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Posts Tagged ‘economics

“Consider the furniture!”*…

 

Ikea is a behemoth. The home furnishing company uses 1 percent of the planet’s lumber, it says, and the 530 million cubic feet of wood used to make Ikea furniture each year pulls with its own kind of twisted gravity. For many, a sojourn to the enormous blue-and-yellow store winds up defining the space in which they sit, cook, eat and sleep.

All that wood is turned into furniture that tries to bring a spare, modern aesthetic to the masses. “We’re talking about democratizing design,” Marty Marston, a product public relations manager at Ikea, told me.

The furniture is also sold according to some unique economics. In many cases, Ikea’s famously affordable pieces get dramatically cheaper year after year. In others, prices creep up. In some cases, products disappear entirely. The result is an ever-evolving, survival-of-the-fittest catalog that wields an enormous amount of influence over residential interiors…

Pull up a chair at “The Weird Economics Of Ikea.”

* Arthur Conan Doyle, The Adventure of the Mazarin Stone

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As we avoid the meatballs, we might spare a thought for Sir Thomas Bouch; he died on this date in 1880.  A railway engineer and executive whose career began at age 17, Bouch was knighted for designing the two-mile-long Tay River Bridge— on which an estimated 75 people died when the bridge collapsed.  An enquiry found Bouch to be liable, by virtue of bad design and construction; he died four months after the verdict.

Bouch is thus also indirectly responsible for the best-known poem, “The Tay Bridge Disaster,” by the gentleman widely-regarded to have been the the worst published poet in British history, William Topaz McGonagall.

Sir Thomas Bouch

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Written by LW

October 30, 2016 at 1:01 am

“The curious mind embraces science; the gifted and sensitive, the arts; the practical, business; the leftover becomes an economist”*…

 

Nobel-winning economist Eric Maskin delivers a 24/7 lecture, in which he explains his research in 24 seconds, then in seven words [source]

 

Congratulations are in order to Oliver Hart and Bengt Holmstrom, winners on 10 October of the Nobel Memorial Prize in Economics. Even though economics is not a full-fledged Nobel Prize, it has been earned by some splendid social scientists over the years — including a number of people who are not economists at all, from Herbert Simon and John Nash to Daniel Kahneman and Elinor Ostrom.

Yet this week I would rather discuss a different prize: the Ig Nobel prize for economics. The Ig Nobels are an enormously silly affair: they have been awarded for a study of dinosaur gaits that involved attaching weighted sticks to chickens (the biology prize), for studying stinky feet (medicine) and for figuring out why shower curtains tend to billow inwards when you’re taking a shower (physics).

But one of the Ig Nobel’s charms is that this ridiculous research might actually tell us something about the world. David Dunning and Justin Kruger received an Ig Nobel prize in psychology for their discovery that incompetent people rarely realise they are incompetent; the Dunning-Kruger effect is now widely cited. Dorian Raymer and Douglas Smith won an Ig Nobel in physics for their discovery that hair and string have a tendency to become tangled — potentially an important line of research in understanding the structure of DNA. Most famously, Andre Geim’s Ig Nobel in physics for levitating a live frog was promptly followed by a proper Nobel Prize in the same subject for the discovery of graphene.

A whimsical curiosity about the world is something to be encouraged. No wonder that the credo of the Ig Nobel prizes is that they should make you laugh, then make you think…

The Undercover Economist (Tim Harford) on “The Ig Nobel prizes in Economics – in praise of ridiculous research.”

* Nassim Nicholas Taleb, The Bed of Procrustes: Philosophical and Practical Aphorisms

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As we prepare our entries for the Golden Fleece Award, we might recall that it was on this date in 1948 that residents of Donora, PA went to bed as usual, not knowing that a suffocating cloud of industrial gases would descend upon them during the night.  The cloud, a poisonous mix of sulfur dioxide, carbon monoxide and metal dust, came from the smokestacks of the local zinc smelter where most of the town worked. Over the next five days, twenty residents died and half the town’s population – 7000 people – needed medical attention for their difficulty breathing.  The Donora tragedy shocked the nation and marked a turning point in the national dialogue about industrial pollution and its effect on health.

