Thursday, May 31, 2007

Are you are a high self-monitor?

I am, according to this test. Since I am not particularly good at lying (and, therefore, never lie) the test failed in my case.

Take the test!

Actually, I wonder if the test doesn't work when you are told in advance it is a test of lying aptitude.

Quote of the day :: George Will

Some immigrants, with their acute understanding of why America beckons, refresh our national vigor. It would be wonderful if every time someone like Paucar comes to America, a native-born American rent-seeker who has been corrupted by today's entitlement mentality would leave.
- George Will, The Minneapolis Taxi Cartel
See, also, Robert Samuelson's piece in praise of price gouging.

Wednesday, May 30, 2007

Spinsterhood, Dowries, and Completeness

Xpress (the tabloid insert to Gulf News):
Up to 50 per cent of Emirati women face Maryam’s fate [spinsterhood], says Eman Abdullah, president of the International Women’s Cultural Forum in Dubai.
What compounds the problem is that more Emirati men are coupling up with non-Emirati women to avoid the skyrocketing cost of marrying their compatriots, according to Eman Abdullah. This diminishes Emirati women’s chances of getting life partners from within the population.

Legally, Emirati women are allowed to marry foreigners, but UAE traditions discourage them from marrying expats – only 500 Emirati women married expat men in the last seven years, according to a recent forum.
Khalfan Al Mhriz, Family Counsellor at the Dubai Courts, said one solution is for women to be willing to be taken as a second wife. "Being considered a second wife has its own complications. They think it opens doors for family troubles, clashes and jealousy between the wives," he added. Al Mhriz added that society must accept the fact that women are becoming more independent and better educated, with no need to rely on a man.

Raya Al Mhrzi, a sociologist in Abu Dhabi’s Awqaf and Islamic Affairs Department and a member of the Marriage Fund, blamed fairy-tale ideas about marriage. Women, she said, have become too demanding, and high dowries, lavish ceremonies, clothes and jewellery become prohibitive. The Institute for International Research, a UAE think-tank, puts the average cost of a wedding ceremony in the UAE at Dh300,000
Ahmad Al Qubaisi, a leading Islamic scholar in Dubai, said: "The concept of spinster does not exist in Islam. The Arabic word aanes is used to refer to a female camel who has reached old age. Muslim women can get married at any time regardless of age. However, Islam encourages early marriage as a way to complete half of his/her religious duties." Al Qubaisi said that getting married and having children is both a pleasure and a duty that completes one’s womanhood.
Dr Mohammad Wafeek Eid, a psychiatrist at Al Musa Medical Centre in Dubai, said most spinsters suffer from anxiety, depression and multiple psychosomatic complaints, including headaches, epigastric disturbances, abdominal gases and discomfort. "They tend to be suspicious and they make those around them uncomfortable. They are somehow viewed as abnormal because they do not go through motherhood – spinsters are the object of social pity. They feel they are unfulfilled, incomplete," he said.
Eman Abdullah, president of the International Women’s Cultural Forum in Dubai, said spinsterhood is a "dangerous" phenomenon. It waters down the Arabic language, destroys local customs and traditions and creates an unstable and unhealthy family life, she said.
I am skeptical that up to 50% of Emirati women are spinsters - but don't disagree that spinsterhood is common. I am skeptical, too, of the statement that most Emirati spinsters suffer from multiple psychosomatic complaints. The article also fails to mention that the children of Emirati women married to non-Emiratis are not citizens, but those of Emirati men married to non-Emiratis are.

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Monday, May 28, 2007

Op-ed: real challenge for Muslim nations is economic

The author is the prime minister of Malaysia. He writes in the Financial Times:
There is a danger that today’s overwhelming focus on the Muslim world’s political relationship with the west is diverting attention from even more fundamental social and economic problems. The Muslim landscape that stretches from Morocco to Mindanao is more diverse than western commentators often suppose. There are peaceful countries where the people are wealthy, healthy and educated. However, these are sadly outnumbered by countries and regions that are under­developed, poor and in turmoil.
Development must, therefore, be at the top of the agenda of all Muslim countries and communities. This is not simply an issue of income levels, good housing and adequate health facilities. It must also mean a literate and informed society, a representative political system that gives effective voice to the people, the absence of severe inequalities, efficient and honest administration and a commitment to the rule of law. A country cannot be considered developed until rights are respected, women are empowered, minorities protected and corruption eradicated...
Here's the $ version at the Financial Times. More quotation from the essay is available here.


