Archive for August, 2009

Sun Ra’s Other Worlds

August 31, 2009

On a rare occasion a couple of nights ago, I took the bus home at a late hour. Sufficently late, taking the bus to my place includes a 20 mins walk from the bus stop. Walking through the night, under a clear sky (a rare occasion it was, indeed) I listened to Sun Ra’s magnificent Lanquidity. I’ve appreciated Lanquidity for a while, particularly the title track. The other night, however, I discovered a couple of new aspects of it.

First, I was struck by the power the contrast between the baritone & alto saxophones generates (uh, I’m no expert by the way, that may well be a tenor sax) on Twin Stars of Thence. I was soon in for more powerful effects.

Second, I could readily imagine someone listening to the last track, There Are Other Worlds (They Have Not Told You Of), with its driving rythm section, layers of flutes, percussion and pianos which all waves in and out of the sound picture, and the repeated whispering message There are other worlds they have not told you of … wish to speak to you, particularly if under the influence of some substance, to start to communicate with themself (who else, I mean, seriously, who else) on some level, fulfilling the music. Sun Ra conjures an illusion of chaos, and the surprising outro serves as an intro to the ‘other worlds.’ When silence finally settles, a void opens, and an influenced, confused mind may fill it with whatever otherwordly stuff.

Keep an open mind. Go listen.

Exogeneous Shocks and Marine Reserves

August 28, 2009

Today, I’ll present at the [Norwegian] National Research School in Business Economics and Administration (in the Management Science and Economics session). The abstract:

The impact on the value of a fishery from exogenous shocks is investigated. A part
of the habitat is protected by a marine reserve, and the remaining fishery is managed
by optimal, total allowable catch quotas. Shocks of different, spatial nature is inves-
tigated. The results suggest that reserves are of minor interest as a management tool
when shocks affect the stock uniformly. Reserves may substantially enhance the value
of the fishery when shocks are spatially non-uniformly distributed.

Freakonomics Q&A

August 26, 2009

Celebrating the paperback edition of Freakonomics, an author Q&A is available on the Freakonomics blog. I found the following question interesting and its answer amusing:

Q. Tell us about the criticism you have received from traditional/academic colleagues over Freakonomics. — J. Plain

A. Levitt’s academic colleagues tend to react in one of two ways. The majority of economists thought about it like economists: the success of Freakonomics probably increased the number of students wanting to take economics courses, and since the supply of economics teachers is fixed in the short run, the wages of academic economists should rise. That makes economists happy. A second group of economists decided that if Levitt could write a book that people would read, surely they could too. So there has been a flurry of “popular” books by economists — some good, some not so good. And then, inevitably, there are a handful of economists who feel that he violated the secret handshake of economics by showing the outside world that what economists do really isn’t that hard or complex. They will never forgive him.

A Vertical Division of Economics

August 26, 2009

Alright, this book (Truth Versus Precision in Economics, Tom Mayer) is so interesting that I’ve put Shakey aside for a while (in the middle of ‘Ohio’). I’m marking pages all the time.

In chapter 2, Two Types of Mainstream Economics, Mayer suggests to divide up economics vertically:

The fields that are often loosely referred to as ‘the sciences’ divide their subject matter not only horizontally by fields, e.g. biology and geology, but also vertically by the level of abstraction, e.g. physics and engineering, and physiology and medicine. In doing so they make room for different criteria at each level. An engineering paper need not be as rigorous as a physics paper. […] In the social sciences we divide fields horizontally, but not vertically, so that economics comprises mathematical formalism, empirical science work, and applications to specific practical problems. Hence we are tempted to apply inappropriate standards of rigour [p. 24, paperback edition].

On the following pages, he discusses the difference between formalistic and empirical economics, particularly in terms of rigour. He concludes chapter 2:

Although there is no sharp line of demarcation between hypotheses that are close to the observational level and those that are at a high level of abstraction, it is useful to classify the work of economic theorists into two categories, formalist theory and empirical science theory, because economists invoke widely different criteria in evaluating theories. Much misunderstanding is caused if one type of theory is judged by the criteria applicable to the other type [p. 36].

