Wednesday, January 9, 2008

90,000 deaths caused by organ donation policy

From Regulation Magazine:

...no one has yet articulated a sensible, ethical reason for why we should continue to allow thousands of patients to die each year instead of paying surviving families a few thousand dollars to motivate an increased rate of consent for organ removal.

...Certainly, there are parties directly involved in this policy debate that benefit economically from a continuation of the organ shortage. For example, owners of dialysis clinics, investigators who receive funding for xenograph research, the agencies that manage organ procurement and allocation activities, and even the transplant centers themselves all may experience significant financial gains from shortage conditions. As with any cartel-type arrangement, producers receive increased profits when they are able to restrict supply.

Payment for Sex in a Macaque Mating Market

From Time:
According to the paper, "Payment for Sex in a Macaque Mating Market," published in the December issue of Animal Behavior, males in a group of about 50 long-tailed macaques in Kalimantan Tengah, Indonesia, traded grooming services for sex with females; researchers, who studied the monkeys for some 20 months, found that males offered their payment up-front, as a kind of pre-sex ritual. It worked. After the females were groomed by male partners, female sexual activity more than doubled, from an average of 1.5 times an hour to 3.5 times. The study also showed that the number of minutes that males spent grooming hinged on the number of females available at the time: The better a male's odds of getting lucky, the less nit-picking time the females received.

Holding Banks Accountable for Abandoned Property

Business Week has an interesting story in its most recent issue on the efforts of local governments to deal with the glut of abandoned houses being driven, at least in part, by the recent trouble in the mortgage markets.

The problem arises when borrowers either become unwilling or unable to continue mortgage payments. The banks often threaten foreclosure, and at this point, the borrower abandons the house. In many cases, the bank abandons the property as well because it can't be sold for enough to make the process worthwhile.

A number of local governments (Buffalo features prominently in the article), are trying to force lenders to spend money to maintain these properties. A New York state law's definition of an "owner" of a property includes those who exert "control" over a premises. Buffalo thinks lenders exert control when they threaten to evict homeowners.

Tuesday, January 8, 2008

Latest presidential futures prices

Big movement from last week, from intrade.com:

At intrade.com, one can buy and sell contracts that payoff $1 if a candidate receives the nomination. If the markets are "efficient," then the prices reflect the probability that the candidate will win.

REPUBLICAN NOMINATION PRICES

2008.GOP.NOM.MCCAIN
John McCain to be the Republican Presidential Nominee in 2008
38.0
2008.GOP.NOM.GIULIANI
Rudy Giuliani to be the Republican Presidential Nominee in 2008
28.0
2008.GOP.NOM.HUCKABEE
Mike Huckabee to be the Republican Presidential Nominee in 2008
14.5
2008.GOP.NOM.ROMNEY
Mitt Romney to be the Republican Presidential Nominee in 2008
12.0
2008.GOP.NOM.PAUL
Ron Paul to be the Republican Presidential Nominee in 2008
3.1
2008.GOP.NOM.THOMPSON(F)
Fred Thompson to be the Republican Presidential Nominee in 2008
2.0

DEMOCRATIC NOMINATION PRICES
2008DEM.NOM.OBAMA
Barack Obama to be Democratic Presidential Nominee in 2008
74.0
2008DEM.NOM.CLINTON
Hillary Clinton to be the Democratic Presidential Nominee in 2008
24.0
2008DEM.NOM.EDWARDS
John Edwards to be the Democratic Presidential Nominee in 2008
2.0

Monday, January 7, 2008

A Major Move in the High Def DVD Wars

We have discussed the fight between HD-DVD and Blu-ray to establish the standard format for high definition DVDs (see posts here, here, and here).

Last week, HD-DVD took a haymaker to the chin when Warner Brothers announced that it would release new movies only in Blu-ray format (see ABC News story here).

Only two major US studios support HD-DVD, while five support Blu-ray. Is HD-DVD headed for the Betamax pile?

Sunday, January 6, 2008

The Economist's view of HR

Good survey article in this month's JEP on Personnel Economics:
In 1974, the 90th percentile of wage earners received about 1.9 times the hourly wage of the 50th percentile, but this multiple has risen steadily over the last three decades and has now reached about 2.3. ...

The proportion of employees’ pay that comes from bonuses rather than from base salary has increased. ... the share of large firms that have more than 20 percent of their workforce working with some form of individual incentives, like a performance bonus, has grown from 38 percent to 67 percent. The percent of firms using any form of “gain-sharing” or group-based incentives has grown from 26 percent to 53 percent.

Friday, January 4, 2008

Compensating beauty differentials

The Economist reports that beautiful people earn more:

[In the US,] the ugliness “penalty” for men was -9% while the beauty premium was +5%. For women, perhaps surprisingly considering popular prejudices about the sexes, the effect was less: the ugliness penalty was -6% while the beauty premium was +4%.

Since then, he has gone on to measure these effects in other places. In China, ugliness is penalised more in women, but beauty is more rewarded. The figures for men in Shanghai are –25% and +3%; for women they are –31% and +10%. In Britain, ugly men do worse than ugly women (-18% as against -11%) but the beauty premium is the same for both (and only +1%).

New Hampshire primary prices: Republicans

from intrade.com:
REP.NH.ROMNEY
Mitt Romney to Win
16.0
REP.NH.MCCAIN
John McCain to Win
75.0
REP.NH.GIULIANI
Rudy Giuliani to Win
0.6
REP.NH.HUCKABEE
Mike Huckabee to Win
2.9

New Hampshire primary prices: Democrats

from intrade.com:
DEM.NH.CLINTON
Hillary Clinton to Win
32.0
DEM.NH.OBAMA
Barack Obama to Win
70.0
DEM.NH.EDWARDS
John Edwards to Win
1.0

Tuesday, January 1, 2008

Auto Dealership Managerial Incentives

Those interested in economics should go car shopping more often. It's like the Thunderdome of economic combat ("Two men enter; one man leaves"!!).

We ran into an interesting situation when shopping for a car recently. Our preferred color/model combination was not on the lot of our local dealer. But, that combination was on the lot of another dealership location, owned by the same company. The local sales manager, however, was not enthusiastic about making a trade with the other location. Why? I don't really know what the mechanics of a dealership are, but I imagine that making the trade would have somehow cost him. Then it becomes a rational decision to resist the trade given his incentives.

But what about from the perspective of the company as a whole. The trade makes sense for the company because a sale is made. But, the local manager's incentives must not be aligned with the overall goals of the company. The result? We went to another dealer (a different company).