How to think

Reflecting on an essay in the Nation, Dani Rodrik writes:

Some years ago, when I first presented an empirical paper questioning some of the conventional views on trade to a high profile economics conference, a member of the audience ... shocked me with the question "why are you doing this?"

On the other hand I have never found neoclassical methodology too constraining when it comes to thinking about the real world in novel and unconventional ways. .... To me it represents nothing other than a methodological predilection for deriving aggregate social phenomena from individual behavior--and as such it is a very useful discipline for any social science. You say people have some preferences, they face certain constraints, take others' actions into account, and go from there.

Neoclassical economics teaches you how to think, not what to think. So it has always been a bit difficult for me to understand the critique that neoclassical economics is necessarily driven by ideology or leads to foregone conclusions.

Rodrik is the Rafiq Hariri Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University.

Another new blogger, labor economist George Borjas (Harvard), also notes The Nation article and remarks:
The article leaves unexplored one interesting anthropological aspect of Life Among the Econ: its herd mentality. The kind of research many economists do is motivated by, well, by the fact that other economists are doing it too.


Monday, May 21, 2007

Kuwait abandons dollar peg

Kuwait unshackled its dinar from the tumbling U.S. dollar on Sunday and switched the exchange rate mechanism to a basket of currencies, throwing plans for currency union with other Gulf Arab oil producers into disarray.

Kuwait's central bank, which battled speculators for weeks to defend the peg, said the dollar's slide against other currencies had forced it to break ranks with fellow Gulf states to contain inflation from the rising cost of some imports.

The move stunned Gulf currency markets and volumes dried up. The impact would be clearer on Monday when international markets open, said Steve Brice, chief middle east economist at Standard Chartered Bank in Dubai.
"The massive decline in the dollar's exchange rate against main currencies ... has contributed to the increase in local inflation rates and this step is part of the central bank's efforts to curb inflationary pressure," Sheikh Salem Abdul-Aziz al-Sabah said in a statement carried by state news agency KUNA.

Kuwait was named as the top candidate for a revaluation in a Reuters poll of analysts in March and markets piled pressure on the dinar, betting the central bank would allow an appreciation as the dollar slid to record low against the euro in April.
"The basket would typically mean the euro, sterling, Swiss franc and the dollar," said Mazin al-Nahedh, head of the treasury department at National Bank of Kuwait. In the past the central bank did not disclose the composition of the basket, he said. Kuwait officials talked with nostalgia of the currency basket as the dollar slid on international markets, blaming the U.S. currency for rising inflation, which hit 5.15 percent at the end of the first quarter.
Not sure why "stunned" is an appropriate descriptor given that's the way the betting had been going. Still the the article is worth a "read it all."


Phoney Money Honey

The lives of many Kenyans are being transformed by an innovative mobile phone money transfer service. The free account - M-Pesa - is offered by Safaricom Kenya, a leading mobile phone service operator and is a technological breakthrough say the operators. It enables subscribers to send large volumes of money in an instant transaction. The service, which is in the process of rolling out to most major towns in Kenya, is also cheap - costing on average about $1 to send or receive money. Just a month after launch, M-Pesa is already providing cut throat competition to existing money transfer agencies, notably the government-owned Postal Corporation, a market leader with a massive network of branches.

See also this Reuters report on micro finance:
"Uganda is probably the most saturated microfinance country thus far, and still the reach to the rural areas is not strong." [So said Sam Daley-Harris, director of the Microcredit Summit Campaign.]

Technology may have some of the answers. Some operators are looking at using pre-paid phone credit and Africa's rapidly expanding mobile networks to transfer money and make repayments, reducing the need for credit agents to travel from village to village collecting tiny amounts of cash.

