Email subject line of the day

It just hit my inbox:

“Climate Change added you as a friend on Facebook…”

I blame Tim Haab.

Random ish

1. How huge is a “huge chunk”? In a recent Rolling Stone interview, Barack Obama said that he would rebate a “huge chunk” of carbon auction revenue back to taxpayers. I heard this through Peter Barnes’ cap and dividend website. For previous commentary on cap and dividend see here and here.

2. What the hell does T. Boone Pickens want? I’m sure you’ve all seen his new wind commercial:

Am I the only person who finds this ad creepy? He doesn’t even ask for anything. Does he want subsidies for the 4 GW worth of wind turbines he just bought? Also, what’s with the “I’m T. Boone and this is my ad” moment at the end?

3. This sounds familiar. Finally, I started reading Rabbit is Rich last night and here’s how the book, which is set in the 1970s, opens,

Running out of gas, Rabbit Angstrom thinks as he stands behind the summer-dusty windows of the Springer Motors display room watching the traffic go by on Route 111, traffic somehow thin and scared compared to what it used to be. The fucking world is running out of gas.

Apparently making $15 million a year is just like slavery

Butting in to the C-Ron transfer saga this week, FIFA president Sepp Blatter said that the Portuguese winger should be allowed to leave Manchester United for Real Madrid whenever he wants to, despite the fact that he’s under contract until 2012. Criticizing Man-yoo’s shocking reluctance to simply give away the world’s best player, Blatter said, “I think in football there’s too much modern slavery in transferring players or buying players here and there, and putting them somewhere.”

Yet this “slave” extended his own period of servitude just last fall. And why would any club give a player a multi-year deal if he could just walk away whenever he wanted? A contract would guarantee the player’s wages if his productivity/ market value declined, but would not guarantee the club the player’s services should his market value increase.

Ottawa

Good grief, the sun comes up early here.

Health break

I am headed to Canadia this morning for a couple days of meetings.  It will be my first time there. Glancing at the agenda I noticed that the 15-minute intervals between sessions are referred to as “health breaks”.  Two comments:

1. I think this is a really great name, but…

2. This is not doing much to reform my stereotypes about quaint, twee, friendly Canadans.

Chasing that **

I do a lot of econometric work, and I rarely post on it.  This is mostly for the benefit of the audience, who may not want to read about the Bayes Information Criterion or Maddala and Wu’s panel unit root test.

Inspired by a post at EnvEcon about Dierdre (then Donald) McCloskey’s take on the academic life, I wanted to post a paper from the Journal of Economic Literature that is generally applicable to applied econometrics in all subfields.  I’ve found McCloskey an interesting figure, not just because she was, until 1995, “Donald”.  Her pursuits are wide-ranging and interdisciplinary, covering history, economics, feminism, law, rhetoric, and philosophy.  From McCloskey’s bio:

I describe myself as a postmodern free-market quantitative rhetorical Episcopalian feminist Aristotelian woman who was once a man.

I first discovered McCloskey while reading David Colander’s The Changing Face of Economics, which is a fascinating series of interviews with unorthodox (I wouldn’t necessarily say that all were heterodox) economists, such as ecological economists and behavioralists.  I took notice of McCloskey partly due to her interesting work and partly because she used to teach at my alma mater, the University of Iowa (for which she had some harsh words).  Anyway, one of her major points on the rhetoric of economics is covered in her JEL article from 1996 with Stephen Ziliak entitled, “The Standard Error of Regressions.”:

That is, most beginning econometrics books even now, unlike DeGroot and Goldberger and before them the modern masters of statistics, do not contrast economic and statistical significance…

…The student from the outset of her statistical education, therefore, is led to believe that economic (or suvstantive) significance and statistical significance are the same thing.  Hoel explains: “This word ['not significant'] arises from the face that such a sample value is not compatible with the hypothesis and therefore signifies that some other hypothesis is necessary”  The elementary point that “there is no sharp border between ’significant’ and insignificant’, only increasingly strong evidence as the p-value decreases” is not found in most of the earlier books from which most economists learned statistics and econometrics.

McCloskey and Ziliak go on to survey papers from AER to see whether these issues of interpretation show up in practice.  An appalling proportion of papers gravely misused the concepts of significance in some way; thankfully, the problem seemed to be diminishing: misuse was decreasing in PhD vintage and the sample is from the 1980s.