In the next chapter, he discusses whether there is too much of one type of economics and why that might be so:

We need both formalistic theory and empirical science theory. How much of each is more difficult to decide. While there are some reasons suggesting that formalist economics currently receives too little emphasis, there are stronger reasons to think the opposite is true. Professional self-interest, a belief that formalist economisits are much abler, and certain confusions all induce our profession to over-emphasize the importance of formalist theory relative to empirical science theory [p. 52].

Related post:

Most Cited Papers in Fisheries Science

August 25, 2009

I came across this list of books and papers most often cited by fisheries scientists. Some highlights are listed below (with a personal bias, of course).

Recent stuff:

Sale PF et al. 2005 Critical science gaps impede use of no-take fishery reserves. Trends in Ecology and Evolution 20:74-80

Roberts CM et al. 2001 Effects of marine reserves on adjacent fisheries. Science 294:1920-1923

Classics:

Beverton RJH and Holt SJ 1957 On the dynamics of exploited fish populations. Fisheries Investigations Series II, volume 19; Ministry of Agriculture, Fisheries and Food, U.K.  533 pp

Hilborn R and Walters CJ 1992 Quantitative fisheries stock assessment. Chapman & Hall, New York, 570 pp

Walters CJ 1986 Adaptive management of renewable resources. MacMillan Publishing Company, New York. 300 pp

Gordon HS 1954 The economic theory of a common-property resource: the fishery. Journal of Political Economy 62:124-142

von Bertalanffy L 1938 A quantitative theory of organic growth. Human Biology 10:181-213

Schaefer MB 1954 Some aspects of the dynamics of the population important to the management of the commercial marine fisheries. Inter-American Tropical Tuna Commission Bulletin 1(2):25-56

Volterra V 1926 Fluctuations in the abundance of a species considered mathematically. Nature 118:558-560

Clark CW 1976/1990 Mathematical bioeconomics: the optimal management of renewable resources. 1st and 2nd Ed, Wiley, New York

Stuff I’ve cited myself:

Quinn TJ & Deriso R 1999 Quantitative fish dynamics. Oxford University Press, Oxford

Pauly D et al. 2002 Towards sustainability in world fisheries. Nature 418: 689-695

Fournier DA et al. 1990 MULTIFAN a likelihood-based method for estimating growth parameters and age composition from multiple length frequency data sets illustrated using data for southern bluefin tuna (Thunnus maccoyii). Canadian Journal of Fisheries and Aquatic Sciences 47:301-317

Other stuff of interest:

Schnute J 1985 A general theory for analysis of catch and effort data. Canadian Journal of Fisheries and Aquatic Sciences 42:414-429

Perry AL et al. 2005 Climate change and distribution shifts in marine fishes. Science 308:1912-1915

I was surprised not to find Hastings & Botsford’s 1999 Science paper on the list. Finally, another interesting observation:

Only two fisheries economics references are listed: Gordon (1954) and Clark (1976/1990). A complete list of other highly cited fisheries economics papers is given in Eggert (2006) “Fisheries economics and 20 years with Marine Resource Economics” Marine Resource Economics 21:269-284.

UPDATE: Here’s another innarresting post by the same guy: Catchiest Titles of Scientific Papers.

Economics: A Science or Not?

August 23, 2009

I came across this truly interesting book, Truth Versus Precision in Economics (1993) by Thomas Mayer. I’m still only on p. 16, but endnote 1 in chapter one provided fodder for my thinking about economics and science:

I see no purpose in discussing whether economics actually is a science. Philosophers have not succeeded in finding a criterion that distinguishes science from non-science […], and the question whether a field is an empirical science may even lack clear meansing […]. Fortunately, nothing hinges on whether one calls economics a science or not, and the question can be left to lexicographers. Knowing whether economics is a science would not allow us to decide whether  it should use the same methods as the natural sciences, since not all sciences necessarily us the same methods. What methods economics should use can be decided better by looking at specific methods and specific problems than by talking in general about ‘scientific method’. Similarly, knowing whether economics is a science would not allow us to say whether it provides answers that deserve a high degree of credence. The science of weather forecasting does not, while the non-science of history does [p. 8, paperback edition].

