Saturday, June 30, 2012

Do entitlement programs become more popular over time?

Some supporters [of the Affordable Care Act] have argued that other social programs in the past were controversial at first before becoming embedded in American society. But polling suggests that is not so.

Social Security was popular from the start, supported by 73 percent of Americans in early 1937 and 78 percent the next year in Gallup polls. Medicare had the approval of 62 percent in early 1965 and 82 percent by the end of that year in Harris polls.

By contrast, just 32 percent supported the Affordable Care Act when it was approved in March 2010, according to a New York Times/CBS News poll. As of a month ago, 34 percent supported it, virtually unchanged. To be sure, about a fifth of those who oppose it say it did not go far enough, essentially frustrated liberals.

Saturday, June 23, 2012

Incentives for Europeans to get sick on vacation

For most Europeans, almost nothing is more prized than their four to six weeks of guaranteed annual vacation leave. But it was not clear just how sacrosanct that time off was until Thursday, when Europe’s highest court ruled that workers who happened to get sick on vacation were legally entitled to take another vacation.

Friday, June 22, 2012

Greek yogurt: A great American story

Hamdi Ulukaya was managing his small cheese company in Johnstown, N.Y., in 2005 when he stumbled upon an advertisement that would change everything. For sale: yogurt-making plant in Columbus, N.Y.

A native of Turkey, Mr. Ulukaya decided the next day that he wanted to buy the former Kraft Foods Inc. facility. Five months later, he made that happen using loans of less than $1 million, including one backed by the Small Business Administration.

The Greek-style yogurt landed on store shelves in 2007 and is widely credited with starting a craze in the U.S. Chobani is now the No. 3 manufacturer of nonfrozen yogurt in the U.S., with about $745.6 million in retail sales, says market research firm SymphonyIRI Group Inc. The only companies ahead of it are Yoplait and Dannon, giant brands that each have more than $1.2 billion in annual retail sales, according to the SymphonyIRI. ...

Greek yogurt—which is strained to remove excess liquid, leaving it thicker and creamier—now represents 28% of U.S. yogurt, up from a 16% share a year ago and a 3% share three years ago, according to UBS. The category, which is led by Chobani, will increase 40% over the next year, and 120% over the next five years, UBS forecasts. ...

WSJ: You spent 18 months coming up with the recipe for Chobani. What took you so long?

Mr. Ulukaya: I wanted to make sure the product was perfect because I only had one shot and it had to work. ... I hired a family friend from Turkey who is a master yogurt maker and we came up with the recipe together. He was our sixth employee.
--Sarah Needleman, WSJ, on the immigrant American dream still being alive

Thursday, June 21, 2012

How to identify gullible people to scam

Most of us know the signs: stilted English, "Dear Sir/Madam," a particular fondness for exclamation points. The occasional spam email that does make it past inbox filters seems transparently fake. And new findings by a Microsoft researcher suggest that’s exactly the point.

The researcher, Cormac Herley, looked into so-called “Nigerian scams,” named for the African nation where the scammers often claim to reside. The emails typically seek a cash investment and promise a lofty payoff, often linking themselves to off-shore corporations or royalty. Herley’s math-rich analysis found that the obvious spam clich├ęs are a deliberate attempt to weed out potential victims who are too savvy to fall for the scheme—and in turn make the most of the human capital required to secure funds from the people who are duped.

"Since gullibility is unobservable, the best strategy is to get those who possess this quality to self-identify," Herley writes, and the scheme ingeniously lines up the most gullible recipients in one swoop. Those who are left "represent a tiny subset of the overall population" but nevertheless a lucrative one for the spammers.
--Jeffrey Bloomer, Slate, on being smart by acting dumb. HT: MEL

Tuesday, June 19, 2012

Donate only your very best unwanted clothes

[The Quincy Street Salvation Army] processes an average of five tons of outcast clothing every single day of the year, and much more during the holiday season when donations spike. From that astonishing mass, the sorters choose exactly 11,200 garments a day to be divided up equally between the eight thrift stores they serve. ...

The Quincy Street Salvation Army builds a completed wall made of 18 tons, or 36 bales, of unwanted clothing every three days. And this is just a small portion of the cast-offs of one single Salvation Army location in one city in the United States.

Most Americans are thoroughly convinced there is another person in their direct vicinity who truly needs and wants our unwanted clothes. This couldn’t be further from the truth. ...

Without textile recyclers, charities would be totally beleaguered and forced to throw away everything that couldn’t be sold. Charities might even have to turn us away. ...

Most of our donated clothing does not end up in vintage shops, as car-seat stuffing, or as an industrial wiping rag. It is sold over­seas. After the prized vintage is plucked out and the outcasts are sent to the fiber and wiping rag companies, the remaining clothing is sorted, shrink-wrapped, tied up, baled, and sold to used-clothing ven­dors around the world ... with the overwhelming majority sent to ports in sub-Saharan Africa. ...

Once again, while many Americans might like to imagine that there is some poor, underdressed African who wants our worn and tattered duds, the African used clothing market is very particular and is demanding higher quality and more fashion-forward styles. Paben told me that access to the Internet and cellphones has made the con­tinent fiercely fashion-forward in recent years. “There’s been a change in what you can sell there,” he says, and the bales have to be much more carefully sorted based on style, brand, and condition.

Sunday, June 17, 2012

Designing the Kikkoman soy sauce dispenser

One of the most enduring objects in [Kenji Ekuan's] 60-year design career — which includes the Akita bullet train and Yamaha motorbikes — is the Kikkoman soy-sauce dispenser. Introduced in 1961, it has been in continuous production ever since. ...

