• Recent Comments

  • Jacques Chester on Lasers and the NBN
  • Mark Crosby on China’s minimum wage
  • Dave on China’s minimum wage
  • Sam on The limits to evidence based policy.
  • Mark Crosby on Should I leave Australia?
  • Bruce Bradbury on The limits to evidence based policy.
  • Paul Frijters on The limits to evidence based policy.
  • labor Outsider on The limits to evidence based policy.
  • Paul Frijters on Post-mortem on the RSPT II: observations and lessons
  • Paul Frijters on The limits to evidence based policy.

• Recent Posts

  • Have the economic/strategic lessons of WWI been learned? How the West is handling the emergence of China and India.
  • China’s minimum wage
  • The limits to evidence based policy.
  • Should I leave Australia?
  • The social information ideal?
  • Want to know more about market design?
  • Post-mortem on the RSPT II: observations and lessons
  • Population and Growth
  • You can’t go wrong with ‘dynamic’
  • A couple of stories
  • Lasers and the NBN
  • What is market design anyway?
  • Economic consensus, tell him he’s dreaming
  • Bank Regulation
  • non price increasing carbon taxes

• Popular Posts

  • Mathtype in Word 2007
  • China’s 2009 GDP growth
  • House price predictions
  • Exchange Rate forecasts
  • Free Insulation
  • Tax multipliers
  • Free insulation, yes pay nothing!
  • What’s “normal” anyway?
  • Bolt on electricity
  • Health insurance changes

• Twitter: Joshua Gans

  • @rurounimaikeru that's the way. 98 or so more to go 11:43:49 AM July 28, 2010 from Twitter for iPhonein reply to rurounimaikeru
  • Why I’m Hoping My Son’s Kindergarten Teacher is Good http://j.mp/cwOgoU 11:30:19 AM July 28, 2010 from Reeder
  • Sharing ... Who Pays For Credit Card Rewards? http://n.pr/9N1utH 08:19:06 PM July 27, 2010 from twitterfeed
  • Scott Adams replicates Paul Romer's idea. http://bit.ly/9rdwoa 04:55:08 PM July 27, 2010 from TweetDeck

• Readership

  

Last week MBS hosted a public seminar on “Who Owns the News?” exploring the impact of the internet on the news industry. The event was organized by IPRIA, CMCL and MBS CITE. It serves to clarify the key issues and lays the groundwork for a discussion of these issues. I had fun and hope that the 110+ people who attended it did too.

Sam Ricketson, Professor at Melbourne Law School, chaired the event and did a great job orchestrating the Q&A session. Mark Davison from Monash spoke about changes in copyright law and expressed concerns over the “Hot News” doctrine, an approach currently being proposed by news organizations in the US to prevent others from copying their content. Stephen King outlined the economic issues and has posted his very thoughtful comments at http://economics.com.au/?p=5909.

As the discussant, I described what I had learnt from Mark and Stephen and also tried to consider various options faced by a CEO in this industry. My pdf slides are at http://works.bepress.com/kwanghui/18. While my comments might have been perceived as pessimistic by Stephen and others, I am actually quite optimistic about the future of the industry, but mainly for individuals and  firms trying out innovative ways of gathering and delivering the news. I am however pessimistic about existing firms: if history has taught us anything, it is that many of them will struggle to adapt with these drastic changes.

The video recordings for “Who Owns the News?” are now available. I have posted them at http://vimeo.com/album/253549. Portions were removed to protect the identity of audience members. We thank the speakers for permission to share their insights online. Enjoy the show

Last year David Weston and I wrote a teaching case on how in 2000, NTP sued Research in Motion (makers of the popular BlackBerry device) for infringing its patents that cover the wireless delivery of email (free download from WIPO). Well, NTP is at it again, and has just sued a number of firms including Apple, Google, LG, Motorola, HTC and Microsoft that make smartphones. The Washington Post has a brief description of the patents. The earlier case ended with a $600+ million settlement, but that large amount was partly the result of (a) RIM was found to have willfully infringed NTP’s patents and attempted to deceive the court when presenting evidence of “prior art” in 2002, and (b) as the case escalated, RIM faced the very real threat of having its US operations closed down in 2005. A number of the original patent claims were subsequently revoked, but I imagine that NTP is hoping that the larger base of email users these days will give it enough licensing revenue from each of the mobile operators. If you haven’t heard of NTP, that is because the company is sometimes thought of as a patent troll and is not well-loved. In my opinion, the lawsuit also highlights a more subtle problem with the patent system. When successful firms like RIM and Nokia choose to settle with companies like NTP, it gives NTP an incentive and the financial resources to then attack a broader group of other firms. A precedence is also set. It would be better if such firms fought back, e.g., by establishing prior art that invalidates such patents or by pushing back on the claims.

News from Singapore this week made it all over the internet. A group of five diners were charged S$1224 (AUD1039) for a steamed fish at the new Resorts World casino. They had earlier ordered a different fish (which was presumably less expensive) but the waiter suggested a substitute without identifying the price. The diners later complained and received a 15% discount. But there are lots of people complaining online that the fish usually costs $6 per 100grams instead of the $60 per 100g charged by the restaurant.

