EclectEcon

God's Country

Hartside Summit and the moors in the North Pennines in northern England. Please click on the photos to get the full effect.

It reminded me a great deal of the wind-swept coulees of southern Alberta and Saskatchewan, which I have also often thought of as "God's Country".... Spectacular vistas and an openness that fills me with awe.



It is all just a few miles from Hadrian's Wall in northern England.

Does File-Sharing Really Hurt CD Sales?

Craig Newmark and Tyler Cowen both had blog entries a couple of years ago suggesting there is little or no effect of file-sharing on CD sales. A recent article by Stan Liebowitz in the Journal of Law and Economics, ”File-Sharing: Creative Destruction or just Plain Destruction?” suggests otherwise:

This paper examines the measurement of file-sharing activity, the theory of file-sharing's likely impact, and the impact of file-sharing. Analysis of various data sets indicate that they do not yet live up to their hoped for precision. Data limitations not withstanding, the evidence seems compelling that file-sharing is responsible for the recent large decline in CD sales for which it has been blamed.

Clinton, Ontario; a Sleepy Little Town

I live on Albert Street in Clinton, Ontario. Here's something that happened just down the street last weekend (from the Clinton News-Record):

Firewood, truck, used in attack



News-Record staff

Wednesday July 26, 2006

Clinton News-Record — A 43-year-old Clinton man is charged with attempted murder following a series of incidents that began on Clinton’s main street on Saturday night.



The Huron OPP reports the first incident allegedly saw Donald Leibold strike a 43-year-old man with a piece of firewood around 10:30 p.m., without provocation, during a house party on Albert Street.



It then escalated when the victim was struck by what police believe was a bottle, resulting in the victim’s need to seek medical attention.



Police allege when the victim, along with another man, were attempting to enter the Clinton Public Hospital, Leibold arrived at the scene and allegedly proceeded to attempt to run them down at a high rate of speed. Police say both men were forced to fun for their lives as Leibold allegedly raced across the hospital lawn towards them.



Police add preliminary reports suggest Leibold may have made more than one attempt to strike the victim. Police also note though neither person was hurt, there was extensive damage to the hospital lawn, several signs and a parking barrier. That damage has since been cleaned up by hospital staff.

The OPP notes both men were able to enter the hospital as the suspect fled in his pick up.

What is the Marginal Revenue Product of Barry Bonds?

Barry Bonds becomes a free agent at the end of this season. Suppose the following:

• There is a freely competitive bidding market for his services,
• Bonds has no location preferences,
• There is no winner's curse in the auction for his services.

How much do you think he could raise in the market? What is the best offer a team might make to him?



The Washington Post (reg. req'd) estimates/guesses/speculates/analyzes as follows:

So, how much money have you made off Barry Bonds? If you are the San Francisco Giants' owners, perhaps the number is in the hundreds of millions of dollars. If you are the Giants' radio or television rights-holders, perhaps in the tens of millions.



... Bonds, whose home run total sits at 722 — close enough to make a run at Hank Aaron's career record of 755 next season — is in the final year of a five-year, $90 million contract...



"We have said many times that is a question we are not prepared to deal with until after the season," Magowan said. "There are too many variables here, including his health and the performance of the team."



Another variable, no doubt, is how much money Bonds can still bring in, relative to how much he would be taking out in salary. The Giants are paying Bonds $18 million this year. It is not so much a negotiation as a calculation.

Exactly! His marginal revenue product [MRP] depends on his marginal physical product [MPP], which depends, in part, on his health; if he isn't healthy, he won't be contributing much to the revenues of the team.



But his MPP also depends on the quantity and quality of other inputs he has to work with. This situation is just like standard micro-theory textbook treatments in which the MPP of labour depends on the quantity of capital labour has to work with.



In the case of Bonds, if his teammates are good, then his contributions have a bigger chance of helping the Giants (or whatever team he plays for) into the post-season gravy train. But if they are not so good, then Bonds' skills are not worth so much to the team.

Viking Ice

I mentioned yesterday that I'm staying in a motel across the street from the Minnesota Vikings' summer training camp. I also mentioned that it is hot enough here that players must be careful not to overdo it during their workouts.



I discovered two things during an early morning walk today.