I agree that nothing really important hinges on whether economics belong to the (hard) sciences or not (what matters is that it is scientific). But, Mayer doesn’t seem to recognize that the English science has lost it’s propper meaning (here’s McCloskey’s explanation): Science means ‘systematic inquiry’ in any other language.

Related posts:

Picture of the Day

August 19, 2009

Francis Bacon: Head VIFrancis Bacon: Head VI (1949). The picture reminds me of the group Screaming Headless Torsos I once dug.

Les Paul Dead

August 18, 2009

Les Paul, the ‘father of the electric guitar’ and the man behind one of rock and roll’s most popular guitar, the Gibson Les Paul, has died. From the Rolling Stone:

Les Paul, one of the most revered guitarists in history and the father of the electric guitar, passed away last night, August 12th at the age of 94. Paul’s manager confirmed to Rolling Stone that cause of death was respiratory failure, and a statement from Gibson indicates Paul was suffering from severe pneumonia and died at a hospital in White Plains, New York.

Almost every professional guitar player in rock and roll seem to own a Les Paul. Neil Young has a really special one, called Old Black:

Cradled in a stand in front of the amps is the fuse for the dynamite, Young’s trademark ax – Old Black, a ’53 Gold Top Les Paul some knothead daubed with black paint eons ago. Old Black’s features include a Bigsby wang bar, which pulls strings and bends notes, and a Firebird pickup so sensitive you can talk through it. It’s a demonic instrument. “Old Black doesn’t sound like any other guitar,” said [Larry] Cragg [Young’s guitar technician], shaking his head.

For Cragg, Old Black is a nightmare. Young won’t permit the ancient frets to be changed, likes his strings old and used, and the Bigsby causes the guitar to go out of tune constantly. “At sound check, everything will work great. Neil picks up the guitar, and for some reason that’s when things go wrong” [p. 8 in Shakey, Jimmy McDonough’s Neil Young biography].

More about Old Black in McDonough’s Shakey:

Young came to [sit in on a gig with the Rockets, the earlier band of the members of Neil’s legendary back up band Crazy Horse] armed with the weapons that have become crucial elements of his rock and roll sound: Old Black, a 1953 Gibson Les Paul, plugged into a 1959 Fender Deluxe. The guitar came from Jim Messina, who found the instrument’s monstrous sound uncontrollable. “Neil’s the kind of guy that if there’s an old scraggly dog walkin’ down the street, he’d see somethin’ in that dog and take it home. That’s kind of like the Les Paul – I liked the way it looked, but it was just terrible. It sounded like hell. Neil loved it,” said Messina.

Young bought the Deluxe for approximately fifty bucks in 1967. As Young told writer Jas Obrecht, he “took it home, plugged in this Gretsch guitar and immediately the entire room started to vibrate….I went, ‘Holy shit!’ I turned it halfway down before it stopped feeding back.” The Les Paul/Deluxe combo, which remains the cornerstone of his sound, would make its thunderous debut in Young’s music on his very first record with Crazy Horse, Everybody Knows This Is Nowhere [p. 298].

Old Black

Friday Beer Post

August 14, 2009

Einstein allegedly once said:

The model should be as simple as possible, but not simpler.

This week, I participated in a workshop on age-structured models in fishery economics (age-structured models tend to be complicated). The above quote came up several times. Workshops usually means beers (not only that, of course) and it was almost inevitable that a beer-themed modification to Einstein’s words of wisdom didn’t come up (at the bar, late at night):

You should have as many beers as possible, but not more.

And yes, the title is copped from Env-Econ.

Green Bias

August 13, 2009

Economists often tend to think of biologists as tree-huggers or similar kinds. Of course, there’s something to it. Most researchers tend to work on issues that interests them, and of course the ‘intrinsic’ interest is an asset in the research. The researcher works harder. But is it also a problem? But of course. It influences the research agenda, it may bias results. Maybe more importantly, are biologists aware of such problems? Do they care?