It may sound a bit harsh, but in my opinion the diners exhibited a lack of bargaining skills. I would have refused to pay any more than for whatever fish it was the substitute for, after all it was the restaurant’s fault for running out of stock. It is also evident that the restaurant manager needs to do an MBA. It is a failure in marketing if people are complaining about your firm’s prices based on the cost of the raw materials used. My former MBA students would have learnt that in a well-run restaurant, customers would be happy to pay for the skills of its chefs, quality of the dining experience, and the ambiance. After all, if you’ve dropped by a high-end restaurant in Japan and eaten fugu (poisonous pufferfish), a price like US$100-200 per head is not unreasonable.

Singapore, June 30, 2010- THEY feasted on a fish named sultan – and were made to pay a king’s ransom for it. Well, not quite a king’s ransom, but a whopping $1,224 for that single steamed fish dish. And the bill left a sour aftertaste. The diner, who only wanted to be known as Mr Liu, 35, had taken his four friends to Resorts World Sentosa’s (RWS) Feng Shui Inn restaurant on June 12. The group had initially wanted marble goby, better known locally as soon hock, but the waiter said there was no stock for the fish. The waiter suggested the white sultan fish instead. The group agreed, without asking how much the dish would cost. They were stunned when the bill arrived. The single sultan fish, which weighed 1.8kg, set them back by $1,224. Source: http://soshiok.com/article/12333

ps: remember to ask the price before ordering at a restaurant.

In today’s headline news, the Auditor General reports that the crime rate is falling on Melbourne’s train system (e.g., see here and here). The number of incidents has remained roughly the same, while the number of commuters has gone up. So, the Transport Minister says there is more crime but the trains are safer . The Auditor General seems concerned that “Victoria Police had failed to carry out promised pilot projects designed to minimise passenger perceptions of danger on railway stations and trains”. Shouldn’t they be catching crooks instead of manipulating customer perception?

Well, if we want to play this game of statistics, here are a few additional things to consider. Many crimes probably go unreported raising questions about data reliability, but lets put that aside for a moment. The Age reports that the crime rate on Melbourne’s trains is 33 per million passengers. I did a quick web search and wow! that figure seems to be pretty high. In Boston last year there were 827 major crimes on the MBTA system out of 350 million trips, making that only 2.2 crimes per million, way below the 33 in Melbourne. Even if we only consider assaults as “serious crimes”, which TheAge reports is 17% of the incidents, that works out to 5.6 assaults per million trips. I don’t have time to find data for lots of other cities, but it appears the New York subway carries over 10 million passengers/day and sees only 5.6 crimes per day, while on the Washington Metro it is about 4.35 per million riders. Is Melbourne’s train system really that safe?

A more sensible approach is to accept that crime happens on the train/subway systems of every major city, and to try and tackle the problem. Statistics could be used constructively. For a start, explore the distribution of criminal activity. Melbourne’s trains radiate outwards from the city center and some train lines go through neighborhoods that are much more crime ridden than others. So we should be looking at the rate of  criminal activity  on each line separately instead of the average across the whole system. Even better,  identify the  location and type of criminal activity in each line segment and station, and do data mining to figure out behavioural patterns. This should inform counter measures, e.g., by putting officers on duty, adding surveillance cameras,  anticipating risky situations, etc. This way, the Police might even earn the respect of commuters, instead of just hoping to manipulate their perceptions of safety.

Last week, IPRIA organized a public seminar on the banning of tobacco logos. I have just posted videos at http://vimeo.com/album/232376. Drop by for an interesting debate on private versus social costs, Government policy and WIPO/TRIPS. Details of the seminar and Powerpoint slides from each presenter are on the IPRIA website.

The Australian Government recently announced its intention to ban the use of artwork and logos in the branding of tobacco products, effective from 2012. In this seminar, four distinguished speakers, comprising: Professor Mark Davison (Law, Monash University); Professor John Freebairn (Economics, University of Melbourne); Associate Professor Angela Paladino (Marketing, University of Melbourne) and Mr Tim Wilson (Institute for Public Affairs), consider the economic, legal, ethical and marketing implications of this decision.

Today the Government released a report by McKinsey and KPMG suggesting it could build a National Broadband Network — without Telstra — for about $43 billion. There are potentially strong benefits of widespread public access to the internet, even if these benefits are hard to add up and may not be realizable today, especially for faster broadband speeds. One of the features highlighted in the new report is open access at a low price, around $30 wholesale for the cheapest tier, which would translate to about $50 retail. In an interview with ABC News Radio this afternoon, I was asked if this really is an attractive price. By today’s standards, it does seem low. However there are two important assumptions being made. First, there will be no cost blowouts beyond the mild scenarios outlined in the report (try not to think of Myki). Second, that $50/month will still be attractive when the network is ready in about a decade. Let us not forget that even over the past few years prices have fallen dramatically. OECD data shows that a broadband plan in Australia costing $130/month in 2005 only cost $70 per month in 2008. Prices are falling across the world and this trend is likely to continue: telecommunications technology (both wired and wireless) is experiencing rapid innovation. I’m not saying that the Government should not proceed but that we should view these projections with a bit of caution.

