economics

Everything interesting takes place in the dark

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Recent theoretical developments in evolutionary psychology suggest that more intelligent individuals may be more likely to prefer to remain childless than less intelligent individuals.

Analyses of the National Child Development Study show that more intelligent men and women express preference to remain childless early in their reproductive careers, but only more intelligent women (not more intelligent men) are more likely to remain childless by the end of their reproductive careers. […]

Because women have a greater impact on the average intelligence of future generations, the dysgenic fertility among women is predicted to lead to a decline in the average intelligence of the population in advanced industrial nations.

{ Social Science Research | PDF }

photo { Richard Kern }

Or have we eaten on the insane root that takes the reason prisoner?

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What you order may have less to do with what you want and more to do with a menu’s layout and descriptions.

After analyzing 217 menus and the selections of over 300 diners, a Cornell study published this month showed that when it comes to what you order for dinner, two things matter most: what you see on the menu and how you imagine it will taste.

{ Cornell | Continue reading }

[Buzz Lightyear flies above the bandits and slices their car with his laser.]

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This paper examines whether demands for bribes for particular government services are associated with expedited or delayed policy implementation. […]

[F]irms confronted with demands for bribes take approximately 1.5 times longer to get a construction permit, operating license, or electrical connection than firms that did not have to pay bribes and, respectively, 1.2 and 1.4 times longer to clear customs when exporting and importing.

{ World Bank | PDF }

‘Nothing can come of nothing.’ —Shakespeare

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Since The Fed’s extension of Operation Twist (and subsequent unveiling of QE3) in 2012, the stocks of “weak balance sheet” companies are up over 100%. In that same period, the stock prices of “strong balance sheet” companies are up a mere 43%.

{ ZeroHedge | Continue reading }

The last 5 days saw “strong” companies outperform “weak” companies by the most in 3 years - something appears to be changing.

{ ZeroHedge | Continue reading }

My art… keeps me sane [gestures at golf ball]

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In Japan, the U.K., and, to a lesser extent, around the world, golfers buy insurance to protect themselves from the potentially bankrupting consequences of sinking a hole in one.

The concept of hole in one insurance may baffle the uninitiated, but to many it is a wise precaution as golf tradition holds that anyone who scores a hole in one should buy drinks back at the clubhouse for his playing group — if not everyone present. In Japan, many give extravagant gifts to friends and family after scoring a lucky ace.

{ Priceonomics | Continue reading }

Come and play with us, Danny. Forever, and ever, and ever.

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To understand how a state acquires legal capacity, we need to study a state that lacked it. France, at the end of the sixteenth century did not possess a centralized legal or tax system. This reflected the way French monarchs had gradually added territories to their growing kingdom since the middle ages. Moreover, as more and more territories were added, the king was forced to concede old, and sometimes new, privileges to the regions so as to ensure their loyalty. In the words of one economic historian, the complexities of the resulting fiscal and legal system almost ‘defy description.’

Legal and fiscal fragmentation reflected the underlying political equilibrium of the French monarchy. This was based on a time-tested and simple quid pro quo: The ruler used his military power to protect local privileges, and in exchange, local elites gave the king their political and fiscal support. France was a ‘natural state’ and control over local courts was a source of rents for the provincial nobility. The disbursement of these revenue streams helped to ensure domestic peace.

The legal authority of the Crown was weak in many parts of the country as well. In some regions the provincial nobility still reigned as semi-independent rulers. Even in those areas where the authority of the monarchy was strong, local families dominated the regional parlements and elections.3 As a result, there was ‘a lack of a coherent and common set of laws,’ and ‘the absence of unified laws even within each governmental region.’ […]

Historians have noted that judges of local or ‘inferior’ jurisdictions usually demonstrated much more zeal in prosecuting witches than did the central authorities, and when left to their own de- vices they generally executed more witches than when they were closely supervised by their judicial superiors.’ […]

The crime of witchcraft had two components: ‘maleficia’, or harm through supernatural means, and ‘diabolism’, or crimes relating to the devil. Maleficia could range from harming cattle or causing a blight on grain to actually committing homicide. For example, in 1611 Jacques Jean Thiébaud in Montbéliard was accused of killing the livestock of neighbors and making them sick. […] Diabolism was defined as having dealings with the Devil or his agents. Attendance at a ‘Devil’s Sabbath’, flying through the air, the use of magic powders or unguents, were identified as common behavior among witches.

