Jun

30

Andrew Leigh leaves the blogosphere

by Joshua Gans | Filed Under Academia, Blogroll, Economics | 2 Comments

… and a ton of other stuff; hopefully temporarily. Andrew is going to Treasury for six months to try his hand as a public servant. On the one hand, I see this as a terrific opportunity, rarely afforded Australian academics, to see government from the inside. For what Andrew does that is essential and so long as it is temporary, his academic career will not suffer for it.

But for me personally, this is a big change. Andrew and I have written many papers over the past few years and continue to do so. Some of those are in the publication train but there will inevitably be a pause to the creation of new ones. But Andrew’s blog was the reason I got into this business and I get so much from reading both it and his AFR columns that were, by far, the best in the country. Many will miss that.

There is, however, another role Andrew was playing. For media commentary (not just on our joint work), we were each other’s fall-back. For instance, recently, I decided not to comment any more on the baby bonus and the timing issues that this would create today and tomorrow. Andrew stepped in and was there to save me from having to explain my decision to journalists. I’ll have to do my own wriggling now.

It is not all cost. One of the biggest mysteries Andrew and I had to deal with was why our push to have the baby bonus installment stopped failed earlier this year. The evidence and economics were compelling and it was a new political party in office. But yet we failed. Interestingly, one clue on that has come to light and it turns out that the policy we will have from 1st January, 2009, is in fact an original Latham era policy to do with parental leave. We had not been aware of this. The original policy involved fortnightly payments and a more stringent means test. But it was not motivated like Costello’s ‘one for the country’ absurdity but about parental leave. Hopefully, it will morph into that.

As a (temporary) insider, Andrew will likely get to learn more about what makes policies get traction and what doesn’t. This will be a valuable for all of us.

Jun

30

Bank hand-outs?

by Joshua Gans | Filed Under Economics | 2 Comments

The head of National Australia Bank in Australia, Ahmed Fahour, came out against government intervention in some places and for it in others. From The Sheet:

Fahour said deposit insurance could do more harm than good and he was equally sceptical about the so-called AussieMac proposal.

“This would effectively mean government would get into the business of purchasing home loans and then issuing them to investors as residential mortgage-backed securities relying on the government’s AAA rating.

“I would much prefer to see the issuers of RMBS making sure their products are less complex and completely transparent, so investors have confidence in them and can adequately assess the underlying return.

“Government intervention may forestall the work necessary to achieve these improvements and ultimately limit access to finance, inhibit innovation and lessen the efficiency of our financial system.”

OK that is all very well but one of the roles of AussieMac was to provide that transparency and stimulate others by creating competitive pressure to do the same.

But Fahour is not above some help: “One initiative I would urge the government to consider is better tax treatment for Australian deposits.” He argues that long-term savings get such tax treatment. But, come on, those long-term savings should be underpinning mortgages as much as short-term deposits. Why ask for favourable tax treatment for deposits that do not provide long-term stability for credit sources? It seems to me that banks are quite happy for government help where it suits them but not others.

Jun

30

HECS-style for parental leave

by Joshua Gans | Filed Under Economics | Comments Off

According to ABC News, HECS architect, Bruce Chapman has finally released his proposal for paid parental leave using an income-contingent loan (through CEDA). His baseline idea, which I have endorsed many times, is that parents will be given income support during maternity leave in the form of a loan that will be paid back through the tax system. This is a fair way of approaching the issue, is compatible with government support (both minimum wage paid leave and return to work tax credits) and is easily funded.

Now I haven’t seen the final version of the report but my only quibbles are the emphasis on maternity as opposed to parental leave and I think that the base for repayments needs to be based on household rather than individual income.

[Update: OK I have seen the final version. Sadly, it is not publicly available. You need to pay CEDA for it. But they have moved to a household income test and parental leave in general. So much for quibbles.]

Jun

29

A conversation on creative capitalism

by Joshua Gans | Filed Under Economics | 2 Comments

There is a very interesting conversation going on between some very noted individuals at this new blog. It started with this Davos speech by Bill Gates. Ed Glaeser has joined in to support it somewhat while economists such as Steve Landsburg, Richard Posner, Gary Becker and others are doing the typical economist thing and wondering whether corporate social responsibility or what have you is a good idea. Perhaps cure government first.

