Friday, July 31, 2009

Shanna's Elements of Style: Denim

This week Shanna gives us her third set of thoughts on her Elements of Style. Today, her topic is denim. As I understand it, denim is a staple in any well-balanced style diet. It's a must-have, so eat up! Here's Shanna.
My Elements of Style -- Denim by Shanna Cookson

Dressed up or dressed down, jeans are the heart of style. Jeans also offer an assortment of options. Although not all jeans work for every set of legs, there’s surely a style that works for you. Here are three of my favorite types of denim.

Bootcut. These are the most basic of all denim, and they come in every wash, fit, rise, and color under the sun. Believe it or not, the online store at Victoria’s Secret has a great selection of denim. The jeans come in inseams ranging from 30” to 36,” size 0-16. You do not have to have a supermodel’s body to wear their jeans. Now that’s something worth celebrating!

Image taken from www.victoriassecret.com

Skinny. If you’ve got it, flaunt it, baby! Skinny denim looks great tucked into boots or worn with flats. For a casual winter look, tuck those jeans into Uggs, or into a heeled boot for a dressy night on the town.

White. Every girl can rock a pair of crisp, white denim. Pair white jeans with a tank, t-shirt, or blouse. White jeans are versatile. Are you reluctant to try them for fear of getting them dirty within seconds? Don’t worry. The benefits definitely outweigh the costs; white jeans look especially chic. When your jeans need a little love, add a little Oxi-Clean to your load. Even though Oxi-Clean works well, my favorite product for keeping whites bright white (and to prevent them from turning yellow), is Mrs. Stewart’s liquid bluing. All you have to do is mix a few drops of bluing to a quart of water and add the mixture to the wash water or final rise. It’s that simple.

This is the last Friday -- at least for a while -- that we'll be graced by Shanna's Elements of Style. Next Friday, we return to some writing tips.

Thursday, July 30, 2009

Update: Magazine Subscription Math

On June 9th, I wrote a post about how our subscription to Money Magazine expired. On the magazine notifying us that "Our Money was running out," they attached a bright green scare-tactic cover that said "DON'T LOSE MONEY MAGAZINE" in bold yellow colors.

The image haunted my dreams, and it bothered me enough that I wrote a post about the strangeness of the ad campaign. I wrote the article well after we had trashed the magazine without reading it. At the time, I was dismayed that I couldn't share pictures of the magazine cover with you. But, much to my delight, when I checked the mail today, I found another magazine from Money with the same scare tactic ad.

When their first dose of bad advertising didn't work, they tried it again. Needless to say, I jumped at the opportunity to take pictures this time around. And, no, we're not renewing our subscription.

Here's the cover:


Here's the back cover with the phrase that haunted me:



Here's the inside of the front cover:



In case you can't read that, here are the three steps:

1. Detach Renewal Savings Card on front
2. Check off number of MONEY issues you want to receive.
3. Mail your Savings Card TODAY!

And, that's how you get... "financial security"? No. That's how you spend $10 or $20 or $30 on sensationalistic financial advice. Sounds like a threat to my financial security. In my opinion, you have better ways to spend $30.

To Money Magazine's credit, acting on the advice inside the cover might help with financial security, but then again, maybe not -- given that the magazine wraps its advice in such ill-informed advertising.

And, lastly, the inside of the back cover.


It amuses me that their advertising is this dishonest (you can save by renewing for three years, but it costs you the same per year as a one year subscription), yet they still claim that what's inside the magazine is "worth more than the subscription price."

I think I'll save my money.

Update: This article is featured on the Economy and your Finances Carnival.

Wednesday, July 29, 2009

Stimulate Your Own Economy

I wonder if Tyler Cowen is behind this:


If so, it's a great product placement. If not, imitation is the finest form of flattery... unless you're This Old House.

** My wife took the photo today while we drove just north of Chicago. Fortunately, traffic was slow.

Avoid doing this...

As I stood in line to pay for my sandwich today, I got an unintentional life lesson. Here's the story:

The woman in front of me had a sandwich, some chips and a bottle of water. The woman handed the cashier her credit card. Then the cashier entered the prices into the register; the total came to $8.25.

WOMAN: "That was supposed to be $5 for the combo."
CASHIER: "Sorry. The combo is with the fountain pop."
WOMAN: "Well... the soda machine is not working."

**Note: I was standing there with a medium fountain pop, properly filled.**

CASHIER: "I can't give the discount myself, but I can call a manager."
WOMAN: "Whatever! Just give me my card."

The cashier gave the woman her card back. The woman and cashier stand there. Then,

WOMAN: "Didn't you run it?"
CASHIER: "No"
WOMAN: "Ugh"

The woman gave her card back to the cashier. The cashier charged the card and handed the woman her card and a slip to sign for the payment.

WOMAN: "This is ridiculous!"

The woman walked off with her food.

Life advice for today: Life's too short to be that rude. Whatever you do, don't ever treat another human being like that. There's no excuse.

Tuesday, July 28, 2009

Human capital: what is on the inside counts

Here's an excerpt from a conversation my wife and I had the other day:

Tony: Did you marry me for my money?
Shanna: What money? **laughs**
Tony: Good point.... Well then, did you marry me for my human capital?

I asked this question hoping that her answer was yes, but my hope rests on my unconventional view of human capital. Let me explain.

First a review: human capital is the stock of knowledge and skills embodied in a person. Human capital makes workers more productive, but that's not all. Because people with more human capital are more productive, they tend to earn more income.

This fact tends to dominate how people think about human capital. Namely, people earn degrees and learn on the job to build up their own stock of human capital. Most people go to school not for the associated good feelings, but to increase lifetime earnings. The investment in human capital, therefore, is often conflated with an investment in future earnings.

So, you can see what my wife must have been thinking when I asked her if she married me for my human capital. She probably thought I was asking if she married me for income I would eventually acquire. In other words, did she marry me for my future money? Accordingly, she said no.

That wasn't my point in asking the question.

Sure, having a good stock of human capital means that you can earn more money down the road, but there's a deeper story. Nobel Laureate Gary Becker loves to point out that human capital also makes you more productive in other activities. In other words, human capital is not just for inflating your wages, but it makes you better at life too.

Moreover, human capital comes in many forms. Human capital can be a well-timed sense of humor; the ability to solve problems; experience working with and raising children; or the ability to write well. Some of these skills are specific; some are general, but all types of human capital require a significant investment and they make us better at using our time. Now, what wife wouldn't want that in a husband?

For that matter, a big reason I married my wife is that she's human-capital-licious. She's smart; she's a great shopper; she has a well-developed sense of humor; she makes a great to do list; she's a wonderful cook; she often challenges me with thought-provoking questions; she'll make a great mother one day. And, much more. Moreover, I view all of these attributes of her personality as bits of human capital.

So, should you marry someone for his/her human capital? I encourage it. That's because human capital comes with the package. As my wife's investment in human capital is forever a part of her, I can only capitalize on that human capital by sticking with her for the long haul. I certainly plan to do so! Because I married her for her human capital, our relationship has better staying power.

More importantly, being with someone for his/her human capital reflects an old adage: what's on the inside counts. The takehome point is stronger: love people for their human capital. Such a relationship truly is an investment, and that's a formula for a long-lasting relationship.

Monday, July 27, 2009

Opportunity cost: A story in pictures

In a previous post, I told the story of our first flat tire in Chicago. In a nutshell, we discovered that there are no tire stores in our Chicago neighborhood of Hyde Park, whereas similar Chicago neighborhoods have multiple places to fix flat tires. I am still puzzled why there are no tire places nearby.

