Tuesday, August 26, 2014

RNC gets it right on a policy issue they have no power over

The Hill reports that the national Republican party is supporting Uber in its uphill struggle against corrupt regulation:
Republicans have promoted their support for the Silicon Valley start-up, hoping to attract more young voters to the party's free-market message. 
Earlier this month the RNC launched a petition backing Uber over "taxi unions and liberal government bureaucrats.”
While this is certainly a step in the right direction, protectionism in the 'drive people around in cars' industry is largely about local rules and regulations.

Sunday, August 24, 2014

Keep dynamic pricing details private and anything is possible

James Surowiecki has a great article about the psychology of Uber's dynamic pricing model:
The basic reality of Uber’s business model is that when people want a ride the most, it’s likely to be the most expensive. This will always be irritating, just as exorbitant prices for last-minute airline tickets are irritating. But over time, surge pricing will also become more familiar and less surprising.
From a customer-relations and marketing perspective, I've never really understood why Uber has insisted on making its 'surge pricing' multipliers so public and in-your-face. Most products that use dynamic pricing keep the sausage-making in the kitchen, and simply provide a price without additional context. Most consumers accept the vast majority of product prices on a take-it-or-leave-it basis, and aren't too concerned about why a price is what it is.

If for whatever reason Uber can't rid itself of the self-damaging public surge multiplier, I suggest implementing a loyalty scheme whereby frequent users could sign up for some amount of future rides at a locked-in price. Uber would cover the difference to the driver to ensure the demand-response function of dynamic pricing stays intact. Uber's ability to pool risk opens up tremendous potential. You could even imagine a service where Uber prices become cheaper the more you use it (again, with drivers collecting full prices and Uber making up the difference).

Friday, August 22, 2014

Pandemic is a terrible risk, but not in the way you think

Preventing disease factories – trench-like warfare conditions, crowded hospitals, enormous refugee camps – is our best protection. While alarmists among us wait for the plague to pounce out of the jungle, it is far more likely to come from inside us, our disease factories and our social world.
This is from an essay in Aeon, an online magazine that consistently tops my monthly list for the most thought-provoking and provocative writing on the web. Pandemic is regularly listed as a potential existential threat, and a major consequence of globalization.  Increasingly I see it as more of a natural extension of poverty, poor public health infrastructure and policy, and low levels of technology and social media saturation in local cultures.

Thursday, August 21, 2014

Survivorship bias in our streets

How many pieces of detritus must have been imperfectly fit into this particular asphalt crack before this bottle settled in with such precise snugness? When observing a good fit between two things, remember that there's often a vast statistical 'graveyard' of potential fits that didn't work out.

Wednesday, August 20, 2014

Francis Fukuyama Speaks

The creation of the U.S. Forest Service at the turn of the twentieth century was the premier example of American state building during the Progressive Era. Prior to the passage of the Pendleton Act in 1883, public offices in the United States had been allocated by political parties on the basis of patronage. The Forest Service, in contrast, was the prototype of a new model of merit-based bureaucracy. It was staffed with university-educated agronomists and foresters chosen on the basis of competence and technical expertise, and its defining struggle was the successful effort by its initial leader, Gifford Pinchot, to secure bureaucratic autonomy and escape routine interference by Congress. At the time, the idea that forestry professionals, rather than politicians, should manage public lands and handle the department’s staffing was revolutionary, but it was vindicated by the service’s impressive performance. Several major academic studies have treated its early decades as a classic case of successful public administration. 
Today, however, many regard the Forest Service as a highly dysfunctional bureaucracy performing an outmoded mission with the wrong tools. It is still staffed by professional foresters, many highly dedicated to the agency’s mission, but it has lost a great deal of the autonomy it won under Pinchot. It operates under multiple and often contradictory mandates from Congress and the courts and costs taxpayers a substantial amount of money while achieving questionable aims. The service’s internal decision-making system is often gridlocked, and the high degree of staff morale and cohesion that Pinchot worked so hard to foster has been lost. These days, books are written arguing that the Forest Service ought to be abolished altogether. If the Forest Service’s creation exemplified the development of the modern American state, its decline exemplifies that state’s decay.
Those are the first two paragraphs from his fascinating new essay, which everyone should read. His new book is out soon, a sequel covering political development from the French Revolution to modern times. I hope he includes plenty of discussion on posthumanism and the splinter neoreaction internet movement, but it will be excellent regardless.

Tuesday, August 19, 2014

LeBron James is eating a low carbohydrate diet

That's according to the Wall Street Journal: 
The basketball world has been buzzing lately about an unexpected decision LeBron James made this summer. It has already had sweeping effects across the NBA, and it has radically changed how everyone sees the sport's biggest star.
He cut carbohydrates from his diet.
Nutrition science is undergoing a paradigm shift, and I would count this as merely another high-profile example of the changing attitudes towards meat, fat, sugar, and carbohydrates. But the effectiveness of carbohydrate restriction on reducing obesity, heart disease, diabetes etc. in the general population is far from proven. Celebrities and athletes have much a higher incentive to stay fit and beautiful, more capability to institute external forcing mechanisms on their behavior (trainers, living in areas devoid of ice cream trucks), and possibly a greater inbuilt biological or psychological capacity to stay healthy and thin. Add to this the social and media benefit of trying something novel, and the supposed effectiveness of celebrity diets isn't a very good data point to support any theory. More good science is in order.