Sometimes, I suspect economists to kind of use the tree-hugger characteristic against biologists. Is it sometimes because biology is a proud memeber of the hard sciences? Something econoics, notably, is not, traumatically enough.

Last night, I talked to an ecologist about this. He agreed that there might be something to my agenda; the research agenda of biologists are often coloured green; they may end up with biased results. But, he contended, economists aren’t necessarily any better. (He’s seen a lot of [environmental] economists make biological claims that are plain wrong!) He’ s probably right. People tend to what they care for & care for what they tend to.

What kind of bias does the ‘intrinsic’ outlook of the economist introduce? (I don’t know; I am [supposed to be] one. Is it blinding to care about efficiency & trade-offs?)

The ecologist slid off the hook, though. Economists doing the same mistake doesn’t free the biologists of guilt.

Quote of the Day

August 13, 2009

M.T. Cicero (106 – 43 B.C.):

No one are so old that they don’t think they can live another year.

David Briggs on How to Make Records

August 11, 2009

In the Neil Young biography Shakey, written by Jimmy McDonough, there’s a long quote from David Briggs on how to make records, and a little bit about what he thought of Neil Young:

I can teach you everything I know in an hour. Everything. That’s how simple it is to make records. Nowadays, buddy, the technician is in control of the medium. They try to make out like it’s black magic, or flyin’ a spaceship. I can teach anybody on this planet how to fly the spaceship. If you look at the modern console, there’ll be thirty knobs – high frequency, low frequency, midfrequency, all notched in little tiny, tiny, teeny tiny degrees – and it’s all bullshit. All this stuff doesn’t matter, and you can’t be intimidated. You just ignore it – all of it.

I walk into studios with the biggest console known to mankind, and I ask for the schematic and say, “Can you patch from here to here and eliminate the ENTIRE board?” I just run it right into the tape machines. All the modern consoles, they’re all made by hacks, they’re not worth a shit, they sound terrible. None of it touches the old tube stuff – like the green board from Heider’s. It has two tone controls – high end, low end and a pan knob – and that’s it. I had great good fortune when I was a kid and started makin’ records. I made ‘em at Wally Heider’s, Gold Star, so all the people that taught me were Frank Dimidio, Dave Gold, Stan Ross, Dean Jensen – these guys were the geniuses of the music business, still are.

They taught me more about sound and how sound is made and the principles of doing it, and it’s unshakably correct what they said to me: You  get a great sound at the source. Put the correct mike in front of the source, get it to the tape the shortest possible route – that’s how you get a great sound. That’s how you do it. All other ways are work. The biggest moment of my life – the one I haven’t been able to get past every, really – is 1961, when I first got to L.A. I got invited to Radio Recorders to see Ray Charles, and I walk into the studio, and Ray’s playin’ all the piano parts with his left hand, reading a braille score with his right hand, singing the vocal live while a full orchestra played behind him. So I sat there and I watched. And I went, “This is how records are made. Put everybody in the fuckin’ room and off we go.” In those days everybody knew they had to go in, get their dick hard at the same time and deliver. And three hours later they walked out the fuckin’ door with a record in their pocket, man.

Of course, in those days they didn’t have eight- , sixteen- , twenty-four- , forty-eight- , sixty-four-track, ad nauseum, to fuck people up, and that is what fucked up the recording business and the musicians of today, by the way – fucked ‘em all up to where they’ll never be the same, in my opinion. People realized they could do their part…later. Play their part and fix it later. And with rock and roll, the more you think, the more you stink.

It’s very easy for people to forget what rock and roll really is. Look man, I’m forty-seven years old, and I grew up in Wyoming, and I stole cars and drove five hundred miles to watch Little Richard, and I wanna tell you somethin’ – when I saw this nigger come out in a gold suit, fuckin’ hair flyin’, and leap up onstage and come down on his piano bangin’ and goin’ fuckin’ nuts in Salt Lake City, I went, “Hey man, I wanna be like him. This is what I want.” Even today he’s a scary dude. He’s the real thing. Rock and roll is not sedate, not safe, has truly nothin’ to do with money or anything. It’s like wind, rain fire – it’s elemental. Fourteen-year-old kids, they don’t think, they feel. Rock and roll is fire, man, FIRE. It’s the attitude. It’s thumbing you nose at the world.

