentoring programs for female faculty

Andrew Leigh | 1 Comment

A new US randomised trial suggests that mentoring programs can have surprisingly large effects:

Can Mentoring Help Female Assistant Professors? Interim Results from a Randomized Trial (unstable ungated link, stable gated link)
Francine D. Blau, Janet M. Currie, Rachel T.A. Croson, Donna K. Ginther
While much has been written about the potential benefits of mentoring in academia, very little research documents its effectiveness. We present data from a randomized controlled trial of a mentoring program for female economists organized by the Committee for the Status of Women in the Economics Profession and sponsored by the National Science Foundation and the American Economics Association. To our knowledge, this is the first randomized trial of a mentoring program in academia. We evaluate the performance of three cohorts of participants and randomly-assigned controls from 2004, 2006, and 2008. This paper presents an interim assessment of the programs effects. Our results suggest that mentoring works. After five years the 2004 treatment group averaged .4 more NSF or NIH grants and 3 additional publications, and were 25 percentage points more likely to have a top-tier publication. There are significant but smaller effects at three years post-treatment for the 2004 and 2006 cohorts combined. While it is too early to assess the ultimate effects of mentoring on the academic careers of program participants, the results suggest that this type of mentoring may be one way to help women advance in the Economics profession and, by extension, in other male-dominated academic fields.

What’s striking about this is that the intervention is only a 2-day workshop. I can’t quickly locate an up-to-date reference for the salary value of an top-tier publication, but let’s conservatively guess that it’s $100,000 of lifetime income. Given that participants are foregoing only a couple of days of their own time, that suggests they ought to be willing to pay at least $25,000 out of their own pockets to attend. (Naturally, this only works in partial equilibrium, since there are fixed number of articles published in top-tier journals each year.)

Feb

7

Athens and Rome

Sam Wylie | 5 Comments

The possibility of a sovereign default by Greece has called into question the permanence of the Euro monetary union and of the European Union itself.  Fiscal problems of smaller members are not a big enough problem to seriously threaten the survival of the EU.  Nonetheless, the following question remains unanswered:  Has there been no serious political trouble between EU members since 1945 because of the EU, or alternatively, does the EU still exist only because there has been no serious political trouble between its members?

The European Union has never been stress tested, so we don’t know how strong the union is.  The US started out as a very loose federation after the War of Independence ended in 1783.  The 13 colonies were more like NATO than the EU.  They created a constitution, then federal institutions slowly evolved, and a sense of American uniqueness and manifest destiny grew from 1820 to 1850.  But they were still “these United States” until the fearful test of the union by the civil war.

The core of the EU is tight and I think it will survive for many years.  The Treaty of Rome is fundamentally a political rather than economic union.  The aim of its founders was to end the wars for control of Western Europe that raged on and off from the breakup of Charlemagne’s Carolingian empire in the 10th century until 1945.  WWII was to be the final tragic act, and in particular an end to the wars driven by Prussian militarism.   The core of the EU — France, Germany, Italy and the low countries will likely move to a deeper political union over the next decades.

Germany is likely to have a more prominent and assertive role in the EU as WWII moves further into history.  Germans are reminded very day of their national disgrace, because the modern era is defined by the second world war   Whenever the boundary of the modern era is mentioned — most goals scored since WWII; best prime minister since WWII; largest crowd since WWII — these are constant reminders.  However, the modern era will soon be defined by the turn of the century.  That has been true in every century and is particularly true this century because it begins a new millennium.

When the modern era no longer begins with WWII, then the war will seem a long time ago and it will change how Germans see their place in the world.  I am not predicting a return of German nationalism — not at all, that chapter is closed — but I do think that Germany will take a much larger leadership role in Europe.  We can see that already in the discussions over a bailout for Greece.

The smaller countries of the EU are not so tightly attached and some could fly off over time.  Major political disputes between EU member countries have not arisen yet, nor has there been a major conflict within one member country, but these things will happen eventually.  Disputes between, or within, the newer members are more likely since their borders are more recently drawn and less settled.  Moreover, in the smaller newer members of the EU there are emigre populations that can be the source of great friction.

Regarding the fiscal problems of Greece.  Why would the EU bail out Greece?  That would create a moral hazard problem that would only end when an member is allowed to default — so why start down that road?  There has never been any explicit guarantee of Greek Treasury debt holders by German and other taxpayers.

