Marginal Revolution

How to fight corruption in Nepal

The Nepalese government plans to issue pants to airport workers that have no pockets.

A spokesman said trousers without pockets would help the authorities “curb the irregularities”.

The move comes after the prime minister of Nepal said corruption was damaging the airport’s reputation, AFP reported.

Apparently without pockets it is harder to take bribes.  (You also can file this under "Carrying costs > liquidity premium.")  The pointer is from Air Genius Gary Leff, who I might add is allowed to wear pockets.

Malcolm Gladwell dissents from Chris Anderson's *Free*

Here are excerpts and the full original article.  Excerpt:

Credit Suisse estimates that YouTube will lose close to half a billion dollars this year. If it were a bank, it would be eligible for TARP funds.

I haven't read the book yet, but hope to report back when I do.  For this pointer I thank Eric Wignall.

Addendum: Via Chris F. Masse, Anderson responds.

Knowledge and Decisions

Today I wanted to cover lots of different topics, so here is a thought from Thomas Sowell:

Perhaps people who are busy gushing over the Obama cult today might do well to stop and think about what it would mean for their granddaughters to live under sharia law.

And to think that I was worried about high marginal rates of taxation.  The full article is here.

Not so long ago, Yana asked me: "What does Thomas Sowell think of Barack Obama?"  I believe I now have an answer for her.

The new Smoot-Hawley?

The House bill contains a provision, inserted in the middle of the night before Friday’s vote, which requires the president, starting in 2020, to impose a “border adjustment” — or tariff — on certain goods from countries that do not act to limit their global warming emissions. The president can waive the tariffs only if he receives explicit permission from Congress to do so. The provision was added to secure the votes of Rust Belt lawmakers who were wavering on the bill because of fears of job losses in heavy industry.

Here is the story and Obama deserves praise for opposing this provision.  Here are my comments on the issue itself.  The bottom line is that Waxman-Markey, as it currently stands, would in fact be counterproductive, once the international scale of the problem is taken into account.  That we learn about this provision only now is startling enough.

I write this all as someone who a) favors a much higher price for fossil fuels, b) thinks that if micro-nutrients are a good idea they are not an alternative to addressing climate change; we could do both with positive expected long-run return, c) thinks that many people on the "Right" oppose W-M mostly because its passage would raise the status of environmentalists and others on the "Left" (but they will not admit as much), and d) thinks that our collective American incompetence in limiting emissions does not eliminate our moral obligation to address the problem.

Sadly, Ezra Klein nailed it:

Climate change is a big problem. It will eventually require a big solution. My understanding is that the polling suggests that people don't like it when you tell them this is a big problem and they don't want to be convinced that they need to spend their time worrying about something new. In fact, like kids who want to believe that they're going to the doctor for a lollipop, they want to hear that this is an awesome new jobs program. But it isn't an awesome new jobs program. It's an effort to avert a catastrophe on the only planet we know how to inhabit. I can't see a successful respon[se] to climate change that doesn't presuppose a majority sharing that belief.

Carrying costs > liquidity premium, a continuing series

The white-haired parking meter repairman who, little by little, stole more than $100,000 in coins from meters in Alexandria [VA], pleaded guilty today to two counts of embezzling public funds, and faces a maximum of 40 years in prison.

Police caught William Jonas Fell, 61, in April, and when they searched his house they discovered about $100,000 in paper money and $7,100 in nickels, dimes and quarters stashed in rolls, a bucket and a silver cup.

Fell's lawyer, Greg English, said that for more than a year, Fell would ferry the coins home and exchange them for bills at a supermarket near his home in Stafford county.

"What else do you do with it?" English said after the hearing in Alexandria Circuit Court. "You can't put it in your checking account."

Here is more.

How to disappear

Tips from a teacher (markets in everything):

There are three key steps to disappearing. First, destroy old information about yourself. Call your video store or electricity company and replace your old, correct phone number with a new, invented one. Introduce spelling mistakes into your utility bills. Create a PO Box for your mail. Don’t use your credit cards and the like.

Then, create bogus information to fool private investigators who might be looking for you. Go to one city and apply for an apartment. Rent a car in another one.

The next, final step is the most important one. Move from point A to point B. Create a dummy company to pay your bills. Only use prepaid mobile phones and change them every month. It is nearly impossible to find out where you are unless you make a mistake.