Monday, August 18, 2014

What is the Target Efficiency of Affordable Housing Policies in NYC?

A provocative argument that it's not very good:
"Why is it in the nation's interest to spend federal dollars so arts industry folks can reside in one of the world's most expensive neighborhoods? Why don't affordable housing set-asides ever go to back-kitchen restaurant workers, house cleaners, or car wash employees? The answer: Those jobs aren't a stepping stone to more lucrative employment, so they don't appeal to college-educated elites.
Giving poor people cash in the form of a negative income tax or something would let them decide how much they value living in desirable locations (by renting or buying market-rate). I suspect that if given the choice to pocket a bunch of money and live in a cheaper area, many would opt for this. The social mission of keeping certain areas economically diverse does seem important, but let's not forget it carries a social cost of its own, in the form of less well-targeted aid to poor people.

Wednesday, August 13, 2014

Automated Speed Cameras Could Revolutionize Road Safety

An underutilized asset?
Photo credit: autoblog.com
When it comes to road safety issues there are three basic approaches. One concerns the design and architecture of streets and public spaces: if a street is built like a highway, motorists are unlikely to take it slow, regardless of speed limit signs or pedestrians/cyclists. We can slow down traffic by narrowing the streets and make things safer for pedestrians by constructing bump-outs and other traffic-calming/protective devices. Basically this approach emphasizes how the physical texture of cities and towns affects road safety outcomes.

A second approach seeks to understand road safety outcomes by looking at the intrinsic motivations of individual actors in the system. Are there cultural or social norms that make motorists or pedestrians act in certain ways? How do certain populations vary in their risk factors for road safety behaviors? Common interventions under this framework might be educational awareness programs, signage telling motorists to slow down or share the road with cyclists, etc.

A third approach sits in between these structuralist and motivation-based approaches: enforcement. If we assume every motorist, pedestrian and cyclist has some abstract baseline road behavior that is sub-optimal from a road-safety perspective (i.e. motorists prefer to go faster, pedestrians prefer to cross streets wherever), enforcement can artificially raise the costs of unsafe behavior, changing the internal cost-benefit calculation of individuals.

Photo credit: wikimedia commons
Enforcement can work in two ways. One is the probability of getting caught for a violation. Raise the probability that you'll get caught for speeding, and you'll see less speeding, regardless of the fine. This typically requires adding cops or allocating existing ones differently. The second is the magnitude of the punishment. Even if the probability of getting caught for a violation is the same, if the fine goes from $50 to $5,000 you'll see a decrease in violations.

The two dimensions of enforcement interact with psychology in complex and interesting ways, but I tend to subscribe to the "swift and certain" application of enforcement for road safety violations. Basically the idea is to dramatically increase the probability of getting caught for a violation, and implement a small-magnitude punishment as quickly as possible.

This brings us to automated speed cameras. Currently this technology is mostly utilized at dangerous intersections to identify motorists running red lights. If a simple algorithm sees a violation, it snaps a photo of the vehicle's license plate and the driver gets a ticket in the mail. I'm no expert in algorithmic pattern recognition or machine learning, but I suspect it's possible to make these cameras do much, much more. Developing more advanced programs to expand the reach of automated cameras into areas like failing to signal or passing a cyclist too closely would be a major boon to road safety efforts. Even $5.00 tickets for something as minor as blocking a crosswalk would likely result in safer streets if motorists knew they would get caught.

A major benefit of these enhanced speed cameras is their feasibility: making the physical landscape of cities safer for pedestrians and cyclists is often expensive and always controversial. Changing the culture and norms of motorists, pedestrians and cyclists is really hard and takes time. Setting up a pilot system of enhanced speed cameras and sending out tons of tickets is an intervention that would be fairly invisible and occur largely in the back-office of municipal buildings. Even if privacy concerns bubble up, using probationers or parolees as a test group should be relatively straightforward and uncontroversial. Let's give it a shot.

Tuesday, August 12, 2014

Abolishing Time Zones is an Important Step in Humanity's Development

Matt Yglesias has written an article making the case against time zones:

I've been saying this for years, and aside from the practical benefits of having a global time (after transition the compliance cost savings in the aerospace industry alone would be staggering), the philosophical benefits are also noteworthy. A single global time would be an important step towards the institutionalization of cosmopolitanism, and a nice reminder that our species is hurtling through space on a single spaceship statistically vulnerable to existential catastrophe.

Along a similar line, switching our timekeeping systems to base-10 (i.e. units of time partition into 10 sub-units, instead of 12, or 60 or whatever) would also be a beneficial reform. The path-dependence of this one might be too much to overcome, however.

