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April 28, 2006

When a rally isn't enough

The Jewish community likes to position itself as a special moral authority on the matter of genocide. But to keep such a privileged position as the holocaust drifts deeper into the seas of time, Jews have a special obligation to try to stop other genocides. They may not always be able to stop them, but they can make sure that it is not though their inaction that they continue. That's why I'm joining friends and family
in Washington DC this Sunday to protest the situation in Darfur.

Words are not enough, but hopefully they will catalyze the application of force. But how can I ask American soldiers to risk their lives in an effort so disconnected from American security needs? Perhaps the answer is mercenaries.

A Boston Globe Op-Ed suggested that we raise the money to hire an army.

This definitively is a risky strategy. In Iraq private security forces paying massive salaries have made it difficult to retain American forces. It is likely that we should paying soldiers better to retain them, maintain their professionalism, and as a matter or moral, but we should recognize that Americans funding private armies in other countries is going to make this worse. Second, there is a real worry that existing mercenary companies can't handle the human rights and peace keeping expectations we have of American armed forces. This could be ameliorated by trying compensation to ongoing good behavior, but it is worth worrying about. Third, we have to worry about their problems becoming our own. If they brutally suppress a radical Muslim elements in Darfur and that breeds another batch of terrorists to spill out across the world, that is definitely our problem.

All that said, there is a genocide happening today, and there aren't enough good government forces spare to stop it. The downsides seem limited, if real. Soldiers-of-fortune can likely end the misrule of Darfur for a few billion dollars. We should start fund raising.

Posted by OneEyedMan at 3:18 PM | Comments (1)

April 27, 2006

Could this save kodak?

Kodak is developing a new technologies to improve the classification of pictures. The first, Scan the World, uses contextual clues like the size, shape, and words printed (Kodak 1978) on the back of pictures to identify when and where they were taken. Engaget points out that this can even help with obscure family photographs from the dawn of photography.

The second, Scene Recognition, can analyze pictures using facial recognition to group pictures of the same person. The former one is interesting, especially when combined with a feeder scanner and a giant collection of mixed up photos from a lifetime of photography. The later one, if they can get around the problem that family members tend to look alike, would simply revolutionize photo organization.

Right now I use Adobe Photoshop Album 2.0, the best program I've seen for organizing a personal photo collection. Of course, I have about 5000 photographs, so staying organized let's me really enjoy my photo collection. I easily take a hundred photos on a big, fun event like a return my alma mater or a holiday visit, so tagging is a serious commitment to stay on top of. To the extent that Kodak makes that easier and faster, I would consider making compromises on just about any other aspect of my photography. If that means I need to buy all new cameras even if it means settling for lower performing, heavier, and more limited lenses, I'd do it.

Posted by OneEyedMan at 12:18 PM | Comments (0)

Mexico is a hypocritical country, just like all the others

As I've discussed before, I am extremely pro-immigration, and yet I still think the Mexican government is disgusting and hypocritical about how they interact with the US on immigration policy.

You might wonder what happens to undocumented migrants in Mexico that come from other countries.

The level of brutality Central American migrants face in Mexico was apparent Monday, when police conducting a raid for undocumented migrants near a rail yard outside Mexico City shot to death a local man, apparently because his dark skin and work clothes made officers think he was a migrant.

Virginia Sanchez, who lives near the railroad tracks that carry Central Americans north to the U.S. border, said such shootings in Tultitlan are common.

"At night, you hear the gunshots, and it's the judiciales (state police) chasing the migrants," she said. "It's not fair to kill these people. It's not fair in the United States and it's not fair here."

Undocumented Central American migrants complain much more about how they are treated by Mexican officials than about authorities on the U.S. side of the border, where migrants may resent being caught but often praise the professionalism of the agents scouring the desert for their trail.

For a different take, Political Wire - Latino says that Mexico too is becoming dependent on cheap immigrant labor.

Read the whole thing over at Yahoo News.

Posted by OneEyedMan at 11:43 AM | Comments (0)

April 26, 2006

Why bother with funds of funds?