A separate issue is whether Telstra is likely to partner with the Government on this project. They have to decide by June. While there are potential cost savings involved, I suspect it is unrealistic. Leaving aside past personality issues and legal threats, the reality is that both parties have different objectives. The government wants to offer broad-based access at a low cost, including to non-metropolitan areas that are expensive to serve. Telstra would probably find it profitable to offer fiber in metropolitan areas and at a higher price. Would they really want to go all the way up to serving 93% of the population with fiber as the Government intends? In the report, costs are a lot higher for serving the last 10%. This may matter to voters, and politicans, but to Telstra the remaining 10-20% of the population may be adequately served if they had NextG coverage, or less. Plus there is the matter of Telstra’s existing copper lines to complicate matters…

Another weekend, another friend anxious about buying a house, another group of people stopping me in the elevator for the “inside scoop” about whether it’s good to live in our building. Maybe it’s a bubble but at least for now property prices are continuing to rise causing concerns about affordability. Yet I predict that at least one good thing will come out of this: the governance of inner city residential buildings will improve. In the past, Australians would only live in the suburbs, leaving city apartments for “visitors and students, temporary contractors, some empty nesters and some committed dinks“, i.e., people like me. As house prices increase faster than apartment prices, an increasing number of Australians and permanent residents are now choosing to live in apartments in the city. It’s already happening quite a bit in our neighbourhood. This will finally put pressure on body corporates, lawmakers and Councils to improve the governance of apartment buildings, which is presently very poor. In the past, residents of apartments were an unimportant constituent (non voting, and without a long-term interest), and most owners were just distant investors. As a result the laws on apartment living and the governance processes  in Australia are under-developed. For example, in Melbourne it is currently a tedious and long-drawn process to take action against a tenant/owner for bad behavior and flouting the rules (I know this first hand as I sit on an owners corporation committee). Another example is parking, a big problem in residential buildings. On occasion we have found vehicles illegally parked in our spot. In Australia, a Body Corporate can do very little about this unlike in other countries. When we lived in Boston and Singapore such cars would have been towed away and a fine imposed, but in Australia all you can do is ask the Body Corporate to put a sticker on the offender’s car. They cannot tow it away as apparently a carpark is “private property”. Recent changes are promising and in the proposed Melbourne CBD parking plan for 2008-2013, concerns such as these may finally be addressed. This mini revolution is occurring because apartment living has become a serious housing option for Australians. It doesn’t require everyone and those with large families to move to the city, all it requires is enough momentum.

After teaching a class last night during which we discussed substitutes, I realized that the recent eruption by Eyjafjallajökull, while sad for all involved, presents a good teaching example. The exogenous elimination of air travel led predictably to a scramble for substitutes. Eurostar ran out of capacity and quadrupled their ticket prices; a black market also naturally emerged. Meanwhile bus companies, facing more rivals than Eurostar, kept the same price but temporarily boosted the number of buses they ran. Taxi drivers cashed in on customers including John Cleese who paid $5000 for his ride. I couldn’t help but reflect upon our trip to Japan last month, where we enjoyed riding on the Shinkansen bullet train. The ride was quick and smooth, there were no long waits at security lines and elaborate rituals at airports, legspace was ample, and our electronic equipment did not have to be switched off during takeoff and landing. Air travel is overrated.

Our computational server was just hit by a worm that has also affected several other machines at our university. What’s remarkable is the rate and sophistication of innovation in this field (not that it’s a good thing). The worm that hit us is called Downad.ad, a recent member of a family known as the Conficker. Early versions of this worm simply gave its mysterious authors remote access to an infected machine. However, over time the worm’s main task has changed: its primary job is now to infect machines, keep hidden and make itself difficult to eradicate. It does so by using sophisticated encryption techniques, blocking antivirus tools and software upgrades, and most interestingly by making deep changes to the operating system and to itself to remain obfuscated. Once lodged into the victim’s computer, it doesn’t actually harm its host but acts as a parasite, forming a node in a gigantic virtual supercomputer that enables other nasty bits of software to be downloaded and run in a distributed fashion. Amazingly these bits of code are themselves encrypted and distributed using a very sophisticated system. After running the downloaded code, the infected machine sleeps for some time before repeating the cycle. I’m not a computer security expert, but it seems to me that the strategy is very clever – basically the worm writers have decided to create a General Purpose Technology that can be used in numerous ways. Now I wish they had popped up a screen right into Stata on our infected machine and offered me some of that computing power for number crunching.

