Link Banana

Uncommon Knowledge highlights interesting facts about the Olympics. This one was new to me:

the disruptions in the host city - or at least the perception of disruptions - are actually a major boon to competing locales. In 2002, the year Utah hosted the Winter Olympics, counties with ski resorts in Colorado netted an additional $160 million in retail sales, according to sales-tax data.

This on isn’t surprising, but it’s still interesting:

Male athletes were seen as more composed and intelligent in victory, and less committed in defeat. Female athletes were seen as more courageous in victory, and weaker athletes in defeat. A similar pattern was found [in NBC’s coverage] with regard to nationality. Americans were seen as having more concentration, composure, commitment, and courage in victory, while non-Americans were granted more athletic skill. The authors note that “parallels between long-held racial stereotypes (e.g., blacks being ‘born’ athletes and whites being superior intellectually) may transfer in similar ways within the domain of nationalism.”

I just read two profiles. Neither was interesting enough to merit it’s own post, but the combination seemed to just pass the bar. The two:

• Dr. Doom. Depending on who you ask Nouriel Roubini is either a lucky pessimist or prescient thinker. There is, however, no doubt that he predicted America’s current economic turmoil in 2006.
• Hit Man. Jerry Corsi, author of the bestselling “Obama’s a Muslim drug addict” book, gets a brief but interesting profile in the New Yorker.

Making time to do things that I usually “don’t have time for” was a good idea. For example, Paul Tough’s (rather long) story for the New York Times Magazine about the challenge and hope for New Orleans schools is good. The most striking paragraph in a primarily optimistic article:

Pastorek’s optimism and determination can be inspiring, but he admits that for now, at least, there’s no proof that a portfolio model will do a significantly better job educating poor children than a command-and-control model. When I spoke last month to Diane Ravitch, a historian of education who has spent decades studying and writing about the often dispiriting process of school reform, she said that she was skeptical that a change in the governance model would solve the problems plaguing New Orleans’s schools. “The fundamental issue in American education — I say this after 40 years of having read and studied and written about the problems — is one that is demographic,” she told me. Poor children, Ravitch said, simply face too many problems outside the classroom. “If you don’t buttress whatever happens in school with social and economic changes that give kids a better chance in life and put their families on a more stable footing, then schools alone are not going to solve the problems of poor student performance. There has to be a range of social and economic strategies to support and enhance whatever happens in school.”

The reality of the price at the pump against the price of a barrel:

Analyses of gasoline economics show that when the price of oil rises, it takes up to four weeks for gas station prices to catch up, with most of the increase taking place within the first two weeks. But when oil prices sink, it takes up to eight weeks for the savings to be passed along to consumers. The phenomenon is known as “asymmetric price adjustment” (PDF) or, more informally, “rockets and feathers.”

An interesting look at the reality of the much heralded and fretted over Tata Nano:

Malhotra is having second thoughts. He’s done the math and realized that once taxes and insurance costs are added, the price of the entry-level Nano rises to just over $3,000. For an extra $500, he says, he could buy a decent used car with a more powerful engine and air conditioning, which the Nano won’t have.

(via Passport)

I’ve documented before The Economist’s penchant for unusual economic indicators. The classic example, the Big Mac index — in which the price of the sandwich serves as a proxy for purchasing power parity (PPP), has been unveiled for 2008.

Perhaps more novelly, the magazine’s Africa correspondent, Jonathan Ledgard, offers the intriguing possibilty that sales of Coca-Cola are a signal of how peaceful and prosperous a given area of the continent is. (via Passport)

An under-understood truth:

Paul Krugman was observing that even though the political coverage is the part of the media that people like to talk about, it’s actually fairly marginal to the business. The New York Times is known for its hard news coverage, but he observes that from a business perspective it’s primarily a fashion and food publication that runs a small political news operation on the side. One issue of T Magazine, he says, pays for an entire NYT European bureau.

(via kottke)

A new paper (PDF) argues that though immigration has a small depressive effects on the wages of low-education Americans in the short run, it helps even them in the long run.

Using our estimates and Census data we find that immigration (1990-2006) had small negative effects in the short run on native workers with no high school degree (-0.7%) and on average wages (-0.4%) while it had small positive effects on native workers with no high school degree (+0.3%) and on average native wages (+0.6%) in the long run. These results are perfectly in line with the estimated aggregate elasticities in the labor literature since Katz and Murphy (1992). We also find a wage effect of new immigrants on previous immigrants in the order of negative 6%.

It’s a pretty well-understood truth that public perception of the economy’s welfare is disproportionately focused on the price we pay to fuel our cars. Dan Ariely’s recent op-ed explores why:

For the several minutes that I stand at the pump, all I do is stare at the growing total on the meter — there is nothing else to do. And I have time to remember how much it cost a year ago, two years ago and even six years ago.

