當我決定繼續攻讀博士時，老師跟我說如果想賺錢，就不要走學術。這句話我聽進去了，也決定要依自己的興趣行事。這已是三年前的事了。
當我來到美國後，我卻漸漸發現老師說的似乎不是那麼正確。經濟系的菜鳥教授薪水雖然不是特別高，但相對來說還是不錯的。那些成名的經濟學家，收入之豐更不在話下。如果不走學術界，產業界給新進博士的待遇更是優渥。從今天的華爾街日報，更讓我發現原來有許多人是靠當"專家證人"賺取豐厚的報酬。(An Economist's Courtroom Bonanza )
這篇報導是寫一個叫David Teece的Berkeley教授，如何受僱於各種產業幫他們在法庭上做證，並成立了一家上市公司專門僱許多經濟學家來做各種相關分析。許多在那工作的經濟學都已突破年薪50萬，當然他自己的收入之高更是不在話下。這篇報導也說明了法院逐漸開始重視專家證人的意見。經濟學家對可能性問題的嚴謹分析能力讓他們的意見常受法官採納:
"Economists are great at answering hypothetical questions with great precision," says Asim Varma, a partner in the Washington, D.C., law firm of Arnold & Porter. "But you have to find out what the assumptions are. If they're spinning the assumptions to help the client, all that precision is illusory."
這句話說明了經濟學家工作在法庭上的價值與問題。就我而言，知道自己的意見將成為法庭的證據，這個工作聽起來還蠻吸引人的。
Monday, March 19, 2007
Thursday, March 15, 2007
王建民的契約
對這個問題我並沒有深入研究。我不了解大聯盟的契約，也不了解相關的利害。不過就王建民的契約而言，我有些猜測。
首先，王建民簽或不簽這次的約，都還是得留在洋基，因為他的三年菜鳥約未滿。給定這個條件，為什麼王建民選擇不簽？
我沒看到深入的相關探討，所以只能猜測。王建民願意放棄每月二萬多差額的原因是什麼？為什麼經紀公司要叫他這樣做？如果只是為了抗議，或宣示"我不是乖寶寶"，我不認為有這種必要。宣示的方法有很多種，例如在簽約時發表嚴正的聲明。藉由放棄到手的錢來宣示是奇怪的手段。
我的猜想是，他這樣做是因為藉由這樣的行為，明年會有更多的籌碼談新約。但我不知道這樣的可能性是什麼。也許洋基明年想要續簽他時，會提高價錢。照這個邏輯，假定表現一樣，洋基會給認份簽約的卡諾較少薪資？這個可能性要看之前的球員這樣做的結果來驗證。
另一種可能是，王建民是做給別隊看的。讓其它隊知道，他並不是非洋基莫屬。只要價錢夠好，他絕對可以離開洋基，沒有忠誠心(loyalty)的存在。我覺得這個的可能性大些。
球員簽約是商業行為，而商業是不講什麼爽不爽的。王建民這樣做的原因絕對是因為看好這樣的行為會帶來明年更好的新約，我認為這點是無庸置疑的。
首先，王建民簽或不簽這次的約，都還是得留在洋基，因為他的三年菜鳥約未滿。給定這個條件，為什麼王建民選擇不簽？
我沒看到深入的相關探討，所以只能猜測。王建民願意放棄每月二萬多差額的原因是什麼？為什麼經紀公司要叫他這樣做？如果只是為了抗議，或宣示"我不是乖寶寶"，我不認為有這種必要。宣示的方法有很多種，例如在簽約時發表嚴正的聲明。藉由放棄到手的錢來宣示是奇怪的手段。
我的猜想是，他這樣做是因為藉由這樣的行為，明年會有更多的籌碼談新約。但我不知道這樣的可能性是什麼。也許洋基明年想要續簽他時，會提高價錢。照這個邏輯，假定表現一樣，洋基會給認份簽約的卡諾較少薪資？這個可能性要看之前的球員這樣做的結果來驗證。
另一種可能是，王建民是做給別隊看的。讓其它隊知道，他並不是非洋基莫屬。只要價錢夠好，他絕對可以離開洋基，沒有忠誠心(loyalty)的存在。我覺得這個的可能性大些。
球員簽約是商業行為，而商業是不講什麼爽不爽的。王建民這樣做的原因絕對是因為看好這樣的行為會帶來明年更好的新約，我認為這點是無庸置疑的。
Wednesday, March 14, 2007
國營事業搬家與成本
這個blog並不只打算寫英文討論外國事。最近熱門的新聞"國營事業南遷"讓吃中油奶水長大的我有了一個好機會來用中文討論這樣的問題。
撇開政治因素不談(雖然這個提議我懷疑有百分之百的政治動機)，討論這樣的問題通常會從成本效益來想。根據經建會的意思，國營事業應該搬的原因是因為他們大部份的員工及廠房都在南部，搬過去便於管理。而從新聞上得知，不該搬的原因是員工無意願，而公司認為效益不大。事實上，這個計畫早有先行的白老鼠，台糖。根據他們的經驗，搬到南部在管理上並未方便太多，但卻造成許多員工提早辦理優退，損失不少人才。
就算不用到經濟學，經建會的理由也相當站不住腳。根據他們的辯解，員工們從台北到南部上班並不是什麼難事。只要他們搭過高鐵就知道其實非常快速。這個理由如果正確，那應該也可以套用到他們的效益上。例如：
幹部從台北到南部管理並不是什麼難事。只要他們搭過高鐵就知道，就算大部份的員工都在南部他們還是很好管理。
這個論點並不只是玩笑。從經濟學的角度，成本是相當重要的考量。它背後的意思是，在討論"移動" 這個問題時，我們應考量是多數人移動的成本大，還是少數人移動的成本大。給定移動的成本相同，答案也許相當明確。但我們別忘了通常主管的機會成本-做某件事時不能做另外一件事-通常比較高。例如主管為了坐高鐵可能需要放棄他做決策的時間，而員工坐高鐵可能是放棄他休閒的時間。這個分析更牽扯到成本是主觀的問題，如同我之前說到the value of life一樣，是不能擺在同一個天秤上衡量的。主管的機會成本和員工的機會成本，孰大孰小還有得討論。
光是移動的問題就不簡單，加上其它的考量這整件事更是複雜。要做周全的計畫不容易，是不是值得在這件事上大費周章呢？是不是有其它更值得付出心力的計畫？這是另一個成本考量的問題了。
撇開政治因素不談(雖然這個提議我懷疑有百分之百的政治動機)，討論這樣的問題通常會從成本效益來想。根據經建會的意思，國營事業應該搬的原因是因為他們大部份的員工及廠房都在南部，搬過去便於管理。而從新聞上得知，不該搬的原因是員工無意願，而公司認為效益不大。事實上，這個計畫早有先行的白老鼠，台糖。根據他們的經驗，搬到南部在管理上並未方便太多，但卻造成許多員工提早辦理優退，損失不少人才。
就算不用到經濟學，經建會的理由也相當站不住腳。根據他們的辯解，員工們從台北到南部上班並不是什麼難事。只要他們搭過高鐵就知道其實非常快速。這個理由如果正確，那應該也可以套用到他們的效益上。例如：
幹部從台北到南部管理並不是什麼難事。只要他們搭過高鐵就知道，就算大部份的員工都在南部他們還是很好管理。
這個論點並不只是玩笑。從經濟學的角度，成本是相當重要的考量。它背後的意思是，在討論"移動" 這個問題時，我們應考量是多數人移動的成本大，還是少數人移動的成本大。給定移動的成本相同，答案也許相當明確。但我們別忘了通常主管的機會成本-做某件事時不能做另外一件事-通常比較高。例如主管為了坐高鐵可能需要放棄他做決策的時間，而員工坐高鐵可能是放棄他休閒的時間。這個分析更牽扯到成本是主觀的問題，如同我之前說到the value of life一樣，是不能擺在同一個天秤上衡量的。主管的機會成本和員工的機會成本，孰大孰小還有得討論。
光是移動的問題就不簡單，加上其它的考量這整件事更是複雜。要做周全的計畫不容易，是不是值得在這件事上大費周章呢？是不是有其它更值得付出心力的計畫？這是另一個成本考量的問題了。
Monday, March 12, 2007
Gains from trade
Whenever we want to buy something, usually we hope to buy it at the cheapest price. We may look around over the internet, ask our friends, or read around magazines or newspapers. It is the same for business. When they want to produce something, they will try to build their plant at the location with the cheapest cost. That is really common sense.