A new innovation is all the rage in Japan… and yes, it’s even better than the iPad . LED lighting is starting to reach the mainstream, and it is both efficient and good. For example we saw this one being advertised on a train as a drop-in replacement for any 60 Watt household lightbulb. Each LED tube consumes only 7.5 Watts and lasts 40,000 hours, or about 4.5 years continuously. While elsewhere people talk about LED lighting, here in Japan regular families are starting to buy them for home use. With prices as low as AUD25 and often ranging AUD50-100, it is starting to become an affordable option. The benefits are not just in energy efficiency. LED lights are cool and the color can be made to appear “natural”. One common complaint is that each LED unit produces only a limited amount of brightness, but it should be sufficient for most households; in any case you can use multiple units. New innovations are allowing for super-bright LEDs, and during the weekend we enjoyed the jaw-dropping experience of “night sakura”: several hundred fully flowering cherry blossoms gracefully lining the moat of the Imperial Palace. These were lighted using LEDs, and I was amazed that each lighting unit was just about the size of a 7-inch frying pan but a couple of inches deep. Only two or three units were needed to light up each cherry tree. They were very bright, but in a manner that was pleasing to the eye and did not overpower the delicate texture of the cherry blossoms.  The park claims to have reduced CO2 emissions by 90% to 0.2 Tonnes by using LED instead of conventional lighting. I imagine LED lighting will become widespread pretty soon, not just in Japan but around the world too.

My colleagues at the Law School have just written an interesting analysis of the Lara Bingle nude photo case. They think she doesn’t have a strong legal case based on either privacy law or defamation law. Lara appears to be earning a tidy sum from the publicity generated, so I suppose its not an entirely bad strategy. The Bingle incident is one of an increasing number of clashes among conflicting goals to maintain privacy, copyright protection, and freedom. It is tempting to blame the technology (cellphones, cameras, iphones, etc.), and to suggest that people should not be allowed to take photographs or videos unless permitted. Countries like the UK and USA now have strict but vague rules on what you can photograph. The problem is that it is difficult to articulate what these parameters would be in a way that is generally acceptable. This creates high enforcement costs and generates unfortunate incidents where people are stopped for doing seemingly legitimate things. Blanket bans do not work well and lead to a climate of censorship and fear. Instead of focusing on the creation of images, a better solution is to concentrate on managing how images are used. Allow people to take photos and videos unfettered. There are so many photos and videos being taken these days that most of these will never see the light of day anyways. Meanwhile establish clearer guidelines on what kinds of images may not be used for various applications: the arts, news, online blogs, commercial advertising and education (also, in each case be clear whether permission is needed from those in the image). While this suggestion may not entirely solve the problem, it will at least take us partways there. Social and legal systems have some ways to go before catching up with the reality of living in a media-rich world.

Apple is known for its penchant for secrecy. Products are developed as top-secret projects and unveiled to the public with great fanfare. This has brought it tremendous benefit, for example with during the dramatic launch of the iphone by Steve Jobs (http://www.youtube.com/watch?v=vZYlhShD2oQ#t=2m20s). However secrecy carries costs, and in some cases the costs outweigh the benefits. Yet Apple retains this approach across a whole range of its products; secrecy is apparently “baked into the corporate culture” (http://www.nytimes.com/2009/06/23/technology/23apple.html). Consider Aperture 3.0, the newly updated photo-management product by Apple aimed at professional photographers. It was launched last week following Apple’s usual “secret till the last minute” approach. It is instructive to compare Aperture to Lightroom, a very similar product by Apple’s rival Adobe which has taken a very different approach.

There have been two effects of the secrecy surrounding Apple’s Aperture 3.0. First, the direct effect of launching poorly-tested software. Twitter and the Apple forums are full of complaints by anguished customers who have been unable to upgrade older photo libraries (e.g., http://discussions.apple.com/thread.jspa?threadID=2331026). No doubt there is a selection bias and users with a trouble-free experience are less likely to visit these forums and complain. But this is hardly the “awesome” and polished experience that is expected from Apple, a company that uses “it just works” as a tagline. Among the reports are complaints by customers whose computers have totally frozen during the upgrade, those who succeeded in upgrading but then found it unstable, and those who gave up but were unable to reinstall earlier versions of that software. It is clear from these reports that Aperture 3 was insufficiently tested before being sold, especially against real-world photo libraries in use by existing users.

A second effect of secrecy is that professionals have been increasingly adopting Adobe Lightroom. While the buzz of unveiling a new product may matter for consumer-oriented products like the iphone or ipad, Aperture is aimed at professional photographers, design companies and media organisations. For this audience, surprise may be less important and even counterproductive. Instead , advance knowledge of upcoming features and a stable product at launch time are probably more important. These allow the client to anticipate changes and plan for its integration into existing workflows and business processes.

In contrast to Apple, Adobe has taken a different approach with Lightroom. In October last year it launched the new version as a public beta, available for anyone to download and try for free (the software expires automatically at the launch of the actual product). The public beta gives Adobe precious information from real-world customers on a massive scale. In addition, customers are able to experiment with features likely to be included in the final version, rather than being kept in the dark with no way to anticipate and plan their own businesses around Adobe’s roadmap. Lightroom has its share of detractors, but generally the response online has been positive. The important thing to point out is that Adobe isn’t one of these “open source” players. Lightroom is commercial software that is quite expensive and the guts of the software are heavily protected. However, by being less secretive than Apple, Adobe is able to engage better with its customers. This applies not just to the public beta: in earlier versions of Lightroom, Adobe took a more open stance towards allowing third-party plugins and introducing user-created presets.