It’s a load. It’s such a load that it burns people out after a few years. Even the best of ‘em burn out. People get old – they forget what it’s like to be a kid, they’re responsible, they’re this and they’re that…. You can’t have it both ways. You’re a rock and roller. Or you’re not.

I wanna tell you something’: Neil’s never been insecure about anything in his fuckin’ life. First among equals is Neil Young, and it’s always been that way. When Neil’s got his ax in hand, it’s like the Hulk. His aura becomes solid – he becomes eight feet tall, six feet wide. The only guy other than John Lennon who can actually go from folk to country to full orchestra. The only guy. I think when it’s all written down, he will unquestionably stand in the top five that ever made rock and roll [pp. 263 – 264].

Taleb on Writing History

August 10, 2009

In his 2007 effort The Black Swan, Nassim Nicholas Taleb described history writing in a way that has stayed with me since I read it.

Our problem is not that we donot know the future, we do not know much of the past either. […]

Consider the following thought experiment borrowed from my friends Aaron Brown and Paul Wilmott:

Operation 1 (the melting ice cube): Imagine an ice cube and consider how it may melt over the next two hours […]. Try to envision the shape of the resulting puddle.

Operation 2 (where did the water come from?): Consider a puddle of water on the floor. Now try to reconstruct in your mind’s eye the shape of the ice cube it may once have been. Note that the puddle may not have necessarily originated from an ice cube.

The second operation is harder. […]

The difference between these two processes resides in the following. If you have the right models […] you can predict with great precision how the ice cube willl melt – this is a specific engineering problem deviod of complexity […]. However, from the pool of water you can build infinite possible ice cubes, if there was in fact an ice cube there at all. The first direction, from the ice cube to the puddle, is called the forward process. The second dircetion, the backward process, is much, much more complicated. The forward process is generally used in physics and engineering; the backward process in nonrepeatable, nonexperimental historical approaches [p. 196*].

I wonder if there’s something to it. I think it’s a bad metaphor. For one thing, historians usually do not only see the final outcome (the puddle) of a history (the melting), but they can observe historical accounts and observations made underway; if one were to describe the shape of the ice cube, it would for example help if someone had written down a description of the shape of the ice cube at some given time in the melting process. In general, I don’t see a clear analogy between Taleb’s clear cut example and the work of historians.

Taleb’s main message about history is that we cannot rely on it when it comes to predicting the future. It is unreliable when it comes to describing the past, he argues, and simply unsuited to foretell the future. I think I’m more in line with Taleb on his main view than his strange example of the melting ice cube.

* Page numbers refer to the British edition.

Coase

August 6, 2009

The Coase theorem is a famous theorem in environmental economics. Many economists are, however, confused about it, it seems. (See for example Economics Is Hard) Tim Haab at Environmental Economics has tried to clear things up:

The Coase-Theorem: The free-market version
As long as both [the polluter and the polluted] are free to bargain, the final amount of pollution will be independent of the initial allocation of property rights.

That is, when bargaining is free and transaction costs are zero. Are they ever?

But, there are a lot of assumptions embedded in [the] simple version of the Coase Theorem.  So many that Coase himself wrote a piece in 1988 to debunk the simple version.  In effect he wrote ‘That’s not what I meant.’

Now we’re talking. Let’s get down to business.

The Coase Theorem:  The fair market version
In the presence of transactions costs, the final amount of pollution depends on the initial allocation of property rights.

Why the ‘fair’ market version? What’s fair with it? It’s more realistic? And, the final amount of pollution will depend on the size of the transaction costs relative to the size of the externality (the damage of the pollution).

