Twitter: Joshua Gans- @jodiecongirl Actually, it says more about you that you've heard of them!
- @jodiecongirl I think it says that economists don't just assume rational agents but are attracted by them too. Talk about a value conflict.
- @jodiecongirl Why uninteresting? Think of Alex P. Keaton, Quark , Sheldon and Dogbert.
- RT @freakonomics: Freakonomics Movie is released via iTunes tomorrow: http://bit.ly/9YveA3 [I'm gathering the kids for a Friday night movie]
- Am I to understand that we are now in the path of a Hurricane? http://bit.ly/daitO9 This aint the tropics.
Readership
Nov
29
Cut Australia in Two
by Joshua Gans | Filed Under Movie Reviews | 1 Comment
The movie that is. Last night I was dragged by happily accompanying my spouse to see Australia, the new epic tourism commercial motion picture. Thanks to a past association with Hugh Jackman we have to see all of his movies. That is fine for X-Men but I’d rather have some negotiating power for others.
That said, save for the length, it was actually an enjoyable movie. It is not just cliched but brilliantly cliched. The actors are all iconic Australians, the plot is a mixture of almost every Australian movie for the last fifty years and the dialogue — oh, the dialogue — is so cornily imagined that it will leave you in stitches. The notion that you can view this movie as anything other than an intended, mostly comedic, homage to Austrlaian film-making is ludicrous. That is precisely why it will play well in Australia, maybe England but nowhere else. You have had to have been subjected to too much of Australia’s popular culture and historic past to appreciate it.
But it is too long. Indeed, half way through you would be quite satisfied if it just ended; even before you got to sit back and see an Australian city bombed to smithereens for a change. It should have been a TV mini-series. You watch one night and return the next to see what happens next. Doing it back to back is too much.
So I recommend that you wait for the DVD and watch it over two separate nights. I’m sure it will be better appreciated that way.
Nov
29
Find-a-Loo is here
by Joshua Gans | Filed Under Economics | 2 Comments
Well almost. I have long lamented the lack of a toilet finding iPhone application. Well, Toilet Mate (available at the App Store) goes a long way there. Open up the application and it finds the nearest facilites and you can then click on them to find directions using the Map Application. Of course, what would be better would be something that let you see all of your options and whether it was open and had parent facilities or what have you. But this will do for the moment and at around a dollar it is cheap. I wonder how they got the data?
Nov
28
Well it has been over a year since we had turnover in the world’s oldest person. Today the mantle was handed from 115 year old Edna Parker to Maria de Jesus who was trailing her by 6 months.
Nov
28
House price predictions
by Joshua Gans | Filed Under Economics | 14 Comments
Steve Keen is predicting a 40% drop in Australian house prices over the next 5 years. Everyone else disagrees.
Turns out the market is also not responding in the expected way. For the last three months, they have risen overall across Australian capital cities.
Nov
27
Children Computing Bleg
by Joshua Gans | Filed Under Economics | 8 Comments
I am looking for a computer programming (or multimedia) course for my 8 year old. He already plays with MIT’s Scratch but I think a little formal instruction would not go astray. If anyone knows of something in Melbourne that might fit the bill, I’d really appreciate it.
Nov
27
Broadband in 1992
by Joshua Gans | Filed Under Economics | Comments Off
As conceived by Telecom. Watch and enjoy here. You can get documents!
Nov
27
Tivonomics
by Joshua Gans | Filed Under Economics | Comments Off
Justin Wolfers loves his Tivo and can quantify that love. There is a ton of consumer surplus in that baby. He estimated $250K per household (yes that is K).
Of course, the surplus comes in two parts. The smaller part is on optimising viewing but that is less of a big gain as it is relative to other methods of doing the same thing (e.g., a VCR).
The big part is the saving of disutility from having to watch ads. But his argument isn’t for Tivo but for banned advertising. What is a more interesting question is why advertising — which surely doesn’t earn advertisers that amount of revenue per household — is worthwhile given how much people appear willing to pay to avoid it?
That said, while he may love his Tivo, there are social consequences. As I have written here it likely causes broadcasters to increase advertising levels (harming non-Tivo owners) and it may have an impact of programming quality.
Nov
26
Telstra looks like waiting until the last minute to lodge a bid on the NBN. I guess they will tell us at 12pm tomorrow.
Their logic for not bidding was on the basis of the government not ruling out structural separation as a condition. That said, why does the whole thing matter? Telstra have said they won’t separate regardless and I’m sure aren’t going to put it into their bid. In terms of making a fuss this week, the whole issue seems like a red herring.