1. Many players work out early in the morning, at times and locations not specified in the team work-out schedule. That seems very sensible.
2. The Vikings' summer camp uses a lot of ice. Those two guys unloaded that entire truckful of ice at the Vikings' camp.
   
   
   

Israel vs. Palestine

From John Lott (His posting is titled, "So which side is more heroic?"):

(as usual, please click on the cartoon to see it more clearly)

Pre-Commitment Strategies

I'm visiting Phil Miller for a few days to do some work with him on sports economics. While I'm here, though, he and his PowerFamily® are holding a garage sale to get rid of some of their junk.



This could have been a problem for me. I love garage sales, and so to avoid buying more junk, I usually just stay away from them. But in this case my pre-commitment strategy* is that I'm driving Ms. Eclectic's small compact car instead of our family minivan. That way I won't be able to load up on too much of the Miller Family PowerJunk.



*For more on "pre-commitment strategies, see this:

On the Way to Mankato

This post is for Phil Miller, whom I will soon meet in Mankato, Minnesota. He said, "I can't wait to see your first post from Mankato," so here it is.



Just on the northern border of Iowa, along Interstate 35, there is a wind farm of 89 windmills. And just north of those windmills is a casino:

Does that look weird or what? A casino sign on a water tower.



Postscript: As an aside, let me add that it is hot and humid here, much the way I remember some pretty horrible summers working in a cannery back in the early 1960s in Faribault, Minnesota, just 50 miles or so east of Mankato.



Postscript #2. I'm here to do some work with Phil. He booked me into a motel near the Minnesota Vikings' Summer Training camp. I think Phil likes sports... a lot!



Postscript #3. It is easy to see how a football player could die in this heat if, say, he were to work out strenuously in the heat during a professional football summer camp.

Conspiracy:Oil Companies Keep Fuel Efficient Cars Off the Market

For as long as I can remember, I have been hearing these claims:



"The technology exists for cars to get 200 miles to the gallon, but every time someone tries to produce cars like that, they get bought off by the big oil companies."



Brian Ferguson has an excellent retort:

If Ford, or any North American auto manufacturer knew how to build an affordable and efficient electric, or hybrid, or fuel cell car, or even a gas driven car that could get a couple of hundred miles to the gallon, how likely is it that they'd be suppressing that technology today? Patent that sucker and get it on the market and the world is yours. Even the oil companies couldn't pay you enough to make it worth your while to suppress that technology. If those storied breakthrough cars aren't coming on the market now, it's because they simply don't exist.

People Respond to Incentives:Hamas, Hezbollah, and Civilians

From a column about Israeli General Daniel Halutz in the July 26th Daily Telegraph [h/t to Jack]:

The target on the night of July 22 [2002] was the Hamas militant Sheikh Salah Shehada. Shehada was killed but so were more than a dozen other people. Despite the apparently indiscriminate nature of the attack, Gen Halutz praised the pilots who had led the raid.



But afterwards 27 air force pilots refused to continue serving. "We oppose carrying out attack orders that are illegal and immoral," they said in a statement. "We refuse to take part in IAF attacks in civilian population centres; [and] refuse to continue to injure innocent civilians."

This kind of response, of course, provides all the more incentive for Hamas and Hezbollah to base their operations in civilian centres with high populations. I find it more than annoying that the mainstream media [MSM] have primarily been blaming Israel for the results, though I did see one interviewer on the BBC, of all places, who asked many Lebanese refugees how they felt about having Hezbollah set up operations in civilian areas. More journalists need to ask those questions.

Gambling, Moral Hazard, and Social Costs

One economic problem with gambling on the outcome of world events is that heavy bettors have an incentive to re-deploy scarce resources to affect the outcome.



For example, if I bet on the outcome of a basketball game, I have an incentive to use scarce resources to influence the outcome by bribing or injuring some of the players. Morality aside, using of scarce resources in this way involves an opportunity cost; the time and labour, etc., could have been used to produce something else. This economic problem is known in the discipline as moral hazard.



I was reminded of this problem when I read this article in the Trono Globe & Mail about all the betting that took place in India on whether the young boy who fell into a deep irrigation shaft would be rescued alive.

While all of India was gripped last weekend by televised efforts to save a boy who had fallen into a deep pit, bookmakers received $33-million (U.S.) in bets on whether the child would survive, a newspaper reported Wednesday.