I find myself in a lucky situation where economic significance is generally emphasized, as policy-related applied work must be set in context.  However, there are times when I feel like I’m chasing that elusive asterisk for p < 0.05 (or even better, two of ‘em for p < 0.01).  I was recently at a presentation where a scholar gave a result with p = 0.06, and he played it down as considerably less significant than a coefficient with p < 0.05.  I’ve also had the experience of presenting economically meaningful coefficients significant at 0.05 < p < 0.10 and being told that they might be worthwhile but in effect were ignored.  I realize that confidence is important, but I feel a type I error happening with a 1 in 10 probability is not a reason to ignore economically signficant coefficients.  When you think about the somewhat arbitrary nature of what passes for statistically significant and what does not (and, thus, seriously influences what gets published and what does not), it kind of puts a damper on the whole “applied economics is a science” thing.  Not to underplay the extremely useful nature of these methods, but I’m once again reminded that metrics has an artistic flourish to it.

Ban the bottle?

The IHT reports that “A majority of about 250 mayors at the U.S. Conference of Mayors meeting in Miami voted to phase out regular use of bottled water for its employees and functions.” My first reaction was that this is a great idea. In the United States, bottled water is a frivolous luxury, as we have regulations in place which ensure that tap water is fit to drink (in most places, it actually tastes pretty good too). Thus, it seems pretty wasteful for local government to spend its citizens tax dollars on bottled water. Moreover, in areas where the tap water isn’t all that great, this program could be coupled with a renewed push for improved drinking water quality, using the money saved on purchasing water and disposing of the bottles to update water infrastructure.

But as I began writing this post I realized that my initial enthusiasm for the story was based on a shaky presumption. I’d assumed that municipal employees first decide what beverage to drink, then chose a vehicle of consumption (ie- they first decide that they want water, and then decide if they want tap or bottled). If this were the case, the mayors’ plan might well indeed save a lot of money and reduce waste. But what if tastes are more nuanced? Assuming that other beverages are still going to be offered besides water, banning bottled water might just induce people to drink more soda. Imagine you’re at a city function. It’s crowded and hot, and there’s a long buffet style line. At the end of the line is a separate table with an assortment of canned/ bottled beverages, including bottled water. If the hosts suddenly swapped out the bottled water for pitchers of tap, but left all of the other options, I think it’s pretty clear that substitution would occur across beverages as well as across vehicles. Now I have no idea what the actual decline in bottled beverage consumption would be, but I’m pretty confident it’s not equivalent to current municipal bottle water consumption, as the mayors would have you believe.

Master disaster

This discussion about near-Earth objects reminded me of a point I heard Robert Pindyck make recently. It will probably sound obvious to all you Bayesians out there, but I don’t think I had heard it expressed so succinctly before.

The point was that in a world with multiple catastrophic risks, our concern about any one individual risk should not be measured by the independent probability of that catastrophe. Rather, we’ve got to discount each of the individual risks by the probability that one of the other catastrophes will wipe us out first.

Thus if we are very likely to be killed off by avian flu in the next century we should be much less worried about climate change.

I noted previously that critics of Easterbrook’s article like this guy want to dismiss asteroid impacts out of hand and focus on climate change. The irony in this discussion is that if we had a reliable method of diverting near-Earth objects — something that seems likely to be quite cheap — we would then be more worried about climate change, not less.

My favorite webcomic goes green

Here is the link.

Just as interesting is the alternate text (an xkcd signature):

Electric skateboards, by cost, get the equivalent of about 300 miles per gallon. Lithium batteries just need to get cheaper.

Is this right?  I wonder if he did the calculation.  Any readers want to chime in on this?

Underserved markets

Or is it now an overserved market?

For the convenience of our bicycling fans, Nationals Park offers a FREE bike valet located in Red Garage C at the corner of N & 1st Street, SE. Access to the valet is on N Street just left of the entrance.

I am very curious about how much this service is used so far. And who do they get to serve as bike valets? Might they start offering a service where you can you get your chain oiled and brake pads aligned during the game?

I am going to my first game at Nationals Park today but I don’t think I’ll be riding my bike. The problem is that I don’t really want to ride home in the dark. I suppose I could take my bike home on Metro but I am pretty sure this is not a great way to make friends with the 15,000 other people who will all be jostling for Metro space after the game ends.

But someday I am using this service — Saturday afternoon game anyone? — at least if it doesn’t disappear first.

Why don’t econ blog ads sell luxury goods?