My submission to the conversation (I have no idea whether they will publish it or not) is over the fold.

Read more

Jun

28

‘Buying’ babies

by Joshua Gans | Filed Under Economics | Comments Off

and what I mean by that is using monetary incentives to encourage fertility. From the New York Times magazine a long article about problems in Europe. With all the discussion again this week in Australia about the baby bonus and alongside it, parental leave, some choice quotes: Read more

Jun

28

Errors in editorial decision-making

by Joshua Gans | Filed Under Academia, Economics | 3 Comments

A new study examines the quality of editorial decision-making at the Journal of International Economics.

There are many parties involved in the publication process who can gain from a better understanding of the inside workings of this process. Since editors are, hopefully, interested in publishing good papers and rejecting bad ones, some indication of the extent of type 1 and type 2 errors should be very useful. The JIE has high type 2 error (7% of published papers have no citations at all) and low type 1 error: very few papers rejected by the JIE are accepted at better-ranked journals. Only 564 of 2434 rejected papers were published and of these 564, only 14% were published in places ranked above the JIE, and even these are cited roughly half as often as all JIE papers on average. This suggests that higher standards might be relatively costless. Our work also suggests that there is editorial heterogeneity in standards and that editors with worse papers allocated to them tend to be more lenient, which is consistent with their under-estimating the average quality of submissions to the JIE. Providing editors feedback on how their standards seem to rank relative to other editors could help reduce heterogeneity in editorial standards.

The authors conclude that making use of rejection without review is likely to be a good move in terms of saving resources and time. Interestingly, the Journal of International Economics was responsible for actually publishing the rejected classic paper of Paul Krugman that founded new trade theory back in the late 1970s.

Jun

28

Didn’t miss it by that much

by Joshua Gans | Filed Under Movie Reviews | 2 Comments

When it comes down to it, only The Addams Family and The Brady Bunch have had movies that bettered their television series originals. But unlike some true disasters — e.g., The Beverly Hillbillies — Get Smart is actually a reasonably funny movie. But to do so, it takes some notable changes in direction from the original and it is the sting of that that takes the gloss off.

First and foremost, Get Smart was always known for its catch-phrases: “Missed it by that much,” “Would you believe a boy scout and an angry dog?”, “Starker this is Kaos who don’t blurrpht here,” “Oh Max” and “Sorry about that Chief.” Those were all there but it just wasn’t the same. And let’s face it Seigfried begs for a fake German accent rather than the accent of General Zod.

Second, the roles of Max and 99 have changed. Max was bumbling but always very lucky while 99 was competent but accepting of her role of never receiving recognition and playing second fiddle. In today’s world that didn’t work and so 99 became competent and defensive of it while Max was unsure of himself but seemed to actually have some measured and non-accidental success.  But some old favourites are still around. The Chief suffers, Laromie is cocky and 13 is despondent (for good reason).

Finally, there was a lack of absurdity. The shoe phone makes a sentimental appearance; something that in so many way emptomised the absurdity that was Get Smart. But there was no flashlight in a gun. And the cone of silence was there but unnecessary. The only throw-back was a Swiss Army Knife with lots of good and useful stuff but a knife. And the entire devious Kaos plan that was usually quite ludicrous and founded on absurd predictions of social commentary was pedestrian and straight out of 24.

Despite all that it was a funny movie. Moreover, it did retain one thing of the original and that was an undercurrent of political commentary that is subtle only because it is disguised with humour such as a high level government discussion with the phrase “Now boys, remember when we squabble the terrorists have won.”

Nonetheless part of me did miss the commentary of an earlier time:

Chief: “So who can walk into Kaos headquarters, retrieve the plans and walk right out again with out being noticed or recognised by anyone?”

Max: “The Vice President!”

Classic.

Jun

28

Minimising the pain

by Joshua Gans | Filed Under Environment | 1 Comment

There is an article in the Sydney Morning Herald in anticipation of the Garnaut Climate Change Report next week looking at how hard it will be to deal with climate change.

