Quotulatiousness

September 15, 2012

Our collective maladjusted attitude to small risks

Filed under: Economics, Europe, Italy — Tags: , , , , , — Nicholas @ 09:44

Tim Harford shows that you can learn a lot about economics by looking at the process of hiring a rental car:

Here’s a puzzle. If it costs €500 to hire a €25,000 car, how much should you expect to pay to hire a €50 child’s car seat to go with it? Arithmetic says €1; experience suggests you will pay 50 times that.

This was just one of a series of economics posers that raised their heads during my summer vacation – indeed, within a few minutes of clearing customs in Milan. One explanation is that the apparently extortionate price reflects some unexpected cost of cleaning, fitting or insuring the seat – possible but implausible. Or perhaps parents with young families are less sensitive to price than other travellers. This, again, is possible but unconvincing. In other contexts, such as package holidays and restaurants, children with families are often given discounts on the assumption that money is tight and bargains keenly sought.

[. . .]

After paying through the nose for the car seat we were alerted to a risk. “If your car is damaged or stolen, you are liable for the first €1,000 of any loss.” Gosh. I hadn’t really given the matter any thought but the danger suddenly felt very real. And for just €20 a day, or something like that, I could make that danger vanish.

[. . .]

What’s happening here? Behavioural economists have long known about “loss aversion”: we’re disproportionately anxious at the prospect of small but salient risks. The car hire clerk carefully created a very clear image of a loss, even though that loss was unlikely. I haven’t paid such fees for years and have saved enough cash to write off a couple of hire cars in future.

September 12, 2012

QotD: Detroit’s golden age

Filed under: History, Quotations, USA — Tags: , , , — Nicholas @ 00:12

It bears repeating that the ’60s — not the ’50s, and certainly not the ’70s — were Detroit’s golden age. The age of tailfins and bulbous deco car bodies was over, and designers went about the business of making the cars look as fast as their increasingly powerful engines actually made them go. The zenith of this is probably the Mustang, but its design aesthetic — less chrome, long lines, agonizing thought put into key details like the grille and the silhouette — dominated the industry, resulting in a decade of cars that look like they want to be driven, not parked (the ’50s) or rolled off cliffs (the ’70s.)

Rick McGinnis, “Fury”, Zero to Sixty, 2012-09-10

August 12, 2012

The (long awaited) growth in Indian manufacturing

Filed under: Business, Germany, History, India, Technology — Tags: , , , , , — Nicholas @ 08:59

The Economist on the relatively slow development of India’s manufacturing sector:

If India is to become “the next China” — a manufacturing powerhouse — it is taking its time about it. “We have to industrialise India, and as rapidly as possible,” said the country’s first prime minister, Jawaharlal Nehru, in 1951. Politicians have tried everything since, including Soviet-style planning. But India seems to prefer growing crops and selling services to making things you can drop on your foot.

Manufacturing is still just 15% of output (see chart), far below Asian norms. India needs a big manufacturing base. No major country has grown rich without one and nothing else is likely to absorb the labour of the 250m youngsters set to reach working age in the next 15 years. But it can seem a remote prospect. In July power cuts plunged an area in which over 600m people live into darkness, reminding investors that India’s infrastructure is not wholly reliable. And workers boiled over at a car factory run by Maruti Suzuki. Almost 100 people were injured and the plant was torched. The charred body of a human-resources chief was found in the ashes.

Yet not all is farce and tragedy. Take Pune in west India, a booming industrial hub that has won the steely hearts of Germany’s car firms. Inside a $700m Volkswagen plant on the city’s outskirts, laser-wielding robots test car frames’ dimensions and a giant conveyor belt slips by, with sprung-wood surfaces to protect workers’ knees. It is “probably the cheapest factory we have worldwide”, says John Chacko, VW’s boss in India. In time it could become an export hub. Nearby, in the distance it takes a Polo to get to 60mph, is a plant owned by Mercedes-Benz.

The initial demand for a domestic manufacturing base was more political than economic: it would serve to reinforce the newly won independence of India by showing that India could make its own goods rather than importing from the UK or other major manufacturing nations. It was also economic, in that it would provide relatively high-paying jobs for India’s rapidly urbanizing population.

