Wednesday, January 31, 2007

Sticky fingers :: Slate

Sirloin is among the most purloined item in US groceries. (Via Free Exchange /

The reasons are well-illustrated in a scene mentioned in the Wikipedia entry for the cult movie classic Pink Flamingos. High value for volume and weight.

Questioning U of Connecticut's Dubai plans

Human rights questioning. brn at UAE community blog has the story.

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Tuesday, January 30, 2007

Could Weak Oil Cost Venezuela, Iran Clout? :: Wall Street Journal

Softening oil prices over the past few months have spurred hope in Washington that less revenue for oil-rich states could weaken the hand of governments the U.S. considers worrisome -- particularly those in Iran, Venezuela and Russia.

The three nations are potentially vulnerable: Oil-and-gas revenue accounts for between two-thirds and three-quarters of government income in both Venezuela and Iran, and only slightly less in Russia. So, a big drop in oil prices would slow economic growth and hit government finances, forcing them to cut back spending increases that have boosted the popularity of all three governments at home and emboldened them abroad.

But it is far too early to expect the changing economics of oil to have big political effects. For one thing, although the price of oil has fallen 28% since hitting an all-time high of $77.03 in July, it is still high by historical standards. The three nations, having weathered crises before, have all built up substantial currency reserves to cushion against a further fall in prices.

"Fifty-dollar oil doesn't put any of them in any grave danger," says Michelle Billig, director of political risk at PIRA Energy Group, a New York-based consultancy. "After all, it was only a few years ago that we were talking about an oil windfall for these places at $30 a barrel."
Unlike Russia, and to a lesser extent Iran, Venezuela has been much more reckless in spending its oil windfall. Last year alone, public spending grew 43%, widening the gap between total government income and outlays to about 1.5% of the total economy, according to estimates by Morgan Stanley.

So far, falling oil prices haven't dented Mr. Chávez's spending habits. Just last week, he announced a program to send 100,000 poor Venezuelans each year to vacation in Cuba. He also recently offered the army's services to build a road in Nicaragua at a projected cost of $350 million.

While economists agree that Mr. Chávez's free-spending policies may eventually shipwreck the Venezuelan economy, they say that won't happen -- if it happens at all -- for at least another year. The main reason: Venezuela has accumulated more than $36 billion of reserves.

But there are signs Mr. Chávez could be headed for trouble, even without a much bigger drop in oil prices. He recently ordered an increase in gasoline prices -- which the government has long subsidized -- to raise federal revenue.
As revenue has soared with oil prices, Iran's public-sector spending has expanded almost as fast. To pay for massive subsidies for most daily goods -- including gasoline, bread and heating fuel -- the government has borrowed in each of the past two years from a special rainy-day fund set up to retain some oil revenue for when prices fall again. But that spending has ignited inflation, now running around 15%.

Iranian President Mahmoud Ahmadinejad introduced a budget early last week that included a 20% increase in spending for the Iranian fiscal year that begins in March. He said the government, whose ultimate authority is held by a council of Islamic mullahs, would be able to add to its rainy-day fund if oil prices remain above $33 per barrel, the level the budget assumes for Iranian oil. But some private economists doubt the budget calculations and predict Tehran would again fall back on those surplus funds to finance spending.

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The Runaway Maid

Or, Of Human Bondage, albeit voluntary servitude.

Secret Dubai has a better solution.

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Monday, January 29, 2007

The value of an intact hymen :: Gulf News

I read this morning in Gulf News about the black market for hymen restoration in the UAE. The price is Dh10,000. It is illegal for an unmarried woman to have her hymen surgically restored, but not illegal for a married woman to do so. Why a married woman would want such surgery I couldn't tell you, but it does give cover for the clinics that offer these procedures.

Why an unmarried woman would want the procedure is easy to explain: this culture highly values virginity in a bride and uses an intact hymen as the test. Vaginal intercourse, however, is not the only way the hymens are broken. An unintended consequence of the high value of a hymen is that girls avoid sports and other exercise. The GN article makes it sound as if only girls who are not vaginal virgins would want the procedure -- false, of course.