Most of the gamblers had expected the boy, who was eventually rescued Sunday night, to be freed that morning, the report said.



... Gambling is a popular pastime in many parts — even though betting is outlawed in India — and thousands of Indians apparently saw the drama surrounding the rescue of the young boy, identified only as Prince, as an opportunity for some action.



... Bets poured in Sunday as the rescue efforts were broadcast, the newspaper reported. It did not say whether there were any big winners.

I am not asserting that anyone actually tried to thwart the rescue operation, but with that kind of betting at stake, surely the incentive to do so was strong.

Billions of dollars exchange hands in India each year through a secretive betting system that uses a complex set of codes often uttered only on phones to avoid leaving a paper trail.



Most of the betting is on cricket, but bets are also placed on a wide range of subjects, such as the colours of saris worn by actresses on television soap operas.



Bets have also been placed on the likelihood of Hindu-Muslim religious riots, the newspaper reported.

These bets are more problematic. What would it take to bet there would be riots and then go out and foment some? Here the social costs would be more than just the gambler-fixer's scarce resources. There would also be the costs resulting from the riots, dislocations, and individuals' attempts to protect themselves.

UN "Peacekeepers" As Human Shields:Another Reason to Dislike and Distrust the UN

Four UN peacekeepers were killed in Lebanon this week. Kofi Annan's reaction revealed his true feelings:

Mr. Annan said he was “shocked and deeply distressed by the apparently deliberate targeting by Israeli Defence Forces.

He has since backtracked (without apology) on this assertion.



In fact, though, the UN forces in Lebanon have behaved as if they are Hezbollah collaborators according to this piece in the NRO by Michael Krauss and Peter Pham. [h/t to BenS and Judith Binder]

What many seem to forget is that there already is a U.N. military presence in Lebanon — and one armed, at least on paper, with a robust mandate. Alas, the blue-helmeted “peacekeepers” are part of the problem, not the solution.



... When Israeli forces completed their pullout from Lebanon in early 2000, Foreign Minister David Levy reminded Annan that it was now up to Lebanon, in collaboration with UNIFIL, to live up to their obligations to deploy the Lebanese army in the south and to secure its border. That the present conflict is occurring is proof positive of the failure of the Lebanese government and of UNIFIL to even attempt to fulfill these obligations. The arsenal and forces that Hezbollah has amassed on Israel’s northern frontier were assembled under the eyes of UNIFIL. In fact, accusing the U.N. troops of “failure” would be inaccurate; “enabler” might be a more apt description.



... Nor has the situation changed much now that the conflict is “hot.” UNIFIL’s only apparent action this past week has been to voice concerns that its troops might get hit in the crossfire. This is indeed a risk — because UNIFIL has long permitted Hezbollah to locate its forces, including its missile batteries, in the very shadow of installations belonging to the “peacekeepers.” UNIFIL has thus turned into a very convenient and high-profile human shield for terrorists.

As Canadian Prime Minister, Stephen Harper said, he hopes people will look into why the UN observers were hanging out so near Hezbollah rocket-launching sites.



Update: Issue 147 of the "Wednesday Watch" from unwatch.org has much more. Its conclusion:

Until the UN demonstrates that it can be more like Resolution 1559, and less like UNIFIL and the Human Rights Council, it will be difficult to imagine the organization bringing peace to Lebanon, or to the Middle East as a whole.

Why So Many Reasonable People Distrust the BBC

Early media coverage of Hizbullah's aggression against Israel presented a generally sound picture of cause and effect, of the terrorist group's agenda and of Israel's right to remove the menace to its people.

The BBC, however, is a frequent exception.

Correspondent Nick Thorpe, for instance, in a report broadcast on July 15 and posted as well on the network's Web site - "Becoming Israel's greatest enemy" - opted for jarringly flippant characterizations of the present crisis in Lebanon, followed by anti-Israel distortions and platitudes.

Here's the link with the documentation.

What's New in Avian Flu?

With all the turmoil in the latest Mideast War dominating news, we may have missed important news about avian flu. [h/t to BenS and Jack]



But I guess not.



Update: Jack just sent me this link indicating there might be some progress being made on developing a vaccine for avian flu.