Acting sooner also puts companies in a better position to adapt to a low-carbon future. A rigorous scheme will give government and business the chance to learn to cope with the new rules, says an economist from the University of Queensland, Professor John Quiggin, and a management expert from the University of Melbourne, Professor Joshua Gans.

It sounds obvious but is often overlooked. “Without knowledge of how to conduct policy, we may be left with painful decisions, in much the same way as economies that fail to handle inflation or manage debt are forced to suffer austerity programs and experience real short-term pain,” they say.

Hmm, ‘management expert’ indeed! Anyhow, what we do say is that to minimise pain and maximise learning and act quickly the government needs to target some sectors first — notably energy and transportation — before examining how to roll out an emissions trading scheme across the entire economy.

Jun

28

Expropriation and disclosure

by Joshua Gans | Filed Under IP, Innovation | Comments Off

In our writing about markets for ideas, Scott Stern and I emphasised the risk that start-ups face in trying to sell their ideas to incumbents. We suggest that for that reason incumbents who want to purchase ideas from start-ups will want to gain a reputation for fair trading. In that context, whomever is right in the following story, Google’s reputation might suffer. Read more

Jun

27

Read Parentonomics for a Cure

by Joshua Gans | Filed Under Economics | 1 Comment

I have, in my hands, the very first printed copy of Parentonomics. My kids are currently doing the MS Readathon (indeed, Child No.1 read books for it while manning her other charity store). So I have decided to help them out by placing that first printed copy for sale on eBay. Click here to see the listing and bid if you want to.

The book will be available in Australia in 6 weeks and elsewhere in the world in 2009. I will ship a personally signed copy to the auction winner. Shipping to anywhere in the world is free. Moreover, all proceeds will go to the MS Society and I will personally match the winning bid with a donation.

So this is a great opportunity to help out a good cause and maybe get some kudos from getting to read the book first up. My mother hasn’t even read it!

In celebration of this, let me link to two older posts. First, here is a great 30 year old story about one child’s view of the MS Readathon. Second, here is what happened when my children had their first eBay experience.

Jun

27

Research Assistant opportunity

by Joshua Gans | Filed Under Academia, Economics | 1 Comment

I am looking for a full-time (or almost full-time) research assistant. The job description and application instructions can be found here. No one is going to pretend that RA pay is lucrative but I promise that the successful applicant will be “paid with opportunity.” The issues I write about on this blog are a good guide to the sort of areas you might be dealing with. If you fit the bill or know someone who might, please send this along to them. Applications close 11 July.

Jun

27

Andrew Bartlett leaves the Chamber

by Joshua Gans | Filed Under Economics | Comments Off

The blogging senator, Andrew Bartlett, gave his final speech the other day. He posted the full text to his blog. I was particularly delighted to read this: Read more

Jun

26

McCain innovates on innovation policy

by Joshua Gans | Filed Under Innovation | 3 Comments

John McCain has proposed a $300 million prize for car batteries: Read more

Jun

26

Game Theorist: Recent Posts

by Joshua Gans | Filed Under Parenting | Comments Off

A ton of activity this week at Game Theorist:

Jun

26

Do we have a problem with search?

by Joshua Gans | Filed Under Competition Policy, Innovation | 1 Comment

There was been lots of discussion about whether a Googlopoly is a good or bad thing. Sure they may have a virtual monopoly on search but they are somewhat of a benevolent one so what is the problem. But even with benevolence, there can be a lack of diversity. So when a friend told me that they were going to be doing lots of work for Microsoft to ensure that there were a variety of search options, I decided to think just a little about it. Read more

Jun

25

What does it mean to include petrol prices in emissions trading?

by Joshua Gans | Filed Under Environment | 18 Comments

Peter Martin discusses the lack of bipartisan support on whether petrol should be included in any emissions trading scheme. I have been trying to follow this debate for sometime and find myself completely confused. Indeed, my current guess is no one is being really coherent on this issue. Read more

Jun

25

Real entrepreneurship

by Joshua Gans | Filed Under Innovation | Comments Off

For those who are entrepreneurs or would like to know what the experience of real entrepreneurship is really like, here is a new site set by Richard Caro that collects those stories.