Secret Dubai has also posted on the story. She is wrong, though, in concluding that hymen restoration will make the value of an intact hymen zero. It will, though, mean that girls who have been raped will no longer be unmarriageable. That is, as long as: their identities are not made public, they can afford the surgery, the authorities do not crack down on the black market, and mothers of the husband-to-be do not insist on an invasive inspection to determine whether there has been surgery.

There is a way, actually, that Secret Dubai could be right. That is if the ready availability of hymen restoration changes behavior and more women engage in premarital sex. Then having an intact hymen would prove very little about whether you were a virgin or not.

GN has a companion piece entitled, 'If cosmetic operation is to deceive someone it is a crime', which explains why hymen restoration is regarded as a religious crime.

What about breast augmentation (deception of fertility) or nose jobs (deception of beauty of future children)? These are legal in the UAE.

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Sunday, January 28, 2007

Analysts predict soft landing in UAE property market :: KT

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Friday, January 26, 2007

Bush advocates tax on fossil fuels :: Mankiw

Kling roasts Krugman


Thursday, January 25, 2007

Jobs in Dubai?

ITP Technology offers some advice to those seeking jobs in Dubai - seller beware. More.

Today's time management brief

1. Have a habit of being late? Try being uncertain about the time. That's not the same as setting your watch fast.

2. When should you wake up? Calculate your optimal time here.

Successful social action

Step 1. (Via Newmark's Door.)

If Step 1 fails, apply Step 2.

Wednesday, January 24, 2007

Gapminder @ google: Carbon emissions

Google's got a nifty new tool. Follow this link for a chart showing income and carbon emissions. Be sure to click play to see how things have changed over time. I've highlighted India, China, the UAE and the US. The UAE has battled the US for first place in per capita emissions for some time.

For economists Gapminder is better than HDTV.

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Tuesday, January 23, 2007

Odor-absorbing underpants: Markets in everything

Demand creates its own supply. Don't believe it?; here's coverage by a real newspaper.

Still no solution to the thunder down under.

Give this lady a pair. Evidently, it's a serious medical condition.

Will Iran run out of gas?

Division of Labour provides us an excerpt from a LexisNexis transcript of an NPR interview. Start there (scroll to point 5). Then come back here for another excerpt:
Prof. STERN: It would be much cheaper for Iran to build new gas-powered electric power generation than to build a nuclear reactor. But the magic of the nuclear reactor for Iran is that Russia is willing to finance it. And Iran has scared off many other foreign investors in its energy sector.

INSKEEP: Are you saying, then, that Iran's pursuit of nuclear power of some kind is actually a sign of their desperation?

Prof. STERN: That's exactly what I'm saying, yes.

INSKEEP: So what does mean for the United States and it's allies as they try to pressure Iran into giving up its nuclear ambitions?

Prof. STERN: If I were giving advice, that advice would be do nothing. I believe that Iran will be in a weaker position in three or four years' time. And if that's the case, they would be in a more conciliatory frame of mind, perhaps with respect to their weapons.

INSKEEP: Roger Stern, of Johns Hopkins University. Thanks very much.


Monday, January 22, 2007

Libya adopts Reaganomics

Sunday, January 21, 2007

Spinsterhood, American Style :: CJR Daily

Recently I noted that The New York Times had a copycat article of a Times article on the declining proportion of women who are in the state of matrimony. The NYT article attracted considerable attention in the blogosphere. And the NYT later ran a more substantive article, perhaps responding to criticism of the first article.

Gal Beckerman crystalized the criticism of many:
[T]here is nothing that will turn our faces red faster than a story that lazily slaps together a few anecdotes, buffered by a minor statistic, and then presents itself as important news. Especially when the "trend" masks a much more complex and dark reality.
. . .
The article, to no one's great surprise, hinting as it does at the problems of sex and love, was the number one most emailed today (or as Gawker, in its inimitable style, put it this afternoon, "Also, 91% Of Women Are Now E-Mailing Spinster Article To Their Single Friends.")