Witchcraft was difficult to prosecute under conventional legal procedures and standards of proof. Maleficia may have sometimes actually occurred and, in rare cases, may even have left evidence. However, diabolism was, by its nature, beyond the pale of rational legal procedure. Since dealings with the devil existed only in the fantasies of accusers and (rarely) the accused, it was a thought crime. In order to get around the difficulty of prosecuting a suspected witch according to traditional standards of legal proof, local judges turned to the theories of the demonologists. […]

The unobservable nature of the crime combined with the use of torture created a self-replicating logic to witchcraft trials. Accusation led to torture, which led to further accusations. This logic is illustrated by the following example which took place in 1599 in the area of Bazuel which lies in the North of France. A widow named Reine Perceval was accused of sorcery and brought to the local abbey for interrogation. Initially, she denied the accusa- tions, despite the attempts of her interrogator to coerce her confession by pointing to another recently accused woman who, by admitting to the crimes, was released. […] Later, under torture, the widow Perceval did confess to being a witch and named several ‘accomplices.’ […]

It was costly in a purely financial sense to try an individual witch. Furthermore, fear of witchcraft could get out of control and result in lynchings and murders or in devastating mass trials in which large numbers of individuals who would not usually be suspected of witchcraft came under suspicion. […]

We establish that witchcraft trials were more likely to take place where the central state had weak legal institutions. Combining data on the geographic distribution of witchcraft trials with unique panel data on tax receipts across 21 French regions, we find that the rise of the tax state can account for much of the decline in witch trials during this period. Further historical evidence supports our hypothesis that higher taxes led to better legal institutions.

{ Johnson and Koyama | Continue reading }

Million ways to cry

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{ CYNK, a ”social networking” startup that has no assets, no revenue, no members, and one employee, is worth $4.75 billion }

art { Paul Klee }

Time to put the O back in Cuntry

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Haberman wanted grocery stores to embrace the 12-digit Universal Product Code—better known as the barcode—to create a standardized system for tracking inventory and speeding checkout. He took his fellow execs to a nice dinner. Then, as was the fashion at the time, they went to see Deep Throat. […]

Without the barcode, FedEx couldn’t guarantee overnight delivery. […] Nearly all babies born today in U.S. hospitals get barcode bracelets as soon as they’re swaddled.

{ Wired | Continue reading }

art { Cy Twombly, Untitled, 1968 }

‘If in the first act you have hung a pistol on the wall, then in the following one it should be fired. Otherwise don’t put it there.’ –Anton Chekhov

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I no longer look at somebody’s CV to determine if we will interview them or not,” declares Teri Morse, who oversees the recruitment of 30,000 people each year at Xerox Services. Instead, her team analyses personal data to determine the fate of job candidates.

She is not alone. “Big data” and complex algorithms are increasingly taking decisions out of the hands of individual interviewers – a trend that has far-reaching consequences for job seekers and recruiters alike. […]

Employees who are members of one or two social networks were found to stay in their job for longer than those who belonged to four or more social networks (Xerox recruitment drives at gaming conventions were subsequently cancelled). Some findings, however, were much more fundamental: prior work experience in a similar role was not found to be a predictor of success.

“It actually opens up doors for people who would never have gotten to interview based on their CV,” says Ms Morse.

{ FT | Continue reading }

related { Big Data hopes to liberate us from the work of self-construction—and justify mass surveillance in the process }

The presence of carbohydrate in the human mouth has been associated with the facilitation of motor output and improvements in physical performance

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The only cryonics storage facilities are in the US and Russia. So while my day job is as a student landlord, in my spare time I run Cryonics UK and train a cryonics emergency team in my own home. We’re ready to administer the medical procedures needed to stabilise and cool a body before it is flown to the US on dry ice.

Around 40 people are on our emergency list – people who can call us and say, “I’m going, please help me.” They pay roughly £20 a month to cover the upkeep of our equipment and ambulance. To call us out when the time comes costs about £20,000, plus there’s the cost of long-term storage. With Alcor, one of two US storage services, the total bill will be $95,000 for “head only” and $215,000 for “whole body”. Most people cover that with life insurance.

{ Financial Times | Continue reading }

mechanical robot, silicone, pigment and wig { Urs Fischer, Airports Are Like Nightclubs, 2004 }

‘Life must be understood backwards.’ —Kierkegaard

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Does temperature affect economic performance? Has temperature always affected social welfare through its impact on physical and cognitive function? While many studies have explored the indirect links between climate and welfare (e.g. agricultural yield, violent conflict, or sea-level rise), few address the possibility of direct impacts operating through human physiology. This paper presents a model of labor supply under thermal stress, building on a longstanding physiological literature linking thermal stress to health and task performance. […]

We find that hotter-than-average years are associated with lower output per capita for already hot countries and higher output per capita for cold countries: approximately 3%-4% in both directions.

{ SSRN | Continue reading }

related { Ambient temperatures can influence the growth or loss of brown fat in people }

‘I have therefore found it necessary to deny knowledge in order to make room for faith.’ —Kant

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The present research provides empirical evidence that drug names may entail implicit promises about their therapeutic power. We asked people to evaluate the perceived efficacy and risk associated with hypothetical drug names and other secondary related measures. We compared opaque (without meaning), functional (targeting the health issue that the drug is meant to solve) and persuasive (targeting the expected outcome of the treatment) names. Persuasive names were perceived as more efficacious and less risky than both opaque and functional names, suggesting that names that target the expected outcome of the drug may bias the perception of risk and efficacy.

{ Applied Cognitive Psychology }

oil on canvas { Vincent van Gogh, Skull of a Skeleton with Burning Cigarette , 1886 }