A Donora street at noon, October 29, 1948

source

Written by LW

October 26, 2016 at 1:01 am

“Forgive, O Lord, my little jokes on Thee / And I’ll forgive Thy great big one on me”*…

 

Religion in the United States has “revenues” of $1.2 Trillion a year– more than the combined revenues of the top 10 technology companies in the US, including Apple, Amazon, and Google– making it equivalent to the 15th largest national economy in the world.

Read the pecuniary particulars at “Religion in US ‘worth more than Google and Apple combined’.”

Download the underlying research– “The Socioeconomic Contributions of Religion to American Society: An Empirical Analysis” by Brian Grim of Georgetown University and Melissa Grim of the Newseum Institute– as a pdf here.

And for a concrete example of evangelical economic activity that may be happening off of the reader’s radar, consider the phenomenon that’s the subject of the film reviewed here.

* Robert Frost

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As we pass the offering plate, we might recall that it was on this date in 1895 that Daniel David Palmer gave the first chiropractic adjustment to Harvey Lillard in Davenport, Iowa. Palmer had been practicing in Davenport for thirty years as a magnetic healer.  During this time, he developed the theory that misalignment of the bones in the body was the basic underlying cause of all “dis-ease,” and the majority of these mis-alignments were in the spinal column.  On learning that Lillard, the janitor in his building, had a hearing problem, Palmer adjusted his spine, which, Palmer reported, cured the ailment– a claim that was seminal to Chiropractic history.

Davenport is now the home of Palmer Chiropractic College.

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Written by LW

September 18, 2016 at 1:01 am

“Let there be light”*…

 

From oil lamps to LEDs– the price of light… a larger, interactive version here.

From Max Roser‘s always-illuminating Our World in Data.  The underlying research (and methodology) here (pdf).

* Genesis 1:3

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As we switch it on, we might spare a thought for Edward Hibberd Johnson; he died on this date in 1917.  Best remembered as a business associate of Thomas Edison (Johnson was president of Edison Electric Illuminating Co., the forerunner of Con Ed, and helped found General Electric), he was an inventor in his own right.  Johnson patented a number of lighting devices, especially streetlights, but is surely best remembered as the inventor/creator of the first electric Christmas tree lights– 80 walnut-sized red, white, and blue bulbs strung together–  which he displayed in the front window of his New York City home in 1882.

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Written by LW

September 9, 2016 at 1:01 am

“The rich get richer and the poor get poorer”*…

 

The richest families in Florence, Italy have had it good for a while—600 years to be precise.

That’s according to a recent study by two Italian economists, Guglielmo Barone and Sauro Mocetti, who after analyzing compared Florentine taxpayers way back in 1427 to those in 2011. Comparing the family wealth to those with the same surname today, they suggest the richest families in Florence 600 years ago remain the same now.

“The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago,” Barone and Mocetti note on VoxEU. The study was able to exploit a unique data set—taxpayers data in 1427 was digitized and made available online—to show long-term trends of economic mobility…

More on the research and it’s import at “The richest families in Florence in 1427 are still the richest families in Florence.”  More on the underlying mechanisms of capital accumulation, the persistence of wealth and income, and their polarization here.

* widely-used aphorism, probably dating back to the Bible verse, “For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath” (Matthew 13:12, King James edition); it’s use was reinvigorated by the popular 1921 song “Ain’t We Got Fun.”

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As we dream the American dream, we might spare a rugged thought for Louis Dearborn L’Amour; he died on this date in 1988.  While L’Amour wrote mysteries, science fiction, historical fiction, and non-fiction, he is surely best remembered as the author of westerns (or as he preferred, “frontier stories”) like Hondo and Sackett.  At the time of his death he was one of the world’s most popular writers; dozens of his stories had been made into films, and 105 of his works were in print (89 novels, 14 short-story collections, and two full-length works of nonfiction); as of 2010, over 320 million copies of his work had been sold.

L’Amour was interred in the Forest Lawn Memorial Park Cemetery near Los Angeles.  His grave is marked in a way that acknowledges that death was able to contain him in a way that he successfully resisted throughout his life: while his body is underground, his site is fenced in.