Leaving aside what struck us as strange methodology (like the fact that the survey counted anyone over the age of fifteen as a woman), there was something else disturbing about the piece. It had a tone of exuberance that spun the numbers as an unambiguously positive piece of progress for women.
. . .
the Times, of all papers -- having run groundbreaking series on both race and class -- should realize that a phenomenon that might bode well for middle-class white women might be absolutely disastrous for poor black women.

Apparently, though, we are the only ones to see it like this. Because apart from a tossed-off paragraph that reminds us that, buried within these statistics, seventy percent of African-American women are single, there is nothing to indicate how the epidemic of single parentage in the black community contributes to this statistic. We imagine -- though aren't told -- that many of these women are raising children alone and being dragged deeper into poverty because of their unmarried status.

Instead the rest of the article is completely about those middle class white women who insist they have chosen to be without ball and chain.

Here's what marriage looks like from the black American woman's perspective. One thing to keep in mind: all women are making choices, not just white women. And many women are choosing to live without a spouse because they, and any children, are better off that way.

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Emirati women want to choose husband as educated as themselves

Gulf News today:
Abu Dhabi: Sixty-three per cent of UAE national men favour traditional marriages, while 71 per cent of UAE national women prefer to choose their husbands themselves, according to a recent study conducted by university students on the issue of marriage.

The study was conducted by Salwa Fouad, Khowla Ahmad and Lamia Ahmad, communication and media sciences students at Zayed University, as part of their graduation project, reported Notes which is published today.
. . .
Students surveyed 200 Emiratis and visited the Abu Dhabi Courts to gather statistics and literature.

The study showed that about 70 per cent of UAE nationals get married for religious reasons. It also indicated that 63 per cent of Emirati women refuse to marry a man with a poorer education than them.

However, 74 per cent of UAE national men said that they would marry women of higher education standards. It also showed that "being religious" was the number one quality men and women look for in a spouse.

Eighty per cent of women and 76 per cent of men agreed that dowry is not an indication of the bride's position and value. This is particularly relevant considering the expensive wedding parties and dowries that are part of UAE national weddings.

Considering that "National females constituted 71.2 per cent of national higher education graduates in the academic year 2002-03 and 68.6 per cent in 2003-04" the reluctance of women to marry men with less education could explain many concerns in the UAE:

- spinsterhood,
- the size of dowries, that is brides prices (to offset lack of education)
- national men marrying nonnationals,
- small number of children per woman (small relative to public policy aims), and
- the "demographic imbalance" (the euphemism for the large proportion of the population which is non-national).

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Watering down the product in order to profit

Those who don't understand how markets work often worry that firms routinely cheat their customers. Certainly there are cases where that can happen, but most often firms are disciplined by a simple mechanism: consumers quickly learn the quality of the product and adjust their demand accordingly.

Thus, you may be able to profit by increasing the quality of your product even if you are reluctant to report thay you have. Here's a great example.

Saturday, January 20, 2007

Performance pay ...

... Sometimes it increases inequality and sometimes it decreases it.

Overcoming Bias

I commend to you the group blog, Overcoming Bias. Here's an about statement:
How can we better believe what is true? While it is of course useful to seek and study relevant information, our minds are full of natural tendencies to bias our beliefs via overconfidence, wishful thinking, and so on. Worse, our minds seem to have a natural tendency to convince us we that are aware of and have adequately corrected for such biases, when we have done no such thing.

In this forum we discuss whether and how we might avoid this fate, by spending a bit less effort on each specific topic, and a bit more effort on the general topic of how to be less biased.
Of course the blogs I recommend, I recommend because they comfortably confirm my biases.

Treating students as customers: corrupt and corrupting

CoreEcon draws attention to this essay by the dean of Chicago Graduate School of Business, Ed Snyder. Quoting Snyder:

Redefining the relationships between business schools and their students as customers has become the norm over the last two decades. We probably got to this point because―somewhere during the last 28 years of above-inflation tuition increases―our predecessors felt better telling those to whom we charged increasingly large amounts that they were not mere graduate students, but customers.
. . .
One problem. The model is corrupt and corrupting.
. . .
If we get the right balance of stretch and support, then we move to a more productive equilibrium, in which students put more in (because they feel both challenged and supported) and they get more out of their experience.

