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Showing posts from April, 2009

Economics of Blog Traffic

Freakonomics points out a new paper on the relationship between blogging and a blogger's activity in the community:
A new study analyzes reciprocal attention in blogging. The authors conclude that “the activity of bloggers is found to be related to the size and level of reciprocity within a blogger’s network.” The study also finds that bloggers who don’t participate in reciprocity are punished with a lower number of readers. In other words, the Internet hasn’t remotely damaged the arts of logrolling and mutual back-scratching.While I think the conclusion is probably true and that it is useful to branch out in the blogging community, it's worth considering the methodology of this analysis. The authors analyzed a dataset provided by LiveJournal; and as any blogger knows, LiveJournal isn't exactly the place where any established or aspiring to be established bloggers are hanging out..

Reforming Newspapers

In light of another devastating collapse in circulation at just about every major American newspaper, it seems like their ultimate death is becoming inevitable. Just about everyone one of these major papers has made significant cutbacks in some way, but they all maintain all of the features of a full newspaper: national and international coverage, local news, sports, weather, op-ed, etc.

Twenty years ago, it made sense for every newspaper to offer this kind of full coverage. It was the only way for someone in, say, Detroit to get coverage of the happenings in Washington; or for a person in Dallas to find out what was going on in Russia. Access to competing newspapers was limited to libraries and wire stories were only available in the newspapers that picked them up. The internet didn't exist. Even in the early days of the internet, most content was locked up and available to subscribers only. It wasn't until recent years that the walls around news access came crashing down.

Even…

Why Rush Hour Exists

In the debate over congestion pricing, an idea that gets thrown around is that for twenty hours a day, most of America's roads and highways aren't even close to their capacity. The rest of the time they are overwhelmed with vehicles. Therefore, we can improve the efficiency of roads and highways by spacing travel throughout the day; and one way to do that is provide an incentive to travel at non-peak times. I'll admit, it sounds great in theory; but it overlooks a few key reasons why rush hour exists at all.


Employees working at the same place and at the same time is good for business. Putting people in the same office for the same forty hours per week makes it easy to organize meetings and to collaborate on projects. Working the same hours as other companies makes it easy to interact with clients and suppliers. If everyone got to pick which forty hours per week they got to work, productivity could take a hit.

Workers, not employers, bear the cost of long commutes. Typically…

The Charity Merry-Go-Round

Two and a half years ago I donated a modest amount of money to an environmental charity. I don't have much income, I have student debt, and I'm not using any charitable donations as a tax write-off. Over the last few years, the value of the letters, pamphlets, pens, address labels and other freebies that this charity has sent me has exceeded the value of my original donation. I can't help but feel the money I donated just got used to ask me for more donations; it didn't go to help the environment at all!

Look, I understand that big donors appreciate gifts and that if charities remind them to donate again they will. But the little donors are the ones who give simply because they believe in the cause and want to do what they can to help. If charities think they can raise additional revenue by sending marketing materials to their big donors, that's fine. I hope that they realize, however, that the same marketing strategy only makes little donors like me feel jaded and …

Transit Credit Cards

Last week GOOD had an interesting proposal for universal transit cards. I think it's a excellent idea. I also think it can be taken a step further: transit credit cards.


I haven't worked out the details, but the system would look something like this: a consortium of transit agencies would partner with a major bank to create a credit card that doubles as an a transit pass. The card would be embedded with an RFID chip that could be used to pay fares on trains, buses, etc. Or fareboxes could be modified to allow these new cards to be swiped. Unlike existing transit cards, which use a debit system to deduct from a prepaid balance, the new cards would charge the fare to the rider's line of credit, and the balance would be paid just like any other credit card. Further, these cards would offer free transit rides as "bonus awards" for all purchases, whether on transit or elsewhere.