Ricardian Equivalence Rears Its Ugly Head

On his blog, Greg Mankiw reproduces his WSJ column with Robert Carroll about the growth effects of tax cuts. The overall conclusion is that if tax cuts induce more private investment, then economic growth will be promoted and people will be better off (in a material sense) in the future. And, not surprisingly, cuts to capital gains and dividend taxes do the most to promote private investment.



But what if the tax cuts are not accompanied by reductions in gubmnt spending? What if, eventually, tax cuts today mean tax increases in the future (possibly to deter foreigners from dumping all their holdings of US gubmnt debt?)?

The results are strikingly different. Instead of increasing by 0.7% in the long run, GNP now falls by 0.9%. Tax relief is good for growth, but only if the tax reductions are financed by spending restraint.

In other words, Ricardian Equivalence is a real world phenomenon to be reckoned with if people expect gubmnts will not reduce their spending. Mankiw adds:

One exception: Lower taxes on dividends and capital gains promote growth, even if they require higher income taxes.

Good luck trying to convince interventionist redistributionists about this conclusion.



Update: For more, see the analysis at Econbrowser

A Message for My Chair, Dean, and President

From Brad DeLong on the academic value of blogging (link via Marginal Revolution):

The hope of all of us who blog is that we will become smarter, do more useful work, be happier and more productive, and will also impress our deans so they will raise our salaries. The first three hopes are clearly true: Academics who blog think more profound thoughts, have a bigger influence on the world — both the academic and the broader worlds — and are happier for it. Are we more productive in an academic sense? Maybe. We will see when things settle down.



Are our deans impressed? Not so far, but they should be. A lot of a university's long-run success depends on attracting good undergraduates. Undergraduates and their parents are profoundly influenced by the public face of the university. And these days, a thoughtful, intelligent, well-informed Web logger like Juan Cole or Dan Drezner is an important part of a university's public face. Michigan gains in reputation and mindshare from having a Cole on its faculty. Yale loses from not having an equivalent.



A great university has faculty members who do a great many things — teaching undergraduates, teaching graduate students, the many things that are "research," public education, public service, and the turbocharging of the public sphere of information and debate that is a principal reason that governments finance and donors give to universities. Web logs may well be becoming an important part of that last university mission.

Greg Mankiw comments:

Brad is surely right that most deans are not impressed. In fact, some may be put off by it: "Why is he wasting his time on that activity?"



I have long thought that academia rewards too narrow a range of activities. At research universities, even teaching is given inadequate weight. I will fight for the good teachers before I fight for the bloggers.

The High Price of Ethanol and U.S. Agriculture Policies

From the back pages of The Economist, where they publish weekly data and interesting little tidbits:

In America it is cheaper to make fuel ethanol from maize because of the high domestic price of sugar. The Agriculture Department forecasts that America will use 34% more maize in ethanol production next season, some 20% of the harvest. Prices, up by a fifth this year, look set to rise further.

And of course the reason for the "high domestic price of sugar" in the US is?

Protection of the US sugar industry.



Add to that the huge incentive US corn farmers have to support protection of the US sugar industry (plus a ban on the import of Brazilian ethanol), and it is easy to see why the international trade talks are stalled because of various agriculture policies. From Slate's Today's Papers:

The New York Times leads with the collapse of the five-year-old world trade talks. Known as the Doha round because that's the city they started in, the negotiations broke down over agriculture policies: The U.S. has been pushing for the E.U. and others to end their agriculture tariffs, with others responding that the U.S. first needs to cut back its farm subsidies--and that is a no-go.

For more on the inefficiencies of US policies regarding ethanol see here and here.

Some Important Questions about MidEast Terrorists

Six wacko different Israeli human rights groups have called for an end to actions by Israel that harm Palestinian non-combatant civilians. Tom Hanna raises some important questions, referring to such groups as apologists for Palestinian terrorists:

The problem for the terrorist’s apologists is twofold. First, when was the last time you heard of six Palestinian groups, especially relatively mainstream groups in the Palestinian population, opposing the targeting of civilians by Palestinian terrorists? Second, and more important, what apparatus has the Palestinian Authority created to enforce the rights of Israelis against Palestinian abuse?



