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Following up on my earlier post today on proposal’s to ban junk food ads or promotional characters to kids, take a look at the ACMA’s summary of the scientific evidence on relationships between children advertising and obesity (relevant passage over the fold). It certainly makes me glad that Labor is going to wait until the results of the ACMA Inquiry before committing to its proposal. Read more

[Cross posted from Game Theorist] Moves to ban popular characters, such as Shrek, on junk food are misguided. They are, at best, a distraction from the real issues and, at worst, will actually make parents’ lives harder in terms of getting their children to eat well.

First, it ignores the reality of what most parents try to do. Basically, we live in a meal to meal negotiation over the proportion of healthy and unhealthy food children eat. We use the prospect of a special treat to get children to more of the healthy stuff. However, to make that deal work in our favour, the more they like (or think they will like) the unhealthy stuff, the more vegetables we can get into them. Read more

Judging from comments last week, this opinion piece of mine in The Age today is likely to upset many. How dare I suggest that sports organisation might different. Anyhow, read carefully. I am just suggesting that they need to go through the same processes as business to get exemptions from our competition laws and that there is a case to be made. Also, these ideas have a solid research base in sports economics. See, for example, the work of Roger Noll (here and here and here). Read more

It has been many years since The Simpsons was a not to be missed television program. I haven’t seen a new episode for years. This is mostly because I have no idea when new episodes are one. Cable and free-to-air television are littered with them. Most are repeats but apparently occasionally new ones are shown at random.

So the movie release this week was an opportunity to enjoy them once again. And enjoy them we did. This movie could easily be one of the “best episodes evah.” That was quite a challenge. At 85 minutes, it is four times the length of a TV show and with no ad breaks. What is more, the writers did not go for an outlandish plot relative to the usual. In fact, it was fairly formulaic with Homer doing something he shouldn’t, becoming an outcast and then, finally, saving the day. But what it had throughout was a continual stream of jokes. The entire family enjoyed it. So if you love or have ever loved the show, you will be very happy indeed with this movie offering. But stay through the credits; it is only over when it is over.

Last week, rather than wait a week for our household copy to free up, I bought a second copy of Harry Potter and the Deathly Hallows. I have read it and can confirm that it was worth every cent of the $27.95 I paid for it. Indeed, I can go further. I think that this book may have generated the highest consumer surplus of anything I have ever purchased. I base this on the fact that I couldn’t wait a week.

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Victorian MP, Evan Thornley, has an intriguing proposition to give households with children more votes; basically, have a child and until they are 18 you get an extra vote. I have said before that the case for not letting children vote is weak.

Thornley is assuming alot in his ‘delegated’ proposal. The first is that two parents might agree on how their children should vote. The second is that giving votes to others is something we should feel uncomfortable about. My belief is that children over the age of, at least, 16 but probably 13 are capable of the cognition required for voting. We should no more take away their votes than we would for someone at the other end of their lives that has become dependent. So I think we should go the whole way and consider increasing the franchise directly.

Andrew Norton wonders if families are really underestimated in voting. By sheer logic, under-representation must be true if children do not have explicit representation. But Norton concludes with a similar view to my own.

In 2003, Stephen King and I recommended in the Prime Minister’s Home Ownership Taskforce that governments reconsider the necessity of having public housing actually being owned by the public. Instead, ownership and provision could be divorced. That message has been found in some State government approaches to low income housing.

The Howard government announced today that it would open up the funds it gives to provision of public housing to providers other than the State governments. In principle there seems to be little wrong with this. However, I wonder what effect it might really have. Such private provision alternatives have been considered by State governments. So what this amounts to is the opportunity to by-pass the states and access the funds by another means. Such governmental competition might be healthy. But in this case it is vertical rather than horizontal. And one would have thought that coherent housing policy is best handled on a narrower geographical basis. What would a national approach really mean? It seems, at first glance, a recipe for a lack of coordination. On the whole, I would have been much more comfortable with this type of move had it come out of a cooperative process that included all government levels as to the best way to provide public housing. Without that process, it is hard to separate the politics from the sense.

I gave a talk yesterday on the risks that might be imposed on infrastructure providers by regulatory processes. (If you are interested my slides are here). My point was that it was going to be pretty hard for a firm to get a regulated price adjustment from the regulator to insure them against that regulator’s risks. If the regulator admitted they were risky, that might be an issue.

I was asked whether regulatory risk might occasionally be a good thing. Possibly. For instance, real competition is better than on-going regulation. If you can actually have some really tough or bad regulation, firms might voluntarily break themselves up to avoid it. This has apparently already happened for some industries around the world. Could it happen here?