Ironically, now that the manufacturing sector seems to be on the upswing, the one thing it isn’t going to do for India is provide lots and lots of jobs: as with the rest of the world, manufacturing “things” is being done with fewer workers every year (even when the total output increases, fewer workers are needed to produce that output).

July 13, 2012

The only long-term answer to road congestion: real-time tolls

Filed under: Cancon, Economics, Politics, Technology, USA — Tags: , , — Nicholas @ 00:04

I know, I know … I hate paying road tolls as much as the next driver. But the current road pricing scheme is broken and getting broken-er. Andrew Coyne points out the unpleasant realities:

… the demand for road use — traffic — is not a fixed quantity. Like anything else, it fluctuates with the price. And the price to use the roads, under present policies, is denominated in time: that is, by how long people are prepared to stew in traffic. This is, when you think about it, perverse. The people who get first claim on the roads are the ones who put the lowest value on their time. Or in other words, the people who need them the least.

That’s why analysts have long recommended pricing roads in more conventional terms, i.e. dollars and cents. But there are lots of ways of getting even this wrong, so we need to eliminate a couple more alternatives, such as:

More taxes. Many people’s first response to the notion of pricing roads is to say “but I already pay a gas tax.” The more knowledgeable will point to statistics showing that revenues from gas taxes more than pay for the cost of building and maintaining the roads.

But these are far from the only costs at issue, or even the most important. As far as congestion is concerned the cost that matters is not the cost of building the road, but the cost of using it. Every time you use the road, you impose a cost on other drivers, so far as you make the roads that much more crowded — as they, of course, do you. Add up those costs over millions of drivers every day — costs measured not only in delays, but in more collisions, more wear and tear, more pollution, and so on — and we are well into the billions, according to several estimates.

[. . .]

What’s really needed, then, is a more comprehensive approach. With modern technology, there’s no reason to toll only some roads and not others. Using GPS-style in-car transponders and satellites, it’s now possible to charge drivers to use the roads generally, with the highest charges applying in downtown centres and at rush-hour — just as you pay a higher charge to use your cellphone depending on the location and time of day. You’d even get a monthly bill in the mail.

Far-fetched? Britain and the Netherlands have each been on the verge of adopting similar schemes in recent years. That each backed down in the end tells you something of the political sensitivities involved: It’s always hard to get people to pay for things they are used to getting for free. But the roads aren’t free. We’re paying more and more to use them every year.

Pay in congestion, in time and noise and aggravation — or pay by credit card. Once you think of it that way, the choice should be easy.

April 23, 2012

More from the Bahrain protests

Filed under: Government, Liberty, Media, Middle East — Tags: , , , , , , — Nicholas @ 09:25

Marc Lynch on what he terms as Bahrain’s “Epic Fail”:

This week’s Formula One-driven media scrutiny has ripped away Bahrain’s carefully constructed external facade. It has exposed the failure of Bahrain’s regime to take advantage of the breathing space it bought through last year’s crackdown or the lifeline thrown to it by the Bahrain Independent Commission of Inquiry. That failure to engage in serious reform will likely further radicalize its opponents and undermine hopes for its future political stability.

Bahrain’s fierce, stifling repression of a peaceful reform movement in mid-March 2011 represented an important watershed in the regional Arab uprising. Huge numbers of Bahrainis had joined in street protests in the preceding month, defining themselves as part of the broader Arab uprising and demanding constitutional reforms and political freedoms. Bahrain’s protest movement began as a reformist and not revolutionary one, and the Bahrain Independent Commission of Inquiry found no evidence that the protests were inspired or supported by Iran.

[. . .]

A ferocious battle over how to understand the events in Bahrain has unfolded in the months since the crackdown, as anyone who has attempted to report on or discuss it can attest. Supporters of the regime have argued that they did what they must against a dangerously radical, sectarian Shi’a movement backed by Iran, and fiercely contest reports of regime abuses. The opposition certainly made mistakes of its own, both during the protests leading up to the crackdown and after. But fortunately the facts of Bahrain’s protest movement and the subsequent crackdown have been thoroughly documented by Bahrain’s Independent Commission of Inquiry.