The Israeli courts do enforce the rights of Palestinians against the Israeli government. Further, the Israeli government has always, to my knowledge, respected the final rulings of those courts. Even under Fatah the Palestinian Authority lacked any apparatus that would come close to giving a fair shake to Israeli citizens. In fact, even Palestinians probably get a fairer shake in Israeli court than they would in the corrupt kangaroo courts of Fatah or the Sharia courts of Hamas.

Scalping and Price Discrimination

All the major league sports teams are getting into scalping [Washington Post, reg. req'd].

NFL, NBA and NHL teams have partnered with Internet firms with names such as StubHub and RazorGator to reap a share of what is known as the "secondary ticket market," where ticket holders can resell their tickets, often at prices well above the price they paid for them.



The emergence of these new enterprises ends years of frustration for sports teams, which have watched as scalpers and brokers sold tickets for several times their value without teams being able to capture any of that market.

At first blush, one wonders why the teams don't just raise their ticket prices if they want to capture some of that market. But it is apparent that the demand for different events against different opponents generates different demand structures, and so single price monopoly models cannot be applied, especially not for all games throughout the entire season. In the past, scalpers have filled in the gaps, charging more than face value for popular events and charging less than face value for unpopular events.



But now the major league teams are getting into the resale business. And as this business becomes more lucrative, look for more teams to hold back a portion of tickets and "re"sell the tickets at (frequently, they would hope) much higher prices in the secondary ticket market.



A great example of price discrimination.

Job Immobility, NAIRU, and the Natural Unemployment Rate

Last week, the Trono Globe and Mail reported about a new C.D. Howe study that blames generous employment insurance benefits for job immobility.

[A] new report from the C.D. Howe Institute, one of Canada's leading economic think tanks, says the economy would be much stronger if Canadians were more willing to move to find work...



In June, the national unemployment rate fell to a 32-year low of 6.1 per cent. And in some parts of the country, particularly in Alberta, businesses are suffering because they can't find enough workers.



... The tendency not to move is particularly pronounced when it comes to Canadians looking for work outside their home province. Worker mobility within the province is about three times greater than inter-provincial movement.



Mr. Guillemette [who authored the study] says one of the obstacles to greater mobility is the federal employment insurance system, particularly the way it provides longer periods of eligibility and lower requirements in areas with greater unemployment. Such "regionally tilted" provisions give the jobless more reason to stay in areas with fewer jobs, he argues.



The report says the EI system has more effect on discouraging labour mobility among people who usually work only between 20 and 49 weeks a year.

Given the job opportunities in the oil patch of Alberta, and given the booming economies of southwestern Ontario and southern Manitoba, it seems pretty clear that many (most?) people who are unemployed in areas of high unemployment have chosen a life style over having a job. In fact the gubmnt has subsidized this choice. From the CDHowe study:

In deciding whether to move, individuals of all ages weigh the benefits and costs of moving, for themselves and their family. They consider factors like expected employment opportunities and earnings, differences in the cost of living and quality of life, as well as financial and psychological costs of moving. The accessibility of government services and benefits also plays an important role in migration decisions. In the case of the unemployed, access to Employment Insurance (EI) benefits is, of course, an important factor. The EI program has lower eligibility requirements and provides benefits of longer duration in regions of high unemployment. Such regionally tilted EI provisions give the unemployed some

reason to stay put rather than move to areas where employment possibilities are better.

In other words, the structure of the Canadian EI programme helps explain why Canada's unemployment rate (including the natural unemployment rate) is higher than it is in the U.S.



It may be heartless, but when people have a number of options, but choose unemployment so they can stay in the community where they grew up, we should acknowledge their decisions as choices, and not treat them as sad, depressed situations that the gubmnt must do something about.



Update: Brian Ferguson has more on the natural unemployment rate in The Maritimes.

[T]he boom in Alberta is drawing younger workers out of NB, and the combination of the availability of jobs and the higher minimum wage is probably increasing the quantity of labour supplied, but probably not enough to hold the equilibrium wage down. That'll make the equilibrium wage rise, from the sound of it by more than the increase in the minimum wage. Which means that supporters of higher minimum wages will be able to point to NB and say, see, the minimum wage went up and unemployment didn't.



Then, in the longer run, when the Alberta boom eases off and the equilibrium wage in NB falls a bit again, unemployment will rise, but they'll be able to say that it was obviously not due to an increase in the minimum wage because that hadn't been increased. In fact, simple correlations will lead some of them to say that the higher minimum went along with falling unemployment in the summer of '06, so obviously the thing to do when unemployment rises again is to raise the minimum wage again. It's separating out the various demand and supply factors like these which makes empirical economic analysis the thrilling, heart-pounding business it is (no, really - why are you looking at me that way?). [emphasis added]



But if there's labour market pressure at eight per cent unemployment, you're saying that the equilibrium (or, if you believe in such things, natural) rate of unemployment is above eight per cent? If so, there's something seriously structurally wrong with New Brunswick's labour market.

Longest Place Name in the World?

It is on Angelsey Island in Wales. My friend and I referred to it as LPG; others refer to it as Llanfair PG. Here is the train station sign with the correct pronunciation in phonetic English below the name; and check out the length of that url! (you may have to click on the photos below to see them clearly):







And here is the name of the town, with the translation below the name:

Update:Kevin Brancato wrote:

I tried posting the following comment on your latest post, but your blog software doesn't let words longer than 60 characters to be posted!



--Kevin



Some good news about the longest single word URL in the world:

Prior to October 1999 it was not possible to register .com domain names longer than 26 characters (including 4 for the .com suffix). This denied many businesses and organisations the ability to register their full trading names as a .com domain name. However in October 1999, it became possible to register domain names up to 67 characters in length (including the 4 for the .com suffix).

Some sad news:

And finally, sadly even the 67 character allowance for a .com domain name is still insufficient for the town of Tetaumatawhakatangihangakoauaotamateaurehaeaturipukapihimaungahoronukupokaiwhenuaakitanarahu

in New Zealand with a staggering 92 characters however even this seems positively tiny compared to the town of

Krungthepmahanakornamornratanakosinmahintarayutthayamahadilokphop

nopparatrajathaniburiromudomrajaniwesmahasatharn

amornphimarnavatarnsathitsakkattiyavisanukamprasit

in Thailand which is a whopping 163 characters long so long that it doesn't even fit on one line! However whilst the New Zealand place name is recognised by the Guiness Book of Record, the Thailand name is not.

Snapdraggons in the Parapet

Actually growing out of one of the crenellations of the parapet outside a third (second?) floor* window at Herstmonceux Castle.

*In most places in Europe, the ground floor is what we would call the first floor in North America, and the first floor is up a flight of stairs.

Hans Christian Anderson

Amazing. His statue even looks a bit like Danny Kaye.

Even more amazing: He seems to have laptop bag just like mine.

The Grand Hotel

Back in June, to get away from the castle for a few days, Ms. Eclectic and I spent a few days at The Grand Hotel in Eastbourne.

The service was wonderful, and for a series of bizarre reasons, they had to keep upgrading us, but we still did not end up with air conditioning (VERY rare in Eastbourne) or a room on the sea. Rather, from our room, we had an excellent view of all the birds who started yelling at each other by about 4:30 in the morning.

Worst Opening Line Contest

Here's the link (courtesy of Brian Ferguson) to a news item about the most recent winners of the "Dark and Stormy Night" contest, wherein people submit their attempts to write the worst possible opening lines to a novel. This year's overall winner:

“Detective Bart Lasiter was in his office studying the light from his one small window falling on his super burrito when the door swung open to reveal a woman whose body said ‘you’ve had your last burrito for a while’, whose face said angels did exist, and whose eyes said she could make you dig your own grave and lick the shovel clean.”

Gee, I don't know. That sounds like the type of stuff I often read while traveling! (see here, for example)



Brian's favourite was the winner in the romance category:

“Despite the vast differences in their ages, ethnicity, and religious upbringing, the sexual chemistry between Roberto and Heather was the most amazing he had ever experienced; and for the entirety of the Labour Day weekend they had sex like monkeys on espresso, not those monkeys in the zoo that fling their faeces at you, but more like the monkeys in the wild that have those giant red butts, and access to an espresso machine

Monkeys on espresso didn't do it for me. But this one sure did:

“A single sparkling tear fell from Little Mary’s cheek onto the sidewalk, then slid into the storm drain, there to join in its course the mighty waters of the Los Angeles River and, eventually, Long Beach Harbour, with its state-of-the-art container-freight processing facilities.”