A fund of funds is a investment fund that invests in several hedge funds. Hedge funds are usually distinguished from mutual funds by their pursuit of returns on capital that are not correlated with the overall returns of the broader investment market. This is called alpha. The purposes of fund of funds are two-fold. First, meeting the right (honest and qualified) people to run your money is difficult, so having a professional fund finder do this is valuable. Second, while any one fund may take big risks and fail, perhaps in aggregate they will do well under broader circumstances.

Last weekend a friend suggest that fund of funds were a bad bet. Consider that by definition, the overall market has an alpha of zero by definition, it can't have performance outside of itself. So that means that the total dollars of alpha profit generated by market participants must be zero. Add this to the fact that fund of fund managers are paid for their services and you have what appears to be a losing combination.

But not all is as it seems.

I've been mulling a this comment, and I think that he is right in his points, but his overall conclusion is inaccurate. First, if you consider that funds have the ability of to participate in private equity and venture capital investments, the overall market can have alpha, because the marginal capital creates new returns. Also, more efficient application of capital by investors creates greater incentives for reinvested to work harder. That could raise overall returns above what it would otherwise be.

Also, alpha generation isn't the only purpose of hedge funds. They are also useful for hedging risks. Let's say your family owns a small (<100MM) US industrial goods company with a factory in China. You might want have one hedge fund that hedges correlation risk in US equities, another one that worries about cross currency rates, and a third that worries about relative equity market movements in India and China. You personally have about 20MM, which isn't really enough to put a big chunk in three hedge funds, because you also own a few houses, have most of your equity in your firm, and as a big believer in the US equity markets, you already own millions in US equity market index funds. But you find a fund of funds that will take a 3MM investment and break it up among all three. You might not expect these three funds to in aggregate generate alpha, but on the off case that one of your big life bets goes awry:
1) India becomes a better place for business than China
2) The Chinese currency moves radically against the dollar
3) US equity markets lose their diversification effects
You have protection to the downside.
So in this case, the fund of funds has real value to you. Sure, in the most likely situations, you expect these investments to do worse than your main investments. But if everything else goes to hell, it is nice to know you will have some protection.

Posted by OneEyedMan at 11:58 AM | Comments (0)

April 25, 2006

A survey of new media

The Economist had a great survey of new media in the April 22, 2006 issue.
I recomend reading the whole thing. I found it insightful, educational, and thourough. Here are my favorite quotes:

The word "blog" appears to date back to 1997, when one of the few practitioners at the time, Jorn Barger, called his site a "weblog". In 1999, another user, Peter Merholz, playfully broke the word into "we blog", and somehow the new term-blog-stuck as both a verb and a noun. Technically, it means a web page to which its owner regularly adds new entries, or "posts", which tend to be (but need not be) short and often contain hyperlinks to other blogs or websites. Besides text and hypertext, posts can also contain pictures ("photoblogs") and video ("vlogs"). Each post is stored on its own distinct archive page, the so-called "permalink", where it can always be found. On average, Technorati tracks some 50,000 new posts an hour.

The second irony-a common one for sunset industries-is that decline, financially speaking, is very pleasant. Printing presses, the main capital outlay for newspapers, last for decades and are depreciating peacefully with little need for new cash. As newspapers get rid of the more atavistic elements in their print editions-such as the pages of (inherently out-of-date) share prices-they also save on ink and paper. Thus, despite all the frightening circulation numbers, Goldman Sachs, an investment bank, estimates that the average profit margin for America's 12 biggest newspaper publishers in 2004 was 21%, more than double the average of the Fortune 500 companies. Some people are still making money, in other words, and are willing to invest. Last month McClatchy, a big American publisher, bought Knight Ridder, the country's second-biggest stable of newspapers, for $4.5 billion.

To put this process to the test, the journal Nature recently commissioned a study to compare the accuracy of a sample of articles drawn from Wikipedia and the Encyclopaedia Britannica respectively. Nature's experts found 162 errors in Wikipedia's articles and 123 errors in Britannica's. Jorge Cauz, Britannica's president, immediately claimed victory because Wikipedia had "a third more errors".
We are all fallible

Privately, however, Britannica's editors were shocked to have to concede that their creation contained any errors at all. Total accuracy, after all, is the main selling point for the old media. So Dale Hoiberg, Britannica's current editor-in-chief, commissioned his own review of the study and found that "Nature did everything wrong that they could possibly have done wrong." Last month Nature issued a rebuttal. But if it did get it wrong, it is not clear why it would have erred more for Britannica than for Wikipedia. Mr Hoiberg puts a brave face on it, claiming that "our model, although not perfect, is the best."