Looking more broadly, my sense is that Apple’s secrecy is costing it not just with Aperture but also with other recent product launches. For example, iPad developers are in a scramble to develop software for the new device which ships in about 2 months. Apparently even Apple’s close allies were introduced to the iPad just weeks before it was publicly announced. Even Apple’s new Snow Leopard operating system had its share of bad surprises after it was launched, causing some cases of data corruption. To this day, none of my colleagues are able to print from it to our enterprise-quality printer down the hallway using the Safari web browser or the Preview tool without causing the software to crash. The lesson to be learnt is that while secrecy may be useful for some products, firms (including Apple) should revisit the question as to whether they need to be secretive across all their products.

Do share your thoughts and comments on our discussion board.

—- update on 17 March 2010

A quick update – after writing this article I received a surprising number of emails. Quite a few photographers and media professionals wrote to say they agreed with my perspective. A few disagreed, including some folks who said Adobe also had its share of problems. A few people also wrote to complain that I am biased and “anti-Apple”; I contend this is untrue seeing that I personally own a lot of Apple products.

A couple of people asked what the benefits were of secrecy, and to give a quick answer, it generates greater consumer buzz when the product is launched (as mentioned). In addition, secrecy is one of the mechanisms by which firms attempt to protect intellectual property (e.g., the oft-told story of Coca Cola’s secret recipe). Keeping something secret may also help prevent competitors from hiring the relevant people to develop similar products, although this is controversial as it depends on how scarce the relevant skills are. I hope this helps give my article some balance. I’m not saying secrecy is bad in general, but that it should be used when appropriate. It may be somewhat less effective for professional rather than consumer products, especially software which involves network effects and benefits from a cohesive developer community.

A spokesperson from Apple wrote to me to say that a number of photographers did work with Apple on the beta prior to launch (but as I understand it from people in the industry, this was a private beta and a non-disclosure agreement was involved). Apple also said many of the issues have been addressed in a recent upgrade to the software, and they dispute the market share data used by John Nack which I linked to in my article. They also made a few other points. I am sharing this so that their view is represented and they are welcome to post a reply too, however I don’t think it takes away from the main points of my article. Subsequent to my post, I learnt that Apple’s secrecy was also a concern raised by various photography blogs (e.g., http://photofocus.com/2010/02/17/aperture-3-0-very-cool-but-not-ready-for-prime-time/). Moreover, the extensive fixes that were made soon after Aperture’s release shouldn’t have been needed in the first place if the software had been properly field-tested. Fundamentally, secrecy means missing out on engaging with the professional community and developers in an extensive way prior to the product’s launch. That is the price to pay, and while in some cases this is worthwhile, in other cases its not always a net benefit.

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/

I suppose it would have been wise to have taken the H1N1 vaccine. But from many accounts, the pig flu was supposed to have only a mild effect on adults. I had observed this to be the case when my wife and various friends had it earlier this year. A few sniffles, a sore throat, and all was well again. So I did not give serious thought to being inoculated.

Well, Nature had decided to disprove my assumptions in a big way. I just spent the past week in bed battling a high fever, diarrhoea, sore throat and various other symptoms. According to the doctor, my symptoms were in line with H1N1. But there was a catch: I had also caught a second, bacterial infection, and that made a huge difference. The interaction of the two wreaked havoc on my body. The fever was difficult to control even with strong medicine, often leading to shivers. For five days I was on a liquid diet. I felt a profound tiredness that I had never felt the previous times I had battled influenza.

Inadvertently this led to some time well-spent in introspection and meditation. In fact this was perhaps the first week in a long time that I have been quite completely offline. I hope you will share the lesson I’ve learnt: the germs are pretty innovative and combinatorial attacks can be very nasty. If you haven’t gotten inoculated for H1N1, now’s the time.

ps: This is an Economics blog and makes no pretense of offering medical advice

UPDATE: I’ve been asked if this is a low-probability random event that I’ve experienced. No. The multiple infections are not independent: a first infection weakens the body sufficiently and makes it easy for a second infection to set in. Search around the web and you will find quite a number of reports in which H1N1 appears with pneumonia and other infections.

If you attempted to upgrade from XP to Windows 7 recently, you probably went through Upgrade Hell along with me and many others.  In the process I learnt a couple of things about Microsoft. Firstly, Microsoft doesn’t understand how to sell software as downloads. If like me, you tried to buy a downloadable version of Windows 7, you would have ended up paying for it dearly, ending up with three files (an exe plus two bin files) delivered to you but with no instruction on what to do with them. The exe file failed to work properly on XP in my case, and searching online eventually yielded command line instructions on how to create a bootable ISO file from these, but that failed to work properly either. Why didn’t Microsoft just sell me an ISO file directly? It shows that Microsoft does not know how to sell software as downloads, perhaps being only familiar with selling software on DVDs or preinstalled on new computers. Ironically, it is now easier to download and install linux than it is to install Windows 7.

