Friday, November 29, 2013

No cheap books please, we're French

France has begun a new chapter in the saga of its online book wars, with French MPs unanimously backing a move that will curb the discounting power of Amazon in the country.

Warning that small independent bookstores were facing unfair competition from the US internet firm, MPs supported a bill that will prevent it combining free delivery with 5% discounts on books.

In a rare show of unity, parliamentarians on the right and left voted for the move to defend the French "cultural exception" against market forces and global digital powerhouses.

The bill, which must now be approved by the senate, is the latest round of French politicians taking on the might of the major US internet firms.

Since 1981 French law has fixed book-prices so that readers pay the same whether they buy online, from a big high street chain, or from a small bookseller. Extensive discounting is banned.
--Angelique Chrisafis, The Guardian, on government-enforced price fixing

Wednesday, November 27, 2013

Burying bad news before weekends and holidays

I exploit an SEC requirement that managers have to disclose any material corporate event to investors within five business days, using Form 8-K. In this setting, managers only have discretion over the day of the week that they disclose the news. 8-K filings allow me to identify the event and the disclosure dates, and the short five-day window reduces the scope for other confounding activity.

I show managers strategically disclose negative news on Fridays in an attempt to take advantage of market under-reaction to pre-weekend announcements. The under-reaction to Friday announcements has been suggested in other settings (Bagnoli, Clement, and Watts (2005); Dellavigna and Pollet (2009)). ...

I find even though events are uniformly distributed throughout the week, managers disclose more negative news on Fridays, before national holidays, and after the market closes. This pattern is absent for non-negative news. Furthermore, negative news is clustered on Fridays regardless of the day of the week the event occurs. ...

If investors are indeed more distracted on Fridays, returns should temporarily under-react to Friday disclosures (Dellavigna and Pollet (2009)). I find a significant under-reaction in cumulative abnormal returns of approximately 50 basis points if managers disclose negative news on Friday. The mispricing persists for three weeks and is not traded away because of limits to arbitrage.
--My colleague Marina Niessner on how to bury bad news

The Obama administration is expected to announce on Wednesday a one-year delay in another major element of the new health care law, which allows small businesses to go online and get insurance for their employees through the website of the federal marketplace. ...

The announcement of the delay, just before Thanksgiving, is reminiscent of the way the White House announced, just before the Independence Day weekend, a one-year delay in the requirement for larger employers to offer health insurance to employees.
--Robert Pear, NYT, on evidence-based management

Tuesday, November 26, 2013

It is more blessed to give than to receive: Scientific evidence

The philanthropy monitor Giving USA estimates that U.S. nonprofits and houses of worship received an amazing $316 billion in 2012.

More than 70% of those voluntary gifts were donated by individuals and families. Even though donations dropped sharply during the Great Recession and have yet to fully recover, Americans still give away more than the entire gross domestic product of prosperous countries such as Israel and Denmark. ...

American generosity is internationally exceptional and generally amazes foreigners, especially those from the social democracies across the Atlantic.

As a European acquaintance once asked me, "What's in it for you?" ...

The University of Chicago's General Social Survey shows that charitable givers are 43% likelier to say they are "very happy" than nongivers. Nongivers are a whopping 3.5 times more likely than givers to say they are "not happy at all."

Skeptics will question the causality here. Does charitable giving make us happier, vice versa or both? Experimental studies hold the answer. In 2008, researchers from Harvard and the University of British Columbia found that the amount subjects spent on themselves was inconsequential for happiness, while spending on others yielded significant happiness gains.

Meanwhile, researchers at the University of Oregon attached fMRI scanners to participants and asked them to divide $100 between a food pantry and their own wallets. Choosing charity lighted up the nucleus accumbens, a brain center of pleasure and reward that also corresponds to pleasurable music, addictive drugs, and the bond between mothers and their children.
--Arthur Brooks, WSJ, on Acts 20:35 demonstrated

Monday, November 25, 2013

Can reasoning alone break schizophrenic delusions?

What might happen, [psychiatrist Milton Rokeach] wondered, if a psychologist were to deliberately pair up patients who held directly conflicting identity delusions? Perhaps such psychological leverage could be used to pry at the cracks of an irrational psyche to let in the light of reason. Dr. Rokeach sought and secured a research grant to test his hypothesis, and he began canvassing sanitariums for delusional doppelgängers. Soon he found several suitable subjects: three patients, all in state care, each of whom believed himself to be Jesus Christ. ...