It is probably best if Greece does default.  Greece is not a global financial institution like Lehman Brothers.  A Greek sovereign default would be similar to the Argentinian default.  Debt holders, including banks will suffer.  Greece will be excluded from global capital markets for a while and growth will be low for a decade.  But it will not be a financial catastrophe.  It would not plunge the world into GFC II.  The sooner that Germany states categorically that it will not bailout Greece, and the EU gives Greece the nod to default, the sooner the resolution process can begin.

The alternative to default is problematic.  Working through the debt means many years of low growth and high unemployment.  It is not obvious that democratic institutions can survive in Greece under that strain.  Greece had a military government for seven years until as recently as 1974.  From the EU’s perspective the economic pain of default is probably better than a fracture in the Greek polity.

A third possibility is that Greece sell some assets.  It is a pity that notions of sovereignty rule out the sale of Greek islands.  It might be better for everyone if Greece could sell off a few islands to pay some of its debt.

Feb

7

Melbourne’s transport non-revolution

Stephen King | 6 Comments

According to today’s Age, Melbourne is about to have a ‘transport revolution‘. After reading the article, I am drawn to a simple question. What is the opposite of “revolution”? Counter-revolution? Anti-revolution? Status-quo dressed up as something new? Whatever it is, Melbourne is about to have one in transport.

Now, maybe I am just a skeptic, but the so-called revolution sounds like the sort of tired old policy I have seen in Melbourne many times before. Try and ration road space on the basis of some sort of command and control system so that vehicles move more efficiently.

The plan, expected to be released by the government this month, centres on the creation of a ”road use hierarchy” that gives priority to cars, cyclists, pedestrians and public transport at different times of the day to improve travel times.

Now that brings back memories – transit lanes, priority tram zones, systems of alternative routes for trucks, cycle paths marked on roads that are close to death traps, priority traffic lights for buses. Indeed there is nothing in the article that we haven’t seen before – in fact many times before. And guess what – while it may give politicians warm and fuzzy feelings, none of it works to significantly reduce traffic congestion. Is this a problem? Well according to the article:

Traffic congestion costs Victoria $2.6 billion every year, but that figure will double to $5.2 billion by 2024 the report warns, unless radical change to road use is embraced.

That sounds like a bit of a problem – $2.6 to $5.2b in congestion costs. (Of course the optimum is not zero congestion costs, so a large number doesn’t prove that this is ‘too much’ but I am happy to go with the article and agree that there is a problem here).

So what is the source of the problem? As the article notes:

”Road space is precious. We’re not getting any more, but demand is soaring … This is a turning point.”

and

the plan would belatedly recognise that road space is scarce and can’t be everything to everybody.

So the problem – road space is a scarce commodity. But for some reason, unlike other scarce commodities, we refuse to charge for it on the basis of use. Instead we deliberately ignore the price system and try to use some form of rationing. And like most rationing systems it ends up in queues – called congestion. Indeed, the queues at the end of the Eastern Freeway in Melbourne in the morning resemble nothing better than the queues of consumers for bread in the old USSR. We used to laugh at those. And yet we put up with the same silly rationing systems in our transport system.

Even worse, we know how to at least partially fix the problem – put on some real time congestion pricing. This would not need to be a revolution. We would simply have to copy some of the ideas that have been tried and tested overseas – for example in London and in Singapore. Even simple charging for peak period road use or a charging ring around the central part of Melbourne could have a significant impact. What is more, many vehicles in Melbourne already have the technology to make such charging simple – it is the same technology that is used on the private toll roads.

Of course we could have a real revolution and use more sophisticated systems such as GPS-based information and charging, for example, for commercial transport.

As the articles lined above point out, congestion charging is not a magic bullet, but it does make a difference. However, it is also politically controversial and takes some political leadership to put it in place.

So two pleas. First, can someone tell me what is the opposite of a revolution? And, second, can we not have one of these again in Melbourne’s transport system?

Feb

7

Of smug and smog

Joshua Gans | 8 Comments

So here in Boston we have moved from a two car commuting family to a single car that is used for incidental activities rather than regular travel. The kids walk to school while I walk and catch the bus to work. Even though it is the dead of winter I have actually sustained this new routine mostly due to the ability to work on the bus with my iPhone. The exercise is doing me good and at some level I am supposed to think I am contributing to the environment.

I also listen to podcasts on the bus as I did when I drove to work. So it was of some surprise that I listened to a recent episode of Tim Harford’s More or Less (while on the bus) about the environmental impact of bus as opposed to car travel. Tim repeats the issue in his FT column today.