Confusion aside, we needed to get the flat tire repaired. Before we can get our car into the nearest shop, I had to replace the flat tire with our spare. This was no small task given my subpar mechanic skills and the fact that my muscles had undergone a year of graduate student atrophy. Forty minutes after I started, the spare was successfully on the car as I collapsed in a heap in our living room.

As I was useless for another twenty minutes, my total time cost of changing the tire was one hour just to get the spare tire on the car. Economists call my next best option for using that time the opportunity cost of changing the flat for the spare. In plain language, opportunity cost is what you give up to get something.

A lesson in pictures. My opportunity cost of changing the spare...








is the value of my next best alternative. Perhaps, this is what I would have been doing:


Or, maybe we would have attended a White Sox game:



Or, there's golfing...



I could have been rearranging our dirty laundry to look like a person...




Or, pondering life by Lake Michigan...



But, most likely, I would have been studying...



I'll leave this open ended with a question to the readers. Studying was my next best option, but as you can see from the pictures, it doesn't exactly make me smile. Where's the value? And, how could we figure out how much value there is?

Sunday, July 26, 2009

Five things I read today -- 7/26

1. Krugman: Why markets can't cure healthcare.
2. Mankiw: In health care reform, "Whom do you trust?"
3. Marginal Revolution: Cowen on free market healthcare.
4. Economists Do It With Models: Economics is Everywhere, Dr. Seuss Edition.
5. Freakonomics-Hamermesh: Taxes I can't complain about.

Enjoy the links.

A question I had while reading #1 -- 3: What exactly is "free market healthcare"? Do Krugman, Mankiw and Cowen have different definitions in mind?

Companies Tony Loves: Young House Love

This week's installment of the Companies Tony Loves Series is on Young House Love. "Companies Tony Loves" posts describe why innovative companies and business practices make us all better off, and therefore, why they deserve our love. "Companies Tony Loves" is featured every Sunday on this blog.

More than being a place to sleep at night, a person's home is a safe harbor. Home is where we retreat after working. Home is where we entertain friends and family. We spend a large fraction of our time at home, and that time is or should be therapeutic. It's no wonder that people frequently look to improve their abode.

Fortunately, home advice is widespread. One of the wonders of a market economy is that it is big business to provide advice on home decorating. If people demand something, a group of suppliers will inevitably rush to satisfy that demand. Case in point, Home and Garden Television (HGTV) has 24 hours per day of home decorating/ property buying advice. And, by all indications, the television channel is thriving.

Another case in point: Martha Stewart.

Beyond HGTV and Martha Stewart, there are loads of magazines and television programs on other networks that are entirely devoted to improving your home. On my subjective rating of value, these programs are much better than shows that merely serve to entertain us. Not only does HGTV entertain their audience, but they provide useful tips that we can use. I rarely get implementable advice from Jack Bauer.

But, these big business programs fall short on a number of dimensions.

First, big business home advice is largely top-down. The message is "We're the experts. We know what we're doing. Here's something you should do." What's wrong with this? It doesn't harness the personal expertise of the listeners, readers, viewers, and followers.

Second, big business home decorating tackles the common projects that most people encounter. After all, they're in it to attract eyes. There's incredible value to this, but tackling the common projects often leaves the home decorating advice in a sterile state: "Everyone should do granite counter tops, crown molding, and sconces... you must have the sconces."

Don't get me wrong, HGTV is great, but this week's Company I Love is even better. Young House Love is a home decorating blog that capitalizes on the Internet's ability to hold an open conversation. Just like the larger outfits, The Youngsters give great home improvement advice. But, John and Sherry -- the couple in charge of Young House Love -- do a tremendous job of personalizing their advice to the audience.

It's the open, welcome-to-our-site philosophy that sets Young House Love apart from the rest. Here are some other things that the Youngsters do well.

1. Giveaways. John and Sherry frequently give away wonderful home accessories to people who comment on their blog. They host these Giveaways every week or so (usually on Mondays), and they randomly give the prizes to people who post comments to the Giveaway post. Aside from generating a buzz, this is a great way to build a sense of community on their blog.

2. Design Dilemmas. John and Sherry contract out their advice at $250 per dilemma solved. As part of the deal, they write a post on the design dilemma and their solution. As their advice is great, there's no shortage of design dilemmas for John and Sherry to solve. Because they post their suggested solution to the web, everyone can benefit from their work.

Moreover, the open conversation about the design dilemma allows readers to comment. As the readers have good design sense themselves, the advice augments the spectacular work that John and Sherry put in. The result of this format is that people's design dilemmas are given a solution that's better than any one designer could provide. That's something worth the price, but for the readers it's also worth paying attention.

3. Reader Redesigns. John and Sherry's blog is a welcome place for comments and it feels like a community. As a result, readers who have undertaken their own designs write in to The Youngsters to show what they have done. John and Sherry call these posts "Reader Redesigns," and they provide inspiration beyond what John and Sherry could personally dream up.

These are just a few of the reasons to love The Youngsters; there are many more. The common thread that ties Young House Love to success is that John and Sherry welcome comments, and they channel other people's inspiration in a way that is imaginative and fun. At Young House Love, you get more than you put in, but then again, I bet the same is true for John and Sherry.

If you have an appreciation for home decorating or you are stumped with your own design dilemma, you should drop by Young House Love. John and Sherry won't disappoint.

If you have ideas for Companies Tony Loves, please let me know. It could never hurt to have more suggestions!

Saturday, July 25, 2009

Poll: Mankiw versus Krugman

In my spare time, I have been following the blog-based skirmishes between Greg Mankiw and Paul Krugman. To catch you up, here's a recent history of the clash:
Mankiw and Krugman have fought with words, columns and blog posts. It has been fun to watch, but I think the question on every economics graduate student's mind is: When will they strap on the helmets and joust American Gladiator style?

That leads me to my poll question of the week: Who would win in a joust? Krugman or Mankiw?

As with all of my polls, please vote ealy, tell your friends to vote and even your local Nobel Laureate. The poll is open for a week. I look forward to seeing what you have to say.

Five things I read today -- 7/25

1. I found this one with a search for "How Tall is Paul Krugman?" Answer: 5 ft 7 inches, and Americans are short too.
2. I found this one with a search for "How Tall is Greg Mankiw?" No Answer, but I did get this cool link from Marginal Revolution: Tall People are Happy.
3. An interesting nudge at Consumerology.
4. Making this Home: What to do with old postcards.
5. Time: Why people in the South are fat.... but not Montanans

Enjoy!

Friday, July 24, 2009

Five things I read today -- 7/24

1. Politico: At big moment, President Obama goes small.
2. Krugman points out that the blue pill-red pill allusion was lost on most of us.
3. MTV Movies: Obama enters the matrix with blue pill-red pill talk.
4. YouTube: The blue pill is the wrong choice.
5. Washington Examiner: Take the Red Pill, Mr. President.

If Obama meant the allusion, he wants to give us cheap health care that keeps us blissfully ignorant of a dangerous truth -- that we are not free. Now, that's crazy talk; is it what Krugman meant when he linked to it?

Enjoy!

PS... I have my last big test today. I'm going to go take the red pill and see how deep this rabbit hole goes!

Elements of Style: How to wear black and be fabulous

This week, we have another guest post from Shanna in her own The Elements of Style series. In last week's installment, Shanna gave some helpful tips on how to be stylish with a white button down shirt and a scarf. Today, she tackles the challenge of wearing all black. Black sounds boring, but Shanna shows that it can be more stylish than you think.

How to Wear All Black and Be Fabulous by Shanna Cookson

You might be thinking, “All black? Why would I ever want to dress in a monogamous color?” OK. You might not be thinking that, but really, black? Really! Black makes you look sophisticated and classy. It also scores some major bonus points for creating a slimmer silhouette.