Rokeach initiated his research experiment at the Ypsilanti State Hospital in Michigan in 1959. ... Three days later, when the "Three Christs" arose, they were summoned to a small antechamber adjacent to Ward D-23. ...

Dr. Rokeach's hypothesis was that it might be possible to alter or eliminate schizophrenic delusions if he forced patients to confront what he described as 'the ultimate contradiction conceivable for human beings': more than one person claiming the same identity. To this end, he contrived a battery of experiments to challenge the Christs' identities over the coming months. ...

Dr. Rokeach finally brought the Three Christs experiment to an end on 15 August 1961, just over two years since the first meeting of Clyde, Joseph, and Leon. None of the patients had measurably improved, although by the time Rokeach departed Leon had indeed renounced his claim to being Jesus Christ. Instead he insisted upon being referred to as "Dr. Righteous Idealized Dung." He had also come to believe that he was one of the Yeti people. ...

Later advances in neuroscience revealed that schizophrenia is disorder of thought processes rather than of thought content, associated with subtle differences in brain structures and in brain chemistry, consequently no amount of psychotherapy can "cure" schizophrenic delusions. However, thanks to modern medicine schizophrenia and similar disorders are quite controllable with the use of antipsychotic medications.

Friday, November 22, 2013

Free pre-school for low-income kids may be ineffective: A randomized controlled trial

Last week legislation was introduced in the Senate and House to create federally funded universal pre-k for 4-year-olds. ...

The rhetoric around the introduction of the legislation includes the by now entirely predictable and thoroughly misleading appeal to the overwhelming research evidence supporting such an investment. ...

Here I want to draw your attention to a newly released study of Tennessee’s Voluntary Pre-K Program (TN-VPK). TN‐VPK is a full day pre-k program for four‐year‐olds from low-income families. ...

The study, conducted by a stellar team of researchers at Vanderbilt, began in 2009. It is a randomized trial (the gold standard for evaluating program impacts) involving about 3,000 four-year-olds whose parents had applied for their admission to oversubscribed TN-VPK programs. A lottery was used to select those to whom an offer of admission was made. Those winning the lottery constitute the intervention group. Those losing the lottery constitute the control group. Only about a quarter of children in the control group found their way into other center-based programs such as Head Start or private pre-k, so the study compares groups that are very different in their levels of access to early childhood education. ...

...the group that experienced the Tennessee Voluntary State Pre-K Program performed somewhat less well on cognitive tasks at the end of first grade than the control group, even though ¾ of the children in the control group had no experience as four-year-olds in a center-based early childhood program.

What about social/emotional skills and dispositions as rated by teachers? The following figure presents those results, again at the end of first grade. None of the differences is statistically significant. Four of the seven signs are negative, meaning that the control group scored better than the pre-k group.

Finally, what about differences on routinely collected school records? Here the results are mixed. Participants in the TN-VPK were less likely to have been retained in kindergarten than non-participants (4% to 6%). In contrast, children served by TN-VPK were more likely to have received school-based special education services than children in the control group (14% to 9% for the full sample – reported results aren’t separated for the intensively studied sub sample). There were no statistically significant differences between the two groups on absences from school or disciplinary actions. ...

I see these findings as devastating for advocates of the expansion of state pre-k programs. This is the first large scale randomized trial of a present-day state pre-k program. Its methodology soundly trumps the quasi-experimental approaches that have heretofore been the only source of data on which to infer the impact of these programs. And its results align almost perfectly with those of the Head Start Impact Study, the only other large randomized trial that examines the longitudinal effects of having attended a public pre-k program.
--Grover J. "Russ" Whitehurst, Brookings Institute, on the case against publicly funding universal preschool. HT: Marginal Revolution

Did a Star Trek budget shortfall lead to the iPhone and iPad interfaces?

Left: Original Star Trek series. Right: Star Trek: The Next Generation
Star Trek also may have helped create the entire image-under-glass paradigm that governs our digital world. The interface—known as LCARS—is cool-looking. It’s distinctive. And it’s actually the result of a budget shortfall.