According to my colleagues on the BBC’s More or Less programme, cars emit 127g of CO2 per passenger per kilometre and buses 106g, based on average occupancy. Even London buses average a mere 13 passengers.

Add my additional walking to the equation and my emissions may well be higher as a result of this change in activity. Indeed, as I like to work on the bus, I prefer to avoid the crowds. So on the bus I catch at 6:30am there are rarely the average number of passengers.

So what is the environmentalist’s response? It is that the bus “would be running anyway.” The idea is that buses have a regular schedule and so there are going to be times where they are more empty than full and other times where the reverse is out. So the appropriate thing is to look at the marginal rather than the average to work out net impact. As the bus is running anyway but a car would not, buses win.

Tim Harford points out, of course, that the same is true for air travel. Air travel is, for the most part, public transport. So the same argument applies to it: “the plane would be going anyway.”

An admittedly unscientific poll of environmentalists at dinner parties suggests to me that they think “the plane is making the journey anyway” excuse is unacceptable but “the bus is making the journey anyway” excuse is spot on – and that they have no coherent justification for the distinction. Their favourite excuse is “you have to set an example” – but surely, before you decide to set an example, you need to be sure that you aren’t setting a bad one.

The resolution lies in a very tortured argument.

For all you environmentalists out there, then, here is the justification for the double-standard of taking the bus but not the plane: it is that bus schedules might be insensitive to passenger demand, while planes are highly sensitive – and ever more so since the budget airlines arrived on the scene. Your best argument for taking the bus is a perverse one: that, no matter how many people do likewise, it’s the rare public transport tsar that will lay on extra buses.

The idea is that airlines and bus authorities put on buses to match demand. But airlines are in a competitive market environment while buses are managed by public authorities who are really bad at putting on extra buses. I’m not sure what the empirical evidence really is for that potential out but it strikes me that it could also go the other way. Public authorities have trouble cutting the 6:30am bus that a private company would happily do away with. In some countries, buses don’t leave until they are full — that is the market system at work.

This all suggests that just like we have ‘time of day’ airline pricing we need ‘time of day’ bus pricing. I should pay for travelling on my average emitting bus more than I would pay for stuffing myself into a crowded one. The interesting question is whether I would end up contributing to emissions less once all of this is in place. For the moment, there is no reason for me to be smug but I do enjoy being able to work while commuting.

Feb

6

Swiss bank records: Private property or state evidence?

Sam Wylie | 3 Comments

Over the last decade ethics has come to be taught as a separate subject at every major business school.  I have mixed feelings about that.  On one level I think it is inappropriate, even bogus.  The average age of MBA students is about 30 years.  If people don’t know the difference between right and wrong by that age then what can business schools do about it.

My classes don’t have much discussion of ethics in them.  I believe that ethics can only credibly be taught by either philosophers, since philosophy directly addresses the question of how we should live and how we should be governed, or by people who have lived a highly moral life and therefore have the personal authority to instruct others.  Lets be clear, ethics and morality are the same thing.  But, of course, ethics courses are never called morality courses.  I don’t  have the intellectual of moral authority to teach students about ethics.

On the hand change in our society is rapid.  We need a continuous, high level discussion of the ethical/moral issues that arise in the evolving business environment.  Business schools are an important part of that discussion because of their thought leadership, impartiality and academic freedom.  So, I don’t know.  I guess I support the teaching of ethics in business schools, so long as right people do it, and so long as ethics is recognised for what it really is — morality.

The German Government’s purchase of a list of names of secret Swiss bank account raises some interesting ethical questions. Read more

Feb

5

The $9.99 eBook

Joshua Gans | 1 Comment

Well, Amazon’s tiff with Macmillan ended in tears (for Amazon). My hunch is the lawyers quickly acted on antitrust concerns. But what should readers think of all this?

The issue is somewhat complicated. The straight out economist in me likes that idea that Amazon is really just a re-seller and delivery mechanism for books and that the price the consumer should see is the one the publisher wants (actually, I’d like it to be what the author wants but let’s not get crazy). The reason is that this avoids the double mark-up problem and ensures that Amazon is paid based on units sold rather than the book’s quality.

But there are other considerations. First, $9.99 for a book may make it a ‘no brainer’ purchase just like those $0.99 iPhone apps. In that case, pricing above that could see a dramatic loss in sales. That is something Amazon is thinking about but if that is really the case, the publishers will come into line anyway and it is unclear why Amazon should care more or less than them about eBook sales. In each case, they have paper book businesses and if anyone thinks that the Kindle as a device is going to earn Amazon money on its own, they’re dreaming.

Second, there is the issue of piracy. What will it take to pirate an eBook? Once you have worked out how and have a device that can accommodate pirated books, then it should be really easy. But that is the issue: you have to work it out. The issue with music and videos is that consumers worked it out prior to content providers getting with the program. Once consumers have sunk those costs, it is all too late.

Now arguably, Apple’s $0.99 price insistence for music stemmed the tide. Not because of the $0.99 itself but of Apple’s commitment to some sort of price. With that knowledge along with an easy to use system, those who hadn’t invested in pirating technology, may well have chosen not to. The move away from DRM has made that so much easier by getting rid of some annoyance.

The problem publishers face is that they now have no similar commitment mechanism. Amazon wants to hand them one and maybe Apple will do so as well at a higher price point. But if they want the free option of being able to set prices ‘at will,’ consumers will be more tempted to expend the costs in working out how to pirate and not pay anything at all. Only a price commitment that, yes, gives consumers a better deal than hard copy books, will be able to accommodate that. And if you think normal trade eBooks are the big game here, think again. Textbooks is where the real threat lies. Let’s hope the $49.99 textbook price commitment comes soon.

Feb

5

Miscellaneous links

Andrew Leigh | Leave a Comment

Nearly every ranking of economics journals uses citations to measure and compare journals’ research impact. Raw citation data, however, include a number of factors that generally are thought to mismeasure impact. For example, under the view that a citation in a top journal represents greater impact than a citation elsewhere, it is usual to weight citations according to their sources. The most common means by which weights are derived is the recursive procedure of Liebowitz and Palmer (1984) (henceforth LP), which handles the simultaneous determination of rank-adjusted weights and the ranks themselves.

Alas, the lists to be used by the ARC in assessing research under the ERA (including the economics list) have eschewed this approach. Instead, they’re using the pre-1984 method of ranking journals by asking senior people in the field wot they reckon.

Feb

4

Unhappy state of the union

Sam Wylie | 5 Comments

I have a feeling that the loss of the Ted Kennedy’s Senate seat last month is the first rumble in an anti-incumbent earthquake in the US.  There seems to be growing feeling of exasperation among the US public about the recklessness and incompetence of whoever they send to Washington.  Democrat and republican voters alike will express their dissatisfaction with the state of the union by voting against incumbents even if the means voting against their own party.

The US Federal budget deficits are a key part of the fecklessness of Congress and the last two administrations.  In President Bush’s first budget, FY 2002, US Federal Government spending went through $2 trillion for the first time and revenues were about $1.9 trillion. President Obama’s 2011 budget has spending at $3.8 trillion and revenues at $2.5 trillion.  Spending up $1.8 trillion and revenue up $0.7 trillion.  The AFR quotes Obama as saying on Tuesday that “It is time to save what we can, spend what we must and live within our means once again“.  At the same time he announced that the budget deficit will be $1.3 trillion in 2011.  The President may actually believe that his statements and actions are congruent, which is pretty frightening.   Read more

Feb

2

The fiscal cap

Joshua Gans | 22 Comments

The Coalition have announced their climate change policy. It certainly isn’t cap and trade. The question is: what is it?

The main part is an Emissions Reduction Fund. It appears that this is a fix pot of money that the Coalition will then spend via a tender process to identify projects that will reduce emissions, not involve price increases to consumers, protect Australian jobs and need the funding. What this appears to mean that the Coalition will ‘pay for carbon’ and cap the total pay. It is a ‘fiscal cap and stay.’

But that only appears to be part of what the fund is for. It also looks set to pay businesses for emissions reductions below their historic average. If they agree to reduce emissions, they will be paid for the reduction. It is not compulsory for small businesses.

That said, the Coalition will hold the line at the status quo. Businesses who exceed their current emissions will incur a penalty. Aside from the obvious issue that this puts an amazing weight on working out what ‘business as usual’ actually is for each individual business what if they can actually do that? Does that mean a polluting business can’t expand? Not quite. So long as they can justify it as ‘best practice.’ In other words, it isn’t a ban but a regulatory hurdle. It is claimed that this will be less complex or bureaucratic than Labor’s proposal, although it is hard to see how. It is also, by its very nature, hard to scale up if a target of more than 5% is required by international agreements. (That said, it makes it much harder for Australia to be part of such agreements too).