Many department stores are adhering to an all-black dress code. If you work in such a field, nothing is chicer than wearing all black with great accessories. For those of you who remember last week’s Elements of Style post, I recommended wearing a scarf to achieve a chic and sophisticated look. But besides sporting your favorite scarf, you can even wear all black with bold, metallic jewelry. Gold or silver. Your choice. Just keep in mind that accessorizing is the key to making all-black attire look stunning.

Although wearing black is easy to achieve, be wary of these fashion pitfalls that happen to the best of us.

  • Always make sure the shade of black in your top and bottom match. If they are slightly different hues, remember to sport a scarf or fun jewelry to draw attention away from the varied black tones.
  • Remember texture. Just like Mary Kate and Ashley Olsen, similar fabrics like to stick together. Lightweight fabrics including silk, chiffon, and rayon should be worn together, while heavier fabrics such as wool, tweed, and chenille should stay in their own league.
  • Rock n’ ROLL. As much as I love black, it tends to show every piece of lint and pet hair. A quick fix is using this Mini Travel Lint Roller. It fits in your purse, is safe on all fabrics, and two pack is only $4.95!
Thanks for dropping by! Join me next week for a discussion of delicious denim. See you then.

Thursday, July 23, 2009

Five things I read today -- 7/23

1. Mankiw and Krugman have different takes on Obama's press conference.
2. Aplia has a blog.
3. Freakonomics: When taxpayers welcome taxes.
4. NBER (via Freakonomics): Insurance makes you fat. There's a paper on that!
5. Marginal Revolution: The soda machine puzzle. I think comment #2 is right.

Enjoy!

Google Analytics: How to make the most from learning about your visitors

In a previous post, I talked broadly about the capabilities of Google Analytics, and I showed off some of the basic mapping tools through telling a short history of this blog. This post provides practical advice on using the mapping functions in Analytics to your advantage. Here, I focus on getting the most from the mapping functions. In the future, I plan to point out some of the other cool features of Analytics.

Aside from being easy to read, Google Analytics maps are interactive. This interactivity is my favorite feature of Google Analytics. To show how this works, I'll take you on a journey though the Google Analytics maps.

The Map Overlay feature starts by giving you a world map. As the legend in the lower left hand corner demonstrates, areas with darker shades of green have accounted for more visits.



Clearly, my blog has primarily been visited by my fellow Americans, but that does not tell me much. We want to know more, and we can investigate by clicking on The United States in the world map. This brings us to a map of the fifty states.



From the map, it's clear that Illinois and Montana have accounted for the most visits, but let's investigate further. When we click on Illinois, we are given city-level information in the form of circles whose size corresponds to the number of visits from that city. Here's a view of the traffic from Illinois:



Chicago really stands out on the map; Chicago suburbs have contributed a lot of visits as well. Do you want to know which Chicago neighborhoods accounted for the most traffic? What about your visitors' street addresses? No can do. Even though greedy bloggers like me want that information, Google is vigilant about privacy. Google Analytics most detailed map is the state map with city dots.

But, that's already more information about your visitors than most people would expect. It's hard to be greedy when Google is so generous with the information.

How have I put this information to use? You may say, "So what? Now, you know where your visitors are coming from, but do you really have enough information to use?"

The answer is Yes. There's even more information than the maps suggest. Below each of these maps, there's detailed information about the visits from each city or state or region. For example, I know that big red dot on the Illinois map corresponds to 812 visits from Chicago. The average number of pages per visit is 1.77 and the average Chicagoan's time on the site is one minute and 28 seconds. For each dot, I have the same information.

Why's this useful? This information tells me where my content is best received. For example, if the average number of pages per visit were 1.01 for a region, that would suggest that those viewers come to my page, and immediately, leave. They don't see what else I have to say.

There are two interpretations of few pages per visit. First, the content is bad. Therefore, people exit quickly. Second, the readers are fickle, and would leave quickly anyway. In either case, low pages per visit indicates that you should to focus your blogging resources elsewhere. Your goal is to engage your readers, and that happens as they click through to your other content.

How do you discover what content works for attracting and keeping visitors? Analytics has another wonderful tool that is integrated with the mapping features: cross-classification. Analytics allows you to cross-classify where your viewers come from with what pages they've viewed.

Where does Analytics allow you to do this? There's a dropdown menu between the map and table of information about the map. For example, if I want to cross-classify by Landing Page, I just get my screen to look like this:



Of the 812 Chicago visits, 483 came to the front page first, 93 went directly to Rules for Driving in Chicago, 71 went to Companies Tony Loves: The Windy Citizen, and 34 went to Who Pays for Chicago Fireworks?

Moreover, the report also gives me the average time spent on the site and the average number of pageviews of someone from Chicago who visited that article first. Now, that's useful feedback. I wrote the Windy Citizen piece both because I genuinely like The Windy Citizen concept and because I wanted to share my other ideas with Windy Citizens.

Therefore, it encourages me that the average number of pageviews from the 71 Windy Citizen visits was 1.56. People were clicking through to see what else I had to write -- not on every visit, but people who read that article generally engaged the ideas in my blog. That's what I wanted. By contrast, other articles that I thought would be more successful in engaging readers were not. That's useful feedback -- both positive and negative.

And, this is just one feature of Analytics that I actively use. There are others, and as an added bonus, the Google Analytics interface is intuitive and organized. If you have a website you want people to read, Analytics is a great toolset for discovering the strengths and the weaknesses of your content. As Analytics provides comprehensive information on your web traffic, your website will be that much better if you put it to use.

Wednesday, July 22, 2009

Five things I read today -- 7/22

1. MRevolution: Yglesias v. Yglesias.
2. MRevolution: Link. Jupiter has new earth-sized hole in it. Thanks Jupiter. If not for you, we might have to take the hit.
3. Mankiw says "Whatever" to Klein.
4. EDWIM relays cool graphics in Ever Wonder Where All of Your Money Goes?
5. Krugman on why we shouldn't hate Cap and Trade because of potential speculation.

Comment on #4: Isn't 4.8% on gasoline a bit excessive? Maybe we need to raise gas prices through some Pigouvian taxation. Really, raise taxes on gas, decrease taxes on income. It just might be a good idea.

Enjoy!

How to share a washer and dryer

Doing laundry can be frustrating without a washer and dryer in your apartment. As we live on the third floor and the laundry room is the basement, one of us treks down and up three flights of stairs whenever it's time to change a load of laundry. At least, it is good exercise!

We share one washer-dryer set with the six other units in our building. Inevitably, we and our neighbors have time conflicts. For example, Saturday is a popular day to do laundry. We frequently show up at the laundry room lugging a load of laundry, some quarters and a bottle of detergent only to find that one of our neighbors has commandeered the washer and dryer.

What's worse? When we run into this problem, the washer and dryer are usually not running. And, who knows how long it has been that way? Did the neighbors forget that they were doing laundry? Did the washer just shut off? Who knows? Moreover, I'm not about to knock on the door of each of our neighbors to find out. It's also not optimal to do the stairs several more times until we find an unoccupied laundry room.

I want to be a good neighbor, yet I want to do my laundry sometime today. What do I do? Here's one solution we tried the last time we did laundry, and it worked!

When we came across the occupied laundry room, we left the following note:
Dear neighbor,

We were also hoping to do laundry today, and we have a lot of laundry to do. If you wouldn't mind letting us know when you plan to finish, we would greatly appreciate it.

Please return this note to our apartment door (the third floor apartment on the right) with what time you plan to finish. That way we can plan our day around when we can do our laundry. If you have not returned it by 11:00 a.m. (note left at 9 a.m.), we'll take that as a sign that you've left your laundry for another day, and we'll take our turn.