Nov
25
Gambling for fuel
by Joshua Gans | Filed Under Economics | 3 Comments
We have seen groceries for cheaper fuel for many years but this one is a new one. According to this notification at the ACCC, Seven Eleven and Crown Casino are entering into a deal where, as far as I can tell, if you do enough gambling you can get a petrol discount. I had always thought there were unexploited opportunities for bundling unrelated goods. Can anyone find the complementarity here?
Nov
25
Is the Australia Institute off the planet?
by Joshua Gans | Filed Under Environment | 7 Comments
It is natural to ask this question given their media release [HT: Peter Martin] that stated that:
‘When emissions trading comes in, every tonne of carbon dioxide saved by households will simply free up a tonne that can be used by industry. Installing solar hot water systems, driving smaller cars and turning off the lights will not help the environment one bit. The only effect reductions in household energy use will have is to free up pollution permits for the big polluting industries,’ Dr Denniss explained.
“Will not help the environment one bit.” Really? How so?
Once the target is set, the efforts of Australian households to reduce their energy use will only change who does the polluting and the price of the permits, but not the total level of emissions. The only effective way for households to reduce Australia’s overall carbon emissions will be to buy emissions permits and rip them up.
So let me understand this. The only behaviour we could possibly be worried here is environmentally conscious consumers as others don’t currently have an incentive to save. Currently, when those consumers reduce emissions that helps the environment. After the ETS, if they want, consumers could say, consume less electricity, buy emissions permits with the saved money (now more because of the ETS) and tear them up. How exactly is that not better?
The Australia Institute is coming up with some hypothetical scenario that requires environmentally conscious consumers to avoid buying permits. Why should that happen? Indeed, with the ETS, they can buy permits and not actually reduce their consumption. Surely that will increase the supply of environmentally conscious behaviour?
Nov
25
Fiscal stimulus
by Joshua Gans | Filed Under Economics | 7 Comments
Money is being thrown at the economy but there is little discussion of what it needs to do. As we are back in a traditional macroeconomics world with the real possibility of a liquidity trap, we know that the money has to encourage expenditure on real stuff. Saving alone will not cut it. That means consumption and investment. Both are currently a problem due to diminished expectations.
So in terms of what the Rudd government is doing how is it stacking up on stimulating the right stuff. The transfer to pensioners does not appear to count. It is mainly to cushion the shock of reduced wealth in our privatised social security world. That means it will go straight back into those savings.
The money given to local governments is better. It has to be spent and spent quickly. It also had to be spent on new stuff that wasn’t budgeted for. Of course, it is hard to perfectly enforce this but this is as closed to forced consumption/investment as you are going to get.
We can also spend money on infrastructure but we have to do that quickly. That is a hard ask and can lead to really expensive bad decisions. Money spent re-tooling for the coming emissions trading scheme may be a better option.
On the tax side, income tax cuts and corporate tax cuts won’t cut it. These will be mostly saved. However, a temporary cut to the GST would be better. Temporary changes to the GST impact on consumption more than saving and in particular on consumption of durables. Durables are precisely the goods whose purchases are being deferred. So it would hit all the right places. Indeed, I suggested the reverse earlier this year when our worry was inflation.
[Update: and that is precisely what the UK has done].
Nov
24
Broadband in the AFR
by Joshua Gans | Filed Under Broadband | 5 Comments
I have a piece today in the Australian Financial Review on broadband (reproduced over the fold). For regular readers, it might strike you as something very new. Put simply, I take as a political constraint that the government is going to invest in high speed broadband. I argue that it should not go halfway (something that I have argued before). Instead, it should build the whole 100Mbps+ network capable of doing all telecommunications and set-up a state-owned entity in direct competition with Telstra. In the article, I outline the numerous reasons why now is the time for such action. Sometimes it is more efficient to invest more money compared to a cheaper plan that would neither bring us up to world best practice, would benefit the rich in society (because access would not be cheap) and would not buy us real competition.
By the way, Kenneth Davidson in The Age today writes that “The fixed network is a natural monopoly. It is impossible to conceive a NBN running parallel with the existing copper network.” Clearly, I do not think it is impossible to conceive of that.
Nov
22
Where’s the transit?
by Joshua Gans | Filed Under Economics | 2 Comments
So a new firmware update for the iPhone is out. One of the big features is changes to Google Maps that will allow public transport route directions, plannings and timetables. You can see how useful that is with the image at the side that tells you precisely how much time you have to get to a train or bus.
Well almost. In Australia, if you are in Perth you can enjoy this feature. Elsewhere it is not available. Why on Earth would that be the case? Are we hiding timetables? Is it a big secret? Are we scared people might plan routes?