The user would benefit in two ways. First, the ability to pay for transit services with cred…

High School Economics

In light of the economic crisis, the NY Times posted a quiz consisting of 18 multiple choice questions from past AP Econ exams. I scored a 17/18, which wasn't bad considering my distaste for multiple choice exams. I'd be curious to see some of the statistics from this quiz (which questions the most people got right and wrong, the mean score, etc.). Considering the results from Pew's News IQ quizzes, I wouldn't be surprised to find out the mean score is less than 8/16. Nevertheless, it probably won't stop anyone from having an opinion on the economic crisis.

Unanswered EV Questions

Shai Agassi has a pretty interesting idea for a new personal transportation infrastructure.



Agassi sees his proposal as a solution to two problems: dangerous CO2 emissions and expensive and volatile imported oil. Here is the problem: Agassi makes no reference to the problems that subsidized vehicles and under priced fuel have caused in this country, notably traffic, congestion, sprawl. In fact, if his program is a success and it manages to decrease the cost of vehicle ownership we risk exacerbating these problems. Agassi talks about declining price per mile driven as some sort of god-send. He ignores the fact that the already low marginal cost of driving is a tragedy of the commons that ultimately leaves everyone worse off.

Now, could we combine Agassi's proposal with policy like smart tolls, congestion pricing or a federal VMT tax? Theoretically, sure. But it seems as though he doesn't mention such policies because he sees the current environment of congestion and sprawl as ide…

Fear of Taxes

I recently had a discussion with someone who believes taxes on super-jackpot lottery winnings are too high. It would seem, to a lottery winner, that a windfall is a windfall. If he's currently making $40,000 a year, whether the jackpot is $4 million or $40 million, the lotto winner is still substantially and immediately better off. Of course my acquaintance had a simple answer: "I don't care if I win $4 million or $40 million, I want to keep it all".

The assumption here, of course, is that eventually he will win.

Economists have long joked that the lottery is merely a tax on stupidity. The expected value of buying a lotto ticket is almost always negative. Now, there are those few times every few years when the jackpot becomes so lucrative that the expected value turns positive. Even I have been known to spend five bucks on tickets during these rare occurrences. But here is the thing... just because you're getting a good value for your money doesn't improve you …

The Voicemail Blow Off

There has been quite a bit of discussionlately about voicemail being a dying technology. Frankly, I agree that email is a superior means of communicating than voicemail, and I prefer to send and receive emails rather than voicemails; but regardless of how second-rate voicemail is to other communications mediums, it’s still bad taste of blow off people who leave you voicemails.

My biggest pet peeve in life is getting stood up. When two people make a social pact to meet at a certain place in a certain time, it’s pretty grimy to not show. Not returning a voicemail isn’t necessarily on the same level of unacceptability, but it doesn’t make me feel particularly appreciated when I leave someone a voicemail and never hear from them again.

If you aren’t the type of person who wants to deal with voicemail, that's fine. There are at least a few options available. First, you can deactivate voicemail entirely. If someone were to call my office phone (and I don’t think anyone ever has since I do…

In Praise of Southwest's 'C' Boarding Group

A few weeks ago I saw a tweet from someone complaining that their Southwest Airlines boarding pass had been assigned A20 (meaning they would be at least one of the first twenty passengers to board the plane). Apparently this person though they should have been assigned a higher number, less their flight experience be considerably spoiled.

Despite the complaints, Southwest has resisted demands to assign seats on its flights, a decision which I personally applaud. I'll admit that I was skeptical when they rolled out the newest boarding procedure, assigning both boarding groups and a line number; but in hindsight it seems like one of the best operational decisions they've ever made. If nothing else, it effectively eliminated the infamous "cattle call" whereby fliers were getting to airports hours in advance and sitting in line on the floor as if they were waiting for the midnight showing of the new Star Wars movie.

When I was an intern at Southwest Airlines last winter, I…

Good Advertising

The blogosphere seems to be one fire over Microsoft's new "Lauren" TV commercial. Frankly, I don't see what the commotion is about.