The BICI report established authoritatively that the Bahraini regime committed massive violations of human rights during its attempts to crush the protest movement. Hundreds of detainees reported systematic mistreatment and torture, including extremely tight handcuffing, forced standing, severe beatings, electric shocks, burning with cigarettes, beating of the soles of the feet, verbal abuse, sleep deprivation, threats of rape, sexual abuse including the insertion of items into the anus and grabbing of genitals, hanging, exposure to extreme temperatures, forced nudity and humiliation through acts such as being forced to lick boots of guards, abuse with dogs, mock executions, and being forced to eat feces (BICI report, pp.287-89). Detainees were often held for weeks or months without access to the outside world or to lawyers. This, concluded the BICI, represented “a systematic practice of physical and psychological mistreatment, which in many cases amounted to torture, with respect to a large number of detainees in their custody” (Para 1238, p.298). And then there was the demolition of Shi’a mosques, widespread dismissals from public and private sector jobs and from universities, sectarian agitation in the media, and so much more. No political mistakes made by the opposition could possibly justify these acts.

April 19, 2012

The Bahrain Formula One: it’s just a car race

Filed under: Liberty, Media, Middle East, Politics — Tags: , , , , — Nicholas @ 08:58

Tim Black writes about the real reasons for protests against the Formula One race in Bahrain:

The way some politicians and commentators are talking, you would think that the fate of Bahrain hinged on whether or not this weekend’s Formula One (F1) grand prix goes ahead. Cancel it, and Bahrain’s repressive monarchs, the Al Khalifa family, will have to face up to the failings of their autocratic reign. But proceed with it and F1 might as well have crushed the Bahraini people’s democratic aspiration itself.

[. . .]

Ecclestone’s assessment of the state of Bahrain is certainly questionable. While life does go on for the 600,000 people of this tiny gulf state, there is little calm beneath the surface. Instead, the conflict between a politically and economically disenfranchised Shia majority and the ruling Sunni monarchy continues to simmer. Saudi troops may have helped Bahrain’s own security forces to quell the most explosive manifestation of this conflict last spring, but the arrests, torture and sometimes killing has continued. In the past fortnight alone, three teenagers were shot dead.

Yet as Panglossian as Ecclestone’s view of Bahraini society is, his larger point still stands: ‘it is not [F1’s] business running the country.’ And that’s the problem: too many commentators and politicians are so ‘wrapped up in their own bubble’, to quote Webber, that they believe that the question of whether or not a car race is staged in Bahrain is incredibly important; it is their business running the country. The grand prix is no longer just a car race: it has become a vehicle for exhibiting one’s moral credentials.

[. . .]

This seems to be the prevailing rationale behind the calls to cancel the grand prix: it is all about showing disapproval, striking a moral pose. Bahrain, a country increasingly seen, thanks to the press offices of Amnesty International and Human Rights Watch, as a photo-essay in state brutality, is little more than a convenient background against which to act righteous. Of course, the calls for F1 to boycott the Bahrain grand prix are not recognised for their essential vainglory; they are presented as compassionate. For the advocates of a Bahrain boycott, those willing for the grand prix to go ahead are the callous, self-interested ones. By staging the grand prix, they are tacitly approving of, and legitimating, the rule of the Al Khalifa family.

But who does this disapproval benefit? Who is this display of moral opprobrium for? It’s certainly not those in whose name the grand prix could be cancelled: the disenfranchised majority in Bahrain. After all, if the grand prix does go ahead, it won’t legitimate or validate the regime in their eyes. For those indulging in running-street battles, for those with no political freedom, for those who experience life under the al-Khalifa autocracy on a daily basis, the presence or absence of F1 will make little or no difference. Their lives will still be marked by a ruthlessly enforced unfreedom.

March 12, 2012

GM: the re-Volting face of corporatism

Filed under: Economics, Government, Politics, USA — Tags: , , , , , — Nicholas @ 09:14

Redmond Weissenberger on the decline of GM from world-class manufacturer to crony capitalist shell:

General Motors was once the Jewel in the crown of American Capitalism. By many, it was considered the greatest manufacturing company in America, if not the world. The company was destroyed by the insidious nature of the Neo-National Socialism that has infected the USA for well on 80 years now, when the merger of state and corporate power that swept across Europe was aped first by Hoover and then by FDR in the disastrous New Deal. The unions that were encouraged to eat away at GM from the inside were bailed out and the US Federal government took a 25% ownership in company. In the 2009 deal to “restructure” GM, the bondholders were wiped out, and the Unions were given a free pass to continue their destructive behaviors.