Star Trek: The Next Generation didn’t have as much money for set design as did the original series, which had panels wired with jewels and glowing buttons. Instead, they cut out sheets of film and put them over glass panes. To this day, people still modify their computers and tablets to make them look like an LCARS device from the 24th Century, by way of the late '80s.
--Roman Mars, 99% Invisible, on necessity as the mother of touchscreen invention

Blue is the color of the sci-fi future

We have seen the future, and the future is mostly blue.

Or, put another way: in our representations of the future in science fiction movies, blue seems to be the dominant color of our interfaces with technology yet to come. And that is one of the many design lessons we can learn from sci-fi.

Designers and sci-fi aficionados Chris Noessel and Nathan Shedroff spent years compiling real-world lessons that designers can, should, and already do take from science fiction. Their 2012 book, Make It So: Interaction Design Lessons From Science Fiction is a comprehensive compendium of their findings.

To give you a sense of how exhaustive their research is in this field, take note that the lesson above—future screens are mostly blue—was determined empirically. Shedroff and Noessel catalogued virtually every interface from every sci-fi movie from 1968 through 2011 and determined an average color per year.

So why is blue the chosen color? Noessel posits that, because blue is so rare in nature (if you discount the sky and the ocean, which are arguably not blue) there’s something fundamentally mystical, unnatural, and inhuman about it.
--Roman Mars, 99% invisible, on our blue future

Why do 74% of kids choose Yale over Princeton? Grade deflation?

While Yale’s ad hoc committee on grading examines grading policies, Princeton is reassessing its own experiment with grade deflation — a move Princeton’s new president attributes in part to concerns about a faltering admissions yield, according to the Daily Princetonian. ...

Most Yale undergraduates and third-party college admissions experts interviewed said that while grade deflation was not a decisive factor in causing students to choose Yale over Princeton, grade deflation does reinforce the perception that Princeton has a more competitive and less collaborative academic culture than Yale. ...

Since implementing grade deflation policies in 2004, Princeton’s yield has dropped from 73.1 percent for the class of 2007 — the last class to be admitted before Princeton’s grading changes were announced — to 68.7 percent for the class of 2017. ...

Of students who were admitted to both Princeton and Yale for the class of 2017, 74 percent chose Yale over Princeton, according to Parchment, an educational website that calculates cross-admit rates between colleges in America. Richard Avitabile, a former admissions officer at New York University and a private college counselor at Steinbrecher and Partners, said while Yale has traditionally held an advantage over Princeton, he does not recall the gap ever being as large as it is now.

Chuck Hughes, president of college admissions consulting service Road to College and a former admissions officer at Harvard, said that Princeton’s decade-long decline in yield can be attributed in part to the university’s stricter grading policies. Hughes added that although students will still choose Princeton over most schools, many of his clients have chosen Stanford, Harvard and Yale over Princeton, citing the difference in grading policies between the schools being one major factor. ...

[A] study published in July in the scientific journal PLOS One demonstrated that grade inflation helps students find jobs and be more competitive graduate school applicants. Samuel Swift, postdoctoral fellow at the Haas Business School at the University of California, Berkeley and the lead author of the study, said that when businesses and graduate schools consider applicants, they do not consider the grade distribution at the school from which the student is applying.
--Yuval Ben-David and Rishabh Bhandari, Yale Daily News, on the academic Phillips curve

Thursday, November 21, 2013

Students learn less from professors they like better

Conventional wisdom holds that “higher-quality” teachers promote better educational outcomes. ... At the postsecondary level, student evaluations of professors are widely used in faculty promotion and tenure decisions. However, teachers can influence these measures in ways that may reduce actual student learning. Teachers can “teach to the test.” Professors can inflate grades or reduce academic content to elevate student evaluations. Given this, how well do each of these measures correlate with the desired outcome of actual student learning? ...

...our study uses a unique panel data set from the United States Air Force Academy (USAFA) in which students are randomly assigned to professors over a wide variety of standardized core courses. The random assignment of students to professors, along with a vast amount of data on both professors and students, allows us to examine how professor quality affects student achievement free from the usual problems of self-selection. Furthermore, performance in USAFA core courses is a consistent measure of student achievement because faculty members teaching the same course use an identical syllabus and give the same exams during a common testing period. Finally, USAFA students are required to take and are randomly assigned to numerous follow-on courses in mathematics, humanities, basic sciences, and engineering. Performance in these mandatory follow-on courses is arguably a more persistent measurement of student learning. Thus, a distinct advantage of our data is that even if a student has a particularly poor introductory course professor, he or she still is required to take the follow-on related curriculum. ...