Jun

24

Finally, finally, finally, TV on iTunes Australia

by Joshua Gans | Filed Under Television | 1 Comment

The Australian iTunes Music Store has finally got itself some TV shows. There is quite a bit of stuff from Channel 9, the Disney Channel, MTV and, of course, the ABC (not just Australia but the US so Lost is there). Episodes are $2.99 making them considerably more expensive than ones in the US (which sell for $1.99). But at the very least that makes having a Video iPod, iPod Nano, iPod Touch, Apple TV or iPhone much more sensible. Previously, only music videos and podcasts were there. It is still pretty sparse and you had better have a good broadband limit otherwise it will be chewed up quickly but maybe this is an alternative to the raft of illegal downloads.

Jun

24

Google Scholar and University of Melbourne

by Joshua Gans | Filed Under Academia | Comments Off

OK this link isn’t for everyone but for those at the University of Melbourne wanting to use Google Scholar and get straight to source articles even when away from the University campus, this link is really helpful and works a treat.

Jun

24

Gmail beats Outlook for school

by Joshua Gans | Filed Under Technology | 1 Comment

NSW schools has opted for gmail for students rather than Outlook. Aside from a massive cost saving this will also allow easy email access outside of schools plus access to Gmail’s great spam filter system and other applications. Surely a lesson there for other educational institutions.

Jun

23

Home ownership, what is it good for?

by Joshua Gans | Filed Under Economics | 2 Comments

Paul Krugman reminds us today that home ownership isn’t all it is stacked up to be. For Australia, this just means we should neither encourage nor discourage it. So can someone please tell our government to stop handing out the stupid, GST transition hangover, first home buyer’s grant?

Jun

23

Game Theorist: Weekend Posts

by Joshua Gans | Filed Under Parenting | Comments Off

Lots of posts at Game Theorist this weekend including:

Jun

20

Results: Happy Economists

by Joshua Gans | Filed Under Blogroll, Economics | 2 Comments

OK so here are the results of yesterday’s poll (thanks to Google Spreadsheets). The first number is the average (out of 5 where 5 is ‘Really Happy’ and 3 is ‘Neutral’) while the number in the brackets is the standard deviation.

4.35 (0.90)     3.3 (0.82)       3.47 (1.1)      

2.88 (0.79)   3.26 (1.06)     3.84 (0.81)

I am guessing Andrew Leigh’s picture was taken pre-baby.

Jun

20

Randomised Business Trials

by Joshua Gans | Filed Under Economics, Tech & IP | 2 Comments

There has been lots of discussion about the need for randomised trials in policy evaluation (just google “Andrew Leigh” and “randomised” to see what I mean). However, the same logic — that choices can use evidence — applies to business as well. In particular, David Pogue is interested in whether electronic books will deter book piracy. As a result, he and his publishers are proposing the following:

Early next month, the company will also start selling electronic versions of certain books with no copy protection. For a single price (cheaper than the printed-book price), the package will include the book in three formats: PDF, Mobipub (compatible with the Amazon Kindle), and Epub (soon to be compatible with the Sony Reader).

Anyway, I’ve agreed to try an experiment involving one of my books (“Windows Vista: The Missing Manual”): to offer it as part of that buy-the-electronic-versions program.

O’Reilly is also offering five other books in these formats, including Information Architecture for the World Wide Web, Third Edition and Open Sources 2.0. The company plans to announce other titles in July.

Now how Pogue and his publisher will use and analyse the data is still open. But it will be there. However, it is not clear how randomised the trial is. How were these candidate books selected? If it was out of hat then fine. But also, there is some contamination coming from the announcement in the New York Times. Nonetheless, at least it is a move in an interesting direction. Precisely the sort of thing that can help resolve the “someone is wrong on the Internet” feeling.

Jun

19

Parental Leave Talk

by Joshua Gans | Filed Under Economics | Comments Off

Slides for my talk on parental leave are available here. But if you are more adventurous I rehearsed and uploaded my talk to YouTube in three parts.

Click here for parts II and III.

Next Page →