Saturday, April 24, 2010

Don't nudge on me

How would you react if you were informed of your neighbors' electricity usage and said you had "room to improve"? In the U.S. it depends on whether you are a Democrat or a Republican write UCLA economists Dora Costa and Matthew Kahn:
“Nudges” are being widely promoted to encourage energy conservation. We show that while the electricity conservation “nudge” of providing feedback to households on own and peers’ home electricity usage works with liberals, it can backfire with conservatives. Our regression estimates predict that a Democratic household that pays for electricity from renewable sources, that donates to environmental groups, and that lives in a liberal neighborhood reduces its consumption by 3 percent in response to this nudge. A Republican household that does not pay for electricity from renewable sources and that does not donate to environmental groups increases its consumption by 1 percent.
More from Ray Fisman at Slate:
That some groups respond in unexpected ways to well-meaning nudges is a lesson that the architects of "behaviorally informed" policy and regulation should keep in mind in drafting their messages. Costa and Kahn's findings suggest that you shouldn't try to prod Republicans into conserving energy through this type of social pressure. But perhaps there is a nudge that would resonate with Opower's conservative customers. Future messages could be tailored to the market—what works in San Francisco might backfire in San Diego—or even to individual households based on their political leanings, ties to environmental organizations, or enrollment in renewable-energy programs.

But this starts to sound an awful lot like fine-tuned social engineering, which gets us away from the original vision of simple nudges making a better world. And it starts to sound exactly like the type of heavy-handed governing that Republicans may be quietly rebelling against by turning up their thermostats.
Emphasis added.

Virginia Postrel recently made a similar observation:
The daughter of Indian immigrants, Iyengar is drawn to such cross-cultural comparisons. Consider an experiment she conducted with elementary-school children in San Francisco’s Japantown. Half were what Iyengar calls Anglo Ameri­can, and half were the children of Japanese or Chinese immigrants who spoke their parents’ native language at home.

“Ms. Smith” showed each child six piles of word puzzles and six marking pens. Each pile contained one category of anagram — words about animals, food, San Francisco, etc. — and each marker was a different color. A third of the children were told to pick whichever category and marker they wanted to play with. Another third were told they should work on a specific category with a specific marker. With the final third, Ms. Smith riffled through some papers and pretended to relay instructions from the child’s mother. In the latter two cases, the category and marker were in fact the ones picked by the most recent child to select freely.

The two ethnic groups reacted differently. The Anglo kids solved the most anagrams and played the longest when they could pick their own puzzles and markers, while the Asian children did best when they thought they were following their mothers’ wishes.

To the Anglo children, their mothers’ instructions felt like bossy constraints. The Asians, by contrast, defined their own identities largely by their relationship with their mothers. Their preferences and their mothers’ wishes, Iyengar writes, “were practically one and the same.” Doing what they thought their mothers wanted was, in effect, their first choice.

Anglos and Asians did share one important reaction: “When the choices were made by Ms. Smith, a stranger, both groups of children felt the imposition and reacted negatively.” Just because people happily comply with the choices of an intimate — or, for that matter, an authority they’ve selected themselves — does not mean they want bureaucratic strangers making their decisions. Advocates who want to use psychology experiments to justify choice-limiting public policy should keep that lesson in mind.
Emphasis added.

Ironically, and not so coincidentally (it is Earth Week), Richard H. Thaler and Cass R. Sunstein, the authors of Nudge: Improving Decisions About Health, Wealth, and Happiness posted this on their blog the other day:
A free online service to track energy consumption launches on Earth day. It’s called Welectricity. You don’t need a separate smart meter; just your energy bills. If your friends sign up too, you can compare your usage with theirs.
If no one tells Republicans this might work to reduce energy. Oops. I just did.

Sunstein is Obama's regulatory czar.

Don't nudge me
Don't nudge me
Don't nudge so close to me (X2)


Friday, April 23, 2010

Markets in everything

The boyfriend body pillow available at Sears for $39.99 (regular price $89.99).
Product Description

Wrap yourself up in the Boyfriend Body Pillow. This pillow is a soft and cozy body pillow that looks like the torso of a man with a comforting arm that cuddles you throughout the night. Feel safe and warm in his embrace while comfortably sleeping on his chest.