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Written by LW

June 11, 2016 at 1:01 am

“Experience declares that man is the only animal which devours his own kind; for I can apply no milder term… to the general prey of the rich on the poor”*…

 

If all U.S. household income totaled $100, this is how it is divided

Something massive and important has happened in the United States over the past 50 years: Economic wealth has become increasingly concentrated among a small group of ultra-wealthy Americans.

You can read lengthy books on this subject, like economist Thomas Piketty’s recent best-seller, Capital in the Twenty-First Century (the book runs 696 pages and weighs in at 2.5 pounds). You can see references to this in the campaigns of major political candidates this cycle, who talk repeatedly about how something has gone very wrong in America.

 Donald Trump’s motto is to make America great again, while Bernie Sanders’s campaign has focused on reducing income inequality. And there’s a reason this message is resonating with voters:

It’s grounded in 50 years of reality…

Take the tour at “This cartoon explains how the rich got rich and the poor got poor.”

* Thomas Jefferson

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As we take stock of ourselves, we might send yellowish birthday greetings to William Randolph Hearst; he was born on this date in 1863.  Hearst built the nation’s largest newspaper chain, and (in competition with Joesph Pulitzer) pioneered the sensational tabloid style– crime! corruption! sex!– that we’ve come to know as “yellow journalism.”  The possibly apocryphal, but indicative anecdote that became Hearst’s signature dates to the period just before the Spanish-American War: famed illustrator Frederic Remington, sent by Hearst to Cuba to cover the Cuban War of Independence, telegrammed Hearst to tell him all was quiet in Cuba. Supposedly Hearst responded, “Please remain. You furnish the pictures and I’ll furnish the war.”

Hearst parlayed his power as a publisher into a career in politics, serving two terms in Congress, then losing a series of elections (for Mayor of New York City, twice, and for Governor of New York State).  An early supporter of Franklin Roosevelt, Hearst became one of his staunchest– and loudest– opponents.

Hearst’s life was the inspiration for Orson Welles’s classic film Citizen Kane.

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“Stealing, of course, is a crime, and a very impolite thing to do”*…

 

If you want to buy soap at the Walgreens on Market Street in San Francisco, you’ll need to find a store employee to unlock the display case for you. 

Fifty dollar earbuds and $100 bottles of Claritin simply sit on the shelves where customers can pick them up and go. But baby formula, shampoo, and soap are all protected by locked display cases. 

It’s well known that pharmacies need to protect their stores of cold medicine, which methamphetamine cooks can use to make illicit drugs. But why soap? Is a $6 bottle of Dove body wash really worth the squeeze?…

The key to understanding the appeal of soap to thieves is realizing that they care less about an item’s price tag and more about the ease of finding a buyer. In other words, thieves want a liquid asset.

The practical economics of larceny: “Why Thieves Steal Soap.”

* Lemony Snicket (Daniel Handler), The Wide Window

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As we call for a clerk, we might recall that it was on this date in 1977 that a notorious crime boss met his end:

Mob boss Michael “Mickey” Spillane (not to be confused with the guy who created fictional P.I. Mike Hammer) had a run of very bad luck on Friday the 13th; he was shot and killed outside his apartment in Queens, NY. Spillane, who headed the Westies gang [see here], had moved to Queens from Hell’s Kitchen out of fear for his safety. The previous year, his three top lieutenants had been taken out on orders from Genovese crime family boss Fat Tony Salerno. Salerno coveted control of construction contracts for the Jacob Javits Civic Center, which was being built in Spillane’s territory. Spillane’s killing was rumored to have been carried out by Gambino crime family associates Roy DeMeo and Danny Grillo. After Spillane’s demise, mobster Jimmy Coonan took over as head of the Westies. Coonan had previously challenged Spillane for control of the group. After he took control, Coonan formed an alliance with the Gambino family, in a deal brokered by the newly-“made” Roy DeMeo. Coincidence? Um… probably not.   [source]

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Written by LW

May 13, 2016 at 1:01 am

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