No one should think that I advocate a return to Stalinism. Abandoning the customer model doesn’t reduce the pressure to innovate. It doesn’t prevent us from investing in global career support. However, getting rid of the customer model does mean that every time our students refer to themselves as customers, you can avoid the trap and instead move to surer, higher ground. It causes our jobs to shift toward setting expectations and asking more of your students.

I have expressed similar thoughts here and here. See, also, the additional insights provided by SCSUScholars, The EclectEcon, and The Economist En Su Laberinto.


Friday, January 19, 2007

The minimum wage went up, so the owner cut my hours! :: Salon

Imagine that: people respond to incentives.

A 19 year-old writes Salon for advice and receives this reply (extract):
Do you want your labor to reverberate in the world by creating more hamburgers, so that the world is increasingly filled with people who are filled with hamburgers and shaped like hamburgers and smelling of hamburgers? Or do you want your labor to reverberate in the world by creating more knowledge and understanding, by helping people who want to become architects become architects, by helping people who want to become mathematicians and scientists and priests become mathematicians and scientists and priests?
. . .
When a person owns a business, he buys your labor from you. Then he owns that labor -- the time you spent, what you made: He owns that. You have sold it to him. It is not a relationship between equals engaged in a common endeavor. It is a relationship between buyer and seller. The buyer in this case has most of the power.

That is not a good situation. He can buy as little of your labor as he likes. It sounds like the price of your labor went up so he decided to buy less of it. He may be making a point; here is what I think of the government's increasing the minimum wage: I will buy less labor!

You have a practical problem here, which is you need more money. In this instance, I think you will make more money in the long run if you take the bookstore job.

That is, assume an opening at a bookstore that pays sufficiently well, taking account of the implicit benefits. But wait, doesn't the bookstore also have to pay minimum wage? Is that opening going to exist?

I want to assume much of this answer is tongue in cheek. But the majority of Americans (and other peoples for that matter) believe the minimum wage benefits the intended beneficiaries. It benefits only the lucky ones who don't lose work.

The "power" to the buyer that exists here, exists purely because of the minimum wage. The owner/manager is going to cut the hours because the incentive to hire labor has changed (not to make a political statement). And those whose hours get cut are the ones the manager likes least -- something that's possible to do with profit consequences because the minimum wage has created excess supply.

Debate declining

What's bringing oil prices down?

You'll get no better analysis than that of James Hamilton (Econbrowser). Go there and read it (nice pics, too).

Thursday, January 18, 2007

Arab bloggers :: CJR

Gal Beckerman has an essay on Arab bloggers in the latest Columbia Journalism Review.

Thanks to Lirun posting at UAE Community Blog.

HAMSA "A dream deferred" essay contest

HAMSA (Hands Across the Middle East Support Alliance) is sponsoring an essay contest.

The contest (see challenges young Americans and young Middle Easterners to express constructive ideas for individual rights in the Middle East. Anyone under the age of 26 can enter, and finalists can win up to $2,000. Deadline: January 31, 2007.

Here is more about HAMSA.

GCC plus Egypt and Jordan

Washington Wire:
After numerous meetings over the last year with the six-nation Gulf Cooperation Council, plus Egypt and Jordan, the Bush administration wins a breakthrough — of sorts. The GCC Plus Two, a group the administration sees as a budding front against Iran, issued its first-ever communiqué.