The second lesson I learnt is that Microsoft does not understand how to price an upgrade. It is clear enough that one should pay a lower price if you one is upgrading from an earlier version of Windows than if one is not. But in addition, Microsoft charges a different upgrade price depending on whether the installation wipes your original Windows installation before overwriting it. This is plainly wrong because the Utility of Windows 7 minus Utility of your earlier version is the same regardless of how you did the install. Case in point: after failing to compete the earlier install, I ended up getting the DVD for Windows 7 Professional Upgrade. That happily wiped out my XP hard disk and installed with no warning about future activation problems, but several days later asked me for an activation key. When I typed in the activation key I had earlier paid for, it didn’t work, generating an error message that the key was for an upgrade, not a clean install. So I ended up with Windows 7 that refused to activate, but installed within it was software (such as Office) that had already been activated, which were now unusable. Microsoft’s website suggested that I reinstall the previous operating system (which had already been wiped out) and try upgrading again. Really! it is clear that the installer did not check for a valid XP installation, and at that point enabled the activation key to work. It turns out that this is a common problem, and so if you plan to upgrade keep these tips handy and follow Workaround 3.

If you went through all this and ended up with Windows 7 installed, you will find that it is a pretty good operating system, but the process leaves a very bad initial impression.

Ariel Kalil is a Professor of Public Policy at the Harris School, University of Chicago. She is a developmental psychologist by training, and her work links developmental psychology with economics, e.g., the effect of parental job loss on child development. I had a conversation with Ariel about her work and thought it would be of great interest to our readers.

Kwang: Congrats on the NY Times feature last week. Not many social scientists make it to the front page. How do you feel about that?

Ariel: It was very exciting! It was fun having friends e-mail to tell me they’d read the article on their train ride that morning. What I was especially happy about was that the reporter got the story right. He was a very curious and thorough guy, and we spent a lot of time on the phone and exchanging e-mails over the past few weeks. He read all of my original papers carefully, and came up with some very good questions for me. And the families that he interviewed had stories to offer that really illuminated some of the quantitative findings from my work.

Kwang: Tell me a little more about your work. What are main themes you’ve researched and what motivates you to pursue these questions?

Ariel: I’m interested in how socio-economic conditions are associated with families’ well-being and children’s development. So, I’m interested in parents’ mental health and their interactions with one another and their children, and I’m interested in children’s behavior and academic performance. In many instances, there is a link between, say, family income or families’ employment experiences and these outcomes. I care, as all economists do, about whether these links are causal. But, in thinking more like a developmental psychologist, I am also interested in “getting inside the black box” to understand why these links exist, and what kinds of individual differences shape how strong these links are for different types of children and families. I’ve always been interested in applying social science to real world problems. The idea that my work might someday shape public policy that could help improve the lives of families and children is very motivating!

Kwang: In the paper featured last week by the NY Times, you show that young people are badly affected when their parents lose their jobs, and that this is true in single parent and dual parent families [paper]. Could you tell us more about these effects and what you think drives the differences between single mothers and dual-parent families? Between male and female parents becoming unemployed?

Ariel: I think there are likely different factors at play for single parent vs. dual-parent households when jobs are lost. First, these families look a lot different from one another in terms of a whole set of demographic characteristics. So, in some sense, it’s a bit difficult to compare the two kinds of families. One of the biggest and most obvious differences is that when a single mother loses a job, the family has typically lost its only breadwinner. These families are likely to already be strained economically, and to have few (if any) people in their set of friends and relatives who can help them out. In many cases, a job loss sets off a cascade of adverse events that can be hard to stop, such as getting evicted or having to move in with others to save housing expenses, and this might disrupt child care arrangements or where kids go to school, and so on. There is just a lot more instability in these families related to the families’ economic circumstances.

In dual-parent families, I think the situation is a little different, and, at least in the short term, I think the impact on well-being and child outcomes has less to do with the economic impact of the job loss than the psychological one; for instance, in the way that parents relate to one another and to their children. For example, most dual-parent families have two earners, and so the family hasn’t lost all of its income at once. And many of these families also have some resources they can draw on, either savings or help from other family members. The immediate economic threat may not be quite as great. Also, in the families from whom I’ve collected data, I’ve found that parents will typically try to cut back on other things before they cut back on spending for their children, so the kids are often spared disruptions in their daily lives. In these families I think the adverse impacts that we see have a lot more to do with stress and anxiety, which we know can be very damaging to family relationships and ultimately to children’s development. And I think a big factor in the current recession is how long it’s taking people to find new jobs. The number of “long-term unemployed” is at an all-time high, and parents are very worried. We may eventually see more of these families exhausting their savings, losing their homes and encountering the same kinds of hardships that single-parent families have been more likely to face.

The different impact when fathers and mothers lose jobs is a really interesting one. In our work, we have consistently found that the negative impact of fathers’ job losses is greater. And this is not simply because fathers’ earnings losses are greater than mothers’ (in fact, in the US, in 40% of dual-earner households women are the primary earners). This is an interesting puzzle that I’d like to try to figure out; unfortunately the data are not readily available on this particular issue!