Better communications and credit monitoring will also help. Kenya's new law, for example, encourages lenders to pool information on borrowers' credit history, drastically reducing the risk of default....
Here's the take over at Marginal Revolution:
If you want to pay for something, just make a call to the provider and transfer cell phone credits to the other trader's account. Why should those credits be any less liquid than currency? They are easier to store and transfer and just about everybody uses them. Monetary economics in Africa is very, very difficult. It must start with the presumption that money is the asset with the highest carrying costs, if only because your relatives find it so easy to take away from you.
Hmmm. Since the phone credit system makes it less costly to send money home does MR think this is good or bad?

There are several compelling comments to MR's post:

  • Mark writes: We have been using airtime as currency in Nairobi for a while. I regularly take change from taxi drivers in airtime - they don't like carrying cash as they are at risk from thieves.

  • doctorpat writes: How do you stop your relatives from "borrowing" all your phone credit?

  • Cyrus writes: The airtime, while still subject to on-demand sharing, is not subject to its cousin, socially tolerated theft.
What if I could buy minutes as a hedge against inflation?


Friday, May 18, 2007

High prices and the state

Rising fast food prices in the UAE are viewed with concern by the state. Yet they are the result of higher costs to the retailers (mostly due to rising costs of imports transmitted through the fixed exchange rate with the dollar).

Meanwhile we wonder whether a reduction in the state's royalty burden on telecom profits (currently 50%) would be coupled with a change in state regulation that would allow price competition between etisalat and du. Price competition would reduce the burden of high prices on the people.

Shouldn't the mission of the Telecom Regulatory Authority be to promote competition rather than to protect competitors?

We also wonder why the telecoms don't capitalize their names.

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An economics degree can be dangerous

15,000%? The forecast rate of inflation for Zimbabwe this year.

Solution? Print more money to keep inflation down.

Expert? President Mugabe, economics degree holder (London University).

Read it at The Times.

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Monday, May 14, 2007

A picture tells a 1,000 stories

The man with the big V-shaped broom

The Angry Economist writes:
Indians seem afraid of improvements in productivity. They very much seem to have the idea that there is a fixed amount of work. Improvements in productivity would destroy some of that work, and make the country poorer. Or perhaps more accurately, it would destroy the employment of enough voters that they resist change.
Intellectually, it's easy to see that improvements in productivity don't destroy work. Instead, they create the wealth that allows people to pay for more work. After all, there is always an infinite amount of work -- what is lacking is the wealth to pay for it. Emotionally, this is harder to feel, particularly when you are employed in a field in which productivity improvements destroy your job.

All over Mumbai, I have observed cleaners using these wimpy little brooms. In the USA, they would hardly even count as being a whisk broom, and yet in India, they are used to sweep vast areas. A very small capital investment in a push broom would enable them to clean in much less time. This would allow them to clean more often, or more likely, cause some of the cleaners to lose their jobs.

I originally wrote this on 06 Jan 2007... On my eighth trip to India in April, I saw a cleaner using a v-shaped push broom which could collapse on itself to become narrower. Hooray, Chatrapati Shivaji International Airport! Good for you! Doesn't mean that the whole country has learned their lesson, but drop by drop a flood is born.
Read it all here. Thanks to Adam Smith Institute Blog for the tip, and for including a post of mine in their Blog Review 226.


Four boys for every girl

It's rainin' men
The single best measure for locating frontiers is the sex ratio. The greater the imbalance of males to females the more frontierlike the place. In his monumental study of people leaving for America from England and Scotland between December 1773 and spring 1776, Bernard Bailyn has found that four out of five were males; and they were mostly younger males. At a time when only 18 percent of the English and Scottish populations were in the 15-24 age group, half of those leaving for America were in this category.
-Finke and Stark
And we're goin' to Bachelor City, 'cause it's four to one
You know we're goin' to Bachelor Camp City, gonna have some fun
Ya, we're goin' to Bachelor City, 'cause it's four to one
You know we're goin' to Bachelor Camp City, gonna have some fun, now
Four guys for every girl