Does podcasting therefore spell the end of radio? "I don't really buy into that per se; what we're really seeing is a big mash-up of stuff," says Mr Curry, the podfather. Podcasting, terrestrial radio and another newcomer, paid-for (ie, mostly advertising-free) satellite radio, are all carving out their niches in people's crowded media lives. The limiting factor of podcasting, says Mr Curry, is that it is "inherently asynchronous" (ie, not live). "If they find Osama bin Laden, don't go running to your iPod," he adds. Breaking news, call-in shows (an old-fashioned form of participatory media) and other live programming will still work on terrestrial radio.

Google, for instance, "happens to be a media company run by technology people", says Larry Page, its co-founder, because virtually all of Google's revenues come from advertising. In fact, Google is the most valuable media company in the world, with a market capitalisation about half as large again as that of Time Warner, the largest "traditional" media company. This is remarkable because Google, an internet search engine with lots of other free internet services, explicitly does not produce that which media companies have traditionally manufactured: content.

But Jerry Yang and David Filo, Yahoo!'s founders, started their company as a hobby, says Mr Moritz. It was always meant to be a media company, and a rather relaxed, human one at that. Larry Page and Sergey Brin, by contrast, have always been "intellectually obsessed" with their mathematical algorithms, says Mr Moritz. This shows. Today, Yahoo! does interesting research into the sociological aspects of the internet, whereas Google hires the world's top computer geeks.

AS A rule, some people, such as Jacobins, tend to be more enthusiastic about revolutions than others, such as monarchs. Another fairly reliable rule is that revolutions abrupt enough to be associated with a single year (1642, 1789, 1848, 1917) tend to cause trouble but rarely bring lasting change. By contrast, revolutions gradual enough to be associated with a name (Renaissance, Reformation, Industrial Revolution) often do have enduring effects. A third rule, or hypothesis, might be that revolutions seem never to be entirely for the better or the worse, but somehow manage to combine both.

Paul Saffo, a futurologist and one of the world's most enthusiastic technophiles, also looks at the downside. "Each of us can create our own personal-media walled garden that surrounds us with comforting, confirming information and utterly shuts out anything that conflicts with our world view," he says. "This is social dynamite" and could lead to "the erosion of the intellectual commons holding society together...We risk huddling into tribes defined by shared prejudices."

Posted by OneEyedMan at 6:24 PM | Comments (0)

April 24, 2006

Does Media Bias matter?

It is a well established that more journalists think of themselves as Democrats than Republicans. But even if this does leak into their work, does it matter? Maybe average number of media consumers per journalist is higher for conservative columnists, so the net effect is zero. But how to measure that?

It seems someone has tried:
"Does media bias affect voting? We address this question by looking at the entry of Fox News in cable markets and its impact on voting….We find a significant effect of the introduction of Fox News on the vote share in Presidential elections between 1996 and 2000. Republicans gain 0.4 to 0.7 percentage points in the towns which broadcast Fox News….Our estimates imply that Fox News convinced 3 to 8 percent of its viewers to vote Republican."

Read the whole paper over at the National Borough of Economic Research.

Posted by OneEyedMan at 9:33 AM | Comments (0)

The art of the deal

Harvard business review just had a case study on strip clubs and their role in generating sales. The best part of the article is the balance. The sociologist and former dancer Katherine Frank goes on the record that "...research on male customers of strip clubs found that the slightly aberrant and titillating environment, the release from the everyday rules for relating to women, and the ego-boosting nature of the interactions there may all contribute to relationship building between men." And sales, when it isn't just about price, is about relationships.

There is evidence that a strip club, at least for aggressive clients, is not just a fun place to get sloshed. It is a nerological place of compromise, where men can go put themselves in a state where they are willing to make fair deals.

