The Allen-Alchian (theorem) Explains Why the Internet Is Made of Cats

Thursday, November 5th, 2015

Dr_PottsDr. Jason Potts Centre Fellow and Project Leader in the ARC Centre of Excellence for Creative Industries and Innovation, Queensland University of Technology, Australia, explains in the special ‘cute’ issue of the M/C Journal, Vol. 17, No. 2 (2014) why the internet is made of cats (with reference to the Alchian-Allen Theorem).

Supporting material here

 

Candy elasticity as a sticky, gooey innovation in economics

Saturday, July 25th, 2015

Economics, candy, and politics have found a new way to mix. This study makes that, at least, clear:

karlanCandy Elasticity: Halloween Experiments on Public Political Statements,” Julian Jamison and Dean Karlan [pictured here], Economic Inquiry, epub June 15, 2015. (Thanks to Sendhil Mullainathan for bringing this to our attention.) The authors, at the Consumer Financial Protection Bureau, Washington, DC, and Yale University, explain:

We conducted experiments during trick-or-treating on Halloween in a predominantly liberal neighborhood in the weeks preceding the 2008 and 2012 presidential elections. We decorated one side of a house porch with McCain material in 2008 (Romney material in 2012) and the other side with Obama material. Children were asked to choose a side, with half receiving the same candy on either side and half receiving more candy to go to the McCain/Romney side. This yields a “candy elasticity” of children’s political support. Results vary by age: children ages nine and older were two to three times more likely to choose the Republican candidate when offered double candy for voting Republican compared to when offered equal candy, whereas children ages eight and under were particularly sticky and did not waver in their choice of candidate despite the offer of double candy….

Children’s responses to the candy incentives varied by age, however. Younger children’s preference for Obama was sticky with respect to price, but older children’s preference for Obama was elastic. This result was first observed in 2008 and then successfully replicated in the 2012 experiment. We discuss several interpretations in the conclusion, including a differential response to symbolic versus monetary rewards, a parental-contamination story for the younger children, and the simplest possibility: that younger children just didn’t understand the task as much and so made the political choice they did understand.

Creepy from Crawley? Study: Economic Growth Fueled by Male Sex Drive

Monday, May 18th, 2015

Massive economic growth comes, in large part, from men’s competition to sexually attract women, sort of, suggests this study:

weberSexual selection, conspicuous consumption and economic growth,” Jason Collins, Boris Baer, Ernst Juerg Weber [pictured here], Journal of Bioeconomics, epub May 19, 2015. The authors at the Business School, University of Western Australia, Crawley, Australia, and at the Centre for Integrative Bee Research (CIBER), ARC CoE in Plant Energy Biology, University of Western Australia, Crawley, Australia, explain:

We propose that the evolution by sexual selection of the male propensity to engage in conspicuous consumption contributed to the emergence of modern rates of economic growth. We develop a model in which males engage in conspicuous consumption to send an honest signal of their quality to females. Females prefer males who express the costly and honest signal, leading males who engage in conspicuous consumption to have higher reproductive success than those who do not, increasing the prevalence of signalling males in the population. As males fund their conspicuous consumption through participation in the labour force, an increase in the prevalence of signalling males gives rise to an increase in economic activity that leads to economic growth.

poster-small(Thanks to Albert Wrangham for bringing this to our attention.)

BONUS: Also coming partly from the Centre for Integrative Bee Research: “More Than Honey“.

“The truth behind India’s new GDP numbers”

Thursday, April 2nd, 2015

Pramit Bhattacharya writes, in the Hindustan Times:

The truth behind India’s new GDP numbers

It is an open secret that India’s new gross domestic product (GDP) series has flummoxed most observers of the Indian economy. The new numbers seem completely out of sync with other economic indicators…

As an analysis of 189 nations over 33 years by the Reuters columnist Andy Mukherjee showed, never has an economy had such an handsome improvement in growth even while recording a big improvement in external balances as India claimed to have had in fiscal 2014.

Finally, given the surprising growth numbers, many global investors have begun comparing the state of official statistics in India to that of China. It is important to correct that perception.

In 2014, the Italian government’s National Institute of Statistics was awarded the Ig Nobel prize in economics, for “proudly taking the lead in fulfilling the European Union mandate for each country to increase the official size of its national economy by including revenues from prostitution, illegal drug sales, smuggling, and all other unlawful financial transactions between willing participants.”

The CSO [Central Statistical Office] needs to act fast to restore credibility of official statistics unless it wants to win the Ig Nobel prize for 2015.

BONUS: “Italy lifts out of recession thanks to hookers, drugs

Westling’s lightning-rod economic growth thesis

Thursday, January 15th, 2015

Tatu Westling wrote an economics paper linking two things he has pondered intensely:

Male Organ and Economic Growth: Does Size Matter?” Tatu Westling, Helsinki Center of Economic Research Discussion Paper No. 335, July 2011. The author, at the University of Helsinki, Finland, explains:

“This study explores the link between economic growth and penile length between 1960 and 1985. It estimates an augmented Solow model utilizing the Mankiw-Romer-Weil 121 country dataset. The size of male organ is found to have an inverse U-shaped relationship with the level of GDP in 1985. Economic development between 1960 and 1985 is negatively associated with the size of male organ. With considerable reservations it is also found to be a more important determinant of GDP growth than country’s political regime type. Two interpretations for the patterns between male organ and economic growth are discussed briefly: the link between penile length, testosterone and risk-taking, and selfesteem production. Despite the robust statistical links, until more rigorous treatments on the subject the proposed ‘male organ hypothesis’ should be taken with reservations.”

In this video, Tatu Westling presents, deadpan, his theory:

[vimeo]32273195[/vimeo]

Here’s further detail from Westling’s paper:

westling-graph

(Thanks to Evelyn Cornish for bringing this to our attention.)

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