Published on 23 Sep 2015
A signal is an action that reveals information. Let’s look at higher education, for example. A large fraction of the value you receive from your degree comes on the day you earn your diploma. Your expected wages don’t increase with each class you complete along the way; instead, they spike sharply at the end when you receive your diploma. This is often referred to as the “Sheepskin Effect” because diplomas used to be printed on sheepskin.
Nobel Prize winner Michael Spence did research on this subject and found that education is valuable not necessarily because it creates valuable skills, but rather that it signals valuable skills. So how does the signal, represented by a degree, alleviate asymmetric information?
Employers don’t necessarily know how smart or skilled you are. Your degree, however, provides a credible signal of these traits and gives them more information they can use in the hiring process.
What other signals exist? We discuss examples like diamond engagement rings, why criminals tattoo their face, and why a peacock has a colorful tail. Let us know what examples you come up with in the comments.
December 31, 2016
November 27, 2016
Published on 25 Nov 2016
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September 20, 2016
Another land-use regulation that makes space more expensive is municipal requirements that establish a minimum number of parking spaces per housing unit.
According Donald Shoup’s analysis, parking requirements add significantly to the cost of housing, particularly in areas with high land values. For example, in Los Angeles, parking requirements can add $104,000 to the cost of each apartment. Parking requirements limit consumers’ choices and increase the cost of housing even for those who prefer not to pay for parking.
Developers typically build only the minimum amount of parking required by law, which indicates that those requirements are binding. That is, in a less-regulated environment, developers would devote less land to parking and more land to living space. A greater supply of living space will, other things equal, lower the cost of housing.
Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.
September 5, 2016
Published on 8 Jan 2015
George Akerlof, a Nobel Prize-winning economist, analyzed the theory of adverse selection – which occurs when an offer conveys negative information about what is being offered. In the market for used cars, Akerlof posited that sellers have more information about the car’s quality than buyers. He argued that this leads to the death spiral of the market, and market failure. However, the market has developed solutions such as warrantees, guarantees, branding, and inspections to offset information asymmetry.
June 17, 2016
Here’s what Clarkson confessed to the Sunday Times:
TO JUDGE from the letters I get and the remarks in the street, it seems the most memorable thing I did on Top Gear was a short segment about the Reliant Robin. You may remember: I drove it around Sheffield and it kept falling over.
Well, now’s the time to come clean. A normal Reliant Robin will not roll unless a drunken rugby team is on hand. Or it’s windy. But in a headlong drive to amuse and entertain, I’d asked the backroom boys to play around with the differential so that the poor little thing rolled over every time I turned the steering wheel.
Naturally, the health and safety department was very worried about this and insisted that the car be fitted with a small hammer that I could use, in case I was trapped after the roll, to break what was left of the glass.
Reliant sold plenty of cheap, usable little three-wheelers, and somehow managed to never be charged for crimes against humanity. The cars weren’t the most stable things in the world (no pointy-fronted three-wheeler is) but they certainly didn’t tumble around like a roofie’d Mary Lou Retton at every turn.
Jason Torchinsky, “Clarkson Reveals Bombshell: Top Gear Modified Reliant Robins To Make Them Roll”, Jalopnik, 2016-01-13.
June 7, 2016
1977 was nearing the nadir (what a fortunate homonym!) of American automotive performance.
The base Monte Carlo of Jimmy Carter’s inaugural year shipped with a 2-bbl 305 cubic inch V8 that wheezed out an underwhelming 140 net horsepower. This gasping iron-block lungfish was plopped in a “midsize” car so big that the average NFL team would probably need two running plays to get from the hood ornament to the trunk latch.
But it sure looked good, and any Cletus with a wrench and a SuperShop in the neighborhood strip mall could unlock a lot more power out of that motor…
Tamara Keel, “Automotif CXXVI…”, View from the porch, 2016-05-28.
May 3, 2016
Larry Correia just got back from a trip to Europe, where he discovered the joys of Germany’s Autobahn system:
Of all the languages, German was by far the easiest to pick up words and phrases for me. Despite being related to Portuguese and Spanish, French sounds totally eluded me. And Czech is HARD (they have like 46 ways to make conjunctions). But German shares a lot of word roots with English, and the actual structure is pretty straight forward. Plus it is fun to just walk around and make up vaguely German sounding names for things, like a pigeon is Das Poopinbirden.