Thank you,
The Cooksons


An hour after we left the letter, our neighbor returned the note telling us when she planned to finish. We were able to unobtrusively schedule laundry for that day, and there were no neighbor quarrels.

This strategy for sharing the washer and dryer worked because it fostered communication. A clipboard/sign-in system at the washer and dryer might have the same effect if our landlord or any of our neighbors were motivated enough to start that system. As for right now, we're happy with just leaving the note. It's simple and convenient for everyone involved. And, no one's laundry has to end up on the floor!

Tuesday, July 21, 2009

Five things I read today -- 7/21

1. The Provocateur: Walmart, the Unions, and the Chicago Way
2. EconTalk: John Taylor on the Financial Crisis.
3. Ben Casnocha on Tyler Cowen: Education as a Placebo Effect
4. Mother Nature Network: 7 Places Climate Change Could Spark War
5. Random StumbleUpon Find: Had my own blog.

Enjoy!

Who decided that some professions are noble?

There is always a line at the Subway sandwich shop where I have lunch. Subway usually has about six bread options, but today, they were out of everything except for wheat and honey oat. As I made my way through the line, I noticed that the worker explained to each patron that there were only two bread options. The worker was clearly not happy about having to explain this deficiency to people and her irritation showed; she practically yelled the remaining two options to people.

I just ordered my sandwich efficiently and waited for it to be toasted. As I was waiting my turn in the lettuce-tomato slot, I watched as two more people encountered the rude worker. Then the next guy in line, who hadn't been paying attention, ordered his sandwich: The worker said, "Alls we have is wheat and honey oat." The customer replied, "Whatever is fresher."

That was not the right thing to say. If the worker was agitated to begin with, she was downright angry after that comment. For the remaining time I spent at the counter, the workers just looked at each other with sideways glances, frustration and shame. It was not a pleasure to dine with them today. And, that's mostly because it's clear that they hate their job.

Honestly, I don't blame them. These Subway workers go to work everyday, and they have to deal with customers who show them very little respect. When they return home, they cannot talk about their time at work as something that was meaningful in their life because ... well... society does not respect sandwich artists. That kind of sentiment can wear on you. Not many people thank the worker for making our sandwich, or tell the cashier at the food court to have a nice day.

In contrast, we have parades for teachers, firemen and police officers. Workers in these noble professions frequently receive public gratitude. A significant portion of the population feels as if they owe a teacher a piece of their heart for being a teacher. Very few people feel that they owe their local department store worker anything but criticism.

What are the noble professions, anyway? Teachers, firemen, soldiers and police officers have noble professions; they frequently receive public gratitude just for doing the work they do. A big reason for this public gratitude is because it is politically popular to show public gratitude to people in noble professions. Doing so makes you appear noble yourself.

Some other professions carry a negative social stigma. It's politically popular to hold disdain for these jobs. For example, plenty of people hold disdain for our consumer culture, blaming our financial troubles on consumerism (at least in part). Indirectly, this creates a negative stigma on any sort of service job: sandwich artist, retail sales associate, or cashier at Walmart to name a few.

What's the purpose of noble professions? I'm not sure. We might believe that people who work in noble professions are underpaid. In this view, we bestow gratitude on workers in noble professions to compensate them better. But then, the flip side of this perspective is that we bestow disdain on ignoble professions (i.e., retail and sales) to incentivize workers from being in those professions in the first place.

On the other hand, when you verbally accost your sales associate, what do you hope to accomplish? Are you seriously trying to incentivize the worker to switch careers? Even if that's the effect of your insults, I doubt that's why you mistreat sales associates and sandwich artists. I think it's because some people are just ungrateful, and when you're the customer, being ungrateful goes unpunished. After all, the customer is always right.

On a more serious level, it's wrong to take sales associates and sandwich artists for granted. First, the person behind the counter is just as human as you are. On that fundamental level, you have no right to judge. Second, sales associates and sandwich artists obviously provide a service you're unwilling to provide, and you value that service enough to pay their wages. Put differently, how would you like to make your own sandwich? Or, why didn't you shop online?

Monday, July 20, 2009

Five things I read today -- 7/20

1. ChiTribune: It's easier to sell drugs than to sell water in Chicago.
2. ChiTribune: We should have a Walmart on the Southside. Speaking of Walmart...
3. Mankiw: Is "deficit neutrality" too easy a test? Yep.
4. Krugman: Ketchup Economists. Is he thinking Harrison and Kreps, or something else?
5. Tabarrok: Calling for an independent Federal reserve is disingenuous.

Enjoy!

Technical note for economists: When I first read #5, I asked myself Doesn't he ignore the time inconsistency of the optimal policy? That is, it's optimal to commit credibly to low inflation, and one way to commit is to establish an independent Fed with the clearly-stated objective of keeping inflation low.

Then, I found this paper by Albeseni, Chari, and Christiano, which applies some serious rigor to that very question. The authors begin their conclusion by saying, "How severe is the time-inconsistency problem in monetary policy? Not severe at all, according to this study."

On the other hand, the authors point to another study of theirs that comes to the opposite conclusion: "Elsewhere, in Albanesi, Chari, and Christiano 2002, we have displayed a class of empirically plausible models in which lack of commitment may in fact lead to high and volatile inflation."

What should we take from this? The authors say, "Should we conclude from our results here that lack of commitment in monetary policy cannot account for the bad inflation outcomes that have occurred? We think such a conclusion is premature."

Therefore, we cannot reject the hypothesis that Congress will be tempted enough by the short-term benefits of inflation to revise away from the long-term optimal monetary policy. Placing the Fed under Congressional perview might still be a bad idea, but it might not.

The lack of a conclusion is frustrating if we want to know what to do. Instead of looking at what the authors write, let's look at how they vote. Did any of the authors sign the petition? No.

I suspect the authors are either still undecided (and cautious), or they believe that time inconsistency in monetary policy really isn't that big of an issue. After all, they have 71 equations that prove it.

Seeing green...

I just conducted a Google search for the word Green. Only one result on the front page was not directly related to environment, a Wikipedia article on the color green. Of course, that's not surprising, but that only makes me wonder why it's not surprising that green is so inextricably connected with protecting the environment.

Is green the color of the environment? Trees are green. Most plants are green. Fungus is green. Amphibians and lizards are green, but that's about it. Aside from amphibians and lizards, most animals are not. Even as you view earth from space, green isn't the color of the earth. Blue is.

Is the environmental movement biased toward saving plants? Not by my recollection and not in the evidence either. In fact, according to the U.S. Fish and Wildlife Service, more animals than plants are listed as endangered or threatened in the United States (1210 versus 749). So, why green?

Is green the natural state of the earth? In forests, thats mostly true, but again, that's the trees and shrubbery talking. Nature is full of all sorts of colors: brilliant reds, blues, oranges, and more earthy tones. Even trees are collages of different colors. Their bark is brown, while some have brightly-colored flowers. If I had to pick a color to represent nature or the earth, I'd probably pick brown. Or, to represent the whole spectrum of colors we see in nature, why not pick a rainbow?

There's no doubt that this is a silly question, but there's a more serious undertone to this discussion. If we didn't collectively question why the environmental movement picked their color, what else about the environment are we letting slip by us? More seriously, are we being brainwashed into thinking that everything green is automatically good? What does it take to be labeled green? What does it mean to be good for the environment?

Moreover, if there's a benefit from labeling something as environmentally friendly, don't we expect companies to game the system? If being green earns you more green, companies might be willing to stretch the truth or just do the bare minimum to meet green standards. And, in that world, there's no guarantee that you're helping the environment by demanding green products.