The Coase Theorem:  The wealth effects version
The two versions of the Coase Theorem presented above ignore the possibility that the bargaining outcome creates wealth for the owner of the property right.  If I have the right to clean air, any income I receive from selling that right might increase my demand for clean air.  Just like getting a raise at work increases my demand for eating out, getting more money from selling my right to clean air might increase my demand for clean air.  Likewise, increased profits to the polluter from selling pollution rights might increase the demand for emissions.  Similar to the transactions cost case, the final outcome depends on the initial allocation of property rights.

Is this the Kuznets stuff again? Get rich and care more? No, I don’t think that is what Haab means. But if the polluted demands more clean air, he is less willing to sell the right to pollute; we get less pollution than without the wealth effect, right?

The Coase Theorem:  The free entry version
Further, the increase in profits from selling the property right might lead others to want to take advantage.  If firms are free to enter the market, the assignment of property rights to the firms and the resulting profits from the sale of those rights might cause other polluting firms to enter the market.  Similarly, assigning property rights to the victim, and creating wealth through bargaining might entice new victims to enter the market–for example, more people might move into a polluted neighborhood as a result of the increased wealth from the sale of property rights.  The simple versions of the Coase theorem assumes away entry–by both new firms and new victims.

Is assuming away the same as not considering?

In a follow up post, guest blogger Jim Roumasset discusses yet another version of the Coase theorem; The Grand Equivalence Version of the Coase Theorem, apparently a version that ‘fits Coase’s agenda’:

[A] version of the Coase theorem is that absent transaction costs, alternative institutions such as markets and contracts are equivalent.

[…] When Coase famously presented the ideas behind, “The Problem of Social Cost” at a 1959 Chicago seminar, and pursuant dinner at the home of Aaron Director, he revealed that he had in mind situations of a priori competitive bargaining […]. If bargaining is costless, then the farmer can be viewed as selecting among several ranchers to bargain with; likewise the rancher.

After some further digression, the Equivalence Version can be stated as:

[T]ransaction costs aside, if property rights are commensurate and competition prevails, then any bilateral externality will be equivalently internalized by markets, contracts, and Pigouvian taxes. The Pigouvian tax solution is equivalent to a competitive market in pollution rights where polluters must buy rights from victims. And the core of a competitive contracting economy shrinks to the same market solution — ergo all three institutions are equivalent.

I think the core of an economy is the set of potential bargaining solutions which bargaining parties can agree on, that is, where noone is worse off (or something like that).

The equivalency result also underlies Coase’s (1937) proposition that the boundaries of the firm are chosen to minimize transaction costs. Aside from the “marketing costs” of using outside suppliers and the agency costs of central direction inside the firm, whether to put Fisher Body inside or outside of General Motors would have been a matter of indifference.

Is it valuable to know that if it weren’t for marketing costs or agency costs, a decision would be superfluous? Is it interesting to assume away something that’s always there? I don’t see it, I don’t get it. (Oh, I get it, it’s about philosophical interest; I care because other care; when other works on a problem, it justifies spending time on the problem; you might save others time if you figure it out faster than them, and we might all be better off.)

Anyway, I’m not so sure this is what Coase had in mind. Coase was interested in the real world. If you go back to Haab’s initial post and look at the comments, a Dan Cole (the last comment) has valuable insights:

This post [Haab’s post, that is] participates in many common mistakes about the “Coase Theorem,” and creates one or two new ones. […] Coase was absolutely clear in that article that his example of a zero-transaction cost world was (1) purely hypothetical; (2) intended to highlight problems with standard assumptions of neoclassical theory; and (3) without relevance in the real world, in which transaction costs are always positive and often quite high.

The fundamental purpose of “The Problem of Social Cost” [Coase’s article] was absolutely not to highlight how all social cost problems would be avoided or resolved by costly contracting in a world of zero transaction costs. In such a world, after all, the legal rules (including property rules) would be thoroughly unimportant. Rather, Coase’s goal in the article was to stress the importance of legal allocations of entitlement for resolving social-cost disputes in the real world of costly transacting.

Related post:

Pictures From Alaska

August 4, 2009

The conference web page now features some pictures from the event. Here’s one of the local glacier (Mendenhall):

Mendenhall Glacier

And one from the social event, me in the middle:

AlaskaRelated post: