Happy Ramadan from Colonel Sanders

(Picture From El Vomitar)
One of the most memorable presentations one of my student has ever given mentioned that KFC offers a Ramadan meal in many Middle East countries. I thought of it today when I heard today was the first day of Ramadan.

DC Tourist Tax

With a new fare increase metro has put in what I think amounts to a tourist tax.

There are two ways to pay for a metro ride a paper fare card or a Smarttrip card. The paper cards can be purchased from vending machines in every station. Smarttrip cards can be purchased at vending windows in just a few stations and CVS. The Smarttrip card cost $5 plus whatever fare you put on them, while paper fare cards have no upfront cost before the fare.

With the new fare increase rides with a paper fare card cost 25 cents more than a Smarttrip. So in less you go on 20 metro rides, it's cheaper to use paper cards. On average though tourist who only use the metro a few times will pay more per trip than a regular native rider.

Even better for DC folks Smarttrip cards will be reduced to 2.50 at the end of August.

Final thought the fare increase is because the metro system is not earning enough money. Since metro has a monopoly on mass transit, this means it could gain even more profit by raising prices even further, but it is not a profit maximizer.

Development Work Isn't Easy Example 762

“Until they repay me,” he said, “I keep their ration card.”

Quoted from a NY Times Article from an Indian money lender who sometimes has ration cards for food assistance to as many as 150 families who owe him money. The money lender uses the card to buy cheap grain with government support then resell it for the regular price, while his borrowers starve.

I'm not sure there is an easy solution or if the ability to borrow against your government assistance is always a bad thing, although in this case it is.

Thanks Dad for the article

Is Canseco Robust?

Jose Canseco was a muscle bound slugging outfielder who currently is the self proclaimed poster boy of steroid use. His recent book Juiced describes how he helped several players access and use steroids throughout his career.

A popular belief is that steroids are the cause of the increase in home runs baseball saw during the late 1990s and early 2000s. If steroids increased home runs and Canseco helped players get steroids then we would expect players who played with Canseco to hit more home runs once he became their teammate. A study by two economists Eric Gould and Todd Kaplan in their analysis of Canseco's teammates found this very result. (see this slate article for a summary)

On reading the paper I felt the results seemed too good to be true. I'm not accusing the authors of faking the data, but I was curious how the results would hold up if they changed a few things that didn't seem typical in the way player performance is typically estimated. It looks like I wasn't alone JC Bradbury examined how the results would hold up if some things in the way the Canseco impact on his teammates' home runs were changed (link). In short Bradbury used only the years Canseco played 1985-2001 instead of all the years Canseco's teammates played 1970-2003. Bradbury made some other changes that I tend to agree with. When he makes these changes, Canseco no longer has a positive impact on his teammates home runs, if anything it's negative.

It's not clear if the Canseco effect via steroids exists or not, but Bradbury's analysis caste doubt on it. I think finding the Canseco effect doesn't exist could be almost as interesting.

The Kaplan and Gould paper was discussed in both slate and Freakonomics. On the one hand it shows economists can get a little too excited about a paper that has not been vetted. On the other hand within a few days or less, a new analysis was posted and our understanding was increased.

Flight Insurance 25 Cents

I was at the Smithsonian Air and Space Museum this weekend and they had an exhibit with an old vending machine that used to be in airports that for one quarter would sell you $7,500 worth of life insurance that would cover you in case your plane crashed (pictured here). A quick calculation shows that for the insurance company to make money planes would have to have fatal crashes in less than 1 in 30,000 cases. This source suggests in the 1960s crash rates were 1.2 out of 100,000 when these machines were popular.

However, this assumes that someone buying insurance will not influence the probability of a fatal crash. In researching these machines, I found the story of United Flight 629, which was bombed by the son of one of the passengers who had purchased extra insurance at the airport for his mother's trip.

So perhaps that's why we don't see these machines much anymore, although I have read they are still around.

Fording the River: Go West and El Norte

As a kid I loved to play the game Oregon Trail. If you haven't played the game before, it simulates migrating from Independence, MO all the way to Oregon in the mid 1800s. The game involved a lot of economics, at the beginning you had a limited budget to purchase your supplies (ox, bullets, spare parts, food, clothes). You also have to decide how to allocate your time (keep going on the trail, hunt, rest). The trail also presented dangerous diseases and river crossings. In short like the families that actually traveled the trail in your game shows you spending almost a whole year and a few thousand dollars making a dangerous trip all in the hopes of a better life.

Although the trip may be shorter, it many ways the economic analysis that most families make in Mexico to travel the trail up to the United States isn't much different. There is an upfront cost in some ways on a similar scale to those on the Oregon trail, there is chance of death or deportation, all in the hopes of higher incomes in a different place.



This post was inspired by the below video, which any Oregon Trail fan will love.

Were You Raised in a Barn?

For those of you who haven't been asked "Were you raised in barn?" it's a popular saying with parents of children who leave doors open. I wonder if some parent is shouting it now at store owners across the US who leave their doors open in the summer to let the breeze of AC entice customers into their stores.

Well one man from Bowie Maryland made a video of several stores at his local mall that left their doors open on a 100 degree day(see the Youtube video below or read this Washington Post Article)

Under most circumstances whenever people consume more of something the price is going to go up, so by fining stores that leave doors open, we might be able to lower electricity prices although the impact is likely to be small.

Another reasons that it might be better for stores to close their doors is that using energy creates pollution as power plants have to burn more coal and natural gas to provide the extra AC. This pollution impacts even people who don't shop at the Bowie mall (we call this an externality) many economists even relatively conservative ones think this is a bad result. For example Greg Mankiw a former economic advisor to Bush has long been a proponent of the Pigou Club, which proposes creating taxes on gas and electricity use to put the cost of the pollution on the user.

I'm agree with the Pigou Club, but I also like shout "Where You Raised in a Barn?". The good news is I can do both.

Finally, I apologize if I offended anyone who was actually raised in a barn, I hope this video will show that I actually think barn folk are great people.