But the statement leaves out any mention of Iran, referring instead to the importance of regional stability and the group’s “collective desire to prevent Iraq from becoming a battleground for regional and international powers.” The intentional omission reflects the sensitivity that that the Gulf countries of Oman, United Arab Emirates, Saudi Arabia, Kuwait, Qatar and Bahrain feel about provoking Iran, the region’s rising power.
. . .
In a slightly more pungent line, the group says it “welcomed the commitment by the United States as stated in President Bush’s recent speech to defend the security of the Gulf [and] the territorial integrity of Iraq.” Bush said in his Iraq speech last week that he was sending another aircraft carrier to the Gulf and would cut off Iranian networks in Iraq.
Also, Saudis pass on the idea of squeezing the Iranian economy by pumping up oil production. Of course, with oil already at $51/barrel, out-of-control governments like Iran and Venezuela will be squeezed and will have to discipline their spending and over regulation.

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Tuesday, January 16, 2007


Visit DetailVisit 106,269

IP Address 84.18.32.# (Rhc)
ISP The Royal Hashemite Court

Referring URL

Unmarried women outnumber married in US

Two weeks ago: Unmarried women outnumber married in UK. Today the turn goes to women in the US -- only 49% have a spouse present.

The New York Times:
Coupled with the fact that in 2005 married couples became a minority of all American households for the first time, the trend could ultimately shape social and workplace policies, including the ways government and employers distribute benefits.

Several factors are driving the statistical shift. At one end of the age spectrum, women are marrying later or living with unmarried partners more often and for longer periods. At the other end, women are living longer as widows and, after a divorce, are more likely than men to delay remarriage, sometimes delighting in their newfound freedom.

In addition, marriage rates among black women remain low. Only about 30 percent of black women are living with a spouse, according to the Census Bureau, compared with about 49 percent of Hispanic women, 55 percent of non-Hispanic white women and more than 60 percent of Asian women.
. . .
Over all, a larger share of men are married and living with their spouse — about 53 percent compared with 49 percent among women.

“Since women continue to outlive men, they have reached the nonmarital tipping point* — more nonmarried than married,” Dr. Frey said. “This suggests that most girls growing up today can look forward to spending more of their lives outside of a traditional marriage.”
In UAE it is common for men to be living without a spouse present. That's due to all the nonnational male labor present. Those with low income are not permitted to bring their families. A substantial portion who are allowed to choose to be temporarily separated, leaving spouse and children at home.

*Is this a proper use of tipping point? The article does not describe a social epidemic. Perhaps the notion is as more women demonstrate they can be happy living alone other women will become infected with the notion that living alone would be best for them as well.


WWF :: UAE beats USA

WWF is not, however, the World Wrestling Foundation, it is the World Wildlife Foundation. Dubai has lots of wildlife, especially after 2AM, but that's not the wildlife we're talking about either.

Actually, the story is this:
When it comes to squandering the earth's natural resources, residents of this desert land of chilled swimming pools, monster 4x4s and air-conditioned malls are on a par with even the ravenous consumption of Americans, according to the World Wildlife Fund.

The average person in the Emirates puts more demand on the global ecosystem than any other, giving the country the world's largest per-capita "ecological footprint," WWF data shows. The United States runs second.
UAE officials demure:
The federal environment agency is devising strategies to cut emissions, including a public campaign that may offer economic incentives to those who turn down their air conditioning, Saad al-Numairy, an adviser to agency, said Monday.

"We have an action plan," al-Numairy said. "But we are a multicultural country with 180 nationalities. It's not going to be easy."
If there are incentives I'm not aware of any. And I'm not sure what multicultural has to do with it. Indeed, with many nonnationals living in third-world conditions it is not they who contribute to the large per-capita footprint. (UPDATE: What anonymous has to say is must reading.) It is partly the lifestyle of the rest of us:
Making matters worse are Dubai's audacious developments, including artificial resort islands that have destroyed coral reefs and an indoor ski slope that still creates snow when it is 120 degrees outside.