If the critics are correct, then "Lauren" is actually Lauren De Long, a Screen Actors Guild eligible actress; and apparently, if you look close enough, she never even enters the Apple store.

Even if all of that is true, it doesn't refute the fact that Apple's laptops are significantly more expensive than most PCs. It isn't a lie that Apple doesn't sell any 17-inch laptops for less than a grand. The advertisement doesn't make any reference to the quality of the machines (or contest any of the claims made in Apple's "I'm a PC" commercials) or provide any good reason to buy one other than price.

As far as I can tell, after years of horrible commercials and a series of flops, Microsoft seems to finally have hired an ad agency that put together a decent advertisement. It's not likely to persuad…

Build Houses. Solve Crisis.

Here's an idea for how to get ourselves out of the economic crisis:
We build more houses.There. That's it. It's so obvious, maybe that's why I'm the first one to come up with it. Houses got us into this mess, and by God, it's houses that are going to get us out!Think about it. We've got thousands of tradesmen out of work 'cause no one is building houses. Plumbers, guys who do drywall, the like—none of them have a job to go to in the morning. If the carpenters don't have jobs, then they aren't buying any lumber. Then the lumber guys don't have any money to buy dresses for their gals, and the dressmakers can't buy cars, and so on down the line.You see? They need jobs, pronto, otherwise we're going to be sitting on a load of lumber and dresses and cars. So I say, give 'em some houses to build! Then they'd have some money to spread around, and the economy wouldn't be so bad.Problem solved.Yes, this was published by the Onion. …

Car-Free Living

I finally got a chance to read my copy of Chris Balish's How to Live Well Without Owning a Car, appropriately enough, on the bus ride to and from work last week. My expectations weren't particularly high, but I was impressed with Balish's simple and convincing argument. He might have been preaching to the choir with me as the reader, but I do think the book could succeed at persuading quite a few people.

Balish's hypothesis is that anyone can live a perfectly fulfilling life without owning a car, regardless of where they live or work. Of course, the claim sounds laughable to anyone who would immediately justify their needing a car to get to work, buy groceries, and everything else their daily life demands; the key is that the author's hypothesis doesn't claim that anyone can instantly and immediately give up the lifestyle they've developed over the years.

The belief that it can't be done stems from the decisions people have made in the past and assumes th…

The Case for a New Upper Tax Bracket

I had a macroeconomics professor whose idol is Ronald Reagan. "Let me tell you about Reagan," his stories would begin, "back when he was making movies the highest marginal tax rate was over 90%! Can you guess what would happen each year after he'd earned enough to be taxed at that rate? He'd quit making movies and go to Florida and play golf." I don't know exactly how accurate this story is, but what is true is that the top marginal tax rate at the time Reagan was doing most of his acting was somewhere between 70% and 91%.

Traditional macroeconomic theory suggests that as taxes go up, individuals consume more leisure and work less. I'm not particularly interested in contesting this point because it probably is true. In the case of Reagan, society was left worse off when he decided not to star in that additional film or cameo in another. I can only how much better life could have been if Ronald Reagan had done more acting and less golfing...

An underly…

The Other Life of a Professor

It's (unfortunately) not surprising that many of my peers will be graduating next month into unemployment; it is surprising how casual so many of them see to be about it. Grad school seems to be a popular option. It's burdensome and frustrating and requires a lot of energy to look for work, send out resumes and cover letters, interview, etc. - applying to the less selective grad programs is apparently like a rather straightforward process. I'm not against the idea of graduate school in principal, but part of me wonders if it's merely delaying the inevitable. "It's a good way to wait out the recession" is typically how the justification begins. When I ask if it concerns people that they'll graduate with an advanced degree and an anemic resume?.. "Not really. Plus, I could always become a professor and teach."

I imagine part the appeal of living the "professor lifestyle" stems from the belief that it's basically like living the &…