Monday, August 11, 2014

A Few Thoughts on Streetcars and BRT

Streetcars have been taking a major beating lately in the urban policy wonkosphere (justifiably in my opinion). The latest is an Economist takedown that covers most of the major critiques. A few additional thoughts:

1. True bus rapid transit (BRT)--in designated protected lanes--is far and away superior to streetcars. BRT is much faster, cheaper (initial and upkeep), and more easily modified (i.e. stops can be added and subtracted easily).

2. Streetcar lines, if shared with traffic, create a horrible safety hazard for cyclists in the form of embedded rails.

3. The Silver Line in Boston is a good example of a true BRT system--it's great!

4. If the primary benefit of streetcars is their permanence (thus spurring private development), this is an incredibly inefficient and costly way to send a signal. There are cheaper ways to signal the permanence of public transportation upgrades (BRT lane barriers, protected stops, protected pedestrian paths and bike lanes etc.).

5. I suspect much of the lustre of streetcars comes from their historical and cultural associations. Conversely, much of the aversion to true BRT is likely due to their physical resemblance to regular city buses and all the sociological baggage that entails.

6. A major benefit of streetcars is their visibility and fixed routes. City buses are not nearly as accessible to newcomers or tourists because of the uncertainty about whether they'll show up, whether you've gotten on the correct bus, and whether you'll get off at the wrong stop. Because bus systems have fungible metal, most don't have fixed route maps inside for passengers. True BRT systems solve all these problems.

7. Indeed, Washington DC's Circulator bus system solves all of these accessibility problems without even being a BRT system. Clever branding, simple and few routes, high(ish) frequency and dedicated equipment go a long way towards patching public transportation voids.

Saturday, August 9, 2014

Self-Checkout Technology is Destroying Our Culture

I read a great book a few years ago called Identity Economics, basically arguing that a productive avenue for economic analysis is to incorporate 'identity' costs and benefits into individuals' utility functions. Identity costs and benefits are largely determined by culture and social interaction. It focused a lot on workplace issues, but the most interesting application of the approach is in consumption habits.

For example, more and more restaurants and convenience stores are offering self-checkout services and online ordering. It seems intuitively true that these innovations, designed mostly with an eye towards reducing employers' costs (labor in the case of self-checkout kiosks) have really interesting effects on consumers' consumption habits.

These technologies insulate consumers from the effects of social and cultural norms over buying patterns. Higher levels of anonymity when buying stuff reduces the costs--or benefits--associated with personal identity. The key empirical question is about magnitudes: does CVS see an increase in sales of embarrassing or socially-undesirable goods after installing self-checkout machines? What about a reduction in 'filler' items designed to mask the conspicuousness of purchasing these items?

On a macro-level, the question is whether these changes result in better or worse outcomes relative to your big policy goals. Are taboos against bingeing on unhealthy food (presumably a beneficial function of culture) becoming less effective? That's bad. Is the awkwardness of purchasing condoms or certain medical products reduced? That's good. Social and cultural norms have benefits and costs. Anonymous consumption shields a massive aspect of modern life from them. We'll see what happens.

Sunday, August 3, 2014

Quote of the Week

"Pasadena returns all of its meter revenue to pay for added public services in the metered neighborhoods, and Old Pasadena is a good example of the benefits. Old Pasadena was until the 1980s a commercial skid row and now it is one of the most popular shopping destinations in Southern California. Parking meter revenue helps to explain that success. The meters, which were installed in Old Pasadena in 1993, bring in $1 million a year to spend on in added public services in just that little shopping district. The meter money paid to replace all the sidewalks, streetlights, street trees, and street furniture. It paid to clean up the alleys and put electric wires underground. The meter money also pays to pressure wash the sidewalks twice a month and to provide added police services. If LA adopted Pasadena’s parking meter policy, all of our business districts would be much more prosperous. Residents of LA would not have to go to Pasadena or Santa Monica or Culver City to walk around in clean and safe environments."
That's UCLA economist Donald Shoup talking about parking policy in LA. He's the author of the fantastic book The High Cost of Free Parking, which applies economic theory to questions about parking.

Friday, August 1, 2014

Vox.com is Underperforming Relative to My Expectation

When I first heard that Vox.com had snagged nearly every one of my favorite bloggers (Ezra Klein, Matt Yglesias, Brad Plumer, Dylan Matthews, Evan Soltas, Tim Lee, Sarah Kliff) I was obviously excited and anticipated a one-stop-shop for econosphere policy blogging. Several months into the new venture, I'm not super-impressed.

While it's certainly one of the better news websites out there, a couple of things bother me. One is the excess coverage of movie and television shows. It's a nice thought to try and expand the 'wonkblog' idea to other areas, but Vox's culture coverage isn't doing anything new in terms of analysis. And novel topics like visual art or fashion are left out.

Perhaps relatedly, Vox's best writers are actually not writing very much. I assume this is because the top bloggers--Klein and Yglesias--have taken on major editorial roles, but it really dilutes the site's concept. Instead of leveraging their incredible all-star team, more often than not all the top posts are from their second-stringers. By not showcasing Vox's superstars (by say, providing unique blogs/pages (they have these notebook things with and unreadable design)), they're selling themselves short.

The last point is that their website organization is a bit restrictive--but I think this will change over time (they're said as much).