First, I think that “stereotypical” gender roles are still alive and well in many families and that the idea of being the “breadwinner” is still very important to many men and that is may be a bigger psychological blow to them when they lose their job.  Second, working women occupy a variety of roles – we see in time use data that women still do the lion’s share of caring for children and tasks around the house (cooking, cleaning, etc), even when they are employed full-time.  It turns out that working mothers cut back on their sleep and leisure time to do all of these things. So it may be that during periods of unemployment these women spend their time at home more effectively than a similarly unemployed man – because they were already occupying those roles anyway. Also, in the families from whom I’ve collected data, there seems to be more strife over figuring out what fathers’ “roles” are going to be during a period of unemployment. Many fathers viewed spending 40 hours per week in an outplacement office or a networking group searching for a new job as a full-time job, whereas many of their working wives thought they could usefully be spending more of that time helping out around the house or with the children. And that created a lot of conflict, which I think is rooted at least in part in “societal” or individual views about how the responsibilities of running a family should be divided between mothers and fathers.

Read more

This week, Australia Radio National ran a Background Briefing on internet piracy. Going beyond just arguing whether “downloading” is good or bad, this podcast discusses changes in copyright law over the centuries, why these tensions came about, and puts copyright infringement in a broader context. I like it that they present a balanced view with both sides represented, that they trace where the myth of the starving artist came from, and that they make a distinction between the debate on illegal downloads and that on remix culture. Relevant sound clips from remix artistes (DJ Danger Mouse,  Girl Talk, Steinsky) and various radio/TV programs are included, as well as comments from IPRIA affiliate Kim Weatherall. The program could have been improved with a more in-depth discussion of how internet piracy fits with the future strategies of firms and other economic actors, as well as possible impacts of changes in the Law across various jurisdictions including Australia. But that might have made it less appealing to a general audience. Overall, an excellent podcast. Listen to the audio or read the transcript at http://www.abc.net.au/rn/backgroundbriefing/stories/2009/2726710.htm.

Last night my computer suffered a bad crash while attempting a software upgrade. Fortunately everything was backed up, so things are back to normal again. I thought I’d write a short note to answer a question I’m often asked: “how do you back up your files?”. My approach is based on two rules: (a) recovery should be simple and (b) the most important things to back up are those that are unique, like my documents, pictures and datasets. Everything else is replaceable, including software and all those music and movie files. So here’s how I do my backups. It may not work for you, but hopefully something similar will be usable.

• Daily: Files on my main computers are backed up daily using Apple’s Time Machine. A second daily copy is made onto a linux home server. This is pretty much my entire life, so there must be two “live” backups, just in case one fails to restore (this has happened to me!).
• Offsite Data: All datasets, personal documents, and project files are automatically backed up regularly onto Amazon S3 using jungledisk. Amazon is very affordable and very good especially if you have lots of files. My family members using PCs use Mozy. Friends and colleagues have also had good experiences with sugarsync. The main idea is that if your house or office burns down or if you’re hit by a hurricane or earthquake, you’ll still have your files. All you need is your web browser. It also helps if you are not traumatized enough to forget your password and private key.
• Offsite Media: Photos and home videos are backed up on smugmug immediately after being downloaded from my camera. Sixty dollars a year for unlimited space is my definition of a good deal. If you use something else, watch out for copyright especially with the free sites, ie. make sure you own all your photos and are not automatically giving the service provider a free perpetual license.
• Cloning: Once a month (and before any major software upgrades or major trips) I use Carbon Copy Cloner to make a complete image of my notebook hard disk onto an external USB drive. Lots of alternatives exists for Windows and Linux. Note the Apple’s Time Machine is good for recovering the odd file or two, but takes forever for an entire system restore. We’ve also been locked out of it before due to permissions issues. Nothing beats a cloned disk image.

That’s it: daily backups, monthly clones and offsite copies. With improvements in synchronization software, all this takes place with little intervention, and backups happen quickly. No matter how busy you are, take a few minutes to plan your own backup strategy.

Club Troppo reports on a paper published by Mixon and Upadhyaya, who measured the citation impact of various Economics blogs. Core Economics does fairly well, with Joshua ranked 15, Steven 23rd, Andrew 33rd, etc. Read the article at http://clubtroppo.com.au/2009/09/20/ranking-economics-bloggers/. I’m happy that our work is making a measurable impact. I want to take this opportunity to thank our readers for your interest, and  I hope that you will continue to engage with our ideas in your professional lives, as well as by posting thoughtful comments on the website.

IPRIA & CMCL ran a seminar on the parallel importation of books yesterday. I’ve uploaded the videos to http://vimeo.com/album/127081. We thank the presenters for permission to podcast their views (Q&A with the audience is omitted). Joshua had earlier commented on the topic of parallel imports on this blog. My personal view is that as we move increasingly towards digital books and other online content, publishers and authors should be proactive in adapting. The real strategic challenge is not the parallel importation of books, nor is it the Amazon Kindle which includes export restrictions and can only be sold in the US. When faced with artificially high prices for books (as well as the total unavailability of particular books in the domestic market), customers will simply resort to downloading unlocked pdf versions of those books. It happened with music and movies in the past, and I suspect the same will happen with books as better quality readers emerge for reading digital content. I make no comment on the morality of such downloading, but want to simply point out that publishers should work toward providing affordable, legal alternatives. Authors need to worry less that their cultural impact will be affected. If push comes to shove, they may be better off selling books as iTunes podcasts, or through upcoming digital merchants like safaribooks. Or they could just write blogs instead. Read more

I recently prepared these comments for a legal audience as a simple introduction to alternative approaches towards Intellectual Property online. I’d like to share them with you. Do post your comments below.