Protecting the environment is important; with imporant issues, it's best to calculate the consequences with a cool head. Are you making a decision that will help the environment or are you looking at the world through green-colored glasses? That's just something to think about the next time you jump at the opportunity to buy something that's labeled green.

Sunday, July 19, 2009

Five things I read today -- 7/19

1. Mankiw -- Larry Summers' views on health care reform contradict economic theory.
2. Krugman -- Larry Summers was being disingenuous (hopefully) on the stimulus.
3. EconLog: Scott Sumner's one sentence autobiography on class.
4. Windy Citizen: We need more global warming; It's cold up here!
5. Curious Capitalist: There are diminishing returns to raising tax rates. Sounds like a Laffer to me.

Enjoy!

Companies Tony Loves: Google

This week's edition of Companies Tony Loves is a follow up on an old post entitled Google: a study in economics (initially published on 23 April 2009). Here is an excerpt from the original post:

Like everything else that Google does, Google is incredibly good at placing targeted ads in unobtrusive places. If you do a Google search for "Houseplant," eight advertisements regarding where you can buy houseplants appear next to your search results. There's even a sponsored link to a professional agency that provides advice regarding how to care for houseplants.

What's smart about this? By conducting the search, you told Google that you want to know something about houseplants. Google provided you with good information (see search results), but Google also provided those who profit from selling houseplants access to your eyes. That's a service worth paying for, and companies do pay Google for it.

There's Google's cash cow. Back to my ads on this blog. I never told Google what ads to place, but the ads are mysteriously on point. I blogged about our houseplant, "Bob." Google placed houseplant ads. I blogged about unions and academic research. Google linked my readers to something called "Labor Unions Research." Someone at Google wrote a very innovative computer program.

Now, that's targeted advertising and its success is a testament to Google's vision. For now, just enjoy the many services Google provides and give thanks to "the invisible hand" for bringing Google to the market.


Google continues to create value by developing new applications and tools. This value is the result of hard work. Yes, Google makes billions annually, but they make this money by creating even more value. For this reason, I still think we should thank the invisible hand; it's a good reason to appreciate Google.

Next week's edition of Companies Tony Loves will feature a company I have not mentioned on this blog before: Young House Love. Check them out. If you have suggestions for why I should love them, I'd love to hear your thoughts. I might even incorporate them into my post.

Saturday, July 18, 2009

Five things I read today -- 7/18

1. Ronald Coase's Wikipedia page.
2. Sell your house ... with an essay contest? That's novel. Here's the contest webpage.
3. Some cool demographics maps comparing the states of the United States.
4. Economists Do It With Models: How to stop a civil war? Use a different sort of weapon.
5. Jon Stewart interviews Robert Glennon: I met him (not Stewart, but Glennon).

Enjoy!

Poll: How much should the President make?

When I took U.S. History as a high school junior, a question on our test was, "How much does the President of the United States make in a year?" Of course, I had studied hard and I knew the answer was $250,000 (correct at the time). When our teacher returned the tests, I had missed only one question on the test (you can guess which one). It turns out that my penmanship was to blame. As my "2" in 250,000 looked like a "7," I lost four points on the exam. I knew the right answer, but I never forgot that response!

With President Obama's demands on auto executives to take pay cuts and all of the fuss about executive compensation, I thought I would turn the tables in this poll. Instead of asking the all-too-popular question of how much CEOs should make, I want to know what you think America's CEO should make. For your information, the President's salary is currently $400,000 (with $259K in other expense accounts), but he gets to ride in Air Force One, too.

So, how much should the President of the United States make per year?

(a) $1
(b) $400,000
(c) the median household income for that year
(d) it should be tied to performance

As always, I appreciate comments on the poll almost as much as I appreciate votes. Vote early. Vote often. Tell your friends, family and your local CEO to vote. The poll is open for a week (it's over there on the sidebar ---->). I look forward to seeing what you think.

Friday, July 17, 2009

Five things I read today -- 7/17

1. Adbrite: I added some ads to the blog.
2. Mankiw links to AP: "Bend the curve" or "Raise the Curve"
3. What do you want to be when you grow up? Human Carpet? Weird.
4. Bellman: Dynamic Programming.
5. Stokey, Lucas, Prescott: Recurive Methods in Economic Dynamics.

Links #4 and #5 are textbooks for graduate macroeconomics. I have a big macroeconomics exam today.

With regard to #1, you might see some double-underlined words on the blog. Don't be alarmed. Those are some of the new advertisements. You might also get a welcome screen ad. If you do, don't worry: you're in the right place. You can "skip this ad" in the upper right hand corner, or you could let the ad draw you in... I'll leave the choice to you.

As I'm experimenting with some money-making ventures with the blog, please let me know if you find the ads too intrusive (e-mail: thisyoungeconomist AT gmail DOT com). My number one priority is to write a good blog. If advertisements get in the way, I need to know.

Two of Shanna's Elements of Style

This week's installment of the Elements of Style series is a guest post by Mrs. Young Economist herself, Shanna Cookson. Aside from being a talented cook and a great photographer, Shanna also knows how to dress well. In today's post, Shanna shares a couple of her everyday style secrets. Take it away, Shanna!

Two Elements of Style: Everyday Fashions by Shanna Cookson

Do you ever find yourself style-challenged? When you walk into your closet or open your bureau drawers, do you find yourself muttering that you have nothing to wear? Truth be told, you have an array of clothing and oodles of sandals, pumps, and wedges, but what will make you feel like a million bucks? How can you solve this daily conundrum of what to wear?

Magazines flaunt the latest fashions, enticing us to purchase things we don’t really need. You want to look and feel stylish, but you also don’t want to break the bank on something that will go out of style in a few months. With so many clothing options out there, how do you decide which pieces will last a lifetime?

Worry no longer. Here are two stylish staples that look great on any body, fit any budget, and leave you looking classy.

The white button-down shirt. This is the most versatile piece every girl must have. Pair it with dark wash denim and boots for a night on the town, or wear it underneath a suit jacket for a day at the office. Many designers are even detailing the classic shirt with white embroidery and pleats. To make the white button-down shirt even more fun, wear a wide belt over the shirt with the buckle placed near your hip.

Where to Shop: Every store on the planet carries this wardrobe staple, and you can purchase it on any budget. Here are three places to snag your white button-down shirt:
  1. JCPenney carries a Worthington long sleeve French cuff shirt for only $21.99. You can even order it in a petite, tall, plus, or plus extended size.
  2. This cap-sleeve fitted blouse by Banana Republic is sure to please. On sale for $44.99, it is a great piece for a hot summer day.
  3. If you are craving high-end designer clothing, try Theory’s ‘Larissa-Luxe’ shirt. It is available at Nordstrom for $190.00. At least your sales lady gets commission. Cha-ching!

The Scarf. From silk to cotton to wool, scarves are an all-season wonder. With several fabrics and shapes from which to choose, there is always an occasion to wear a scarf. But, most of us don’t know how to tie a scarf aside from your basic knot. And for some people, basic equals BOR-ring. Here is a scarf-tying guide that is sure to please. For those of you who like to watch a video of how to tie a pashmina, here is an excellent clip.

For additional pictures and information about scarves, check out The Luxe Mix.

Now that you are armed with a little white button-down shirt and some scarf know-how, have fun! Experiment with belts, necklaces, and cuffs to create a look that is all your own. A personal touch – Now that’s stylish!

Stay tuned next week’s edition of Shanna’s Elements of Style. I’ll reveal a couple more of my secrets in my next post. See you then!