I am willing to bet that someone in State governments around the country are to blame. It is appauling that people are carrying around a mechanism and software to actually use this information and it is not available. If anyone can enlighten me as to the circumstances that would lead this information not to be available I would be most grateful.
[Update: here is one answer provided by Kwanghui Lim, Metro, that does contain Melbourne information. The question remains: why there and not in Maps?]
Nov
21
Derek Slater and Tim Wu think that customers could build their own fibre connections to the net. Here is their paper. I haven’t read it yet but as I mentioned some months ago it sounds like an excellent idea. I have had a related idea here.
[Update: OK, I have now read the paper. It is excellent. Of course, I would think that as it seems to follow the line of thinking in my 2006 CEDA report. Customer-owned fibre is just one option in a raft of suggestions as to how to get local provision of broadband in place. The authors note that the chief barrier is likely to be the availability of what they call an Open Point of Presence connection to the Internet. That is the barrier we face in Australia. But they also argue that a tax credit for broadband investments by customers may be a good funding model. I agree.]
Nov
19
Lego arbitrage
by Joshua Gans | Filed Under Economics | 2 Comments
Is there an arbitrage opportunity in the market for Lego parts? From GeekDad:
A few weeks ago, I picked up an Imperial Dropship set to stow away in the gift closet (handy to have for for short notice kids’ birthday parties and to build up a stockpile for our own birthdays, Christmas, etc…). It was roughly $13 and included 3 stormtroopers and 1 shadow stormtrooper pilot. Looking at the minifigs for sale on the usual sites, I found prices for the shadow stormtroooper (new) ranging anywhere from around $4 to $18. New condition stormtrooper minifigs were fetching anywhere from $3 to $18, with the average being somewhere in the $5 area. So, if one were to purchase the Imperial Dropship LEGO set, even at full retail price, and part it out, the net take would be at least $20 for the four minifigs alone, then probably a couple of bucks for the ship itself. That’s a pretty decent profit margin considering that you can just auction these off without having to bother with retail space or staff and buyers pay for their own shipping. Plus you may get that determined collector who starts bidding the price up. Start adding in the much beefier prices for less common figures and it becomes even more compelling: Snowtroopers, AT-AT Drivers and Ewoks going for $20 each, Count Dooku at $25, Greedo at $45 and Jango Fett at $75. Even Jar Jar Binks will get you at least $7 and no-one likes him… Of course you can usually pick up Star Wars LEGO sets on sale on any given week, so full retail price is not something that you would typically have to pay for your stock.
Food for thought.
Nov
19
How exactly did Keynes survive?
by Joshua Gans | Filed Under Economics | 4 Comments
What is clear is that when it came to the crunch, as policy-makers searched for ways to save the financial world, the tools they used were stock-standard traditional Keynes. In many respects, it was as if the frontier of macroeconomics had not changed from the Neoclassical synthesis of the 1950s. The pump is being primed and liquidity is being injected into markets — by both traditional means and nationalisation. Keynes himself must be bouncing up and down with joy in his grave.
I must admit, there are times where I think that I was the last one out on reading Keynes and, in the mainstream, being schooled in post-Keynesian thought. When I arrived at graduate school at Stanford 18 years ago, none of my classmates had read the General Theory — let alone actually studied it — and I am sure they have not picked it up since then. Macroeconomics would talk about discretionary policy and that it could have benefits but it was very theoretical and it was just not clear it was the stuff of serious policy anymore.
The last two months have proved that not to be the case. The amazing thing is not that we are all apparently Keynesians but that there were some Keynesians around in positions of power to actually have that influence. But they must have been there.
I only write this by way of curiousity. Perhaps some historian who looks at this moment in history will be able to track the flow of ideas.
Nov
18
Fonts and phones
by Joshua Gans | Filed Under Economics | 2 Comments
I have waxed lyrical about the importance of font choice on this blog. One of the things that struck me about the iPhone was the beauty of the numerical typeface. It is, of course, Helvetica. But everytime you type a number, you can appreciate it’s clarity. It is a joy to use. (And no that isn’t going over-board, you philistines!)
In Slate today, an article about how deep this goes within Apple.
As Jobs told the Stanford grads, “If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do.”
Nov
16
The Sydney Morning Herald has an article today that quotes me on what might happen when the means test for the baby bonus comes in at the beginning of next year.
He said a similar phenomenon could be expected up to the end of the year.
“The good news is that it won’t affect too many families.
“The bad news is that even for them $5000 tax-free is enough money to think about,” he said.
Professor Gans said a similar incentive in the US tax system makes the last week of December a very busy one and “I think we can expect the same [in Australia] this year”.