Academics at the University of Leuven in Belgium took an another look at the connection between the erotic and doing business. They used the ultimatum game. In that game one participant (the offerer) is given a sum of money which they divide in two however they like. The other participant (the evaluator) knows the total amount of money and how much he gets. The evaluator can then keep this amount, allowing the offerer to keep his amount, or decide that both should have nothing. This simple game evokes a battle of wills and test of the participants valuation of fairness.

The academics showed men erotic pictures of women before allowing them to play evaluator. They found that as a group drove, "High-testosterone men fight hardest for a large cut...But the most testosterone-driven men were also the most likely to slacken their cash demands after viewing sexy women." Low testosterone men also saw a increase in willingness to compromise, but a smaller one.

Posted by OneEyedMan at 8:58 AM | Comments (0)

April 20, 2006

Sometimes there is a better way

When I visited Israel in January of 2005, we stopped at Mount Herzl, the Israeli military cemetery (much like Arlington). With just a few exceptions for Hertzel, Eshkol, Rabin and a few other heads of state, everyone has a simple headstone, with the date and name in Hebrew, English, or Russian. Take a look at Yonatan Netanyahu's grave. Like all traditional Jewish graves, the dead is buried wrapped insimple white fabric and usually buried in a simple wooden box. Equal in death no matter how different in life.

Contrast all that with Prestigious Ever-Aftering in Brooklyn, an account of the renewed practice building mausoleums. Heated rooms, space for 256 bodies, and of course, marble everywhere.
The Mausoleum at Halicarnassus and the Taj Mahal not withstanding, a wasteful memorial to the dead is not the best way to remember and celebrate them. Tangible memorial has its purpose, but the difference between something expensive and something modest in recalling the departed is over-rated. So even if you aren't Jewish, when burying the dead, go for the modest casket, the simple grave market, and spend the rest on something for the living that they would have approved of.

Posted by OneEyedMan at 9:01 AM | Comments (0)

April 19, 2006

Measuring social mobility

How do you know if you live in a mobile society? Usually it is measured like this. Break the population up into tiers by income, such as top 20%, next 20%, middle 20%, 60-80% lowest , and the lowest 20%, let a period of time pass, then measure again. A society with a income mobility is one where lots of people change percentiles.

I recognize knowing that you can become richer (either relatively or absolutely) is highly motivating. Economic mobility (or a myth of such mobility) creates constituency for economic liberalism because people believe that they will win from the process of creative destruction. Nevertheless, I've never liked this method much. After all, this treats the economy as a zero sum game, where all that matters is relative prosperity, and you know how I feel about that.

In Social mobility and equality, Stumbling and Mumbling finds that income mobility and economic equality are complements. Which is to say, that in societies with high income mobility also have low income inequality. Some people thought this was surprising. A country where people are free to sink or swim (moving throughout the quintiles) could encourage the successful to acquire riches, driving up income inequality. But thought us another way, this seems obvious.

Let's say that in two societies have the same average household income (30,000), the average change in income is zero, and they both have a standard deviation of income change of $10,000 . Let's assume that income change is normally distributed. What they differ in is income distribution. Society A has an relatively equal income distribution ($10,000 standard deviation of income), society B has a relatively unequal one ($20,000 standard deviation of income). In society A, a one standard deviation move of income will move you a full quintile. In society B, a two standard deviation move will move you a full quintile. That will make income mobility as measured by quintile change be almost 20 times as large in society A as society B, even though real the income changes of workers in both are identical.

Posted by OneEyedMan at 4:18 PM | Comments (2)

April 18, 2006

Blasts in Tel Aviv

My mother and stepfather, who are visting Israel, were unharmed by and nowhere near yesterday's murderous blast.

Posted by OneEyedMan at 12:03 PM | Comments (0)

April 17, 2006

Something for the man who has everything

Frontgate is a fancy homeware retailer in the mode of Hammacher Schlemmer or the Sharper Image. They sell lots of silly crap that one almost wants or could want for a very different price. But Frontgate's Mahogany Charging Station is something I could actually use. Superficially it appears to be a valet for holding a man's wallet, watch, phone, change and keys. A lovely touch, but what justifies the $200 price tag is a hidden interior power stip. That allows you to conceal the ugly AC-DC transformers used to charge all your mobile devices.