Thursday, July 16, 2009

Five things I read today -- 7/16

1. Sears Tower is now named Willis Tower... who would do such a thing? Willis?
2. WSJ: Economics Blogs Attract Rabid Followers
3. Reason: I, Toaster. The market built me, but a single human can't.
4. Young House Love Giveaway: rain barrels. Giveaway closes at 8 pm.
5. Freakonomics: Why can't NASA find a better launch site?

Enjoy!

Are second stimulus haters logically inconsistent?

It bothers me that some economists and commentators are calling "new stimulus haters" inconsistent in their reasoning. In particular, they say that if you supported the first fiscal stimulus, logic does not afford you the right to oppose a second dose of stimulus.

To see why it bothers me, note that they make a good logical point. We have compelling evidence that the problem is a bigger than we initially expected (depending on how you look at the data). If you thought the first stimulus was "just right," bad news has to make you think it is too small; the first stimulus is not nearly enough. In other words, if you favored a first dose of fiscal stimulus, bad economic news makes a case for shoving more stimulus down the pike.

To take an analogy, suppose your wife calls you into the room to kill a spider. As you forecasted an ordinary spider, you grab a fly swatter and walk briskly down the hall to where the spider is. But then, if your wife yells "It's the size of a frisbee!" you'd be pretty silly to not also grab the baseball bat, even if you were running down the hall with the fly swatter. So it is with the second stimulus.... At least, this is how second stimulus supporters see it.

But, it bothers me that the analogy ends there with fiscal stimulus. What if by the time you grabbed the baseball bat, the spider will have already eaten your wife? From that perspective, it looks silly to go grab the baseball bat. You should probably cut your losses, tell your wife that you love her, and get the heck out of there. That's because it doesn't matter if you get the bat. You're not going to be able to accomplish anything anyway.

This is precisely the problem with a second stimulus. For stimulus to work the way it is intended, we need to spend the money now, but the first stimulus did one of two things:

(1) It exhausted nearly all of our low hanging fruit. With the first stimulus, even when trying to spend the money quickly, a huge chunk of it won't be spent until next year (or the year after). And, if we spent the first stimulus well, we picked the best-bang-for-your-buck projects. For a second stimulus, are we going to be spending money in 2012? If so, how's that going to do us any good?

OR

(2) The first stimulus showed us the political reality of fiscal stimulus. Fiscal policy is hijacked into pet project spending that will take place way too late for a stimulating effect. If this is true, why do we think a second stimulus will get the political economy right?

Now, ask yourself if the newcomers to the "stimulus hater" movement are being logically inconsistent.

If you believe (1), the marginal dollar spent in the second stimulus will be less effective in heading off our new problems because it can't be spent as effectively or as quickly. If we have already picked the low-hanging stimulus fruit, a second stimulus will cost more money and accomplish less.

Undoubtedly, the problem is bigger than we first expected, but the pattern of spending in the first stimulus demonstrates that a second stimulus isn't like grabbing a baseball bat from the other room; it's like running to the store to buy a baseball bat.

Thinking on the margin: the additional benefit of a second stimulus is bigger than we first thought, but so is the additional cost of the right kind of stimulus spending -- at least if you thought there were loads of opportunities for low-hanging stimulus fruit.

If you believe (2), it makes sense that you are now less optimistic about the political economy. If you feel like the first stimulus was wasted on pork, who can blame you for being disillusioned with a second stimulus? Talk of a second stimulus smells like bacon.

Moreover, the first stimulus taught us things about fiscal policy (or at least reminded us of these things we should have known): Fiscal stimulus takes a long time, and it gets political. As a corollary, a second stimulus will take longer and cost more.

Given what we learned from the first stimulus, support for a second stimulus rests on less compelling logic.

Wednesday, July 15, 2009

For the econ nerds... the market for kidneys

There's an interesting discussion in the comments section of a recent Economists Do It With Models post. The question on the table is: How much would you pay for a kidney? That is, if you had kidney disease, how much would you pay for someone else to donate a kidney?

The easy answer is "a lot of money." The not-so-easy-answer is whatever the market price turns out to be. So, what would that be?

The post makes a really good point that the market price will depend on how responsive suppliers of organs are to changes in the price. If organ donors respond a lot to the price, the price won't have to increase by that much to get the right number of organs on the market (there's currently a waitlist with 80,000 names). If organ donors do not respond much to the price, the market price will be higher.

I'm a sucker for a fun/morbid discussion. So, I made a comment on the post. I pointed out that the market price will also depend how responsive demanders of kidneys are. If demanders want a kidney at pretty much any cost, the price is going to have to be higher (all else equal). If changes in the price induce demanders to consider alternative treatments, the price won't have to increase by that much.

This point is general. In any market, an increase in price does two things:

First, increasing prices induce suppliers to the market.
Second, increasing prices fend of demanders who don't value the good all that much.

The end result is the quantity supplied and quantity demanded are equal, just so long as there aren't any silly prohibitions in place.

Another comment for the econ nerds
The comments after mine went into a discussion of how elastic is demand for kidneys. [Review: elastic is economist-lingo for responsive, inelastic is economist-lingo for not responsive. As with all comments, we economists have a formula... see below] In the comments, people generally thought that demand for kidneys would be inelastic. And, then Justin Ross of The Perfect Substitute made this comment:

If there is a perfectly inelastic good, it seems like it would be kidneys (perhaps chemotherapy also). If they make it cheaper, I probably don’t want more. If they make it more expensive, I probably don’t want any less.
I agree that demand for kidneys is likely inelastic, but I don't think it would be perfectly inelastic. As the price increases, some people will substitute away from kidneys and toward alternative treatments like dialysis (Jodi Beggs made this point in a later comment, too).

Granted, dialysis isn't "the perfect substitute" for a kidney transplant, but that just means that the price for kidney donations would have to increase by a lot before people would be indifferent between the two options.

A really nerdy comment...
On the other hand, there's an annoying nerdy/techy detail: At a price of zero, the demand for any good is guaranteed to be inelastic... That's because the formula for elasticity (E) is:

E = (percent change in quantity)/(percent change in price).

Changing the price from zero to any positive number means that the price increased by "infinity" percent. That means E=0, which means the good is perfectly inelastic.

This detail is annoying because (1) it's true, and (2) it misses the point. The point is that it matters whether the demand curve is steep (inelastic demand is related to steepness, but it's not quite the same thing).

Nevertheless, we economists frequently say the word inelastic when steep would do. Sure... elasticities are unitless, but sometimes the right tool is rise/run.

Five things I read today -- 7/15

1. Making This Home: A Simple Workspace, sew or blog... your choice.
2. Mankiw: Top marginal tax rate to exceed 50 percent. And, that's not counting sales taxes.
3. Three articles on Goldman Sachs: Justin Fox, Jeffrey Miron, and Mark Thoma.
4. Hamermesh at Freakonomics: Give me your odd pairs.
5. Jodi Beggs on Kidney Organs: See my comment #4 (darn typos).

Let's see... two light and fun (#1 and #4), three dismal-ish (#2, #3, #5). Enjoy the links if you can!

Chicago: Why we have good apples, but few old cars

I previously discussed how driving and other aspects of life are surprisingly interesting in Chicago. From twice-a-week fireworks to downtown and the lake, Chicago obviously has a lot going on, but there's much more beneath the surface. This post is a case in point.

Chicago streets have a lot of nice cars: BMWs, Audis, Hummers, Range Rovers, etc. Even the less expensive cars are relatively new. This is in stark contrast to the stock of cars in Montana. Not only are such fancy cars rare in Montana, but the fleet of vehicles is much older -- at least based on my casual observation. Our 1997 Oldsmobile Cutlass is a dinosaur in Chicago, but it does not stick out too much in Montana.

This begs the question: Why are there so few old cars in Chicago? Economic theory gives two reasons we would expect to see fewer old cars in Chicago.