This approach of setting a budget and then somehow allocating it to a grab-bag of projects is a difficult task. In the bizzaro world we are living in, it is the sort of thing that those who have great faith in governments recommend. By faith I mean in the ability of governments to gather accurate information and allocate funds in a way that doesn’t encourage rent seeking. Call me crazy but this proposal seems a textbook example of how not to do things when you note that in the real world, there is a governmental knowledge cap and a flow of funds to industry in a way that would surely be difficult to account for — even if you can somehow make it transparent. It throws two decades of public sector management improvements out the window.

I had previously called Abbott an environment-hater. In retrospect, I realise that can’t be the case. After all, how can someone willing to expend so much in economic inefficiency for the sake of the environment, hate the environment? The Coalition policy caps the government’s fiscal commitment to climate change but not the economic commitment of the economy. It is still unknown how costly that economic commitment will be and hopefully we will never have to find out.

Feb

2

Update on Gene Patents (June-Dec 2009)

Kwanghui Lim | Leave a Comment

Rachel Goh has put together a news and research update on gene patenting, covering the second half of 2009. Rachel is a medical student at Melbourne University and works at the Centre for Eye Research Australia. She helps us regularly on MBS & IPRIA research projects. Due to the large number of links in the article, I am not including the full text in this post to avoid it being blocked by email filters. Please follow this link to read the article and post your comments: http://genepatents.info/2010/02/02/update-on-gene-patents-june-dec-2009/

Feb

2

The iPad Evolution

Joshua Gans | 5 Comments

There is already talk that the 10 inch iPad is just the beginning and more stuff is on the way. Here is what I think will happen. The touch screen will be integrated into the MacBooks and iMac. But it won’t work on the Mac OSX side. Instead you will touch something and the screen will flip into an iPad mode. For a MacBook you can then operate it like an iPad or switch and use it as a laptop. They will share files and disk space but that is likely to be it. That way you can carry around a MacBook and iMac as an all-in-one device. Add to that some MicroSIM card and some network unlocking and you will then have a laptop you can use overseas at reasonable data rates. All speculation but it makes sense to me at least.

Feb

2

The Size of Nations

Andrew Leigh | 7 Comments

Ever wondered why there are so many countries in the world? My AFR op-ed today attempts to provide an answer. Full text over the fold.

Read more

Feb

2

Is 35 million enough?

Sam Wylie | 7 Comments

I read Treasury’s 2010 Intergenerational Report today.  There are a few good graphs and tables.  The discussion of historical fertility rates in Australia and the collapse of birth rates from 3.50 children per woman in 1960 to 1.8 per woman in 1980 is interesting.   The description of the age distribution of immigration is interesting.  The comparison of Australian labour force participation rates with other countries is illuminating.  But overall, for such an important topic, there isn’t much that is new or profound in the report.

But at least the anticipation of this report, and its prediction of an Australian population number by 2050, has sparked some discussion about Australia’s population dynamics.  The fact that Australia’s population might grow to 35 million persons by 2050 is not in itself surprising.  The (geometric) average growth rate of population over the last 100 years has been 1.8%, so forty years of growth at 1.2% per annum would be nothing new for Australia.   What I find surprising is the stridently negative reaction from several quarters to a forecast of 35 million.

Read more

Feb

1

The new filters

Joshua Gans | 1 Comment

Clay Shirky, in his usual provocative way, talks about the problem of filtering — as it has always existed — in the face of information overload.

This is related to things I have been thinking about. In the olden days, publishers and booksellers were the big filters. There was also a role for reviews in the mainstream media and some social networking. This is how you chose what books to read. What is interesting is that the vast majority of the filters were from interested parties — people who wanted to sell you books. We passively just let this filtering process take place with the idea that reputational mechanisms and learned behaviour would keep the filters honest.

Today this whole set has changed. There is a vastly more diverse set of people who provide information that assist you in choosing books (among other things). The publisher and bookseller have been reduced in their importance. Bloggers, reviewers etc (to be sure they were always there in some form) have become more important — especially when facilitated by Google searches. The problem is that there hasn’t been enough history for most of these sources to have built up a trust relationship for quality. There is pollution both of quality and also likely hidden conflicts of interest. For instance, I can claim my independence but I have my own biases and views and these influence what I review and how I review it. How that is of relevance to you is something you have to learn and if you have got here on the basis of a Google search, then what do you do?

iPhone apps are instructive here. For the most part, it is a new market — people were not buying software in this quantity before. But where are the publishers? We may know about EA games but the rest are new. The best source is what Apple is providing at its storefront. This is the publisher and the filter although they are not disinterested and we have little guidance as to what determines what gets there. The other filter is provided by Apple but is different — it is revealed preference in the market — the top downloads lists. But that has other issues. Finally, there are some blogs and mainstream media that provide pointers. But which ones there are ones that you can trust? It is really hard to tell. I used to monitor all app releases but have given up and now use a few sites that review a few things for news. Am I missing stuff? Undoubtedly. But the equilibrium filter is not there yet.