It's Raining Men! Hallelujah! - It's Raining Men! Amen!
I'm gonna go out to run and let myself get
Absolutely soaking wet!
It's Raining Men! Hallelujah!
It's Raining Men! Every Specimen!
Tall, blonde, dark and lean
Rough and tough and strong and mean


Housing and the bachelor imbalance

Gulf News helpfully has provided an article this morning to complement my previous post about innovative housing solutions. It covers the restrictions that governments in Abu Dhabi, Dubai, and Sharjah place on bachelors living in residential areas. Families about the character of neighborhoods changing when villas originally intended for families are rented by groups of bachelors.

A few quotes:
Amer Abdul Jalil Al Fahim, chairman of Al Qudra Real Estate, estimated that singles account for 50 per cent of residents in the emirate. "They are in dire need for houses that meet their needs. They must be integrated in the social fabric of the city, as they are important in managing businesses."

Al Fahim said that singles should not be segregated along social or professional lines. "Their houses must be near their places of work," he said, adding that labour cities may accommodate workers of construction companies but may not be suitable for other employees who run most of the businesses inside the city.
Bachelors are facing similar housing problems in Sharjah and Dubai as they have been asked to stay away from residential areas. In Dubai, the Dubai Municipality had made it clear that bachelors can reside in flats but not in villas while in Sharjah they are allowed in designated areas like the Sharjah Industrial Area and Al Saja'a.

One of the main reasons for the municipalities to undertake the campaign is to provide a safe and secure environment for families. "It does not matter what the profession is, but bachelors are not allowed to live in residential areas in Sharjah," said a Sharjah municipality spokesperson.
As the article points out, most 'bachelors' have families leaving apart from them in their home countries. They have a name: Sort of Bachelors. The Times refers to these sorts as LATtes (living apart together).

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Sunday, May 13, 2007

Shacking up

People are all the same, I say. For example, if you can't find housing that's affordable you create it. In Dubai, bachelors cram into flats 8 to a room. In New York, bachelorettes do the same thing:
As the apartment-hunting season begins, fueled by college graduates and other new arrivals, real estate brokers say radical solutions among young, well-educated newcomers to the city are becoming more common, because New York’s rental market is the tightest it has been in seven years.
Last fall, Kate Harvey, a part-time nanny and a junior at N.Y.U., and eight friends saved on rent by camping out in vacant offices at Michael Stapleton Associates, a downtown explosive-detection security firm. For nearly three months, they told the guards at 47 West Street that they were interns, even as they trudged in near midnight or pattered through the lobby at 10 a.m. in pajamas and slippers.
It was nine girls and a cat,” Ms. Harvey said, sipping on steamed milk in a Greenwich Village coffeehouse. “At least three of the nine would have had a really hard time paying for school and staying there.” Mr. Harvey said his daughter told him that some friends had spent the summer sleeping on friends’ couches and even in the N.Y.U. library because they could not afford rent.
After taking a job as an instructor at Outward Bound, Ms. Rubin, along with some of her co-workers, settled into the top floor of the organization’s Long Island City headquarters. She camped out in a bunk bed; others converted nearby office cubicles into sleeping spaces, or pitched tents on the building’s roof. To create some privacy, they hung towels and sheets around their bunks.


Saturday, May 12, 2007

Surely UN jest: Zimbabwe to chair environment body

Further confirmation that the United Nations cannot be taken seriously:
Zimbabwe has been elected head of the UN's main inter-governmental body on the environment, despite criticism over the way it has managed its own economy.

European Union nations led objections to Zimbabwe's candidacy late on Friday, when the Commission on Sustainable Development voted for a new chair.

The 53-nation commission choose Zimbabwe's environment and tourism minister, Francis Nheme, as chairman to replace oil-producer Qatar.
Human rights organisations also voiced outrage over the decision.

Both the United States and the European Union have imposed targeted sanctions against Zimbabwe for human rights abuses.