Alternative transportation options. The city provides public transportation, which is a good substitute for an old vehicle, but a poor substitute for a BMW. People who just want to get from place to place take the train or bus. This decreases demand, and therefore, quantity of old low quality vehicles. As a result, it's not surprising to see that most cars on the road are fancy. If public transportation were a perfect substitute for driving, the people with luxury cars would be the only ones with a reason to drive (i.e., showing off).

There's another compelling -- and economically fascinating -- reason to expect fewer old clunkers on the road in Chicago than in Montana.

The fixed cost of driving. Compared to Montana, there's a high fixed cost of driving in Chicago. License and registration is approximately $50 per year in Montana. Once you take care of all of the licenses and stickers that Chicago requires, you've spent $150 per year. You might say that it's only a hundred bucks, but keep in mind that this is $100 per year. To keep your car appropriately licensed for five years costs $500 more in Chicago.

More importantly, parking in Chicago is expensive (and full of hassles). In our neighborhood of Hyde Park, it costs upwards of $100 per month to secure a parking spot in a paid lot. Even the University of Chicago charges $80 per month, and at that price, they have a waiting list. In contrast, paid parking in Montana is rare. Paid parking at Montana State University for a year costs about the same as a spot in a typical Chicago paid lot for a month. Annually, parking costs about $1000 more in Chicago.

Over five years, the fixed cost of driving in Chicago is about $5,000 more than it is in Montana. That presumes that you pay to park your car, but it does not account for the significant hassle of owning a car in the city. For this reason, the fixed costs of having a car could be higher or lower: $5,000 is probably a fair estimate of these costs. It's a convenient number anyway.

How do these fixed costs this affect what kinds of cars city-dwellers purchase? If a 10-year old car costs $5,000 and a comparable brand new car costs $15,000, that's not really the right comparison if there are significant fixed costs to driving. In both cases, the buyer also has to pay the fixed costs. Old cars cost just as much to park and there's no discount on the license and registration.

Add in the fixed costs and we're comparing $10,000 to $20,000. On account of fixed costs of having a car, the new car went from being 3 times the price of the old car to just twice the price. On account of this effect, buying new cars in Chicago looks relatively more attractive than in Montana.

What do apples have to do with it? If you care to know whether my fixed cost story is well-founded, it is precisely the Alchain and Allen (1964) conjecture: "a per-unit transaction cost lowers the relative price of, and raises the relative demand for, high quality goods." This is the Shipping the Good Apples Out theory, which is established economic theory.

In the original context, Alchian and Allen noted that you are more likely to find a good apple in Chicago than in Washington State (where they grow the apples). The reason? Every apple -- good or bad -- incurs the same shipping cost to get to Chicago. Suppose the shipping cost is $0.25 per apple; good apples sell for $0.75 and bad apples sell for $0.25 in Washington. After adding in shipping costs, good apples cost $1 and bad apples cost $0.50 in Chicago.

In this example, people in Chicago only have to give up two bad apples to get one good one. Therefore, even though the higher price means they buy fewer apples overall, Chicagoans demand a mix of apples that is skewed toward good ones. Hence, Washington apple orchards ship the good apples out.

For the same reason, we see few old cars in Chicago: driving is more expensive in Chicago whether you have a clunker or a BMW. This fixed cost of driving has two effects: (1) As fewer people are willing to drive, there are fewer cars on the road than otherwise, and (2) people tend to buy more expensive vehicles.

Or, as that guy who just passed you in the red Audi would say: Driving is expensive in Chicago. You might as well do it in style.

Tuesday, July 14, 2009

Five things I read today -- 7/14

1. Greg Mankiw links to Andrew Biggs: Pet vet care on the same rise as health care.
2. Zingales: Biggest Threat to New York City (and America)
3. Freakonomics: War is over
4. Curious Captialist: Let's just blame the fat people.
5. EconTalk Podcast: Justin Fox on the Rationality of Markets.

Enjoy!

Data Sniping: "This Young Economist" Search Traffic

Have you ever wondered how people find a blog if you just started? Sure, you can advertise and promote to your friends and family, but there has to be a way to get your words to a wider audience. After social networking sites, attracting search engine hits is the most promising way to promote your blog.

In my last post, I wrote about how Google Analytics can be useful for bloggers. Here's a case in point. Google Analytics gives detailed information on the searches and web traffic from searches on my website. For example, here are the top 10 searches that brought people to my blog during the month of June:

1. Melissa Rycroft (6)
2. Ross Landfried (6)
3. Groupon (5)
4. Wet cell phone (5)
5. Noah Landfried (4)
6. That versus which (4)
7. "Companies I Love: Apple" (3)
8. Empirical observation (3)
9. Marijuana cost (3)
10. Math magazine (3)

This list teaches me a lot about what people wanted when they searched the Internet and stumbled upon my blog. In fact, these are the precisely the words people typed into Google (or Bing). From this list, I learned three things about search traffic and my blog:

First, my "how to" articles score big on search engines with two of the top 10 search queries: wet cell phone and that versus which. This makes sense; I often consult search engines to learn how to do something.

Second, writing about controversy generates search hits. Among other articles on marijuana legalization, I wrote an article questioning the examples some commentators use for "jailing peaceful druggies." I questioned whether Ross and Noah Landfried, two brothers who ran a fairly extensive drug trafficking ring in Pennsylvania, were truly "peaceful druggies." Plenty of people want updates on the Landfried brothers; even more people are interested in articles on marijuana legalization.

Third, variety attracts different searchers. My blog has touched on a number of different issues and topics. The top keywords reflect that.

What articles were most popular with search engines? Here's a list of articles that attracted ten or more search hits during June:

1. Marijuana: The "estimated" cost savings from legalization (23)
2. Marijuana II: Does the ban on marijuana put peaceful druggies in jail? (14)
3. Saving a wet cell phone (14)
4. Why is Melissa Rycroft famous? (13)
5. Rules for Driving in Chicago (10)
6. Twitter: Do you follow? (10)

Again, this list taught me about my search audience.

First, although lots of people conduct searches on marijuana, the most engaging topic is How much can legalization save? The peaceful druggies search was probably driven up by people who know the Landfrieds.

Second, my audience is looking for something specific and useful. Consequently, my "how to" articles do well. Want to know about Twitter? How do you save a wet cell phone? What are the rules for driving in Chicago (it isn't a "how to," but search engines don't know any better)? My blog has you covered!

Third, celebrity articles can get search hits. Although I wouldn't recommend the strategy of writing on celebrities, the Melissa Rycroft article has gotten me a fair number of search hits.

What have I learned from this? At the very minimum, these data have given me an interesting snapshot into who reads my blog and why. But, there's more to the search data. Analyzing the search data from my blog tells me what people find interesting. That's information about my audience that I didn't have before I looked at the search results.

The number one rule of good writing is to write to your audience. For this, it helps to know who your readers are and what interests them. With Google Analytics, you know your audience. You have the tools. Now, get out there and write.

Monday, July 13, 2009

Five things I read today -- 7/13

1. Mankiw: Modern Macro that Krugman would love.
2. This Young House: Sued for a name by an older house? Now: Young House Love.
3. CNN: Is narcissism keeping you single?
4. Tyler Cowen: Which words make you wince?
5. EDIWM: Baseball giveaways and strategies (Check out the first comment.)

Enjoy the links!

Google Analytics: Mapping to improve the future of This Young Economist

When I wrote my first blog post on April 17th, I didn't know what to expect from writing a blog. Mostly, I was just trying it out to see if it was for me. Since that first post, blogging has been a great hobby; it is a wonderful outlet for generating and discussing ideas.

