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A question: what radio show set a record for the number of times it mentioned ‘p-value’ in a single half hour? Answer: the BBC’s More or Less. I have been listening to these as podcasts and they are a great round-up of everything statistical that might have graced the news that previous week. What is more, they are not afraid to use technical terms. Tim Harford is the host and if you want to find out what a p-value is and why it is useful in working out the gender of your child take a listen to this week’s show. It and past episodes are available from here.

… the United States who are contemplating a temporary pause in petrol taxes. And wait there is more: to make up for lost revenues, they are proposing to tax oil companies! And even more disturbing, this is a plan that Senators McCain and Clinton appear to agree but that Senator Obama and most likely the Whitehouse oppose. Is there no neat political divide when it comes to petrol?

John Quiggin has been trying to reduce travel costs (mostly environmental) by agreeing to video seminars. He has one at ANU today. Somewhat extraordinarily, if you want to watch that seminar you need to get yourself to ANU! Well, think of the environmental costs still associated with that. If John is on a video, why isn’t he on a video link over the Internet that anyone can, at least, watch?

Since switching back to the Mac, I have found that there are several programs that I can’t live without and have bought subscription licenses to.

• 1Password: This program keeps track of all my passwords using an encrypted file structure. Every time I go to a web page, it remembers how to log in and how to fill in any required information.
• SugarSync: this is the file synchronisation program that makes backing up easy. My documents are mirrored across computers and on the web. It is wonderful.
• EverNote: this program is in beta but it serves as an important part of my memory. Whenever I need to remember a web site or bit of information, I click a button and it stores that information in a searchable way on my computer and on the web.
• ImageWell: this program allows me to clip an image from my computer screen and send it anywhere. A gem.
• Skitch: Skitch is a favourite of my children but I find it useful too if I want to sketch a quick drawing like this.

The rights employees have to things they invent while at work is something that has been an on-going issue for some time. Within Universities it is even more complicated. News today that in Australia, the rights might lie squarely with academic researchers. Here are some words from the judgment:

“Absent express agreement to the contrary, rights in relation to inventions made by academic staff in the course of research and whether or not they are using university resources, will ordinarily belong to the academic staff,” Justice French said.

“The position is different if staff have a contractual duty to try to produce inventions. But a duty to research does not carry with it a duty to invent.”

I haven’t read the judgment but it would be interesting to know whether the research had been funded by government grant or not. While this allocation of property rights might create strong incentives for researchers to pick out their inventions and commercialise them, I worry that it may also raise the price of such commercialisation activities and not increase the flow of knowledge from universities.

My co-author, Andrew Leigh, who is a reliable character has been forced ‘off the equilibrium path’ to deal with an errant co-author, Bruce Chapman. In a behavioural move that would make Thomas Schelling proud, Bruce asked Andrew to impose on him some public humiliation that would ensue should he not complete their long-standing paper by the end of the week.

Impose on me a strict deadline in the very short run to do the revision, and somehow manage to publicly humiliate me if I don’t make it.

Andrew posted the request on his blog thinking that would be enough to keep Bruce in line.

Sadly, Andrew is not really a game theorist and so I think this tactic might not be enough. Let’s think this through. First, the likely reason Bruce is slack is because his incentives for the marginal publication are much less than Andrew’s. That won’t change by the end of the week. Second, let’s say we get to Friday, then what? Andrew will post the failure on his blog but then Bruce will have no further incentive to complete the task. Given this, Bruce and Andrew might be tempted to find a way of renegotiation that ‘punishment’ outcome to get the incentives right from that point on. Third, of course, even that is doomed and it is unlikely Bruce’s behaviour will be improved as the public humilitation will never be imposed. Put simply, this bilateral enforcement mechanism doesn’t stand much chance of working. Andrew may end up looking sad at the end.

So let me help by making the mechanism multilateral. Andrew did one thing right: he announced the current and on-going failure of Bruce in his scholarly commitments. Bruce has, of course, come to me (and I bet others too) offering various ‘help’ in selling income-contingent loan ideas. Well, Bruce, we are watching you. The last thing I want to do is accept your offer of help only to see deadline after deadline fly by. You may like that wooshing noise but I don’t. I need reliable co-authors. So, let’s see you comply with Andrew’s plea by the end of the week or else I can tell you that we that I will credibly commit to decline your offers of ‘help.’ Let others watch this play out too.