It took three years for Ekuan and his team to arrive at the dispenser’s transparent teardrop shape. More than 100 prototypes were tested in the making of its innovative, dripless spout (based on a teapot’s, but inverted). The design proved to be an ideal ambassador. With its imperial red cap and industrial materials (glass and plastic), it helped timeless Japanese design values — elegance, simplicity and supreme functionality — infiltrate kitchens around the world.

More than 300 million dispensers have been sold, in more than 70 countries. In 2007, to mark its 50th year in the United States, Kikkoman issued a gold-capped version, and the company has also given souvenir bottles, bearing the image of Mickey Mouse, to groups of schoolchildren visiting the factory. But Ekuan’s original design persists.
--Leslie Camhi, NYT Magazine, on a timeless design that just works

Friday, June 15, 2012

Deceptive advertising busted by the iPhone

Ski resorts self-report 23 percent more snowfall on weekends. Resorts that plausibly reap greater benefits from exaggerating do it more. We find little evidence that competition restrains or encourages exaggeration. Near the end of our sample period, a new iPhone application feature makes it easier for skiers share information on ski conditions in real time. Exaggeration falls sharply, especially at resorts with better iPhone reception.
--Jonathan Zinman and Eric Zitzewitz, "Wintertime for deceptive advertising?," on another way the iPhone has made the world a better place

Thursday, June 14, 2012

Doctor work hours are dropping

After decades of working exceptionally long hours, U.S. physicians have steadily shortened their workweek in recent years. A study led by Dartmouth economist Douglas Staiger, Ph.D., found that doctors today are working an average of 51 hours a week, a substantial decline from the 55 hours a week they worked throughout the 1980s and 1990s. ...

The four-hour change is "very unusual for an occupation," Staiger says. To analyze trends in physician hours, he and his colleagues used three decades of data from a monthly U.S. Census Bureau survey. They were "really surprised at how broad-based the decline was," Staiger says. All groups of physicians—men, women, younger doctors, older doctors, residents, and nonresidents—saw a substantial decline in hours. ...

The researchers found a strong correlation between the number of hours worked and physician fees. Inflation-adjusted fees were constant during the early 1990s but dropped by 25% from 1995 to 2006. "When fees go down, that last hour of work is less rewarding," financially and in other ways, Staiger explains. ...

Usually, Staiger says, physician supply forecasts "assume that physician hours will remain at their traditionally high levels." But the three-hour drop for nonresidents is roughly equivalent to cutting 36,000 physicians from the workforce. So the study, which was published in the Journal of the American Medical Association, could be seen as evidence that a doctor shortage truly is just around the corner.
--Katherine Vonderhaar, Dartmouth Medicine, on why your doctor won't see you

Tuesday, June 12, 2012

The economics of economics superstars

Thomas Sargent, an American economist who won the Nobel Memorial Prize in Economic Sciences in 2011 together with Christopher Sims, will teach at Seoul National University (SNU) beginning this year.

The school said Monday Sargent, 69, currently a professor of New York University, will teach macroeconomics at SNU as a full-time professor for two years beginning the second semester of this year. ...

Sargent is expected to receive some 1.5 billion won ($1.27 million) annually, including salaries and research funds.
--Na Jeong-ju, Korea Times, on big money chasing big guns

Monday, June 4, 2012

Michael Lewis on luck and entitlement

Life's outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognize that if you have had success, you have also had luck — and with luck comes obligation. ...

I now live in Berkeley, California. A few years ago, just a few blocks from my home, a pair of researchers in the Cal psychology department staged an experiment. They began by grabbing students, as lab rats. Then they broke the students into teams, segregated by sex. Three men, or three women, per team. Then they put these teams of three into a room, and arbitrarily assigned one of the three to act as leader. Then they gave them some complicated moral problem to solve: say what should be done about academic cheating, or how to regulate drinking on campus.

Exactly 30 minutes into the problem-solving the researchers interrupted each group. They entered the room bearing a plate of cookies. Four cookies. The team consisted of three people, but there were these four cookies. Every team member obviously got one cookie, but that left a fourth cookie, just sitting there. It should have been awkward. But it wasn't. With incredible consistency the person arbitrarily appointed leader of the group grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto: lips smacking, mouth open, drool at the corners of their mouths. In the end all that was left of the extra cookie were crumbs on the leader's shirt.

This leader had performed no special task. He had no special virtue. He'd been chosen at random, 30 minutes earlier. His status was nothing but luck. But it still left him with the sense that the cookie should be his.

This experiment helps to explain Wall Street bonuses and CEO pay, and I'm sure lots of other human behavior. But it also is relevant to new graduates of Princeton University. In a general sort of way you have been appointed the leader of the group. Your appointment may not be entirely arbitrary. But you must sense its arbitrary aspect: you are the lucky few. Lucky in your parents, lucky in your country, lucky that a place like Princeton exists that can take in lucky people, introduce them to other lucky people, and increase their chances of becoming even luckier. Lucky that you live in the richest society the world has ever seen, in a time when no one actually expects you to sacrifice your interests to anything.

All of you have been faced with the extra cookie. All of you will be faced with many more of them. In time you will find it easy to assume that you deserve the extra cookie. For all I know, you may. But you'll be happier, and the world will be better off, if you at least pretend that you don't.

Friday, June 1, 2012

How Disney lies to you to make you happier

Studies show that we’re much more patient when we’re given an idea of how long we’ll be waiting, instead of wondering whether it will be three minutes or three hours. So, for example, some New York City subway platforms now feature digital displays featuring estimated arrival times for the next few trains. But again, Disney is the master. It posts estimated wait times next to various spots in its long queues—but, according to [MIT queuing theory professor Dick] Larson, it pads the times so you always get to the head of the line more quickly than you’d expected: “You think, ‘We’re 10 minutes ahead of schedule!’ and so you’re happy.”
--Seth Stevenson, Slate, on optimal expectations