E-Commerce in Africa

CBC's radio show Spark had a recent discussion of African E-Commerce (episode 130). Basically, individuals are increasingly using cel phones to conduct business transactions using texting services whereby they are able to communicate their inventories of goods, their demands for goods, and transfer funds between banks and individuals. Without cel phones, these transactions involved individuals traveling from village to village with their goods, incurring significant time costs while traveling between. These can be particularly high given that traveling to purchase some goods may require an individual to miss a day's wages. As such, cel phones serve the role of infrastructure in reducing the opportunity costs of engaging in transactions.

There are a lot of digital conveniences we take for granted in the Western world. Ok, let’s be honest and say we take most of them for granted. If we want something –anything– it is available at our fingertips. So what’s it like in places where the infrastructure still doesn’t exist to make those digital conveniences viable? Femi Akinde is the founder and CEO of Slimtrader, a company that is looking to change the way people in sub-Saharan Africa do business…all through their cell phones.

Keynesian versus Kenyan

Today is (mid-term) election day in the U.S.

Today, we have a guest post from UofC Economics PhD student Kent Fellows:

My Dad recently forwarded this link from the Globe and Mail. The article discusses a working paper by Anindya Sen, Marcel Voia and Frances Woolley in which data from www.ratemyprofessors.com is used to estimate the returns to physical attractiveness or "Hotness" among professors. Their conclusion is that more attractive professors not only earn more, but that their attractiveness is also highly correlated with their teaching productivity, and not their research productivity.

Dad is a recently retired professor emeritus, so I am not exactly sure of his interest in this topic. I have yet to ask him weather he feels that the family genes with respect to appearance improved his earnings or not.

From the Abstract:
"Although a relatively small proportion of our sample is rated “hot” by students, hotness generates, for some, a significant earnings premium, even with comprehensive controls for productivity. We find a strong relationship between hotness and teaching productivity, but a much weaker relationship between hotness and research productivity. The unique contribution of this paper is the use of data on actual productivity, which is generally unavailable in papers assessing the returns to appearance."

The main results suggest that for economics professors, being male and attractive is the best combination to improve earnings. Does this suggest that professional development resources in the department could be better spent on trips to the tropics to get a better tan and in house image consultants?

Economics and Art History

I'm currently reading Sassoon's Becoming Mona Lisa, a book about how Leonado Da Vinci's most famous painting became... well... his most famous painting, and likely the most famous painting in the world. Aside from the art history component of the Mona Lisa's story, there's a fair amount on the economics of art, production, and re-production:

The unique work of art is, by definition, in a position of monopoly. There is after all, only one Mona Lisa; there will never be another one. In a world dominated by reproducible commodities whose value plummet as technology lowers production costs and makes them available to an ever expanding mass of consumers, to be the “one and only” becomes a major selling point. For this to happen, it is necessary that the producer should be exceptional; better still, a certified artistic genius. A painting by an unaccredited artists, an amateur, someone not previously authenticated, is of little or no met value. Past masters have the advantage over their contemporary rivals of having had their fame repeatedly endorsed by a succession of arbiters of taste. ...

It is, of course, a tautological circle. A museum masterpiece can only have been painted by an established master; an established master is ones whose works are to be found in a major museum. (p. 78)

Do Incentives Affect Fertility? The Case of Quebec

Quebec has been experiencing lower-than-average birthrates for some time. Going back to 1997, the porvincial government has attempted to increase birthrates, the number of monthers returning to the labor force and fathers' involvement in child rearing through a set of policies grouped under the rubric of "Family Policy." A recent episode of the Current discusses these policies and their effects. From the episode:

The Quebec Government is pulling out all the stops for parents these days. If you're a working couple with two children in Ottawa, you'll probably pay 80 to 100 dollars-a-day for childcare. Across the river in Gatineau, Quebec ... you'd pay 14-dollars-a-day. You'd get better parental leave too. There's even a special leave just for Dads. And as of last month, if you're infertile, the Quebec Government will cover the cost of In Vitro Fertilization.

The Quebec Government has spent 13 years overhauling its Family Policy. The goal has been to boost two demographics ... new births and working women. As part of our project Shift, our Quebec Producer Susan McKenzie decided to take a look at whether the program has worked and whether it's sustainable. We aired her documentary, Baby Bump.

Joe Siglitz on a foreclosure moratorium

Here's an interview with Columbia University economics professor and Nobel Laureate Joesph Stiglitz on, among other things, creating a moratorium on housing foreclosures in the U.S. While I found the whole interview interesting, I was particularly intrigued by his arguments regarding the role of fairness in policy. It's one of the few times I've seen direct incorporation of "social preferences" directly into policy discussions (outside of purely academic circles).

Countersignalling and the genius of John Cage

There's a paper by Kim-Sau Chung and Peter Eso on signaling when an individual has career concerns. This paper has been around for a couple of years, but this is the first time I saw it applied to music and particularly John Cage's 4'33". From Jeff Ely's Cheap Talk blog on economics and more:

Which type of artist debuts with obscure experimental work, the genius or the fraud? Kim-Sau Chung and Peter Eso have a new paper which answers the question: it’s both of these types.

Suppose that a new composer is choosing a debut project and he can try a composition in a conventional style or he can write 4’33″, the infamous John Cage composition consisting of three movements of total silence. Critics understand the conventional style well enough to assess the talent of a composer who goes that route. Nobody understands 4’33″ and so the experimental composer generates no public information about his talent.

There are three types of composer. Those that know they are talented enough to have a long career, those that know they are not talented enough and will soon drop out, and then the middle type: those that don’t know yet whether they are talented enough and will learn more from the success of their debut. In the Chung-Eso model, the first two types go the experimental route and only the middle type debuts with a conventional work.

The reason is intuitive. First, the average talent of experimental artists must be higher than conventional artists. Because if it were the other way around, i.e. conventional debuts signaled talent then all types would choose a conventional debut, making it not a signal at all. The middle types would because they want that positive signal and they want the more informative project. The high and low types would because the positive signal is all they care about.

Then, once we see that the experimental project signals higher than average talent, we can infer that it’s the high types and the low types that go experimental. Both of these types are willing to take the positive signal from the style of work in exchange for generating less information by the actual composition. The middle types on the other hand are willing to forego the buzz they would generate by going experimental in return for the chance to learn about their talent. So they debut conventionally.

Now, as the economics PhD job market approaches, which fields in economics are the experimental ones (generates buzz but nobody understands it, populated by the geniuses as well as the frauds) and which ones are conventional (easy to assess, but generally dull and signals a middling type) ?

If you're not familiar with John cage's famous piece, here's a rendition of it:

If you haven't read the Cheap Talk blog before, its worth checking out. Also, Jeff Ely's web page has a great version of the classic Asteroids game.