That is truly amazing prose, especially with the tag line about "state-of-the-art container-freight processing facilities."



The writer of the overall winning entry put the icing on the cake with this admission:

“My motivation for entering the contest was to find a constructive outlet for my dementia.”

Brian and I both agree that some of Peter Robinson's lines might easily have won, had they been submitted.

Purchasing Power Parity and Denmark

According to the Big Mac Index, the Danish Krone is substantially over-valued and has been for many years. It sure looked that way to me while I was there. Hotels and B&Bs were very expensive, relative to other places I had visited. So were food, meals, clothing, souvenirs, etc. It didn't make sense to me that everything could be so much more expensive in Denmark than it is everywhere else. I wondered what other people are buying that is keeping the Krone over-valued relative to purchasing power parity [PPP]?



Oh, sure, Denmark producers export some beer, some cheese, some furniture designs, some architectural services, but what else is keeping the foreign price of the Krone up there? Why does the Danish Krone seem even more over-valued than the Euro, to which its value is pegged?



Energy, according the CIA Factbook. But that source, too, notes that the nominal exchange rate differs noticeably from the PPP exchange rate.

English Heat and the Problem of Melting Highways

The top national story in England these past few days has been the heat wave. On Wednesday, the temperature set an all-time national record in a town not far from where I have been living.



One problem with the heat has been that the asphalt on some roads has been melting. In fact, on Tuesday a friend and I were driving up north (where the photo below was taken), and we noticed that the hot tar from the highway was sticking to the tyres of the car at times.



And so, to keep the roads from being destroyed, the road commissions are sending out the winter sanders (or gritters, as they are called here) to spread fine stone chips and coarse sand over the roads to protect the melting tar.



Winter sanders in the heat of summer — what a sight!

Update: Jack says, "You have to admire the English for their true grit."



Up-Update: BenS adds, "John, you’ve become a real Roads Scholar. And that can be a real avenue to success."

Instant Replay, Technology, and the U.S. Open

It was only a matter of time.

The U.S. Open will be the first Grand Slam event to review disputed calls electronically.



... The technology will be used at the 10 U.S. Open Series events leading up to the Grand Slam in August.

The costs of using digital electronic technology to review line calls quickly has been plummeting. Meanwhile the technology has been improving over time, with the result that people tend to trust the electronic version of what happened more than they trust the line judges or the chair umpire. Result: the expected benefits of using the technology outweigh the expected costs, and it gets adopted.



But why will the tournaments use the NFL challenge-type system?

Each player gets two challenges a set to review line calls. A player only loses a challenge if the call stands. Players will receive an additional challenge during a tiebreaker, but can't carry over challenges from one set to another.



The system will be used on stadium courts, showing replays on video screens.

Why bother with challenges and guesses? Why not just programme the system to beep if shot is out?



And how much longer will it be until similar technology is used to call balls and strikes in baseball?

Denmark and Design

A couple of weeks ago, I spent some time in Copenhagen. One of the things that impressed me is the Danish sense of design. Even the baggage carts/trolleys at the airport have some aesthetic appeal, possibly because they are different from those everywhere else, possibly because they have some clean lines and curves that seem to epitomize my stereotypical view of "Danish Modern".



Many streets in downtown Copenhagen have shops that feature this general style of furniture and other trappings of interior design. I especially enjoyed just wandering down Bredgade and just standing in awe as I looked in the windows. Here is a lamp that really intrigued me for some reason (as you can see, it was raining when I took this photo):

At the same time, I was less-than-impressed with the aesthetics of the new Copenhagen Opera House:







Here's another photo of it, straight on:







And here is one more view of the opera house (and the Amalienborg Palace) from the dome of Frederick's Church (Marmorkirken):

The Whitechapel Tube Station

This sign greets travelers as they emerge from the Whitechapel Underground station in London, England.

I tried to think what the impact of this sign might be.

• Would it induce (m)any people to turn around, get back on the train, and go to a different stop?
• Would it induce people to stay in well-lit areas with lots of people around?
• or would it lead people to avoid the area in the future?

This is an unusal sign. Most warning signs like this say something like "Beware of pickpockets and purse snatchers", things people can do something about right on the spot. But I'm not quite sure what the intended goal is of the authorities who put up this sign (other than to inform people about risks? you bet!)