The next day we drove across all of Germany to the Czech Republic, and I got to experience the autobahn, which my whole life has been this sort of mythical place that has no speed limits, and is filled with drivers that understand slow traffic stays right, and where they never camp in the left lane, and in fact, if you’re blocking the left lane, they’ll come right up on your bumper at 100 miles an hour, honking, and flashing their lights. It was a place devoid of mercy, unforgiving of weakness. So we set out.
Apparently there are two kinds of tourist drivers on the autobahn. Those who are weak, fearful, whose crying pillows smell of lilacs and shame, who stay in the truck lane, or who wander out into the left occasionally, timidly, to be honked at and chased aside by awesome Teutonic Super Drivers…
And the other kind is the American who manages to average 180km an hour across all of Germany in a Volvo diesel station wagon.
It was AMAZING. I felt like a race car driver across an entire country. You know why German cars don’t have cup holders? Because if you stop to drink while driving, YOU WILL DIE. And you should. You need to be on. I’d get a gap, jump out to the left, floor it (because fuel economy is for hippies I’m on the mother f’ing autobahn!), and nobody pulls out in front of me in a minivan to enforce their personal speed limit, people ahead of me going slower (like 100mph) immediately get out of the way, and when some bad ass comes up behind me in a super car, I get out of his way, and then they blast past me like I’m standing still.
It was beautiful.
You wouldn’t think a diesel Volvo would be comfy at 112 miles an hour, but it really is. Yes. I friggin’ love the autobahn. If I lived here I would buy a giant BMW or Audi and drive very fast, all the time. Why can’t we have something like this here? I would like to institute autobahn style rules on I-15 in Utah. Sure, a few thousand people would probably die in the first weekend, but after that it would be awesome.
April 17, 2016
April 11, 2016
March 13, 2016
Published on 8 Feb 2016
Are electric cars greener than conventional gasoline cars? If so, how much greener? What about the CO2 emissions produced during electric cars’ production? And where does the electricity that powers electric cars come from? Environmental economist Bjorn Lomborg, director of the Copenhagen Consensus Center, examines how environmentally friendly electric cars really are.
March 11, 2016
Long-time readers know that I am not a gender-difference denialist; I fully accept that there are many ways in which men and women tend to be totally different, and believe it’s foolish and counterproductive to pretend otherwise. But there are other differences between the sexes which have little (if anything) to do with biology and everything to do with societal expectations. Take car repairs, for example; though many women don’t care for getting dirty, there is no earthly reason for a woman not to learn basic techniques that could get her out of a jam or save her money (especially if there’s no man handy to do them). My father would not let me drive alone until I showed him I could change a tire, and though I absolutely hate doing it and generally prefer the “stand on the side of the highway and look frustrated until a man stops and changes it for me” method (which for me never takes more than five minutes to work, at least in the daytime on a busy highway), I think it’s still a good thing that I know how to do it in a pinch…even if I do (as per Daddy’s lesson) stop as soon as I can thereafter and ask the first convenient man to make sure the lugs are tight enough. But see, that’s not really helplessness; that’s just recognizing that I simply don’t have the upper-body strength necessary to tighten those babies as tight as they probably should be. And for all his bad qualities, I do have to give Jack credit for one thing: he insisted I learn how to perform every simple car repair he could teach me, from changing spark plugs to replacing a brake master cylinder. Since Grace’s dad didn’t believe in letting her be ignorant of cars, either, I haven’t had to do any of those repairs myself in over twenty years; however, it’s still nice to know what is involved in them.
But even if a woman is as lucky as I was, and has boyfriends and family members who don’t intentionally keep her as helpless as possible, she still has to endure endless societal pressure (not just from men but from women and institutions) telling her not to take risks, not to do anything that might scare her and get her in trouble, not to explore her existence without the help of a man (or worse, of Big Brother). And though early feminists seemed to be making some progress against that, their successors have embraced it and are its most vociferous proponents. “Feminists” demand that young women be protected not only from physical harm, but even from ideas or pictures that might upset their delicate sensibilities, rattle their chains or force them to question their preconceptions for five minutes. And they march arm-in-arm with religious conservatives and police-state functionaries to restrict women’s sexual choices and send armed thugs to hunt, entrap, rape, brutalize and cage them in order to “send a message” that utilizing one’s sexuality to win economic independence is too dangerous an activity for women. Their propaganda reveals their incredibly low opinion of women’s competence; sex workers are said to be unable to place their own ads online, and touring is reframed as a criminal “circuit” in which helpless, ovine women are passively trucked around by evil “pimps”. The idea that the female brain might actually be capable of booking hotels and writing ad copy is completely alien to the narrative.