Stanford Professor Roger Noll gave a compelling talk last night at the ACCC Regulatory Conference. He argued, very convincingly, that there is no reason — theoretically or empirically — to exempt sporting associations (such as the AFL and NRL) from competition laws. They are, of course, not exempt in Australia but curiously operate in a manner that might lead you to think that they are. Sporting teams are independent corporate entities. Together — facilitated by an association — they engage in price fixing like behaviour with both salary caps and drafts on the player side and collective broadcast right behaviour on the other. As Roger Noll pointed out the alternative without such restrictions (as occurs for European soccer) would be more broadcast, an improved matching of players and teams and a more balanced competition leading to greater overall consumer satisfaction.

Today, the C7 judgment is being handed down. It was all about bidding for sports broadcast rights. I dare say it that the whole issue might have been avoided had Seven been able to bid for the rights to broadcast individual team games.

I am not sure what the current legal status of sports associations are in Australia. I do not think that there has ever been an authorisation hearing by the ACCC but the elements here suggest that there should be. It seems odd that the ACCC can in the past go after banks for price fixing in credit card associations and worry about potentially tacit behaviour amongst petrol stations while the icons of Australian sport engage in practices that, at the very least, fly in the face of competition principles.

Sure the paper was peer reviewed and published in Social Science and Medicine but a write-up in the British Medical Journal (over the fold) seems to me to give it all a certain sense of respectability.

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Last week I found out that I had won an Xbox 360 console. I was pretty happy. So am I keeping it? Of course not. After all, I have chosen not to buy an Xbox before, why should that change? My reasoning is this: before I could pay say $599 and get an Xbox while today I can receive maybe the same amount and not have an Xbox. Clearly, I would rather the ($599, no Xbox) bundle to the ($0, Xbox) bundle. Economic rationality compels me to sell the Xbox. (By the way, if you are interested, it is on eBay).

Now if I had won a car or a house, this reasoning would not apply. In those cases, winning has improved my wealth so I could imagine keeping the loot. Also, if there were significant transaction costs in selling, I would also hang on to the prize. But with eBay there are not. This leads me to wonder why anyone keeps prizes these days.

On that score, another sort of prize is a ‘give away’ that you get with something else you wanted to buy. Why keep those? For me that happened with a 80GB Video iPod; it is now on eBay too.

Yesterday, I received my very first call from an iPhone. It was located in the US and the caller was very excited for having worked out how to make it. Actually, the caller had previously failed to receive a call from me because his fingers were cold and he couldn’t unlock his phone.

Suffice it to say, my experience of using and iPhone to me did not really live up to all the hype. Perhaps it will be better when at the end of 2008 as it is now looking, I might have an iPhone here in Australia. Until then, we will just have to make do with the warm glow at the other end of the ‘line.’

No, it is isn’t a premium or caffinated edition of Google, it is a green one. The idea is that rather than having a white background, the Google searches have a black background. That appears to save about 20 percent of screen energy usage. Click here for Blackle. The sad thing is that it doesn’t appear to have the personalised functionality of Google. Actually, from the site itself it may not be an official Google product but that shouldn’t deter you from using it.

Google have posted an interesting essay on why they think they would be disadvantaged in the upcoming 700 MHz spectrum auction in the US. The economics there is very sound. Everything they write also applies to the upcoming broadband tender — Coalition or Labor as the case may end up being. As you read it you will see why Telstra has every reason to be confident. I hope the expert panel are reading widely.

Australia may be low on the broadband ladder but we are in good economic company: the US. In the New York Times, Paul Krugman wonders how the US came to fall behind in broadband. And unlike our politicians, he doesn’t point to a lack of government money but instead a lack of adequate regulation and competition policy. Read more

I will probably return to this after I get through the latest book — as of this posting, I’m at around page 100. Anyhow, my reaction to this article by Megan McArdle was thuburptttt. She complains that the economics in Harry Potter is all wrong because there is no convincing explanation of the supply of magical powers; namely, why they are scarce. She forgets that (a) ability clearly plays a big role and (b) study helps too. McArdle points to the poverty of the Weasleys. Why not just create their way out of that? But given that there is an active productive economy, it should be pretty clear that they can’t just make anything. Indeed, I struggled to think of an example of that. What is more, there is a great deal of inherited wealth. Finally, what economy there is is riddled (if you’ll pardon the pun) with regulation and peppered with monopolies. What is more the wizard folk seem happy with that. Hagrid tells us in the first book that there is only one bank and that is the way it should be.

Now the issue of scarcity comes up in this stuff all of the time. I remember making a McArdle-like point to Ken Arrow many years ago in relation to Star Trek. I pointed out that replicator technology had rendered the economy mute. He corrected me and said that that couldn’t be true because there was only one Enterprise. So there had to be inherent scarcity. I learnt my lesson; there is always scarcity, you only have to know where to look.