Student evaluations are positively correlated with contemporaneous professor value-added and negatively correlated with follow-on student achievement. That is, students appear to reward higher grades in the introductory course but punish professors who increase deep learning (introductory course professor value-added in follow-on courses). ...

As an illustration, the introductory calculus professor in our sample who ranks dead last in deep learning ranks sixth and seventh best in student evaluations and contemporaneous value-added, respectively.
--Scott Carrell and James West, Journal of Political Economy, on teaching to the student evaluation

Frequent testing improves classroom learning

Grading college students on quizzes given at the beginning of every class, rather than on midterms or a final exam, increases both attendance and overall performance, scientists reported Wednesday.

The findings — from an experiment in which 901 students in a popular introduction to psychology course at the University of Texas took their laptops to class and were quizzed online — demonstrate that the computers can act as an aid to teaching, not just a distraction.

Moreover, the study is the latest to show how tests can be used to enhance learning as well as measure it. The report, appearing in the journal PLoS One, found that this “testing effect” was particularly strong in students from lower-income households. ...

Most students hated it at first, Dr. Pennebaker said.

“Sam and I usually get really high course evaluations” from the students, he said; “these were the lowest ever.” ...

By the end of the course, however, the class had outperformed a previous Psych 301 class of 935 students that used midterm exams — scoring 10 percent higher on a subset of 17 questions that appeared on both classes’ tests. The quizzed group also got slightly higher grades, the study found. superstitions

Some navigators [who help people sign up for health insurance on] have rituals that they think might improve their access to the federal website. Mr. Trevorrow, who works for Resources for Human Development, makes sure to clear his computer’s browsing history, or cache, before trying to enroll someone. John Foley, a navigator with the Legal Aid Society of Palm Beach County in Florida, avoids enrolling people early in the week because he thinks that is when the site has more problems. ...

On Friday, Mr. Trevorrow helped a client complete an online application in one sitting for the first time, he said, getting to the point where they could start shopping for plans. “We were both as excited as we could be,” he said.

But then they encountered a problem: The website said that his client was not eligible for a subsidy to help with her premium costs. Based on the income she had reported, Mr. Trevorrow was certain that she should, in fact, get a subsidy.

“It did bring an abrupt halt to the proceedings,” he said. “However, we ended on an upbeat note. I told that consumer this was the farthest I’d ever gotten with an application, it’s the smoothest I’d ever seen the system run, and I was very optimistic that we could finish.”
--Abby Goodnough, NYT, on the new blowing on the Nintendo cartridge

Tuesday, November 19, 2013

The optimal strategy for finding Waldo

I knew that [Martin] Handford had placed Waldo in each of these illustrations, and in my experience, all people—even people who make a living hiding cartoon men in cartoon landscapes—have tendencies, be they conscious and unconscious. True randomness is very difficult to achieve, even if you want to, and according to Handford he does not necessarily aim for unpredictability. “As I work my way through a picture, I add Wally when I come to what I feel is a good place to hide him,” he once told Scholastic. Knowing this, is it possible, I wondered, to master Where’s Waldo by mapping Handford’s patterns?

I sought to answer these questions the way any mathematician who has no qualms about appearing ridiculous in public would: I sat in a Barnes & Noble for three hours flipping through all seven Where’s Waldo books with a tape measure. ...

What we do see, as highlighted in the map below, is that 53 percent of the time Waldo is hiding within one of two 1.5-inch tall bands, one starting three inches from the bottom of the page and another one starting seven inches from the bottom, stretching across the spread.

So, if you want to find Waldo on any given page, a good strategy would be to start by scrutinizing these two bands first, before moving on to other areas. Although 1.5 inches isn’t a particularly narrow range, it’s small enough to focus on without missing Waldo; and over half the time, he’ll be there.
--Ben Blatt, Slate, on Waldo's tendencies

Monday, November 18, 2013

Hail the mid-30s tech entrepreneur

Incidentally, though 20-something tech founders like Mr. Zuckerberg, Steve Jobs and Bill Gates get a lot of ink, they are unusual. A recent study by the VC firm Cowboy Ventures found that among tech startups that have earned a valuation of at least $1 billion since 2003, the average founder's age was 34. "The twentysomething inexperienced founder is an outlier, not the norm," wrote Cowboy's founder Aileen Lee.
--Farhad Manjoo, WSJ, on the prime of life

Thursday, November 14, 2013

The lumbering pace of McDonald's service

McDonald's Corp. came out with its strongest acknowledgment yet that its customer service in the U.S. has suffered recently, and that it blundered by introducing too many new menu items too quickly. ...