The filtering issue was at the heart of the Wikipedia/Britannica debate. Britannica could not fathom that they lost the filter prominence so quickly given that they had the reputation and, in many respects, still do. But the filter is not just about that but about ease of access and here Wikipedia wins hands down.

Anyhow, I can recommend this Clay Shirky video; if only for the way in which this is all working on Facebook.

Feb

1

Amazon and Macmillan

Joshua Gans | 8 Comments

Want to buy the original Macmillan published version of the General Theory today from Amazon.com? You can’t. Amazon has deleted it and every other Macmillan title from its store over a dispute between Amazon and Macmillan over eBook pricing. Let me repeat: every book not just eBooks for the Kindle. So if you wanted to by the latest from Orson Scott Card, as I did, you have to go through other retailers. I don’t have a Barnes and Nobel account but may get one today because what I liked about Amazon was that it was likely to have every title.

It is hard to understand what is going on. This post is as informative as it gets. It looks like Macmillan would like to charge more for its eBooks and to receive a greater share than Amazon is willing to give. Fair enough. In other places, that has led to titles being removed that are part of the dispute. But to extend that to the bigger and otherwise stable broader book market is a more troubling move. Of course, the deletion is only for the US. You can still get Macmillan books from Amazon.co.uk, for example. This indicates that Amazon is willing to use whatever power it may possess in book retailing in general to get what it wants in eBooks in competition with many new, but less well-known, entrants.

This happened in Australia, not in books, but in bread. Safeway in Victoria deleted entire lines of bread from a given manufacturer from its stores when smaller outlets were found to be discounting standard loaves. The Federal Court found that to be an anticompetitive act and Safeway faced substantial penalties. Amazon is surely heading down that path itself.

[Update: confirmation of all this from Macmillan].

Jan

31

“Legal fiction” and “nexus of contracts”

Sam Wylie | 2 Comments

In the “Sons of Gwalia” decision the High Court gave shareholders who could prove that they were misled by the firm before purchase of their shares the same status as unsecured creditors in the windup.  The Federal Government announced earlier this month that it will overturn the Sons of Gwalia ruling through legislation.  Most financial economists consider the High Court’s decision a very poor judgement which would ultimately damage the corporate financial sector if it was allowed to stand.

The main problem is the uncertainty introduced by the Court.  The Court arbitrarily changed the priority of claims on the cash flows and assets of the firm.  Before the decision all shareholders are treated the same in the wind-up of the firm.  Shareholders have the residual claim and all shareholders had the same claim.  The court changed this by elevating a sub-group of shareholders to the level of unsecured creditors.  This gain for the subset of shareholders was at the expense of the original unsecured creditors — which seems to make no sense at all.  The remaining shareholders are not punished because their claim remains worthless.  The High Court’s decision created uncertainty and punished the innocent (the unsecured creditors), for no gain.

The decision also ignored the symmetry between shareholders who bought shares on the basis of false information and those who chose not to sell shares on the basis of the same information.  Surely shareholders who chose not to sell have the same grievance.

Read more

Jan

29

AFL and the soccer world cup

Sam Wylie | 20 Comments

The AFL (the Australian Football League) has a big stake in the bid to host the soccer world cup in Australia in either 2018 or 2022, and it can influence the outcome, so how should the AFL play its hand in this game?

I think the best result for the AFL is for the bid to simply fail.  Australian rules football and soccer are competitors for players, fans, sponsorship and government support.  This is not a win-win situation.  If Australia hosts the world cup then some kids who would have played football will instead play soccer; some viewers will switch from watching football to watching soccer; some sponsors will switch; a whole season of football will be disrupted; and the building of rectangular stadiums will not help the AFL one iota.  It is silly to say that a winning world cup bid would help all codes — if the world cup comes to Australia it will diminish the status of Australian rules football.  Soccer is like an introduced species — beautiful in its own environment but a threat to the indigenous species of football in Australia.   Read more

Jan

28

The iPad Revolution

Joshua Gans | 10 Comments

Yes, I know some of you rolled your eyes at that but I am now going to remind you all of a prediction I made when the first iPhone was announced three years ago.