But here is the bit that really surprised me. The professions are only too happy to help:
Royal Australian and New Zealand College of Obstetricians and Gynaecologists women’s health committee chairman Ted Weaver said most medical staff would accommodate requests to induce labour or perform a caesarean section a few days early.
“It’s important we help patients out financially and help them get as many shekels from the Government as they can but only if it does not compromise the welfare of the mother or her baby,” he said.
Now a few months back there was a controversy about whether the delays to childbirth when the baby bonus was introduced and increased were a bad thing or not. The argument put forward was that planned birth timing generally led to too early a birthday and that some delay would be a good thing. Presumably, the proponents of that argument will be up in arms at policies that cause parents to time their births earlier.
Nov
16
Blogging and piracy
by Joshua Gans | Filed Under Academia, Blogroll | 2 Comments
For some reason, this new paper on blogging by Gaudel, Mathieu and Peroni was associated in my mind with this article in Slate on movie uploader, aXXo.
The blogging paper concerns the economics of reciprocal attention. The hypothesis is that the reason people blog is to have their ideas read but that this comes with a price (or norm) that you need to read and acknowledge the ideas and opinions of others. The paper looks at Livejournal data to test this out by examining the quantity of blog content and the type of network a blogger has — friends versus readers. The idea is that you have to consider putting effort into blogging. Under the norm, if you don’t provide much content you will have to cite and discuss others more so as to maintain status. Conversely if you provide lots of content, you don’t have to worry about giving as much attention to others. It is overall contribution that matters. What they find is that blogs with more readers than friends do indeed provide more content. I’m not quite sure this is the first order model but, as usual with these things, it can get you thinking.
So I was thinking about aXXo. aXXo is apparently a brand name in the Bit Torrent network for providing good quality movie content. Of course, this is illegal content but in a world ungoverned by the rule of law, that illegality attracts malicious content disguised as something more attractive. So a brand matters and the torrent distribution cites maintain the integrity of brand names with account verification.
But what is in it for aXXo? There can be no explicit recognition as identity is secret. There is no obvious remuneration although the torrent sites can do well from advertising revenue. aXXo is purely self-motivated but with cost, some risk of prosecution. It seems from the article that aXXo does get attention and recognition with downloaders leaving complementary comments. Can that be it? Is that enough to keep going? It makes you wonder.
Nov
16
Loo Dues
by Joshua Gans | Filed Under Economics | 2 Comments
The newspapers are reporting on a scheme to save water by installing meters on toilets and having households pay by the flush. Well actually not quite that. They want people to pay for their water on the basis of outflows.
The question is: how much will this really differ from the current scheme — that already includes an installed water meter — based on inflows? In my mind, not much given that we hardly charge for use there. So if that remains this would hardly make a difference. Indeed, it will involve additional costs of installing appropriate meters and if users can work out ways of not diverting water back into the system they might use more water.
That said, if there are additional costs associated with outflows, charging for it is appropriate. The problem is that the politics have put barriers on real charging for all flows and that is the thing we need to fix.
Nov
16
Big Bang Theory
by Joshua Gans | Filed Under Economics | Comments Off
One the best sitcoms in recent years, The Big Bang Theory is back this week on Channel 9 at 8pm Wednesday. I cannot recommend it more highly.
Nov
14
Broadband in the Age (Day 5)
by Joshua Gans | Filed Under Broadband | 2 Comments
This article marks the final part in my five part series, “Better know a broadband debate.” Today’s instalment, “a new hope” in which I discuss things other than broadband ‘pipes.’
Nov
13
Surplus vs deficit
by Joshua Gans | Filed Under Economics | 2 Comments
Thinking about this exchange.
What is the difference between a $1 surplus and a $1 deficit? Answer $2.
What is the difference between a $4 surplus and a $2 surplus? Answer $2.
Multiply by $10 billion and enjoy.
And the point: it is change in fiscal position that matters, not the description of where it ends up.
Nov
13
Broadband in The Age (Day 4)
by Joshua Gans | Filed Under Broadband | 2 Comments
In which I explore the hopes for competition. Basically, the choice is up to the government: competition or the money. All past governments have chosen the money and we have paid for it. Tomorrow: some other broadband policies other than infrastructure that would make a big difference.
Nov
12
So FuelWatch has been defeated. Well near as I can tell the problem identified by the ACCC in its Petrol Price Inquiry — that the Trade Practices Act may not protect against information sharing on price and other conditions by competitors — remains. The question is: will the ACCC now test the waters in the Courts on such price sharing or will the Federal government step up to the plate and actually introduce the real reforms highlighted by the ACCC’s inquiry? FuelWatch might have circumvented the need for that but there was a real competition issue at the heart of this that has not gone away. It is time to put that back on the agenda if our policy-makers are really serious about competition policy.