QSR Magazine, a trade publication that conducts an annual drive-through performance study of fast-food restaurants, said last month that McDonald's clocked its slowest average speed of service in the study's 15-year history, at 189.49 seconds.

Wednesday, November 13, 2013

How can a website cost so much?

A witness from the Government Accountability Office said "north of" $600 million had been spent on through the end of September.
--Jennifer Corbett Dooren, WSJ, on the amazing cost of building a broken website

Saturday, November 9, 2013

The beautiful prayers of Flannery O'Connor

From early 1946 to the fall of 1947—from the ages of 20 to 22—[Flannery] O’Connor wrote in a hardbound, marbled Sterling notebook, which was found by writer, scholar, and O’Connor friend William A. Sessions during a visit to her archives in 2002. ...

“I cannot love Thee the way I want to,” she writes. “You are the slim crescent of a moon that I see, and my self is the earth’s shadow that keeps me from seeing all the moon ... what I am afraid of, dear God, is that my self shadow will grow so large that it blocks the whole moon.”

Her ambition is plain but something she tries to accommodate to God’s will. “Please help me dear God to be a good writer and to get something else accepted,” she implores, but then adding, aware of the sin of pride, “That is so far from what I deserve, of course, that I am naturally struck with the nerve of it.” She questions her motives, her honesty, and worries over her presumption: “I have not asked You, I feel, in the right way. Let me henceforth ask you with resignation . . . Oh God please make my mind clear. Please make it clean.” ...

She worries her mind is not strong, she describes it as being “in a little box, dear God, down inside other boxes inside other boxes and on and on. There is very little air in my box.” She worries that she may be, artistically, merely mediocre. “If I ever do get to be a fine writer,” she says, “it will not be because I am a fine writer but because God has given me credit for a few of the things he kindly wrote for me.” But “right at present this does not seem to be His policy. I can’t write a thing.”
--Marian Ryan, Slate, on the prayers of a great writer

Friday, November 8, 2013

We can now upload memories to a mouse

We have the ability, in a live mouse who's running through a maze, to actually image thousands of neurons in the hippocampus and see what's happening as that mouse learns how to get from one spot to another. In other experiments, researchers have transferred memories from a trained mouse to a naïve mouse, and that mouse seems to know how to negotiate a maze that it's never seen before.

Now that's pretty freaky. Maybe we're starting to learn some of the language by which the brain operates.
--NIH director Francis Collins, WSJ on getting closer to "I know kung fu"

How JFK became a war hero

It was involuntary. They sank my boat.
--John F. Kennedy on how he became a war hero

Wednesday, November 6, 2013

The genetically engineered silkworm

The domesticated variety [of silkworm], compared to the wild form, has increased cocoon size, growth rate and efficiency of its digestion. It has also gained tolerance to human presence and handling and living in crowded conditions. It also cannot fly and lacks fear of potential predators. These changes have made it entirely dependent upon humans for survival. ...

The silkworm is one of the world's most genetically modified animals. Silkworms were first domesticated in China over 5000 years ago. Since then, the silk production capacity of the species has increased nearly tenfold. Silkworm is one of the few organisms wherein the principles of genetics and breeding were applied to harvest maximum output. It is next only to maize in exploiting the principles of heterosis and cross breeding.

Should good-looking actors deliver online courses?

So-called MOOCs, or massive open online courses, typically get tens of thousands of sign-ups to watch video lectures delivered by tweedy academics, some more photogenic than others. But imagine how many students would tune in—or make it through the class without dropping out—if instead of bookish professors, Hollywood stars delivered the lessons.

That’s one idea under consideration by leaders of EdX, the nonprofit provider of MOOCs started by Harvard University and the Massachusetts Institute of Technology. ...