Over at 26econ:

The survey that John Whitehead and I did of econ blog readers has finished and produced some interesting results. Thanks very much to everyone who took the time to do the survey. In total we got 387 responses. Here’s a summary of the basic responses to each question …

Check the income responses.  This looks like an income distribution of subscribers to the FT or the WSJ, if not Bloomberg.  Also remember that the ~25% of blog readers that list their occupation as “students” are probably mopping up a lot of the low end of the distribution.  Can econ blogs get premium ad rates due to their rather exclusive clientele?

You’ll notice we don’t have ads around here but maybe we should start hawking Cristal and cavier.

Free Ride

Yesterday Greenwire had a story on Congress’s new WheelsForWellness program. The exact details of the program are still being worked out, but the general idea is to place bikes around the Hill that staffers can register to use for free. While this is a nice little gimmick, I’d really love to see DC go the way of Copenhagen, and offer free public bikes to all of us. This would be especially useful for DC tourists, as the Metro is really only practical for going long distances and the cab “system” is a joke.

Moving on, I’d just like to point out that John McCain called for a summer gas tax holiday in his economic policy speech yesterday. The man who self admittedly “doesn’t understand economics” is proving it to all of us by simultaneously calling for action on climate change and a suspension of gas taxes. I guess it’s easy to be a “maverick” when the media lets you have your cake and eat it too. What a joke.

Finally, with the Pope in town today I figured it’d be a good time to talk about the Popemobile. First of all, can you believe we call it that? Like the Batmobile. On to the vehicle. I had a hard time figuring out exactly what type of car the Pope’d be rollin in today. The picture on Wikipedia appears to be a suped up Mercedes-Benz 230 G with a giant tic-tac case mounted to the back.

While Benedict’s clearly got a bias towards ze Germans, I sure hope someone’s workin to put him in test version of the Volt.

Assorted links

1. Agricultural Subsidies: Still a Bad Idea. Felix Salmon explains why removing ag subsides and taxing carbon are similar, and why they both make sense. Free Exchange squares the circle with a discussion of biofuels.

2. Who Pays a Tax? Tim Haab’s two-part series is here and here.

3. 6 Cities That Were Caught Shortening Yellow Light Times For Profit. What happens when your city stands to make money off of lawbreaking? Yep, that’s right, they make it harder to avoid breaking the law.

4. Malaria and the politics of disease. Efforts to fight malaria seem to be ramping up quickly. But even if near-term success can be achieved, will many be left worse off in the long run?

5. Congestion pricing works. Evidence from California.

6. Location, location, location. The premium for urban living.

7. The cost of siting transmission lines.  This came up yesterday in the seminar on curbing electricity demand at RFF as one of the key uncertainties in the future of electricity, given the political or economic forces that will bring new types of resources onto the grid in the coming years.  (Video from the event should be up in the next few days.)

The Green Monster just got greener

I used to think there wasn’t anything I’d change about Fenway Park, but this is pretty sweet.

The green at Fenway Park will no longer be limited to the cushiony grass, historic rafters, and 37-foot high wall in left field. Enough solar panels are being installed on the roof to heat a third of the hot water needed at the 96-year-old ballpark.

City and federal officials trumpeted the environmental upgrade at Boston’s most celebrated home yesterday to highlight a $600,000 initiative to increase the city’s solar energy output 50-fold by 2015.

H/T to Environmental Capital (which I typically read before I hit the Globe sports section )

Survey of econ blog readers

Over at 26econ:

John Whitehead and I are conducting a brief survey of readers of economics blogs. I’d be really grateful if you could spend a few minutes answering the questions. The idea is to get some idea of the “demand side” of economics blogs. This will be a nice complement to my earlier survey of econ blog authors. We’ll publish the results when the survey is over.

Take the survey!

I took it.  It’s quick and painless.  It also really drove home for me the way that blogs are becoming an increasingly large portion of my news diet.

Assorted links

1.  New York City’s congestion pricing plan dies in Albany.  Felix Salmon and Ryan Avent are depressed and disappointed, respectively.  Disgust comes to mind as well.

2.  Tyler Cowen has been providing a thought-provoking discussion on Jeff Sachs’ new book Common Wealth: Economics for a Crowded Planet.  The first three installments are on climate change, water policy, and biodiversity.