"Of all the places to make artificial snow, this has to be the most absurd," said Jonathan Loh, a British biologist who co-authored the WWF report.
Partly, too, it is because the environment does not support carbon absorbing greenbelts. Creating greenbelts here makes things worse in fact:
"It's a fact of life that the UAE will always have a large ecological footprint because of where we are," said Habiba al-Marashi, who chairs the Emirates Environmental Group. "But to be classified as the worst, that hurts. We don't think the report is on solid ground."
. . .
The country's landscape offers little help. Undulating sand dunes and jagged mountains of bare rock offer precious little greenery to soak up carbon emissions.
. . .
Longtime Emirates ruler Sheik Zayed oversaw the planting of a forestry belt kept alive by irrigation, which is now considered a waste of water. Parts of the forests are being allowed to slowly die off.
It's being allowed to die off because 98 percent of our water comes from desalination; created by burning hydrocarbons:
One focal point for Dubai's emissions is the red-and-white smokestacks jutting from gas-fired power plants and an aluminum smelter that line the beach on the city's outskirts. The plants do double duty distilling fresh water from Gulf seawater, an energy-intensive process that accounts for 98 percent of the fresh water in a country with no rivers and little usable groundwater.
Another quote from the article:
The Emirates, like the rest of the oil-producing Gulf states, was until the 1960s an impoverished desert country whose residents survived through subsistence fishing, farming and small-time trade.

Now, the government's energy subsidies give Emirates citizens free water and cheap electricity. Gasoline sells for around $1.70 per gallon.

"Really, we're happy to be rich now," said Majid al-Mansouri, who heads the environment agency serving Abu Dhabi.
Actually the price of gasoline is not particularly low -- possibly because it is not easy to subsidize it to nationals without doing so for nonnationals. Just before flying back to the UAE yesterday I paid $2.20/gallon for gas in the US, including federal and state taxes.

Monday, January 15, 2007

Athletic supporters for girls

Thirty girls signed up for the cheerleading squad this winter at Whitney Point High School in upstate New York. But upon learning they would be waving their pompoms for the girls’ basketball team as well as the boys’, more than half of the aspiring cheerleaders dropped out.
. . .
Whitney Point is one of 14 high schools in the Binghamton area that began sending cheerleaders to girls’ games in late November, after the mother of a female basketball player in Johnson City, N.Y., filed a discrimination complaint with the United States Department of Education. She said the lack of official sideline support made the girls seem like second-string, and violated Title IX’s promise of equal playing fields for both sexes.
. . .
At a small school like Whitney Point, with 525 students, the ruling has devastated a cheerleading program that had just begun to rebound after being eliminated in budget cuts in 2002. Some of the girls who dropped out just did not want to cheer for other girls, while others said the team was not as fun without traveling to away games and being able to check out routines by rival cheerleading teams. (Since most schools in the league are complying with the ruling by keeping cheerleaders on their home courts, the squads are now left to rah-rah without response.)

The girls’ basketball players complained about the change, too; the coach asked cheerleaders to stay on the bench at crucial moments during the first few games so as not to distract his players.
Not much different, really, from the consequences of raising the minimum wage. An unintended -- but entirely predictable -- fall in benefits going to the intended benificiaries. That'll happen unless you want to take away the (potential) cheerleaders' free will and enslave them to cheering.

My stand

Who cares?

Or, Charity begins at home, religious homes.

I do wonder, how much of that giving goes to the maintenance of the church?

Saturday, January 13, 2007

Economists (head) Hugo Chavez

Polyandry and bride prices

Friday, January 12, 2007

Economist Intelligence Unit on rent caps in Dubai

Thanks to The EclectEcon for the tip to this Economist story. I don't buy the EIU's analysis of rent caps in Dubai for two reasons: (1) I anticipate that enforcement will be ineffectual (more bluntly, it's window dressing), and (2) (more speculatively) I think the number of units coming on line is beyond the needs of the market already.

Many of those coming to the Emirates Economist are searching for information on inflation in the UAE. Here's what the article says about UAE inflation:
Inflation in Dubai last year was anywhere between 8% and 20% depending on who you ask (the UAE Central Bank, the IMF, commercial banks and, last but not least, the Economist Intelligence Unit). The consensus was around the mid-teens--too high for comfort--and this was beginning to hurt Dubai's competitiveness.