The chair rotates every year between the world's regions and was chosen by African countries this year.
It's all here.


Blogging and cooking

If you multitask, cooking and surfing the web at the same time, then check this handy online timer.

Folk economics and
evolutionary psychology

Emory University economist, Paul H. Rubin, writing in the Washington Post:
Our primitive ancestors lived in a world that was essentially static; there was little societal or technological change from one generation to the next. This meant that our ancestors lived in a world that was zero sum -- if a particular gain happened to one group of humans, it came at the expense of another.

This is the world our minds evolved to understand. To this day, we often see the gain of some people and assume it has come at the expense of others. Economists have argued for more than two centuries that voluntary trade, whether domestic or international, is positive sum: it benefits both parties, or else the exchange wouldn't occur.
A useful analogy is between speech and reading. All humans growing up in a normal environment learn to speak, but reading must be taught because it does not come naturally. Folk economic beliefs are like speech -- we get them without trying. A deeper understanding of economics is like reading -- it must be taught.

America's success in lowering its barriers to outsiders shows that we can and do learn. But like reading, we must teach each generation anew.
One of the things that struck me when I came to the Middle East five years ago was the degree of effort that goes toward influencing rewards. The belief is prevalent that rewards are not based on merit, that rewards can be influenced through negotiation and badgering, and that if someone else in an organization gets a reward it comes at someone else's expense. The view is that effort is best directed towards getting a bigger share of a fixed pie. It is not believed that the pie can be made larger.

If others are expending effort on influence and are seeing results, then you too must expend effort on influence as well. To some degree the presumption that influence matters is self-fulfilling -- those in authority too often take the short-sighted way out and bow to the pressure to use their influence to make exceptions. So exceptions become the rule. I have seen, though, that organizations here that can avoid the short-sighted approach out-perform their rivals in the marketplace. A reputation for awarding on merit is hard won, and hard to maintain, but it can pay.

One of my firm beliefs is that people are fundamentally the same, and that differences in the wealth of nations has much to do with differences in societies' institutions. In particular, Rubin's evolutionary psychology argument that all people are biological programmed to think zero sum is compelling. And, yes, every generation needs to be taught to read that the world is not that way. But that teaching won't stick if society is so pervaded with influence that merit doesn't pay.

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Outsourcing the reporting of local politics

As noted at Marginal Revolution, there's a news media outlet in California with a job ad stating, "We seek a newspaper journalist based in India to report on the city government and political scene of Pasadena, California, USA."

Yes, and I know someone based in the UAE who reports on the political scene in the Episcopal Church (USA) and the wider Anglican Communion.


Monday, May 07, 2007

Markets in everything :: what's the value of a roach?

In the local market of Houston, TX they trade for 25 cents a piece.

Free exchange/ reports:
Houstonians have an unusual money-making opportunity this month. The Houston Museum of Natural Science wants to build an insect exhibit and needs 1,000 roach colonists. And it is willing to pay—25 cents apiece.

That sounds like a great opportunity. There are trillions of cockroaches in Houston, and they are not hard to find in the summer months. But there is a catch. The museum wants them alive. Entomology curator Nancy Greig gave readers of the Houston Chronicle a step-by-step method for capturing roaches. First, you cover a glass jar with pantyhose. (These are still in fashion in Houston.)
Who knew roaches were scarce? Perhaps the museum is hoping to get a group of cockroaches together that aren't inbred?


Friday, May 04, 2007

Who is the Britney Spears of Economics Bloggers?

Reuters has a story about economists who blog, and why they do it.

Of course the story can't mention every blog, but I'm surprized that Marginal Revolution was not mentioned. It's the best economics blog out there. Another of my favorites, Greg Mankiw, does get a mention.

It's fair enough to open the story with a mention of Brad DeLong, although he's not my cup of tea. But then the article starts to reflect the standard confusion about what economics is. One of my favorite bloggers is mentioned, but Daniel Drezner himself would emphasis that he's not an economist. Next, a blog for investors is mentioned - reflecting the standard misconception that economists are stock market analysts.

Thanks to nzm for the link.