2. Apple will release a tablet device that will be a large version of the iPhone designed to accommodate easy web and email viewing as opposed to pocketable portability. It will probably include a camera the other way for video conferencing and integrate with Apple TV (anyway you might figure). I wonder if it will slot into a fridge but there is a chance that it may be part of a new iMac with separating screen.

3. All MacBooks will migrate to a touch screen option and will have a GSM or Edge integrated option.

4. There will be a GPS navigation version with iPod included specifically for cars.

5. And, finally, for my big hope: an ebook reader that will do to books what the iPod has done to music.

OK we are not quite there but there is something quite natural in the evolution of these devices. But here is why the iPad will be a revolution.

  1. eReading will now take off. The iPad will offer Apple’s store but also the Kindle and probably many others as well through applications. Apple may end up controlling the hardware but that is far from a given as eInk still has the quality that it has long battery life and you can use it on planes during take off and landing.
  2. eMedicine will now work. The idea is that doctors should be able to enter reports and get access to data at the hospital bed rather than transcribing back to computers. This will change the way health is practiced.
  3. eEducation will get a big lift. The iPad is the natural education device for the classroom. Children as young as one can understand a touch screen but the key has been having a larger screen that did not require as much dexterity. This is now solved. All they need now is flash so that sites such as starfall.com will work. Think also about the drawing apps.
  4. The end of DVDs: this is it for DVDs. The only thing holding back their destruction is that the iTunes store is so proprietary. Once that goes, there is no need for a portable DVD player and the iPad will simply plug into televisions as a substitute.
  5. Presentation computers. We will have no computer in the classroom for lectures. This will be the device we use for PowerPoint and other demonstrations. If we need a computer application, we can use logmein to access one elsewhere.
  6. The newspapers may be saved. OK this is harder to think about but my speculation is that the format for reading will be comfortable and will be a paid subscription. Moreover, the newspaper will be browsed again so advertising will come back as being more effective.
  7. New games: iPhone games are impressive but only a few really work on a small screen. The larger screen will open up more games — especially board games and games like Air Hockey among others.

I could go on but you get the point. This device creates options that have not been there before and given the price point, the potential to become widespread. What I don’t think will happen is a camera and that whole videoconferencing angle. The camera on a computer is never flattering and I just don’t think it will work for people on a handheld device. Apple’s camera ambitions will grow off the iPod and iPhone.

Jan

28

iPad: The breakthrough is the economics

Joshua Gans | 5 Comments

Apple announced its iPad this morning. It is a big iPod that also serves an eBook reader (through iBooks) and also runs iWork (which will make it the presentation tool of choice). Amazing though all that is, it is not the true breakthrough. The amazing thing is the economics. It will have an optional 3G plan with $14.99 per month for 250MB but just $29.95 for unlimited in the US. It is incredibly cheap. Now usually you would think that this would be made up for by an expensive price. However, the baseline iPad costs just $499 with the top of the line one with 3G and 64GB, it is just $829. Moreover, it is available worldwide and is unlocked. Basically, Apple is pricing for a mass market and is now acting like a major rather than the niche company. And so it should. But with technological leadership and such a lead in the market, it is difficult to imagine competitors getting anywhere anytime soon.

Jan

28

Carbon offsets in The Age

Joshua Gans | Leave a Comment

My co-author, Vivienne Groves, has an opinion piece in The Age today on carbon offsets and the potential problems that may arise if the Government is not vigilant in ensuring that they are actually doing their job. The opinion piece is based on our joint research. The latest version of that paper is available here.

Jan

27

Now there’s an idea people should copy

Andrew Leigh | 1 Comment

Most of the time, low-cost interventions have barely any impact. So it’s refreshing occasionally to read about small things that make big differences, particularly when the results come from a rigorous randomised trial. From the Dee-Jacob economics of education factory…

Rational Ignorance in Education: A Field Experiment in Student Plagiarism (stable gated link)
Thomas Dee and Brian Jacob

Despite the concern that student plagiarism has become increasingly common, there is relatively little objective data on the prevalence or determinants of this illicit behavior. This study presents the results of a natural field experiment designed to address these questions. Over 1,200 papers were collected from the students in undergraduate courses at a selective post-secondary institution.