The Reserve Bank has released its initial report on reviewing the credit and debit card payment systems in Australia. It canvasses several options from doing nothing to a stricter regime to a hands-off or light-handed approach. The latter involves less regulation in return for more transparency in interchange fee setting. It looks like it may adopt the light-handed approach. This could be the right way to go, but it is hard to tell.

I made a submission to the RBA Review (click here) and it highlights something very disappointing in the RBA’s initial report: no reliance on economic evidence. The RBA does not consider or refer to any studies of the impact of its reforms using the usual tools in economics — the same tools it uses for monetary policy. My submission appended such an analysis and demonstrated very convincingly, that interchange fee regulation had likely had no effect despite the dramatic nature of such reforms. Indeed, if you want to impact on credit card use, change interest rates.

At the 2020 Summit, there was a universal call for more evidence-based economic policy. In this instance, the RBA — otherwise the high standard of such processes — has continued to shy away from the evidence in favour of informal theories and industry submissions. For us academics, this is very discouraging. Given the reaction thusfar, I don’t imagine I will be making any more submissions on these matters and, consequently, one of the few independent voices on payment systems will be exiting the fold.

Apparently, experts aren’t too sure. No one seemed to ask: why would we want a company to measure innovation? If you find out that one company is more ‘innovative’ than another, what then? I guess my view is that looking for innovation is like looking for a forest when you care about individual trees.

But on the innovation front, I think that this time Dean Kamen is onto a significant winner with this machine that will purify any liquid into drinkable water and generate electricity as an added extra; all for a fraction of the price of a Segway. It comes with a measuring cup so you can measure the innovation drop by drop.

Need I say more; 25 years on. Click here.

Megan McArdle asks whether merchandise bought at charity auctions should be tax deductible? She seems to imply that they should not be because you are paying ‘fair market value.’ Here is the story that motivated the question.

This is all very well except charity auctions are different. The reason is that it is not a ‘fair’ market value but a market value induced by the ‘charity’ part. That part may change the winner’s willingness to pay (they realise it is for charity and so bid more) and also other bidders’ (who are losing) willingness to pay (for the same reason). So if you win such an auction, you are (at least in part) donating. What is more, the tax deductibility serves exactly the same function for these auctions as it does for non-auction donating: it increases the money raised by the charity up to the level of the tax deduction.

Comments are offline today and probably for the rest of the weekend. Not sure why.

So in attempting to take some time off after the 2020 Summit, I forgot to write about my one big idea that came to me during the Summit but, of course, was never aired as I was in the wrong group for it. It was this: the way to sell the public on high petrol prices as a way of reducing emissions would not be to impose a tax on it but to fix the price of petrol at, say, $2.50 per litre, for the next 3 years and raise it by some fixed amount thereafter.

What is the rationale? Well, we know that people do not like petrol price fluctuations (as per the whole Fuel Watch thing). Also, we know that the vast amount of price fluctuations are cost driven. So if we set the price of petrol at $2.50, pegged, we would be sending all the right environmental signals and we would have the government assume the risk associated with cost fluctuations. At $2.50, the government would still be raising more revenue but it would also be absorbing price fluctuations.

How we would ensure that the government wasn’t being ripped off? Let them negotiate the petrol price on behalf of consumers. Any retailer who didn’t want to play ball could just accept a say, 100% tax. I think this would be constitutional as retailers could opt out of the scheme.

There are probably all sorts of practicalities to work out. But I think with regard to petrol, the government is going to need to think what it can offer voters drivers as a quid pro quo for climate change policy.

I am in favour of an increased use of prizes to motivate innovation. From Slate, some fairly convincing arguments that some prizes may not be up to scratch. In this case, it is a $1m prize for substitute chicken meat:

So what’s wrong with the PETA prize? You need to sell your product in order to win. According to the contest guidelines (PDF), the million-dollar meat must be available in stores to qualify for the cash. Fake-chicken entrepreneurs have to demonstrate a “commercial sales minimum” at a “comparable market price”; in plain English, they need to move 2,000 pounds of the stuff at supermarkets and chain restaurants spread out across 10 states during a period of three months. And the Franken-meat can’t cost more than regular chicken.