In the last couple of years I've heard talk of a holy-grail of these devices, a charging pad where you leave the devices sitting on the pad and the devices charge without a cord. Maybe one day we will all have a Splashpower charging pad, but until then this device will look nice and deliver almost all the same functionality.

Posted by OneEyedMan at 11:28 AM | Comments (0)

April 12, 2006

What a great country to inspire such love

From People Power in today's times.

A recurrent complaint against new immigrants — particularly Latinos, the overwhelming majority at most rallies — is that they are slow to assimilate. But these crowds clearly had internalized at least one pillar of the American way: that peaceful dissent can spur a government to action.

Though recent immigration developments in Washington had been a discouraging mix of stalemate and cold political maneuvering, the marchers seemed motivated less by a sense of grievance than by hope, and the pure joy of seeing others like themselves rallying for a precious cause. They were venturing boldly from the shadows and daring the country to change its laws, but were doing so out of a desire to participate in the system, not to undermine it.

This became especially clear when the thousands on the Mall recited the Pledge of Allegiance, reading from yellow sheets printed in English and in a crude phonetic spelling to help Spanish speakers pronounce the unfamiliar words. Something about the latter version — with its strange sense of ineloquent desire — was enough to provoke tears.

Ai pledch aliyens to di fleg

Of d Yunaited Esteits of America

An tu di republic for wich it estands

Uan naishion, ander Gad

Indivisibol

Wit liberti an yostis

For oll.

Posted by OneEyedMan at 10:16 AM | Comments (0)

April 11, 2006

Winners and Losers

Disney / ABC is planning to release their most popular shows online for free from their website. They will also be available for free from itunes. On both platforms the content will be ad supported but users will retain the ability to fast forward.

Which didn't seem too big a deal to me, but the Intersection of Anthropology and Economics changed my mind. Their claim?
Winners are the networks (and other content providers) and conventional advertising. The losers are Google, Apple, cable companies, TIVO, and even DVDs. This could be huge.

I'd like to add some extra winners to the list. Movie companies will love this if they have the guts to try it. The ability to distribute full length movies in DVD quality but advertising supported could provide a revenue model that discourages most people from pirating movies. It could also allow them to monetize their back catalogs. The phone companies. Since only a few programs are downloaded at a time, nearly in real time, the differences between the cable and phone content delivery models have shrunk. It would be funny if TV over DSL hurt cable the way that VOIP is hurting the phone companies.

Posted by OneEyedMan at 8:25 AM | Comments (0)

April 10, 2006

Is Ethanol the key to oil independence?

Today's NY Times had an article about Brazil's use of Ethanol to reduce their dependence on foreign oil. As one would expect it is mostly fawning praise of the benefits of such a program. They paint a picture of a eco-paradise where the sun makes sugar cane, and then the cane makes alcohol for auto fuel and and the waste is burned to power the production facility.

It has taken 30 years and serious government intervention to achieve "energy self-sufficient". But I'm not convinced this is real. Oil is at about $68 a barrel, so I should hope that Ethanol were somewhat competitive today. Because if not now, when?

Ethanol wholesale goes for about $2.49 per gallon. On the other hand, wholesale gas, even with oil at a historically high prices, costs only $2 per gallon. So if Oil is heading to $80 or $100 a barrel, maybe Ethanol makes a lot of sense. On the other hand, if oil ever goes back to $20 a barrel, or even $40, Brazil will have made a big investment in technology and infrastructure with little economic value.

And peak oil people to the contrary, there is reason to suspect that the long term price of oil is below $40 per barrel. With a Saudi Arabian sized tar sands in safe, advanced, and nearby Canada, it just doesn't seem much in the cards to have $60 oil as the long term price. At current prices(actually even at $35), Canada has oil reserves almost as large as the Saudis do.

It might not be popular to say it, but for America, across a larger percentage of likely oil price scenarios, money invested in cleaner and lower cost tar sand extraction technology would be better than investing that money in expanding ethanol production.

Posted by OneEyedMan at 5:07 PM | Comments (2)

April 7, 2006

Big Love?

In One Man, Many Wives, Big Problems, Jonathan Rauch tries to establish that because the social consequences of polygamy are serious and very different from homosexuality, we should not allow it. Essentially he argues that it won't take much polygamy to lead to massive social unrest. Nevertheless, I'm not sure what an article like this is doing in Reason.