Built by what is now a de facto state-owned corporation, the Volt was the child of the green-washed brains of the Obama administration. The Volt was built for no-one, but a vision of the perfect, “New eco-Socialist Man”. Who is buying the Volt? According to Bill Visnic, senior editor of Edmunds.com, “The Volt appeals to an affluent, progressive demographic” General Motors itself stated that the average income of a Volt buyer is $175,000 a year. This trend does of course line up with the type of individual who has been at the forefront of the environmental movement since day one. A rarefied elite, righteously indignant, statist in nature, ready to have the government force eco-correct behavior on all who inhabit the land. The classic example is Prince Philip, Duke of Edinburgh, who once opined that “In the event that I am reincarnated, I would like to return as a deadly virus, to contribute something to solving overpopulation”.

The Volt is a very good example of what happens when the means of production falls into the hands of the State. The system of profit and loss that can only operate when prices are set by the private owners of the materials and the means of production. The Chevy Volt can only exist within the sphere of the state wherein there is no rational economic calculation possible.

[. . .]

It is estimated by Tom Gantert that the Volt has received up to $3 Billion in Local, State and Federal Subsidies. And if you believe that GM has indeed sold 6,000 Volts, then the total subsidy per car can be estimated anywhere from $50,000 to $250,000. All of this for a mid-sized 4 door sedan that retails for $39,828 (eligible for a $7,500 federal rebate of course).

The hidden dangers of driving an antique BMW Isetta

Filed under: Europe, Germany, History, Media, Technology — Tags: , , — Nicholas @ 00:04

March 8, 2012

Woolley: We need power tools (and cars) for girls

Filed under: Economics, Randomness, Technology, Tools — Tags: , , , , — Nicholas @ 11:59

Over at the Worthwhile Canadian Initiative blog, Frances Woolley marks International Women’s Day:

Goods are becoming ever more specialized. Everything from baby diapers to multivitamins is now dispensed in gender- and age-appropriate models. Yes, it makes sense to have his and hers jeans. But gender appropriate soft-drinks? Does the average guy’s masculinity really need to be bolstered by buying Coke Zero instead of Diet Coke?

The profitability of his and hers products is partly due to price discrimination. The local hair salon charges women more than men because women are prepared to pay $50 or $60 to get their hair cut. Men asked to pay that price would just walk across the road to the barber shop that charges $15 for a short back-and-sides.

[. . .]

Second, gender differentiated power tools. I have small hands. My palm sander doesn’t fit into my palm — it’s more like a two-handed sander. I’d love to get a new drill, but most have such a large grip that I can barely hold them. It’s not just a gender issue — men’s hands come in all sorts of different sizes, too. How can women be expected to share equally in home repair duties when every power tool is the wrong size for their hands?

Finally, I’d like to see more cars built with features that appeal to women. I’ve heard — but I don’t know if this is true — that as soon as a particular model of car is perceived as being “girly,” men won’t buy it. Since men still constitute the majority of car buyers, sales collapse. I’ve heard this offered as an explanation of the lack of cars like the Smart car — two person vehicles that use hardly any gas, and are easy to drive and park on city streets. Smart cars are just too cute, and cute=girly, and girly is the automotive kiss of death. But what is the cost of this pursuit of masculinity?

February 9, 2012

Brazil tries to quash Twitter users over speed trap tweets

Filed under: Americas, Law, Liberty, Technology — Tags: , , , — Nicholas @ 10:44

Proving yet again that the main concern is revenue generation rather than safety, Brazil is trying to force Twitter to stop its users from sending out tweets that warn about speed traps:

The attorney general of Brazil has filed a lawsuit against Twitter in a bid to block accounts that warn drivers of police speed traps and roadblocks.

The government argues the tweets interfere with police efforts to fight drunk driving, reduce accidents and uncover evidence of crime, report CNN, PC Magazine, The Next Web and BBC News.