The fun and cozy Boyfriend Body Pillow is excellent for people whose partner is away on military leave or work absence. Singles, who want to feel the presence of a man, without actually having to be with one, love it too. This novelty pillow makes a great gift for a friend or relative with a good sense of humor that would love to have a bit more hugging at night.
The girlfriend body pillow available at Sears for $9.95.

What accounts for the price difference? I don't think it is a cost difference -- the boyfriend is fully clothed, the girlfriend is not.

H/T Gizmodo.


Monday, April 12, 2010

Annals of outsourcing: grading writing assignments

If they choose to, UAE universities to hire lots of cheap, qualified graders to give students feedback on their writing assignments. Having students write more is a highly effective way to get students to improve their writing skills; but they need feedback (and the incentive of an accurate grade). The bottleneck is having enough skilled graders.

From Inside Higher Ed:
That shortcoming led Ms. Whisenant, director of business law and ethics studies at Houston, to a novel solution last fall. She outsourced assignment grading to a company whose employees are mostly in Asia. Virtual-TA, a service of a company called EduMetry Inc., took over. The goal of the service is to relieve professors and teaching assistants of a traditional and sometimes tiresome task—and even, the company says, to do it better than TA's can.
Mr. Bangari, who is based in Bangalore, India, oversees a group of assessors who work from their homes. He says his job is to see that the graders, many of them women with children who are eager to do part-time work, provide results that meet each client's standards and help students improve.
There's evidence that use of the service results in a decline in the number of students dropping a course.

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Saturday, April 10, 2010

No gender gap in math in Muslim countries

Roland G. Fryer and Steven D. Levitt (the latter of Freakonomics fame):
We document and analyze the emergence of a substantial gender gap in mathematics in the early years of schooling using a large, recent, and nationally representative panel of US children.

There are no mean differences between boys and girls upon entry to school, but girls lose more than two-tenths of a standard deviation relative to boys over the first six years of school. The ground lost by girls relative to boys is roughly half as large as the black-white test score gap that appears over these same ages. We document the presence of this gender math gap across every strata of society.

We explore a wide range of possible explanations in the data, including less investment by girls in math, low parental expectations, and biased tests, but find little support for these theories.

Moving to cross-country comparisons, we find earlier results linking the gender gap in math to measures of gender equality are sensitive to the inclusion of Muslim countries, where, in spite of women's low status, there is little or no gender gap in math.
Emphasis added.

Source here, with a hat tip to Chris Blattman.

My experience is that women in the UAE and other Arab countries, given the opportunity of an education, do not waste it: the better their educational achievement, the greater their independence -- from fathers, brothers, and husbands. It is a means to delay marriage, and insurance in case of divorce.

Thursday, April 08, 2010

Yahsat buys Islamic insurance for satellites

Space News
Startup satellite fleet operator Yahsat of Abu Dhabi, United Arab Emirates, has secured what its insurers say is the first space-insurance policy meeting financing conditions established in Islamic law for a portion of its two-satellite insurance package valued at up to $1.15 billion, Yahsat and its insurers announced April 7.

The broad lines of the policy covering the launch and first year in orbit of the two Yahsat satellites, to be launched separately in 2011, had already been organized by Yahsat under conventional commercial-insurance terms. That policy provides for about $450 million in coverage for Yahsat 1A, and the same amount for Yahsat 1B. But if both satellites fail at launch, the claim for the second satellite will rise to around $700 million under the policy’s terms, insurance officials have said.
These conditions included a review of Yahsat, its satellites and their proposed use by a Shariah supervisory board to verify that the policy did not violate Islamic law precepts including prohibitions against price gouging.

Another aspect of the Shariah-compliant portion of the insurance package backed by Methaq is what is sometimes called a no-claim bonus, wherein Yahsat will be refunded a portion of its insurance premium paid to Methaq if it makes no claims under the policy. “The Shariah moral principle of ‘I help you and you help me’ is what’s at the core of this,” said Pierre-Eric Lys, chairman of Elseco.