My experience with blogging has also surprised me regarding the depth of the tools available on the Internet. More than two months in, I am still learning about the tools that I can use to promote my blog. There's a lot more to blogging than just putting your ideas on the screen: presenting your ideas and pitching those ideas to an interested audience takes creativity, connections and some innovative technology.

This post is about a key piece of that useful technology: Google Analytics. Google Analytics is a free service provided by Google that records and organizes detailed information about your website's Internet traffic. It is especially useful for bloggers.

For example, Analytics tells me which posts have been viewed the most, which posts have been viewed for the longest period of time, and which websites are linking to me. I could not obtain this information directly from my audience, and this is exactly the information I need to improve my blog.

Analytics helps me recognize good posts after I write them, and more importantly, it helps me recognize what topics or posts have been abject failures. This allows me to respond with better content and a better presentation of my ideas. And, I can avoid subjecting you to boring or tedious articles.

That's Analytics in a nutshell, but it's hard to know what Analytics does without seeing what the tools do. In this post and some future posts, I'll showcase some of Analytics' cool features. Today, I'd like to show you a history of this blog as told through the Map Overlay feature.

This Young Economist: Two months of Maps
Although I started the blog on April 17th, I didn't discover Google Analytics until May 6th. Therefore, the data I have only dates back to May 6th. Have you ever wondered about who reads my blog? You probably wonder less than I do, but here's a map that tells the geographic distribution of people who read by blog between May 6th and May 16th (a day when I wrote the article, To Save Tigers, Eat Them?):


After 10 days of Analytics and a month of blogging, I had only managed to hit a smattering of the states; None in the south, none in the northeast and only Nevada in the southwest. I had been viewing this information, but I didn't know what to do with it. I really only know people in Montana and Illinois. Therefore, you can see where my biggest following is.

Slowly and surely, my blog started churning out interesting topics -- topics that appealed to a broader audience. If you look at the posts throughout the rest of May, I had one post stolen (Companies I Love: Apple), one post has become popular with search engines (Saving a Wet Cell Phone) and one post was all the rave on The Windy Citizen (Companies Tony Loves: The Windy Citizen). How did that map look by the end of May?


It looks a lot better. My blog was starting to gain some traction; the map was filling in. Although my blog had made progress, eleven states were still unaware of my blog.

All the while, I kept learning about ways to promote my blog. I started following other blogs, which have been a great source ideas. I even joined some social networks like Twitter to help promote my ideas. And, of course, I sent my local stories to The Windy Citizen, which is a great outlet for my posts on Chicago.

After another 25 days, where does the blog stand?



Compared to where I began, the map looks great. But, people in four states are still missing out on This Young Economist fun: These are Delaware, Wyoming, Arkansas and Lousinana. Someday soon, I hope my ideas reach these places. For now, I promise to keep writing on interesting topics. If you agree that what I have to say is interesting, I'm glad you came along for the ride. With the right tools and the right mindset, there are even better things to come.

Sunday, July 12, 2009

Five things I read today -- 7/12

1. [Video] Glenn Loury and Brink Lindsey discuss... everything.
2. Mankiw: Taxing height and citations.
3. The Atlantic: ... With Functioning Kidneys for All.
4. Paul Krugman gets causation, or does he?
5. Hamermesh at Freakonomics: Drunk on economics or drunk on wine?

Enjoy the links. On #1, if you're not really into incarceration/drug war, skip to the 35 minute mark. It gets really good from there.

Companies Tony Loves: Pandora

This week's Company Tony Loves is an update from the vault. On April 29th, I wrote a piece called Downlifting and Pandora. Here's an excerpt. For the whole thing, check out the original post:

In the 2000s, music piracy (now called downlifting) was the number one issue facing the music industry. It was so pervasive that ordinary people became criminals en masse. We all knew that downlifting was stealing, but many of us felt that the music industry was already stealing from us at the rate of $20 per CD (that's compact disc, not certificate of deposit).

From an economic perspective, we should have seen this coming. Two factors made a showdown between music executives and Internet pirates inevitable:

1. Existing forms of music were basically files stored on awkwardly shaped discs. As memory cards became smaller and bandwidth became faster, it made less sense for people to carry around CDs. Companies came out with iPods and other portable music players (the Walkman, anyone?) -- understandably, consumers ate these up. This was precisely where the market was going.

2. These new forms of digital storage were much less secure from theft. In electronic file format, music became easy to copy and easy to distribute. Quite literally, the only remaining obstacle to owning our favorite song was our sense of morality. Those with fewer scruples from downlifting had more songs in their collections.

These new innovations made music non-excludable from those who don't pay. The word non-excludable sounds like a good thing, but it is terrible for the good's sellers, and therefore, for the good's buyers. Why's that? If nothing was done about the emerging non-excludability of music, no one would ever want to pay for music.

If no one wants to pay for music, why would anyone make music? Internet radio gives an interesting model for dealing with non-paying customers in the music industry.

Internet radio's solution? Don't charge a listener when you can charge an advertiser. Radio and television stations figured this out long ago. In these industries, the secret to success is to expand your audience and charge advertisers for air time.Loads of Internet radio stations are out there, but my favorite is Pandora [...]

I wrote those words nearly three months ago, and I still believe them. But, mostly due to a messy lawsuit from the Recording Industry Association of America (RIAA), Pandora has changed its business model.

Now, Pandora offers 40 hours per month of free, advertiser-sponsored listening, and if you want to listen more, it costs $0.99 per month, which is charged to your credit card if you exceed the 40 hour listening limit.

Digital music in any form remains non-excludable. Moreover, Pandora has been providing an innovative solution to the non-excludability. All this makes me wonder if the RIAA has chosen the wrong enemy. The enemy is non-excludability, and Pandora has an innovative way to get around that.

Why sue Pandora when forming an alliance makes more sense on efficiency grounds? Sure, the RIAA wants to extract more revenue from Pandora, and that makes sense. But, suing Pandora has made Pandora more difficult to use for heavy users. One possible side effect is that these users will return to even-harder-to-detect music piracy. And, no one wants that.

Saturday, July 11, 2009

Five things I read today -- 7/11

1. The Pat Down: Do cabs honk at you? Honk back!
2. Krugman pro-stimulus (via Mankiw)
3. Levy anti-stimulus (via Mankiw)
4. Pew: Scientists' liberal and other biases: Passed on from Krugman.
5. Marginal Revolution: Is Montana's senior senator "evil"?

Enjoy!

Poll: Where did I read this?

This week's poll question is: What country/ era does the following quote describe?

I was there on Saturday night heading east from the southernmost point of the food area, walking by the porta-potties, when a stampede of terrified people crossed our path--they were definitely running north, away from something scary; I assumed a gun. My friends and I continued east after the mob had passed [...] 20-30 police in riot gear appeared on our left, broke off into formation, and started charging north, as did a bunch of blue lighted vehicles of some kind, which were closer to the lake shore. I assume they were going after the "melee" that has been mentioned.

It was memorable, as was the walk home [...]. Police were actively looking for certain individuals, and the atmosphere still felt relatively lawless despite such an intensely heavy police presence--cops with billie clubs in hand, SWAT teams, federal agents with machine guns--the whole bit. I couldn't wait to get home to check the news and internet to find out what had happened. The news reports bore little resemblance to what I had just seen.

Your options are:

(a) China in 1979
(b) The Soviet Union in 1989
(c) South Africa in 1999
(d) Chicago in 2009

Please vote before clicking on the link [here]. I want to know where you think these events fit in history. I'm not particularly interested in your getting the answer right.

But, once you vote, check it out. Tell your friends, local gang members, and your local riot officials to vote. The poll will be open for a week. The poll is on the sidebar. Happy voting!