Firms were forced to hike salaries to keep staff, and then pass those costs on to customers. GEMS, a leading operator of private schools in Dubai, announced an increase in fees of up to 70% for 2007, blaming higher teacher salaries and rents. Privately, some managers of multinational companies said that they had shelved plans to expand their regional headquarters in Dubai, because it was too expensive compared with alternatives such as India, Eastern Europe or Ireland. They also dislike the uncertainty that inflation brings.
That's about right. But do notice, much of the inflation has come about because Dubai, and the UAE in general, is growing and attracting investment.

Related: Lastest on imported inflation and the UAE's dollar peg.

Later: The Economist, also, notes that "China is choking on its own success".

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Thursday, January 11, 2007


An oil trust to share oil revenues with all Iraqis.

But the specifics matter greatly.

UPDATE: Knowledge Problem has lots of links and more explanation.

Tuesday, January 09, 2007


Iranian brain drain not stemming :: BBC

The number of educated young Iranians trying to leave the country appears to have increased in the last year since President Mahmoud Ahmadinejad took office judging by the numbers sitting the IELTS exam.

The figures have increased two-and-a-half times this year over the same period last year, according to the Australian administrators of the test.

A year ago, the International Monetary Fund said Iran had the highest rate of brain drain of 90 countries it measured.
. . .
According to the IMF more than a 150,000 of the best young minds in Iran are leaving every year.
. . .
It will be months before these students can do their language test. Then they will join the long queues outside foreign embassies in Tehran.

And the cost to Iran of not stemming this brain drain - one government estimate put it at nearly $40bn a year.


Saturday, January 06, 2007

Optimal job assignment?

Put economists in charge of hell. That is, if God is serious about making it unpleasant.

Thanks for the link goes to Scott of Hybla.

Friday, January 05, 2007

The Rolls-Royce Phantom Drophead Coupé

Regional stock market analysis

1. MarketBeat Blog: "It wasn’t easy to go wrong with global investments this year — unless you sank all your money into the Middle East. . . . Just four of the 81 countries surveyed lost more than 20% this year in their major equity index — Jordan, Qatar, the United Arab Emirates, and Saudi Arabia."

2. Global Economic Forum: "Even after a deep correction, there is still no sign of recovery in Middle Eastern markets. The abundance of petrodollar liquidity led to the emergence of a new equity culture in the Middle East, where stock markets had remained by and large irrelevant for decades. Unfortunately, lacking historical benchmarks and a proper regulatory structure, the liquidity-driven boom in asset markets resulted in a speculative frenzy that eventually collapsed under its own weight."


Thursday, January 04, 2007

Education makes you healthy :: NYT

Many of the big-time bloggers I follow are blogging this NYT article,
Health insurance, too, he says, “is vastly overrated in the policy debate.”

Instead, Dr. Smith and others say, what may make the biggest difference is keeping young people in school. A few extra years of school is associated with extra years of life and vastly improved health decades later, in old age.

It is not the only factor, of course.

There is smoking, which sharply curtails life span. There is a connection between having a network of friends and family and living a long and healthy life. And there is evidence that people with more powerful jobs and, presumably, with more control over their work lives, are healthier and longer lived.

But there is little dispute about the primacy of education.

“If you were to ask me what affects health and longevity,” says Michael Grossman, a health economist at the City University of New York, “I would put education at the top of my list.”

The first rigorous effort to decide whether education really changes people so they live longer began in a most inauspicious way.

It was 1999 and a Columbia University graduate student, Adriana Lleras-Muney, was casting about for a topic for her doctoral dissertation in economics. She found an idea in a paper published in 1969. Three economists noted the correlation between education and health and gave some advice: If you want to improve health, you will get more return by investing in education than by investing in medical care.

I'm not sure that the causal relationship is there. It may just be that idiots are more likely to drop out of school, and also to die young as a consequence of idiotic behavior. As John Wayne said, life is tough, and it's tougher when you're stupid.

Greg Mankiw:
The article is particularly good at explaining how studies handle the identification problem. That is, researchers have worked hard to disentangle correlation and causation. The results indicate that education has a causal impact on health.