The suit, which seeks $290,000 for each day that Twitter or its microbloggers fail to comply, claims the warnings violate criminal and traffic laws.

Twitter recently announced that they now have the capability of restricting the distribution of tweets within countries (they used to block worldwide distribution by default).

H/T to Walter Olson for the link.

February 3, 2012

Great moments in advertising

Filed under: Environment, Europe, Media — Tags: , , , , — Nicholas @ 09:55

This is not one of them:

BMW apologized after a PR strategy to pay for the naming rights to a weather system backfired — that system turned into the deep freeze that’s claimed dozens of lives across Europe.

The goal was to promote BMW’s Mini Cooper brand by paying Germany’s meteorological office 299 euros ($392) to name a system “Cooper” — a practice in place since 2002 to help fund weather monitoring work in Germany. Unfortunately for BMW, the system it was assigned to turned out to be a killer.

On the face of it, this seems like a pretty stupid notion: pay money to associate your brand with a major weather disturbance? Didn’t BMW’s PR folks notice that the association most people have with named weather is negative?

January 20, 2012

The anti-Top Gear crowd: “In certain quarters, Clarkson-bashing has started to replace tennis as a favourite pastime”

Filed under: Britain, Humour, India, Media — Tags: , , , , , — Nicholas @ 09:28

Patrick Hayes on the tut-tutting, disapproving folks who only watch Top Gear to generate more outrage at Jeremy Clarkson’s antics:

I wonder what proportion of the five million viewers of the Top Gear India Special over Christmas were desperate-to-be-offended members of the chattering classes? Skipping the second instalment of Great Expectations, they no doubt sat through the show solely to tweet about how awful Jeremy Clarkson and Co’s monkeying about on the road to the Indian Himalayas was.

In certain quarters, Clarkson-bashing has started to replace tennis as a favourite pastime. He was chastised for offending blind people when he called former UK prime minister Gordon Brown a ‘one-eyed Scottish idiot’, censured for driving while sipping a gin and tonic en route to the North Pole, and generated fury when a couple of years ago he called for the Welsh language to be abolished. But never has he generated so much controversy as the Twitch-hunt that took place against him at the end of last year, after he made a quip that public sector strikers ‘should all be shot’.

This was so evidently a joke, although a crap one, that you had to wonder whether the tens of thousands of ‘offended’ people who took to their keyboards to campaign to get him sacked were for real. Is it humanly possible to be that po-faced? Evidently so. Irony-phobic Labour leader Ed Miliband led the way, calling the comments ‘absolutely disgraceful and disgusting’. A sour-mouthed trade union rep even compared his comments to the atrocities carried out by former Libyan tyrant Muammar Gaddafi.

[. . .]

For these petty censors, it’s not enough simply to change the channel. The danger, so the argument goes, is that Clarkson could become a red-blooded role model to millions of impressionable viewers who will mimic his expressions and share his juvenile, PC-averse passions. Attempts to tame Jezza are invariably attempts to try to reform the viewing public, too. If not stopped now, it would seem, Top Gear could generate an army of misogynistic, environment-despoiling racists-in-the-making.

The danger doesn’t come from Clarkson, however. It comes from these Clarkson-bashing killjoys who are intolerant of informal banter, suspicious of anything ‘fun’, taking every word said in jest literally and moaning to the authorities because Clarkson sets a bad example. These are the ones who, to steal a phrase from the man himself, ‘should be avoided like unprotected sex with an Ethiopian transvestite’.

January 12, 2012

This time it’s India that gets the Top Gear treatment

Filed under: Humour, India, Media — Tags: , , , , , — Nicholas @ 12:12

I haven’t seen the Top Gear special in question, but from the complaints, it sounds like a pretty typical outing for the boys:

In the letter, published in the Daily Telegraph, the HCI criticised a lack of cultural sensitivity and called on the BBC to take action to pacify those offended.

One Indian diplomat told the BBC News website: “People are very upset because you cannot run down a whole society, history, culture and sensitivities.

“India is a developing country, we have very many issues to address, all that is fine but it is not fine to broadcast this toilet humour.”

He added: “There are many parts of the programme that people have complained about.