One for-profit MOOC producer, Udacity, already brings in camera-friendly staff members to appear with professors in lecture videos. One example is an introduction to psychology course developed earlier this year in partnership with San Jose State University. It had three instructors: Gregory J. Feist, an associate professor of psychology at San Jose State University, who has been teaching for more than 25 years and who wrote a popular textbook on the subject; Susan Snycerski, a lecturer at the university who has taught for 15 years; and Lauren Castellano, a Udacity employee who recently finished a master’s in psychology from the university, advised by Feist.

In the course’s opening lecture, the three stand together and go over the ground rules, but after that, Castellano takes the lead on camera. Feist and Snycerski make regular appearances throughout the 16 lessons, but often only briefly, to explain a concept or two, or to be part of a demonstration or skit with Castellano. ...

In fact, [Russell Poulin, a researcher with the Western Interstate Commission for Higher Education,] argued that one benefit of online learning is that the various parts of the professor’s role can be “pulled apart.” In an online course, he argued, there’s no reason to have the same person develop the content, deliver it, and run assessments, when people with skills in each of those areas can work together to create clearer and more effective lessons.
--Jeff Young, Slate, on division of labor in online courses

We take a large sample of student instructional ratings for a group of university teachers and acquire six independent measures of their beauty, and a number of other descriptors of them and their classes. Instructors who are viewed as better looking receive higher instructional ratings, with the impact of a move from the 10th to the 90th percentile of beauty being substantial. This impact exists within university departments and even within particular courses, and is larger for male than for female instructors. Disentangling whether this outcome represents productivity or discrimination is, as with the issue generally, probably impossible.
--Daniel Hamermesh and Amy Parker, "Beauty in the Classroom: Instructors' Pulchritude and Putative Pedagogical Productivity," on what will sell in online education

Who do you want to see teaching you psychology in your browser?
Susan Syncerski, lecturer, San Jose State University
Gregory Feist, associate professor, San Jose State University
Lauren Castellano, course developer, Udacity

Tuesday, November 5, 2013

Loopholes in medical ethics

Doctors and psychologists working for the US military violated the ethical codes of their profession under instruction from the defence department and the CIA to become involved in the torture and degrading treatment of suspected terrorists, an investigation has concluded. ...

Medical professionals were in effect told that their ethical mantra "first do no harm" did not apply, because they were not treating people who were ill.
--Sarah Boseley, The Guardian, on convenient narrowing of scope. HT: Marginal Revolution

Field goal kickers have gotten a lot more accurate

[NFL] kickers entered Monday making nearly two-thirds (65.8%) of all 50-plus-yard attempts. Compare that with the 63.6% success rate on all kicks in 1980. Being automatic is now expected, with an all-time-record 85.4% of attempts sailing through the uprights.

Strangely, strategies haven't changed accordingly. Teams are attempting barely more 50-plus-yard field goals today (4.6 a season) than in 1980 (2.9), when the success rate was a meager 28.4%.

--Michael Salfino, WSJ, on human progress

Administration says that Obamacare is not a federal health care program

The Affordable Care Act is the biggest new health care program in decades, but the Obama administration has ruled that neither the federal insurance exchange nor the federal subsidies paid to insurance companies on behalf of low-income people are “federal health care programs.”

The surprise decision, disclosed last week, exempts subsidized health insurance from a law that bans rebates, kickbacks, bribes and certain other financial arrangements in federal health programs, stripping law enforcement of a powerful tool used to fight fraud in other health care programs, like Medicare.

[Secretary of health and human services Kathleen Sebelius] did not explain the legal rationale for her decision, which followed a spirited debate within the administration. ...

Lawyers and law enforcement officials said Ms. Sebelius’s decision was unexpected because the insurance exchanges and subsidy payments appeared to fit the definition of federal health care programs in the anti-kickback statute. ...

Such programs are defined broadly as “any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States government.” ...

Kevin G. McAnaney, a lawyer who specializes in health care fraud and abuse cases, said Ms. Sebelius’s decision would allow drug companies to give coupons to people who buy insurance through the exchanges.

Such coupons subsidize co-payments and reduce out-of-pocket costs for consumers, encouraging them to use certain brand-name prescription drugs when lower-cost alternatives are available, Mr. McAnaney said.

The federal government has forbidden the use of drug coupons in Medicare and other federal health programs, saying they amount to a classic kickback scheme, with drug companies paying consumers to use their products. ...