Marginal Revolution:
The main point of the article is that education is strongly correlated with better health outcomes, although the author too quickly assumes a causal connection. For instance education may signal rather than cause low time preference and thus responsible behavior.
Since I routinely rely on these sources to determine what I think, I am left confused.

UPDATE - Arnold Kling tips the balance for me:
Suppose that a law was passed in a given state saying that all children born after January 1, 1925 had to attend school through 10th grade, where previously they only had to attend through 6th grade. Then, if we observe a discontinuity in the longevity of people born after January 1, 1925 compared to people born just before, this is plausibly due to greater schooling. Greg Mankiw rightly points out the value of such methodology.


Wednesday, January 03, 2007

The charms of Dubai property :: Money Week

No exit strategy, no evacuation plan. Financially and physically

I wouldn’t put a penny of my money into Dubai, says Stuart Law of investment property firm Assetz in The Independent. “It’s a city based on consumerism. I’m not sure that guarantees its role as a long-term holiday home location. I wouldn’t buy there.”
. . .
According to a spokesperson for Standard Chartered Bank, also in The Independent, “development of the Palms, Dubai Marina, Business Bay and Arabian Ranches, to name just a few [schemes], is going to boost supply in the coming five years in dramatic fashion. To us, this suggests that a decline in property prices is just a matter of time.”

Kevin Fleury, a mortgage broker specialising in overseas loans at Conti Financial Services, agrees. He tells The Times that when investing in property abroad, an exit strategy is needed. With Dubai, though, there isn’t one. “There is a severe danger that there will be an oversupply because so much is being built. This will suppress rents and capital growth, and I think many people will find it difficult to sell.”

Even when it comes to selling a home, the vendor will face additional problems. Dubai may well have just granted the right to own freehold properties to expatriates, but “there is no conveyancing system for property purchases”, says Gill Kerby in The Sunday Times. “The developers and agents offer to undertake all contract exchanges on your behalf (not a good idea).”
. . .
“Palm Jumeirah is a peninsula, with one way in and out,” says William Kistler, European President of the Urban Land Institute. He tells The Daily Telegraph that “the question of how the road provision is going to connect into the transit infrastructure is something that we have got a not very satisfactory answer to”.
. . .
The only road from the resort (down the palm’s trunk) leads directly to Dubai’s main highway, the Sheikh Zayed Road, where traffic “moves as slowly as water down a blocked drain”, says Kistler. People were wondering whether the infrastructure was sustainable even before they built the Palm Jumeirah. Although two new road projects are planned for the area, so too are 100 residential towers, accommodating up to 40,000 people.

The reason for the extra towers seems to be that Nakheel, the property development company owned by the Dubai government, grossly underestimated the number of properties that would be built on the palm-shaped idyll, says The Daily Telegraph. The result makes scary reading. According to a former construction worker for the company, the current plan has 150,000 people living there, “but there are no medical facilities and no evacuation plan in place”.

UPDATE: nzm recommends Dubai Property News.

Troop surge and oil prices :: WSJ blog

A “troop surge” in Iraq could trigger a surge in oil prices, too, says Joseph Quinlan of Bank of America.
. . .
Quinlan raised the specter of greater anti-American sentiment overseas, and a backlash against the dollar, “with petro-states like the United Arab Emirates, which just announced its intention to diversity out of the U.S. dollar, leading the way.”
The UAE is not an anti-American state, nor is it filled with a populace that is anti-American. Just to be clear, it has diversified its portfolio for purely economic reasons.

Quinlan also is quoted as saying such an oil price surge could knock the wind out of the global economy. I'd say most of the increase in oil prices that we have seen throughout the war has been demand driven - growing demand in India and China - and not due to troop levels. Why should that change now?

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Tuesday, January 02, 2007

Single women now outnumber married in UK

But how many are marrying later? Little discussion of this in the article, or the job market reasons for this.

Indeed, the analysis of the phenomenon is also decidely lowbrow in The Times and in The Telegraph.

UAE does not allow professors stay in class this long

UK: If you choose not to walk to school, a taxi will be provided for you