Is that last sentence so reassuring?  What is his success rate?

Usually, I don’t hear back from my clients. It would be too dangerous.

I occasionally wonder that if I had a) a new identity, b) enough money to live on, and c) a willingness to live abroad and no family for them to threaten, how long would it take a team of ten professional hit men to find me.  What would be their optimal strategy of pursuit?

For the pointer I thank Henry Farrell.  Here is Henry's interesting post on the surprising success of smoking bans.

Addendum: Bruce Bartlett refers me to www.escapeartist.com.

The FDA regulation of tobacco

Here is an NYT summary of what it means:

...the law would give the F.D.A. power to set standards that could reduce nicotine content and regulate chemicals in cigarette smoke. The law also bans most tobacco flavorings, which are considered a lure to first-time smokers.

For purposes of argument, let's say you buy into paternalism and the government's ability to do a good job with it (no need to reargue those points in the comments, they are only simplifying assumptions for the purpose of focusing on another question). 

My question is: why impose quality restrictions when higher taxes would appear to be more efficient in limiting consumption and raising revenue at the same time?  Revenue is especially scarce right now and making cigarettes less appealing lowers the revenue that can be raised by taxing them.

Can you derive the conditions under which such a quality restriction might be efficient nonetheless?  I see a few cases:

1. More government revenue is a bad thing. 

2. You have a funny model where a quantity restriction serves as a non-convex "notch" incentive and has a more powerful disincentive effect, yet with lower deadweight loss, than the smoother incentive embedded in the higher tax-enhanced price.  (Heterogeneous consumer groups can contribute toward such a result but these are exactly the kind of theory papers which many people hate.)

3. The black market is a big problem.  Quality regulations mean that good black market cigarettes must be made with illegal inputs and thus those inputs can be detected at the factory source and also remain detectable throughout the life of the cigarettes.

What else am I missing?  Overall, given the initial premises, I still suspect that higher taxes are a better policy than quality restrictions.

Sentences to ponder

Iraqis are actually demanding that Kuwait pay compensation for facilitating the 1991 U.S.  "invasion" of Iraq...

In case you weren't sure, that's a story about right now, June 2009.  Here is more.

Does the gender of a judge matter?

From the work of Christina Boyd, Lee Epstein, and Andrew D. Martin, Boyd and Epstein report:

In research that we conducted with our colleague Andrew D. Martin, we studied the votes of federal court of appeals judges in many areas of the law, from environmental cases to capital punishment and sex discrimination. For the most part, we found no difference in the voting patterns of male and female judges, except when it comes to sex discrimination cases. There, we found that female judges are approximately 10 percent more likely to rule in favor of the party bringing the discrimination claim. We also found that the presence of a female judge causes male judges to vote differently. When male and female judges serve together to decide a sex discrimination case, the male judges are nearly 15 percent more likely to rule in favor of the party alleging discrimination than when they sit with male judges only.

This holds true even after we account for judges' ideological leanings.

The research paper is here.

Divorce and Crime Victimization

While paging through the statistical tables of Criminal Victimization in the United States I found some interesting data on victimization, marriage and divorce.  The rate of victimization for violent crimes (per 1,000 persons aged 12 and over) for never married and married males is as follows:

Never Married Males: 45.0
Married Males: 12.3

Clearly, married males are older and they have settled down, usually in places away from crime hot spots.  Thus the fact that the rate of victimization for married males is much lower than for never married males is no surprise.  What did surprise me is that divorced males have rates of victimization about as high as for never married males:

Divorced or Separated Males: 44.2

The same pattern is even stronger for females:

Never Married Females: 38.4
Married Females: 10.3
Divorced or Separated Females: 49.4

The patterns are suggestive of how large a difference one's choices can make for criminal victimization.  That is, one hypothesis to explain the data is that singles congregate in urban, high crime areas and they go out at night to bars and other high crime locations.  Married individuals move to low crime suburbs and stay home with popcorn and Netflix.  The divorced, however, move back to the cities where the singles are and they head out at night to try to mate again.

An alternative hypothesis is that the individuals who tend to get divorced have personalities or behaviors which make them more likely to get divorced and more likely to be victims of crime: a drug user, for example, is likely to have a higher probability of divorce and a higher probability of being a victim of crime than a non drug-user.    

How many other hypotheses can you think of to explain the data?  What tests would you suggest to distinguish hypotheses?