Major battles are being fought on the internet over intellectual property. The founders of the Pirate Bay now face a jail sentence, the recording industry recently won a $1.92 million verdict against an American woman for downloading 24 songs, and in Australia the internet service provider iiNet is being sued by movie studios for allowing illegal downloads.

Filing lawsuits against business partners and customers may sometimes be necessary, but isn’t always the best course of action. The case against the American woman led to a great deal of negative publicity across the world. It’s unclear that the recording industry will eventually recover much money as a result of any of these lawsuits. Meanwhile, illegal downloads continue unabated.

It is time for media firms to revisit their business models. Apple has demonstrated that it is possible to make money through legal downloads via its iTunes store and by selling iPhones and iPods to play those files. But other approaches may also be possible.

Read more

I just flew United Airlines from Melbourne to Chicago. Full flight. My 13″ MacBook wouldn’t completely open, without hitting the seat in front. Did they just shrink the Economy class seats? The in-flight entertainment system crashed both during SYD-LAX and LAX-ORD and refused to reboot (oh, I hope they maintain the planes better than these units). After cursing about being unable to use my computer  properly, I realized that it was not a problem, but the solution. A single MacBook battery (4000+ mAh of power) can recharge an iPhone or iPod Touch enough to fly nonstop around the world several times. In Airplane mode, the iphone/ipod takes very little power.  The screen is crisp. I watched several good videos, caught up with my favorite podcasts, played games, wrote this blog post, and read a few books (in color, unlike on the kindle). It was liberating. Why even bother with in-flight entertainment when you can bring along much better quality stuff? (Added: Airlines should get out of the business of providing poor quality entertainment, and instead focus on providing the two resources that are scarce: electricity and a wifi connection).

Last week, the BBC broadcast an interview with palaeontologist Jorn Hurum, who led the research into the fossil called Ida. A podcast is available from http://www.bbc.co.uk/programmes/p003lrtc. Ida is 47 million years old and an almost complete specimen. It is believed to be an early primate, making it an important evolutionary link. The BBC interview contains a first-hand account of how he ended up buying the fossil on behalf of the Oslo Natural History Museum. The deal was initiated at a vodka bar in Hamburg where Jorn was shown several photos of Ida by a fossil dealer. Ida was initially thought to be an ancestor of the Lemur. Subsequent research shows that it was most likely to be a primate instead (although this is still hotly debated). While Jorn has been criticised for paying around $750,000 for the fossil, it must in fact be worth a lot more than that. Interestingly a number of other scientists have suggested that a “market for fossils” should not exist at all; I suppose they think of fossils as repugnant goods.

Our students at MBS have organized a photo competition. Really nice shots have been submitted by the MBS community. Pop by to take a look: http://web.me.com/photoclub. Compared to when I helped organize such competitions during high school, things are much better now. The web provides a great mechanism for  sharing the entries, and the audience gets to vote for the winner.  The winning shot may not be the best technically (in terms of color, composition, lighting), but it will be the one that makes the biggest impact on viewers. Quite appropriate for a theme like “Sustainability”.

Joshua Gans and Richard Hayes have recently completed the 2008 update in their series “Assessing Australia’s Innovative Capacity”. The latest update paints a picture of Australia moving into uncertain times despite some gains mid-decade, particularly due to the weakening of the global economic environment. In a partial reversal of recent gains, Australia’s innovative capacity actually fell backwards in 2008. We maintained our 13th placed ranking only because a number of other countries also backtracked in their innovation efforts. The report highlights how drivers of national innovative performance – such as public education funding, support for universities as centres of research performance and the complex relationship between the intellectual property system and innovation outcomes – continue to be critical to the national debate and to innovative capacity. The report is available at http://www.ipria.org/publications/reports.html.

Next Page →

• RSS Feed

  • Subscribe to Main Feed

• The CoreEcon iPhone App

  Free! Click to download

• Email

  • Subscribe (Daily Edition)
  • Subscribe (Weekly Edition)
  • Subscribe (Kindle)

• Archive by Author

  • Andrew Leigh
  • Chris Lloyd
  • Christine Neill
  • Guest Contributor
  • Joshua Gans
  • Justin Wolfers
  • Kwanghui Lim
  • Mark Crosby
  • Paul Frijters
  • Sam Wylie
  • Stephen King

• Archive by Date

  July 2010

  M	T	W	T	F	S	S
  « Jun
  			1	2	3	4
  5	6	7	8	9	10	11
  12	13	14	15	16	17	18
  19	20	21	22	23	24	25
  26	27	28	29	30	31

• Interesting Items

• Ads

• Blogroll

  • Christopher Joye
  • Club Troppo
  • Economist’s View
  • Economix
  • Freakonomics
  • Greg Mankiw
  • John Quiggin
  • Kalimna
  • Marginal Revolution
  • News for Econ Students
  • Paul Krugman
  • Peter Martin
  • The Dilbert Blog
  • Tim Harford

• Sites
• Core Research
• Parentonomics
• GameTheorist Blog
• Aussie Mac
• Centre for Ideas and the Economy