From Google, news that in June its No.15th ranked top gainer in searches in Australia was “baby bonus.” Looks like some people were wondering what the benefits of having a baby in July might be. It happened last year too by the gains then were around $800. This year there are none. In March it was bumped $133 and may get another in September.

Ironically, “I’m feeling lucky” choice would take you to this ATO site but that would be about the previous baby bonus which is still around for some people who had babies after 2002 and before 2004. The number three choice is probably what you are looking for. And if you don’t like the whole deal, you will enjoy Ross Guest’s article at number four.

We have pre-ordered one copy of Harry Potter for tomorrow. This created an immediate issue: who is getting to read it first? We went through, “you read it first last time” to “I will read it quicker.” And, no, this wasn’t the kids; if they want to be part of the negotiation either learn to read or buy it themselves. It came up that this would not have been a problem if we weren’t together. So I think that we will be buying two copies as the superior solution. Sometimes couplehood just doesn’t save on purchases. Now, of course, there is a new problem: who is going to mind the kids this weekend?

Two newspaper reports on the same study. At The Age, teen obesity is rising. At news.com.au, teens are engaging in drastic weight control. So, media diversity is what we need for information or maybe just information.

Telstra are going to offer TV programs on NextG mobile phones. Let’s see apparently, its own TV programs will cost $4.95 an episode viewable for 7 days. In the US, you can view TV programs forever on an iPhone for US$1.99 per episode. And you can transfer them to Apple TV too boot. How can the Telstra pricing model possibly make sense?

Want to destroy your faith in humanity or restore your faith in economics, head over to bored.com. They have dropped 100 wallets and videoed the consequences. The people who keep the wallet always seem to look in it immediately as soon as they pick it up while those who return it don’t. Wallet #62 took the wallet with one hand while holding his child’s with the other. There are also some statistics. I should hasten to add that this study is not peer reviewed so take from it what you will.

Three Nobel prize winners contribute to an issue of The Economist’s Voice on global climate change.

• Ken Arrow argues that the arguments regarding the social discount rate in the Stern report are largely meaningless because on any reasonable estimation of that rate, the economic case for action is compelling.
• Thomas Schelling argues that the immediate need is for research to mitigate the consequences on climate change. After all, if there is one thing humanity has been good at, it is devising ways of insulating itself from variable weather.
• Joe Stiglitz argues that the rest of the world should get tough on the US and prohibit imports of energy intensive goods just as the US stopped Thai shrimp imports that were caught in ‘turtle unfriendly’ nets. What is more, he argues, this counters the US claim against Kyoto that there is no enforcement mechanism.

If I were ever to appear in The Simpsons (over the fold) …

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A new website takes a swipe at Googleopoly. This is apparently what we are heading for if the US government does not challenge the Google/Double Click merger. There is a whole paper with arguments but it is really hard to understand the objections. The chief one is that there is some sort of tipping point that Google and Double Click have reached so no one else will ever be able to properly enter the targeted advertising online market.

I am not sure what evidence there is for that. When it comes down to it, if you advertise on Google you get 65% of the consumers and if you advertise on Yahoo or MSN you get much of the rest. So how can Google possibly raise advertising rates; especially, since it is all an auction anyway? In a sense, Google competes for eyeballs with other providers but I can’t see what network effects could be at work there. What is more, how would Double Click help it dominate markets for attention? In any case, is it really possible to go from nothing to monopoly in just a few years?

[Cross Posted from Game Theorist] A new study says that when it comes to daughters and their propensity for maths and science in later life, Dads are to blame. If Dads hold stereotypes, they hold their daughters back.

One a related note, I thought that it may be the 11th or 12th Grade before my daughter came home with a maths problem that stumped me. (The earlier that happened the better the reflect on our education system.) Usually, I look over her homework and try and work it out in my head. It never takes more than a minute and then I can at least check whether she gets it right or not. (By the way, we might talk about it, if she doesn’t but I never give her the answer.) And some of those problems are tricky. Last term she had one where she had to take a clock face and draw two lines across it such that the numbers in each of the resulting three areas summed to the same number. Took her about 15 minutes and me about 2 (more than I wanted at the very least).

So this week’s problem has me worried. Take the numbers 1 though 9 and keep them in that order. Then using any operator (+, -, x or /) and also parentheses make them into an expression that equals 100. Now I can see how to do that by trial and error but I can also see that is going to take sometime. My daughter is currently slogging through that. But I can’t see how to do it simply. I ran out of my 5 minute limit so I thought I’d post it here for your amusement. Please feel free to leave, not the answer, but any short-cuts in the comments.

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