Yet I have no such memory about the prices of items in any other category. I have no idea how much milk was six years ago, how much bread was three years ago or how much yogurt was a week ago. But I suspect that if I stood next to the yogurt case in the supermarket for five minutes every week with nothing to do but stare at the price, I would also know how much it has gone up — and I might become outraged when yogurt passed the $2 mark.

Another odd thing about the way we buy gasoline is that we usually buy multiple units. I just bought 13 gallons for a little more than $55. The sticker shock isn’t as intense when I see the price per gallon as it is when I’m faced with the total cost. Fifty-five dollars! I remember when I filled my tank for $20 and $25 and $30! Maybe if we bought 13 loaves of bread at a time or 15 gallons of milk we might become just as sensitive to how much we spend on those items.

This is rather old, but it was news to me: when taught to use currency, monkeys pay for sex.

(via Wired Science)

Steven Levitt explains and considers:

Blacks who “sound black” earn salaries that are 10 percent lower than blacks who do not “sound black,” even after controlling for measures of intelligence, experience in the work force, and other factors that influence how much people earn. (For what it is worth, whites who “sound black” earn 6 percent lower than other whites.)

Marginal Revolution points to a peculiar fact: you can buy “futures” of almost anything, except onions.

The bulbous root is the only commodity for which futures trading is banned. Back in 1958, onion growers convinced themselves that futures traders (and not the new farms sprouting up in Wisconsin) were responsible for falling onion prices, so they lobbied an up-and-coming Michigan Congressman named Gerald Ford to push through a law banning all futures trading in onions. The law still stands.

And yet even with no traders to blame, the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics’ belief that futures trading diminishes extreme price swings.

An interesting measure of poverty: the percentage of total household spending that goes to food, drink, and and fuel.

The Boston Globe’s Ideas section recently featured this interesting idea: natural disaster may actually be an economic good for the affected country.

Rebuilding efforts serve as a short-term boost by attracting resources to a country, and the disasters themselves, by destroying old factories and old roads, airports, and bridges, allow new and more efficient public and private infrastructure to be built, forcing the transition to a sleeker, more productive economy in the long term.

“When something is destroyed you don’t necessarily rebuild the same thing that you had. You might use updated technology, you might do things more efficiently. It bumps you up,” says Mark Skidmore, an economics professor at Michigan State University. “Disasters help people think about things differently.”

But there is this cogent counter-argument:

“Over any reasonably relevant period of time, society is not made wealthier by destroying resources,” he adds. If it were, “Beirut should be one of the wealthiest places in the world.”

Everyone knows the role of supply and demand, but this Explainer column offers a number of interesting factors that make for differences is price both across states and within them. One of the many things I hadn’t considered:

Retail gas prices can vary depending on state and local environmental requirements. Urban areas with particularly dirty air are required by federal law to sell “reformulated gas” for all or part of the year, and because the cleaner-burning fuel is refined through a special process, it tends to be a little more expensive than regular gas.

Roger Cohen made the interesting — if intellectually dubious — contention yesterday that the world isn’t actually flat, it’s inverted:

To understand it, invert your thinking. See the developed world as depending on the developing world, rather than the other way round. Understand that two-thirds of global economic growth last year came from emerging countries, whose economies will expand about 6.7 percent in 2008, against 1.3 percent for the United States, Japan and euro zone states.

In case you’re not sold on the idea that there are upsides to high gasoline prices, I recommend this article.

(via GOOD)

Firm evidence that high gas prices really make people think more and drive less.

At 11 billion miles less in March 2008 than in the previous March, this is the sharpest yearly drop for any month in FHWA history.

(via Marginal Revolution)

I was just thinking that the oft-mentioned dollar-a-day poverty line seems rather arbitrary. The Economist reports that it’s being reconsidered:

They gather 75 national poverty lines, ranging from Senegal’s severe $0.63 a day to Uruguay’s more generous measure of just over $9. From this collection, they pick the 15 lowest (Nepal, Tajikistan and 13 sub-Saharan countries) and split the difference between them. The result is a new international poverty line of $1.25 a day.

Two recent mentions of the psychological trick caught my eye. First: in his review of Nudge, John Cassidy — while pointing out that Senator Obama’s policies share logic with those of the book — offer this interesting test:

If you think you are too smart for this description to apply to you, try this simple mental exercise. Take the last three digits of your cell phone number, obtaining a number between zero and 999, and add two hundred to it. Write down the resulting figure and put the letters AD after it. Now, consider this question: When did Attila the Hun invade Europe?

Unless you are an expert on the Dark Ages, or your brain is unusually wired, the chances are that your answer will be pretty close to the date you write down. Say the last three digits of your cell number are 787 and the number you write down is 987 AD. Then, most likely, 900 AD will sound like a reasonable answer to you, and so will 1050 AD, but [440, the correct answer] will sound wrong. That was certainly how it worked when I tried the exercise.

Also, Matt Yglesias suspects a local developer is employing the technique to show why he should move.