Archive for April, 2008

Bad Weather (Prediction)

April 21, 2008

This morning I finished my last mid-term and I wanted to celebrate, but unfortunately rainy weather limited my options. In order to find out the likelihood of my parade being drenched, I took a look at our online weather report. It said there was a 50% chance of rain.

Then I realized that I had no idea what that statistic meant. Did it mean that there was a 50% chance that it would be raining during any particular instant of the day? Did it mean that 50% of Taipei would get a measurable amount of rain? Did it mean that there was a 50% chance that there will be rain at some point during the day?

The answer is, rat-a-tat-tat, that of previously recorded days with similar weather conditions, 50% of them had a measurable amount of rain at some point during the day.

I looks like I am not the only one confused. I pulled the above definition from a study measuring what people in various cities in Europe and the United States think “x% chance of rain tomorrow” means. The researchers gave people three choices: Time (x% of the time it will be raining), Area (there will be a measurable amount of rain in x% of the applicable area) and Days (x% of previous days with similar weather conditions had a measurable amount of rain sometime during the day). As I mentioned above, the “Days” option is the correct one.

Here is a chart reporting the author’s findings:

rain chart

Go New York!  Interesting how people in Amsterdam were mostly wrong in the same way, while in Athens and Milan the distribution was more even.

Full disclosure: I would have guessed “Time” before I saw the answer.

The Pritchett Club

April 20, 2008

If you read Greg Mankiw’s blog, you know that (in between his daily textbook adverts) every few weeks he unilaterally inaugurates a new member into his “Pigou Club”.  Usually he does this when someone famous espouses carbon taxation.

I’ve decided it’s time for another Economics related club.  I hereby found the Pritchett Club, after Lant Pritchett.  The club will restrict its membership to enlightened individuals who realize that if rich countries allowed more open immigration policies, the gains to the world’s poor would be enormous.

Let me begin by accepting Bryan Caplan.  He blogged earlier today about a quick, effective fix for Haiti’s food shortage.

The Pope is also currently under consideration.

Quote of the Day

April 18, 2008

I found this especially apropos since I took my Macroeconomics mid-term this morning.

“Amphetamines don’t actually give you more time–they just let you borrow it from the future at an extremely high rate of interest.” -Mark Kleiman

Via Megan McArdle

Engrish

April 16, 2008

Today I had my camera with me, so I captured a few Engrish snippets that I happened upon:

The first one is from the men’s room at a coffee shop where I study.  It’s next to the toilet paper dispenser:

Engrish

Next check out this building:

Building

And how should we call such an elegant residence?

Engrish

Far Glory For Tuna.

Finally, I took a different route home than usual, and happened upon this trustworthy motorcycle repair shop:

Engrish

Witty Robin Hanson Blog

April 15, 2008

Hanson writes that people ask for advice on relatively unimportant decisions, but not on big decisions:

For example, we like HowTo books, but not WhatTo books. How to manage your computer, not what machine to manage. How to please your partner, not what partner to please. How to fix your house, not where to live. How to drive fast, not what speed to drive. How to get promoted, not what job to work at. How to raise your kids, not how many kids to raise. And so on.

Well put, but I disagree with his main point. I remember getting a mountain of “big decision” advice books upon graduating from high school. The Career Center at Carleton College also had a room filled with them.

What?

April 15, 2008

Tragedy of the Commons, Egyptian style:

  • “It’s not enough to make you crazy, but it is very tiring,” said Essam Muhammad Hussein, as he sat in a cracked plastic chair outside the corner food shop his family has owned for 50 years. He was shouting as he talked about the noise, though he did not seem to realize it.  “What are we going to do?” he asked. “Where is the way out?”
  • “The noise bothers me and I know it bothers people,” said Abdel Khaleq, driver of a battered black and white taxi, as he paused from honking his horn to stop for passengers.  “So why do you do it?” he was asked.   “Well, to tell you I’m here,” he said. “There is no such thing as logic in this country.” And then he drove off, honking.
  • Moustafa Abdel Aleem, who works in the booth with Mr. Omran, said, “The noise is not something I want, but I can’t do anything about it; it’s forced on me.” So he turned on the radio in search of a song he liked, and of course, turned the volume up.
  • “Life is like this,” said Ahmed Muhammad, 23, who makes his living delivering metal tanks of propane to homes. He hangs four tanks off the back of a rusted bicycle, then rides with one hand on the handlebars, the other slamming a wrench into one of the tanks to announce his arrival to the neighborhood. “Making money is like this,” he said. “What am I going to do? This is how it is.”