Maggie McNeill, “Boy Juice”, The Honest Courtesan, 2015-01-08.
November 10, 2015
Hunter S. Thompson’s iconic book Fear and Loathing in Las Vegas has been re-imagined in Troy Little’s graphic novel:
November 3, 2015
Sam Smith remembers learning how to drive with a manual transmission:
At first, I thought my dad was just teaching me to drive a stick. At 16 and a few months, I had already earned a license, already had my first accident. (Missed a stoplight in the family Volvo while changing CDs. I cannot remember being dumber.) Two weeks of lessons later, I suspected something was up.
We drove in 20-minute spurts. Before dinner on weeknights, after lunch on Sundays, whenever. Always the same route: leave driveway, around the subdivision, back. Practice, learning how to shift, long past the point where I thought I was good enough.
The truth soon came out: My father, a patient man, wasn’t going to let me drive a manual—which meant borrowing his car—until I met what seemed like an arbitrary standard of smoothness. He wasn’t mean, just firm about it: You will do this right. And I won’t feel it when you drop into second.
The neighborhood was perfect for it. A rolling, quiet patchwork of curves. Enough uphill starts to keep you thinking. Or at least keep 16-year-old me thinking, because the first time you shift a manual gearbox, you’re a bag of elbows. This gear? That one? Then you screw it up again.
October 21, 2015
October 21, 2015 is Back to the Future day, and Toyota is playing along with the theme:
In a press release from Toyota, Back to the Future co-creator and producer Bob Gale offers some background on the manufacturer’s partnership with the franchise. “Toyota stands apart for their nod to the future and the past with the auto technology depicted in the movies. When Toyota approached us about helping tell a bigger story about the future and innovation with the Mirai, we loved the direction — and who can resist Marty’s retro Toyota truck?”
Call the number on the screen to talk to Jimmy Joe Statler himself. He offers you three choices. Be sure to press 2 for a free license plate frame. He mentions that three customized BTTF Tacomas will be revealed at Hollywood & Highland in Los Angeles and Times Square in NYC. They are also doing a tour of Dallas, so keep your eyes peeled if you live nearby. No word on whether Toyota will release the flying cars seen in the window’s reflection at 00:19 in the video.
We don’t know if the custom Tacoma will be produced for sale, but it should be easy enough for you to make one yourself. Just make sure you include those sweet KC lights.
October 17, 2015
Tesla does over-the-air updates for their electric cars (which is kinda neat). The latest update includes an almost-but-not-quite self-driving feature:
Tonight, Tesla makes its cars autonomous. Well, semi-autonomous. And it did it with an over-the-air update, effectively making tens of thousands of cars already sold to customers way better.
There are two things to talk about here. There’s the small story about the features and what the upgrade actually looks like and how it works. That’s a good place to start: This is the biggest change to the visual display of the Model S and X ever. There are new instrument panels, app windows are larger and take up more of the 17-inch touchscreen. Drivers will now get more information about what their cars are doing when in Autopilot, they can lock and unlock their car from the status bar. There’s a new clock!
These are simple cosmetic changes. The Big Story is that all of this—and really, who cares about anything beyond autopilot mode?—is being pushed through to customers’ Teslas overnight. The update will begin being pushed out tonight, and will hit every Tesla made and sold in the US in the past year over the course of this week.
Before you get too excited about an autonomous, hands-free present, you need to know that you can’t nap in the back, chauffeured around in beautiful, electric silence.
Even in Autopilot, you keep your hands on the steering wheel. Well… you don’t have to keep your hands on the steering wheel. You can rest them on your knees (resting on knees, palms up, fingertips touching the wheel is advised), or keep one pinky on the wheel. And okay, you can take your hands off altogether for a moment. But after a few seconds, your car will give you a little message, asking you to touch the wheel in some capacity.