If everyone involved is of a consenting age and enters into it willingly, I'm not sure why anyone else should care. Even if it leads to a bit more crime, it hardly seems like anyone else's business, especially if they don't use it as an excuse to grab for new state subsidies. If all these people want it the right to leave some stuff to their several spouses and not have to worry about the police kicking down the door, than we should be leaving these guys alone.

The issue leaves me with the same general feeling I have about homosexual unions, that I'm fine having them be legally recognized, but as long as we are going to involve the state in each other's business generally, also I do not have a problem with special privileges being accorded to long-term monogamous heterosexual relationships, especially those involved in procreation.

But some people do find the social unrest issue a plausible threat. Roaming bands of unmarried men harassing and destroying doesn't sound too nice, so it makes for a good scare tactic. The reality would be unlikely to be as dangerous.

Why? Three reasons, jail, homosexuality, and women.

First let's deal with jail. There are over 2 million incarcerated Americans between US prisons and jails. There are about 9 (actually more) men in prison for every women. That makes
a net reduction of 1.6 million men. So right off the bat, we know that There are about 98 million Americans between the ages of 18 and 40, the key child bearing years. Half of those are men, there are 3% more women than men as a baseline to actively compete for mates. Yes, I know that some people in jail are married, but in many respects they are taken out of the marriage pool. They certainly are much less likely to be married.

Next, on to homosexuality. Trendy female bisexuality non-withstanding, male homosexuality is usually measured as at least twice as common as that of female homosexuality. On the high end this estimate that makes another 2 million net men vanish from the heterosexual pool.

Plus, women like to marry more than men do. Among single English-speaking, heterosexual men ages 25 to 34, fifty-three percent agree that they are "not interested in getting married anytime soon. In contrast, 63% of college going women hoped to meet their future husbands there. Eighty three percent of those women thought that, "being married is a very important goal to me"

So, all in all we have millions more women than men in the heterosexual marriage pool, and of those the women feel much more strongly about getting married. Is it any wonder that as a result that working women do more housework? The deck is stacked against women who want to be married, and most of the reason for that is the near-complete breakdown in the solidarity young women once had in avoiding premarital sex. Now that the motivations for male marriage are diminished, but maternal appetites remain, women are in a difficult situation.

I have seen much of this first hand. I went to an engineering school, so I watched first hand what having too many men looks like, the women were treated like queens. One of my friends transfered to the University Arizona, 77% women. Eating disorders suggestive clothing, and promiscuous behavior was rife. He never had a date his whole freshman year, but within a month of starting his sophomore year he had a girl that looked like a model and he treated like dirt.

Allowing polygamy would suck many women out of the dating pool, forcing the average man to work harder for the average women. One way that they would do this is to offer a marriage of gender equality. With US already having safely having a massive gender imbalance now, reducing this by allowing others to exercise their freedom of association in polygamous relationships can be tolerated. For foreseeable levels of polygamy it would merely be a transfer of gender power from men to women that would not be a threat to social stability or most men's ability to get a monogamous marriage.

Posted by OneEyedMan at 3:44 PM | Comments (0)

Blair vs Brown

Crooked Timber has a neat bit of political economy where they try to estimate when Tony Blair will retire in favor of Gordon Brown, his heir apparent. It makes use of game theory, probability theory, and some wicked Excel work.

Posted by OneEyedMan at 2:57 PM | Comments (0)

April 6, 2006

Why do observed rates of homosexual behavior vary as much as it does?

Is sexuality is inborn and does expression depends on a supportive environment? We visited this once before in dealing with relatives with AIDS.A genetic theory of the cause homosexuality would require that homosexuality have primarily genetic causes and that sexuality be binary (or near so) such that few, if anyone, can choose, in the way one chooses between living in a city or the suburbs, between homo and heterosexuality depending on how they are raised. That is, some people may be heckled into not expressing their true sexuality, but their is an independent sexuality from their expressed sexuality.

All but the most die-hard believers in the genetic determinants of sexuality would agree that a supportive environment encourages people with genetic predispositions for homosexual urges to follow those urges. But it it should be a testable hypothesis if some people's sexuality is informed by the way they are raised and not just genetics.