Coupons may drive down the co-payment for an expensive brand-name drug, but often, the insurer must pay much more than it would for a generic version of the medication.
--Robert Pear, NYT, on twisting the meaning of words

The efficient outsourced life

Jon Steinsson and Emi Nakamura do not have enough time to do everything they need to do. They’re recently tenured, highly productive rising stars at Columbia University, as well as parents to an infant. But they have a secret weapon helping them prioritize: Econ 101. ...

Even if you’re faster and more effective than everyone else at a given task — fighting with the cable company, say, or folding your socks just so — you still might be better off if you pay someone else to do it for you. Why? Because there is an opportunity cost for every hour consumed by these tedious, nonproductive tasks; there exists some higher-value activity you could be spending your time on instead.

Steinsson and Nakamura, both economists, take the tenets of their field seriously. And so they outsource as much of the humdrum aspects of their personal lives as they can.

Last year, the couple hired a personal chef. She drops off five healthful meals at the beginning of every week to reduce the time they spend cooking (they used to cook recreationally; now they’d rather spend that time with their son). They have also paid people to: build Ikea furniture for them (even though the service often costs more than the furniture itself); teach them how to use software programs and baby carriers; and load their CD collection onto their computers. They even hired someone to spend hours going through thousands of old family photographs to figure out which are the “good ones.”

That last task has proved a bit problematic. It’s hard for a stranger to look at snapshots from your childhood and determine which ones represent truly memorable moments. Still, Steinsson remains confident in the theory. “We haven’t figured it out yet, but we haven’t given up,” he told me. ...

Part of the problem is that most people don’t understand the value of their time, particularly if they are salaried. Paying someone to buy your groceries or take the car to the mechanic sounds like money down the drain if you’re not billing hourly. But buying yourself an extra hour to work today can be good for your career tomorrow, if doing so improves your chances of getting a promotion or a raise.

That’s why Steinsson and Nakamura paid for housekeeping services even when they were penniless grad students. Outsourcing household tasks meant they had to take on more debt, but they calculated — correctly — that spending an extra hour working on a paper was better for their lifetime expected earnings than spending that same hour vacuuming.
--Catherine Rampell, NYT Magazine, on applying comparative advantage theory to your life

Monday, November 4, 2013

Why are continental breakfasts continental?

The term dates to the late 19th and early 20th centuries, when American hotels began changing to appeal to an emerging middle class and to European tourists. One meaning of the original “continental breakfast” refers to the type of food served: Americans traditionally ate large quantities of hearty, fried fare for breakfast, like pancakes, eggs, and meat—holdovers of the agrarian lifestyle. European visitors to America were appalled by such greasy abundance, preferring lighter items like fruit, bread, and pastries. Hotels began offering such continental foodstuffs to appeal both to Europeans and to health-conscious Americans.

The “continental” in “continental breakfast” didn’t just refer to cuisine—it also referred to the way hotel guests paid for their meals. At traditional hotels, guests paid for their room and board together: They were expected to eat all of their meals in the hotel’s restaurant, and the price of all meals was included in the hotel’s rate. This was known as the American payment model. In the late 19th century, as middle-class patrons began demanding cheaper and more flexible arrangements, some hotels adopted a so-called European plan, in which guests paid only for their room and could either pay separately to eat in the hotel restaurant or go elsewhere for meals. Soon a hybrid American-European plan emerged, called the “continental” model to distinguish it from both (but to retain a whiff of foreign sophistication). At a continental-style hotel, breakfast was included with the cost of one’s room, but guests were on their own for lunch and dinner.

Sunday, November 3, 2013

Till death do us part illustrated

When my grandfather died last spring I saw the most beautiful thing; I saw my grandmother help him die. She snuggled next to him in bed, and talked to him and stroked his face and held his hand. I have seen till death do us part up close. It is beautiful and absolutely worth devoting my life to.
--Lisa Holtby, NYT, on the good marriage. HT: JL

Double-tap drone strikes

A U.S. drone strike killed at least 17 people in Pakistan's tribal region on Wednesday [July 3], Reuters reports.

But Reuters also reports this (emphasis ours):
Many were wounded in the attack, local tribesman Kaleemullah Dawar said, but rescuers delayed for fear of falling victim to a second attack, a common tactic with drone strikes.
That tactic is known as the "double tap," which bombs multiple targets in relatively quick succession — meaning that the second strike often hits first responders. ...