That means PETA won’t be content with any intermediate (and not immediately profitable) breakthrough, like the development of lab-grown chicken that tastes as good as the natural stuff. Instead, the organization will hold the purse until a “commercially viable” product hits the market. In other words, you can’t win the $1 million unless you’re already in position to make a profit. At that point, a science prize doesn’t provide much incentive for innovation. It’s more like a small bonus.

The good news, of course, is that if you get the terms of a prize wrong all that happens if nothing. Pick grant and subsidy winners wrong and you still have to pay.

Following up on my piece yesterday about income-contingent loans, here is a cartoon that represents precisely why they require government provision. [HT: The Big Picture] Read more

Tax reform emerged out of the 2020 Summit but one guesses its seeds were planted well before. In today’s Age, Tim Colebatch asked 2020 participants what type of reforms the government might consider. I mentioned income-contingent loans and the idea of making the filing of an actual return optional. Then I said this: Read more

So what ideas came of the 2020 Summit? I might comment on my own Productivity stream a little later but, contrary to what some might have thought, I think that there were some potentially interesting ideas to emerge elsewhere. There were, of course, some that seemed a bit strange. Let me run through the highlights here. Read more

I have an opinion piece in today’s Age about the use of income-contingent loans to fund various programs. They sadly cut my call from a government-wide inquiry into areas where these can be deployed.

Read more

News today that the Reserve Bank is actively intervening to support liquidity in the mortgage-backed security market. Read more

Well the 2020 Summit is over. It was a torrent of activity and upon reflection really hard work. But what was it all about? In what is probably going to take a few posts, I am going to reflect upon the past few days and also some of the ideas that came out of the Summit. I’m doing this mostly to try and make sense of it all because, at first blush, and not surprisingly, there were few surprises. Read more

We are still in the midst in 2020 and I have no idea where we are going to end up. But this post from the ABC pretty much sums up the first day from our Productivity stream.

Well I have just survived day one of the 2020 Summit. I have a few seconds and so thought I’d just mentioned that. One thing is for sure — all the well thought out ideas had been heard before and were not too exciting even if sensible and the others were very “under-cooked” but are getting better.

It was a long day and hard to sustain the discussion. The best part for me was when I decided to get more ambitious and put forward that perhaps our goal should be to put an Australian on Mars by 2020. When queried about the cost, I elaborated that it was not part of the goal to bring them back — that was the expensive bit. But let’s face it, if that idea gets up it will have the quality of being new!

[Update: it appears that if Stephen Hawking had attended the 2020 Summit, he would have proposed something very similar]

So Peter Garrett failed to get the States to agree on what to do about plastic bags. In the media, it is apparently some sort of disaster. But when you look at what is going to happen, there may be some excellent outcomes from this.

What is going to happen? South Australia is going to ban plastic bags. This seems insane but so be it. Victoria, on the other hand, is going to trial a levy on plastic bags in two regional centres or localities. Now the word ‘trial’ is what is encouraging. So rather than blindly go into a policy they are going to see how it goes in a few areas. That way they can measure costs, the impact on bag use and, importantly, the impact on the number of gaps that end up in the natural environment. Of course, they have to measure those things before and after the policy and I urge them to put the informational gathering processes into place. But it is a good approach.

In this regard, even SA’s seemingly crazy approach can be measured for impact and compared with the trials and the status quo. So the lack of agreement has an opportunity for all to learn about what the best way forward is. Now who can bag such diversity?

Please stop the rumours already!

Of course, it is fake. It will say, “Australia, say g’day to the iPhone”

[From Engadget]

So with all this talk about Fuel Watch and what benefit it might bring to consumers, in the background is an issue relating to whether airport parking is over-priced or not. I don’t know about that but if you take a look at the Melbourne Airport website you can calculate your various parking options — and compare them to the competitor (a taxi) — before leaving home. That kind of information is not the hallmark of those with monopoly power.

Today, the Bank of Queensland came out in favour of an AussieMac style institution for Australia [over the fold]: Read more

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