3.  Someone was listening to Rich’s complaint about the lack of coverage of escalating food prices: Paul Krugman discusses it on the New York Times Op-Ed page.  Plus the blogosphere is on the case – Energy Outlook examines the food-energy nexus, Free Exchange questions whether grain markets are behaving rationally, while this guy just wants to know he’ll still be able to afford his craft beer.

4.  David Zetland is blogging on the economics of water.

5.  Tim Haab issues a green jobs analysis challenge.

6.  And speaking of Env-Econ, UCLA couldn’t push me past Tim on Saturday night, so he edged me out in the Env-Econ NCAA tournament pool. But the combination of the Memphis win and UNC loss actually put Evan in front of both of us and gave CT bragging rights in the EE-CT showdown.  I think I’m now supposed to thank Evan for providing me cover when my “mouth starting writing checks my ass couldn’t cash.”  Or something like that.

Cognitive biases about transportation

As usual, it is presumed that traffic and transportation problems will have seen a lot of progress when in fact they have not.

That is Tyler Cowen, observing that our predictions about the transportation future — in this case, 2008 seen from the vantage point of 1968 — are much more optimistic than the ultimately drab realities.

I am inclined to agree, with the qualification that our expectations about the future in general — across the board, not just for transportation — frequently seem too optimistic about revolutionary changes and insufficiently in tune with how much better things can get through evolutionary changes at the margin. Think of the difference between the forty years from 1880 to 1920 and 1920 to 1960 — the first period was a transportation revolution and the second an evolution. It was probably easier to “predict” 1960 from the vantage point of 1920 than 1920 from 1880. But probably more people were positively impacted by the transportation changes in the second period than in the first.

Do policy changes count? I suspect that most households get better transportation services for a smaller share of their budget than 40 years ago.

What would a revolutionary change look like for transportation in the next 40 years? What is your outrageously over-optimistic model?

My (expected) model is basically evolutionary: Personal automobiles remain the central mode of transportation. More (most?) of them are electrified. More roads will be priced, including development of real-time-variant congestion pricing in some urban hubs. More and better mass transit in urban hubs, but not that much more. (Infrastructure is slow, slow, slow.) More people walk and bike but that will have more to do with urbanization and where new housing is built (infill in cities instead of suburbanization) than transportation per se. Carbon will be priced and that will help along these changes but decarbonizing transit will be a slow process (unless electrification and CCS both work and soon). I would like to have centrally-directed ‘auto-pilot’ cars — what is the dividing line between cars that drive themselves and pod-based mass transit? — but I doubt most people want or will accept this in the near term and so it will be limited to various forms of driver ‘assistance’ (with perhaps auto-pilot options for the highway — Kansas, anyone?).

Update: Matt Yglesias comments.

The whole article is very entertaining and gets some things quite right. (”The single most important item in 2008 households is the computer.”) I couldn’t resist the opportunity to make a few completely off-topic comments and I’ve placed these below the fold.

Best. Statistical Representation. Ever.

From the NYTimes.

Someone should do this for the environmental/ energy proclivities of the US Senate. H/T Anthony.

Let’s make waves in Tim and John’s (tournament) pool

The EnvEcon guys have decided to run their own NCAA tournament pool over at their blog. Given the emerging rivalry between our domains, we here at CT are going to jump in and try to make a mess.

Here’s the deal: Head over to the EnvEcon post and sign up to their ESPN.com group. When you create your bracket change the name of your entry (under “Edit Entry Settings”) to include “CT” in the name of your entry. You’ll see, for example, that my entry is currently named “DHall(CT) The new rivalry”.*

Tim and John are currently promising “a free ‘Drive Less!’ bumper sticker and bragging rights over John” for the winner. We don’t have any cool gear yet, but if a CT reader wins we’ll give you props here on the blog, plus promise you a future Common Tragedies shirt or hat should they come to exist.

*That last bit is subject to change over the next few weeks, e.g., “EnvEcon gets pwned”, “OSU=NIT”, etc. Further suggestions welcome.

Freedom!!!!

More good stuff from the inbox.  This time from Johnny Walker:

The bike registration law is repealed!!  According to the most recent Ride On.

Finally, three years after a report by the Office of Police complaints entitled “Pretextual Stops of Bicyclists” pointed out the problems of “bicycle harassment” by police, the awful law that REQUIRED bike riders to have a registration number scratched into their bike or have it impounded has entered the annals of misbegotten history.  Apparently DC Councilmember Phil Mendelson is largely responsible, he has earned our undying love.

http://www.dccouncil.washington.dc.us/images/00001/20080122094734.pdf