NYU Student Josh Begley revealed the trend while tweeting every U.S. drone strike since 2002.

Last year a study by the NYU School of Law and Stanford Law School detailed the U.S. use of the double tap, providing first-hand accounts of its devastating effect on rescuers and humanitarian workers. ...

Last June the UN special rapporteur on extrajudicial killings Christof Heyns said he considers secondary strikes to be "war crimes." ...

Furthermore, Spencer Ackerman of The Guardian reports that a recent study conducted by a U.S. military adviser found that ... drone strikes in Afghanistan were "an order of magnitude more likely to result in civilian casualties per engagement" than manned bombing runs.
--Michael Kelley, Business Insider, on how the precision of drone strikes is used

The seeds of Obamacare's disastrous rollout were planted in 2010

In May 2010, two months after the Affordable Care Act squeaked through Congress, President Obama’s top economic aides were getting worried. Larry Summers, director of the White House’s National Economic Council, and Peter Orszag, head of the Office of Management and Budget, had just received a pointed four-page memo from a trusted outside health adviser. It warned that no one in the administration was “up to the task” of overseeing the construction of an insurance exchange and other intricacies of translating the 2,000-page statute into reality.

Summers, Orszag and their staffs agreed. For weeks that spring, a tug of war played out inside the White House, according to five people familiar with the episode. On one side, members of the economic team and Obama health-care adviser Zeke Emanuel lobbied for the president to appoint an outside health reform “czar” with expertise in business, insurance and technology. On the other, the president’s top health aides — who had shepherded the legislation through its tortuous path on Capitol Hill and knew its every detail — argued that they could handle the job.

In the end, the economic team never had a chance: The president had already made up his mind, according to a White House official who spoke on the condition of anonymity in order to be candid. Obama wanted his health policy team — led by Nancy-Ann De­Parle, director of the White House Office of Health Reform — to be in charge of the law’s arduous implementation. ...

Three and a half years later, such insularity — in that decision and others that would follow — has emerged as a central factor in the disastrous rollout of the new federal health insurance marketplace, casting doubt on the administration’s capacity to carry out such a complex undertaking.

“They were running the biggest start-up in the world, and they didn’t have anyone who had run a start-up, or even run a business,” said David Cutler, a Harvard professor and health adviser to Obama’s 2008 campaign, who was not the individual who provided the memo to The Washington Post but confirmed he was the author. “It’s very hard to think of a situation where the people best at getting legislation passed are best at implementing it. They are a different set of skills.”
--Amy Goldstein and Juliet Eilperin, Washington Post, on the dangers of making the political people the technocrats

Most black NBA players didn't grow up in poverty

[LeBron] James was born poor to a 16-year-old single mother in Akron, Ohio. The conventional wisdom is that his background is typical for an N.B.A. player. ... But it isn’t.

I recently calculated the probability of reaching the N.B.A., by race, in every county in the United States. ... Growing up in a wealthier neighborhood is a major, positive predictor of reaching the N.B.A. for both black and white men. Is this driven by sons of N.B.A. players like the Warriors’ brilliant Stephen Curry? Nope. Take them out and the result is similar. ...

Putting all the information together, my best guess is that black N.B.A. players are about 30 percent less likely than the average black male to be born to an unmarried mother and a teenage mother. ...

From 1960 to 1990, nearly half of blacks were born to unmarried parents. I would estimate that during this period roughly twice as many black N.B.A. players were born to married parents as unmarried parents. In other words, for every LeBron James, there was a Michael Jordan, born to a middle-class, two-parent family in Brooklyn, and a Chris Paul, the second son of middle-class parents in Lewisville, N.C., who joined Mr. Paul on an episode of “Family Feud” in 2011. ...

[The] data suggest that on average any motivational edge in hungriness [from growing up in poverty] is far outweighed by the advantages of kids from higher socioeconomic classes.

What are these advantages? The first is in developing what economists call noncognitive skills like persistence, self-regulation and trust. We have grown accustomed to hearing about the importance of these qualities for success in school, but players in team sports rely on many of the same skills. ...

The second relevant advantage of a relatively prosperous upbringing is height. The economist Robert W. Fogel has demonstrated the impact of improved early life nutrition on adult height over successive generations. Poor children in contemporary America still have substandard nutrition, holding back their development. ... I estimate that each additional inch almost doubles your chances of making the N.B.A.