“It’s not only Indians, it’s also our British friends — it goes much beyond.”

The diplomat cited an “offensive” banner placed on the side of a train — reading “the United Kingdom promotes British IT for your company” — which read quite differently when the carriages were parted.

And he also criticised a scene in the programme which showed Clarkson taking off his trousers at a party to demonstrate how to use a trouser press.

Showing off the customised Jaguar, complete with toilet roll on its aerial, presenter Jeremy Clarkson said on the programme: “This is perfect for India because everyone who comes here gets the trots.”

Update: Jeremy Clarkson strikes again, this time agitating the folks on the Isle of Sheppey and recent immigrants:

Clarkson wrote: “Mostly, the Isle of Sheppey is a caravan site.

“There are thousands of thousands of mobile homes, all of which I suspect belong to former London cabbies, the only people on Earth with the knowledge to get there before it’s time to turn round and come home again.”

“And what of the locals? Well, they tend to be the sort of people who arrived in England in the back of a refrigerated truck or clinging to the underside of a Eurostar train.”

“And that reinforces my point rather well.

“Mboto has somehow evaded the gunmen and the army recruiters in his remote Nigerian village. He walked north, avoiding death and disease, and then somehow made it right across the Sahara desert to Algeria.

“Here, he managed to overwhelm the security men with their AK-47s and get on a boat to Italy, where he sneaked past the guards.”

The article in Top Gear mag adds: “He made it all the way across Europe to Sangatte, from which he escaped one night and swam to Kent.

“But that stumped him. Getting out of there was impossible, so he decided to make a new life in Maidstone.”

January 1, 2012

Bargain hunting: pay only $103,000 for a car costing $2.2 million

Filed under: Economics, Environment, Government, Technology — Tags: , , , , , — Nicholas @ 12:41

They’re pretty exclusive: so far they’ve only made 239 of them, and they start at $103,000 per unit. They have, however, taken on a bit of US federal government funding:

It’s another example of USA tax dollars at work — in Finland:

From ABC News, Oct 20th, 2011:

    With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.

    Vice President Joseph Biden heralded the Energy Department’s $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the company’s manufacturing jobs are still limited to the assembly of the flashy electric Fisker Karma sports car in Finland.

Let’s do the math.

239 cars produced for 2012 model year.

$529,000,000 USD in Government loans

That works out to $2,213,389 (2.2 million) per car.

Selling price $103,000 USD, that leaves only $2,110,389 in taxpayer funded overhead per vehicle. And, they’ve only sold 50 so far.

Such a deal.

Of course, when your promotion strategy revolves around a sitcom based on Charlie Sheen, such things are bound to happen

December 22, 2011

Perhaps the Cruze won’t be the salvation of Government Motors

Filed under: Government, Technology, USA — Tags: , — Nicholas @ 11:08

The Chevy Cruze was supposed to be a bellwether for the overall health of Government General Motors. If so, things are not looking as rosy for the 2012 model year as they did for the 2011 model:

Ever since emerging from bankruptcy, the Chevrolet Cruze has been something of a symbol of GM’s rebound. Widely hailed by the automotive media as General Motors’ strongest effort to date in a compact segment that has become increasingly important in recent years, the Cruze seemed to show that the “new” GM was capable of selling smaller cars on their merits, rather than as afterthoughts to more profitable truck, SUV and large car offerings. And indeed, through the first half of this year, it seemed that the Cruze was something of a roaring success, regularly outselling its segment competitors. But then, in June, when production shifted from 2011 models to 2012 models, something changed: sales started to slow, and inventories started to rise. As Cruzes began piling up on dealer lots, GM trimmed production moderately, but still, inventories began to grow out of control. Clearly something was going wrong.

Last week, GM shut down production of the Cruze, saying only that it had an unspecified “supplier issue.” But Automotive News [sub] reports that had already GM shut down the Lordstown plant for the entire week of November 28, after inventories shot from 33 days supply to 73 days supply during the months of September and October. As of December 1, inventories had risen higher still, to 88 days, as sales continue to slacken. Lordstown reopened yesterday, but with sales falling and inventories running out of control, another slowdown or stoppage of production seems inevitable.

« Newer Posts — Older Posts »

Powered by WordPress