To test this, we must find families with biological children and at least one one adoptive child. Given that a biological child is gay, what is the likelihood that the other biological children are gay? What is the likelihood that the adoptive child is gay? Those with a genetic connection should have a more highly correlated expression of homosexual behavior if it has primarily genetic causes.

As far as I know, no one has done that precise experiment. However, there are some interesting related experiments. I am not sure if these studies are any good, but they make for interesting conversation.

52% of identical twins of homosexual men were likewise homosexual, compared with 22% of fraternal wins, but only 9% among non-twin biological siblings, that could suggest in vivo causes are more powerful than genetic causes. But what do we make of 11% of adoptive brothers sharing homosexuality? The samples aren't huge, so let's call this the same as the 9% among non-twin biological siblings. That's compared with a background rate of what 5%-6%? Doesn't that suggest that socialization has some role? Unless 10% is the true background rate of homosexuality, which is possible, but then suggests no genetic condition, only stuff that happens in the womb.
That's an interesting idea, maybe that could be tested with Amniocentesis data.

Posted by OneEyedMan at 6:15 PM | Comments (0)

Nice to see someone making my ideas happen

Last summer I discussed a hypothetical social mapping tool for a organization that would illustrate the connections between users by looking at the phone call, instant messaging, and email records. By connecting users that call and email each other, you could discover the highly connected individuals and possible reconfigure management hierarchies to reflect actual work practices.

Some researchers at MIT, HP, and IBM got together and made a computer program that handles the back end data processing and front end visualization tools for making this email portion of this idea possible. I give thanks to Future Feeder for tipping me off to this.

I wonder if they are going to patent it? Does my writing about it on my website constitute prior art? They definitively have real advances and differences though. My tool was mostly for the organization, as so was designed to draw inferences that would be useful to the organization, like who is highly connected, and who is acts as a narrow connection between disparate areas.

Their system is more for a single user to understand what they work on and to whom they communicate. As such, they develop keyword visualization tools that seem interesting. You can see who is talking to whom and what they are talking about. A little too intrusive for a organization level tool, but users might like having access to these tools if management did not.

They also point out that in a heterogeneous email environment, several email addresses might point to one person, and their tool helps to straighten that out. They also have the clever idea to filter out Spam by ignoring any email addresses to whom the mailbox owner has not sent at least one email. They also point out the importance of filtering out trivial words when working with keywords in emails. This is much like Amazon's statistically improbable phrases. One thing that occurred to them after their experimentation is that forwarded text comes to dominate the important keyword lists. Because of the various conventions of displaying quoted text, their order in time, and the fact that individual blocks of text are unlikely to repeat randomly, their there are somethings you can do about this. Fore similar reasons, the contents of signature files kept popping up.

One thing they don't deal with is mailing lists. I didn't discuss this last year, but my suggestion is that the more people an email is sent to the less it should count for. This came from the institutional focus. A one-on-one message suggests a thicker connection than a mailing list or group message. This won't dilute the connections established by highly active mail groups because the volume of messages sent to the large number of people will counteract the lower weighting. Empirical testing would be required to establish if linear (weighting = 1/ # recipients) or lower (weighting = (1/ # recipients)^b , b>1)

Posted by OneEyedMan at 3:07 PM | Comments (0)

April 5, 2006

Weather

I just wanted to say that it is April 5 and it is blizzarding outside my window. That is an outrage.

Posted by OneEyedMan at 11:19 AM | Comments (0)

Saying Thanks

My family wasn't much for thank you notes. As I recall, the only time I ever had to write them was for my Bar-Mitzvah gifts. I got mostly cash for college, so they were pretty easy to write. For everything else, calling the gift giver to for salutations and thanks was all that was required.

I got a bit of a letter witting bug in college. There were serious and frivolous reasons that I wrote letters, but not many for thanks. When I learned that the Japanese spend the first paragraph of their letters speaking about the seasons and the weather, so I tried that for a while too. I even read a book on the broader subject of letter writing.

Nevertheless, now the Blue-Eyed Girl and I are getting married, and the gifts have started to arrive. Keeping on top of the letters is just a matter of organization, and so far we have been on top of things. But what to say?