Students in half of the participating courses were randomly assigned to a requirement that they complete an anti-plagiarism tutorial before submitting their papers. We found that assignment to the treatment group substantially reduced the likelihood of plagiarism, particularly among student with lower SAT scores who had the highest rates of plagiarism. A follow-up survey of participating students suggests that the intervention reduced plagiarism by increasing student knowledge rather than by increasing the perceived probabilities of detection and punishment. These results are consistent with a model of student behavior in which the decision to plagiarize reflects both a poor understanding of academic integrity and the perception that the probabilities of detection and severe punishment are low.

Jan

27

Value-Added NAPLANs?

Andrew Leigh | 14 Comments

On the eve of public reporting of NAPLAN tests throughout Australia, Ben Jensen (ex-OECD, now running the education program at the Grattan Institute) has a new report on the topic. His key argument is for value-added scores (which will be possible when/if we get 2010 test data). The money quotes:

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Jan

27

Are the AFL and NRL subject to antitrust?

Stephen King | Leave a Comment

This is not quite the question before the US Supreme court. But the Court is looking at the NRL’s and AFL’s US equivalent, the NFL. A recent story on the case is here.

The US case raises a variety of issues. The US court is looking at whether the league, which has independently owned teams, is really a single entity from an antitrust perspective.

[T]he bigger question was whether the NFL should be considered a “single entity” — rather than a collection of 32 independently owned teams — and thus shielded from the Sherman Antitrust Act. A single company cannot be guilty of conspiring with itself to harm consumers.

Change the name of the league and insert Trade Practices Act (s.45) insterad of the Sherman Act and you have the same issues in Australia.

There have been some previous decisions on Trade Practices and the football leagues. in the 1996 Superleague case, Burchett J found that rugby league competed in a broader market against other ‘entertainment’ although the precise limits of the market were not stated. But this doesn’t mean that the clubs in either the AFL or NRL are exempt from the laws on collusion. Further, during my time at the ACCC, I can’t remember seeing any applications by either league asking the ACCC to authorise any conduct that would potentially be illegal.

Now, there may be old authorisations dating back to the Trade Practices Commission days. And there are certainly some earlier court decisions that I am not familiar with. So the lawyers reading this may tell me that it has all been sorted out. But if not – well the best new spectator sport for our football gurus may be watching the US supreme court.

Jan

27

Disclosure versus prohibition

Joshua Gans | 2 Comments

In the NYT, John Tierney looks at whether academic scientists should be ’scored’ on terms of purity based on whether they have received corporate money or not.

Sure, money matters to everyone; the more fears that Dr. Pachauri and Mr. Gore stoke about climate change, the more money is liable to flow to them and the companies and institutions they are affiliated with. Given all the accusations they have made about the financial motives of climate change “deniers,” there is a certain justice in having their own finances investigated.

But I don’t doubt that Mr. Gore and Dr. Pachauri would be preaching against fossil fuels even if there were no money in it for them, just as I don’t doubt that skeptics would be opposing them for no pay. Why are journalists and ethics boards so quick to assume that money, particularly corporate money, is the first factor to look at when evaluating someone’s work?

He points to laziness — it is easy to point to conflict and assert this causes conclusions — and to snobbery — conclusions that are above “trade” are intrinsically better. The problem is that, in each case, this pressure leads to a prohibition (sometimes voluntary and sometimes mandatory) on the acceptance of corporate money. If all such money corrupts that might be justified but let’s face it, it is likely that the vast majority of corporate financed research is just as rigorous and dispassionate that research funded from other sources. This is something Derek Bok argued in a book (Universities in the Marketplace: The Commercialization of Higher Education) I read, recently.

Tierney suggested disclosure or transparency as an alternative:

Instead of stigmatizing certain kinds of research grants, perhaps we should consider the bigger picture. If scientists listed all their public and private donors on their Web pages, journalists could simply link to that page and let readers decide which ones are potentially corrupting. Instead of following rigid rules to report “conflicts,” journalists could use their judgment and report only the ones that seem relevant.

This is, of course, something that should definitely occur. However, I wonder if it will solve the problem. The stigma may still remain. What we need is some careful study to see whether the stigma has any basis and to consider why academic standards of peer-review may not be doing their job and ensuring quality regardless of source.

Jan

26

Let It Rain

Andrew Leigh | 2 Comments

I have a new ANU working paper out, titled ‘Precipitation, Profits, and Pile-Ups’.* It arose from an ongoing debate with my wife. She loves it when it rains. I’m normally a bit grumpy about rain. So when she rejoiced about how good rain was for the garden, I’d counter by saying that it made the roads more dangerous. Sure, the vegies are growing better, but how about all those awful crashes?

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