More from the New York Times.

Thoughts on Savings

April 14, 2008

I am currently in Mid-Term review mode, so I was reading our Macroeconomics textbook.  In the chapter on consumption, Romer defined savings in a simple, obvious way that made me think.   Savings are future consumption.  Savings today are just transfers between you today and you tomorrow.  People who save a lot are just very concerned about the welfare of their future selves, and less concerned about their present selves.  In the same way, negative saving (borrowing for consumption) is just spending tomorrow’s money today.  Those who borrow a lot care more about their present selves than their future selves.

Mysterious Pee (kind of a gross post–consider yourself warned)

April 12, 2008

I often study at coffee shops here in Taipei, and I have noticed a disturbing trend. Often men’s bathrooms will have a puddle of pee on the ground, about two feet in front of the toilet. In the coffee shop I am in right now, there is a urinal next to the toilet, far away from the puddle. The first few times I saw the pee puddle I figured it was just someone incontinent who had an accident, but it appears to frequently for that (I think). I have checked ladies’ rooms a few times and there were no puddles. I am truly puzzled. My current guess is that people are squatting on top of toilet seats, and the way men are set up things don’t go where they are supposed to. Any ideas?

BTW, this week I will be going through the blog desert known as mid-terms, so bear with me as I write a little less than usual.

We Don’t Care about the Dead

April 9, 2008

A few months ago Tyler Cowen wrote a blog opposing the destruction of some extant Nabokov manuscripts that the author had wanted burned before his death. Cowen’s point is that the wishes of the dead shouldn’t count in the social welfare function. Basically, the welfare of the dead is the same no matter what we do. So if something makes the living better off, even if it is contrary to the prior wishes of the dead, we should do it.

This doesn’t however mean that we should disregard wills and bequests altogether, because of the “moral hazard” problem. If we outright disregard wills or other wishes of the dead, then those of us still alive will realize we must take care of what we can while we are alive (say allotting money to our children) because after we die our wishes will no longer count. Would this be a bad thing? Cowen mentions that publishing Nabokov’s manuscripts will cause future Nabokovs to be sure and burn the works they want destroyed before they die. But if an author doesn’t, let’s read them.

Another thing is that if the wishes of the dead aren’t respected, you can forget about monuments to yourself you want erected postmortem. Don’t forget that the pyramids were built while the pharaohs were still alive. Better start your’s soon!

Loss Aversion and Chinese Flowers

April 7, 2008

We have had 80 (27) degree weather here for the last four days and various shrubs and trees have got the message. There are flowers all over campus. I don’t remember seeing as many spectacular flowers anywhere else. On the other hand, I feel a bit like Lin Daiyu, a character from the Chinese classic novel Dream of the Red Chamber. She spends her Springs burying the petals from fallen flowers. Famously she sings this song (I’m skipping the hard parts…this was written in the 18th century and I can’t be bothered to look up the hard words at the moment):

Flowers wilt, flowers fall, flowers fill the sky. The reds disappear, the fragrance is cut short, and yet no one mourns. The girl from the mansion grieves over the Spring grave, sadness fills her heart with no reprieve. She leaves her chamber with a flowering spade, and has to endure trampling the fallen petals coming and going. While we can expect the pears and plums again next year, who knows next year who the mansion will hold. In the 360 days of the year, the knives of wind and swords of frost press on. How long can beauty last? One morning the wind blows and it’s never found again…

What we see here is typical loss aversion. It’s better to have flowers than not, but once you have them, it seems worse to lose them than never having had them at all. I felt that way today seeing all the beautiful flowers. On Wednesday we are supposed to get thunderstorms, and then they will all be gone.

The more I reflect, the more I realize that I (and I assume other people) are loss averse. I am much more worried about losing 20 dollars than I am about gaining 20 dollars for instance. Another possibly more personal example is that I am more worried about disappointing people who have a high opinion of me than impressing people who think I am mediocre.

Who would have thought I would have so much in common with a sensitive rich girl from 18th century China.