Jim Gaffigan in a bit I discovered on Dr. Katz, Remarks about how stupid everyone sounds when they you write postcards. Pretty much every postcard sounds the same, "This place has big buildings, I like food, bye." I didn't want my my thank you cards to be as inane as that, so went in search of a tutorial. I found an interesting bit about thank-you notes that might be useful to you too.,

Posted by OneEyedMan at 10:49 AM | Comments (0)

Quotations

Here is a bit of inspiration to go with your Wednesday morning, a list of over a thousand libertarian quotations.

Posted by OneEyedMan at 9:53 AM | Comments (0)

April 4, 2006

Are art prices growing at the rate of economic growth?

Back at Stumbling and_Mumbling, someone suggested that this major work of art essentially grew at the overall nominal rate of economic growth, making it a normal good. That's wrong. Art, or at least this piece of art, is a luxury good. Correcting for the fact that we have to use the real growth rate, 1.8%, that is way above the average rate of economic growth over that period from 1649 to 2006.
If we calculate it out:
1.018^(2006-1649)-1 = 58,200% growth. GDP per capita in the UK is 29,600, so 29,600/582 = $51 per year in real income in 1649, which is much too low. I couldn't find the number for the in 1649, but "in 1500, the estimated European per capita income was roughly $215; in 1700, roughly $265." Using a straight line estimation, that gets us $251 in per capita income, implying a historical growth rate over this period of 1.3% . That might not seem like a lot, but if the UK economy had squeezed out that extra half a percentage for the last 350 years they'd make $146,300 a year today instead of $29,600. Since supply of the art (1 painting) has been constant as the price has grown faster than income, we can only assume that demand has been shifting faster than income growth. That is a behavior exhibited by luxury goods.

Posted by OneEyedMan at 11:15 AM | Comments (0)

April 3, 2006

Imputed rent and the price of art

What is a share of stock worth? Given enough time all companies either go bankrupt or are acquired, so at some future date we'll have sale price. Stocks also pay dividends, providing a stream of income until acquired or bankrupt. If we knew them for certain, we could take the net present value (NPV) of these two types of income to calculate the exact value of a share. We can't know for certain, but estimates of these income streams determine what people are willing to pay for a share.

We can use the same methodology to calculate the worth of a home. Since eventually everyone moves or dies, you own the home for a finite amount of time before someone eventually sells it. In this case, the dividend isn't in cash, it is the rent you could charge if you rented out your home. This is what is known as the inputed rent. There is also a stream of costs associated with maintaining the house. Again, take the NPV of all three to calculate the value of the home. This method of analysis was used in the Saturday times to estimate if US homes were overpriced.

What does all this have to do with the price of art? Imagine that you bought the art, but didn't hang it in your own home. You rented it out to galleries, collectors, and shows and kept the income. You did this for a few decades and then you sold it for a profit or it was destroyed in a fire. You could take the NPV of that income and use that as the value of the art. Sure art has ascetic and sentimental value, but the economic price is all about what others will pay for it.

Why? Because prices allow us to separate those who value it highly from those who value it lightly, so a high rental prices are the proof that others derive great pleasure from having and viewing it. Art has to be kept clean and dry, and so has warehousing costs. Now we can apply the home valuation methodology to pricing art. Take the NPV of the rental stream (implied or real) of the art, the warehousing costs, and the resale value.

Stumbling and Mumbling in Long-run returns to art, measures the long run real increase of the value of a major piece of art at 1.8% (3% in nominal terms). But he's only looking at the changes in resale value. Art doesn't rent for 3% or its sale price, it rents for more like 20%. So 17 percent of that is the imputed rents / consumption value and insurance. That's a hefty return. With the stock market, gold, or government bonds, you'd be hard pressed to match that.

I draw two conclusions from this. If you want to own art for personal use, own a few pieces which you love and you'll view a lot. This dwarfs the return from appreciation. Two, we need a liquid rental market in art to get better measures of the price of art. For example, we could start an art investment mutual fund that focuses on assembling a portfolio that has high rental value, and renting that art out. People could hold this in the tax-deferred portions of their portfolios and it could be a uncorrelated and high-returning asset class.

Posted by OneEyedMan at 8:51 AM | Comments (0)