However, when the cheapest location to build a plant is not at the enterprise's home country, some of their fellow countryman may complain about they "bring out jobs out of country" or "benefit someone else economy". Its part of the so called "protectionism" argument. They may also support the protection of local business by setting high tariff, try to prevent foreign business taking advantage on local market.
Those argument can actually be seen worldwide, and the current popular enemy is China. Their cheap labor attracts tons of business building plants there, including their ideological enemies Taiwan and United States. And this not-surprised behaviors of business from those countries has been blamed by some of their politicians.
Here is today's WSJ commentary, Protectionists Never Learn , by George Mason's economics professor Russell Roberts. I think he made a really interesting metaphor using recently red-hot Japanese pitcher:
...The story of the baseball off-season is the Red Sox spending $100 million to bring Daisuke Matsuzaka from Japan to the United States. Dice-K, as he's known, is the ultimate import. He takes away a job from an American pitcher. And the Japanese baseball teams discriminate against American players with strict quotas. But even though America's trade deficit with Japan just hit that all-time high, no one uses Dice-K as a symbol of unfair Japanese trade policy....
His critics is toward to Hilary Clinton' recent comment that "China's holdings of U.S Treasuries threaten our sovereignty." Not only due to presidential campaign, I think this kind of argument will appear very often. Just as this Japanese pitcher case, sometimes we notice only the cons and sometimes we only notice the pros from free trade.
However, when the cheapest location to build a plant is not at the enterprise's home country, some of their fellow countryman may complain about they "bring out jobs out of country" or "benefit someone else economy". Its part of the so called "protectionism" argument. They may also support the protection of local business by setting high tariff, try to prevent foreign business taking advantage on local market.
Those argument can actually be seen worldwide, and the current popular enemy is China. Their cheap labor attracts tons of business building plants there, including their ideological enemies Taiwan and United States. And this not-surprised behaviors of business from those countries has been blamed by some of their politicians.
Here is today's WSJ commentary, Protectionists Never Learn , by George Mason's economics professor Russell Roberts. I think he made a really interesting metaphor using recently red-hot Japanese pitcher:
...The story of the baseball off-season is the Red Sox spending $100 million to bring Daisuke Matsuzaka from Japan to the United States. Dice-K, as he's known, is the ultimate import. He takes away a job from an American pitcher. And the Japanese baseball teams discriminate against American players with strict quotas. But even though America's trade deficit with Japan just hit that all-time high, no one uses Dice-K as a symbol of unfair Japanese trade policy....
His critics is toward to Hilary Clinton' recent comment that "China's holdings of U.S Treasuries threaten our sovereignty." Not only due to presidential campaign, I think this kind of argument will appear very often. Just as this Japanese pitcher case, sometimes we notice only the cons and sometimes we only notice the pros from free trade.
Saturday, March 10, 2007
The value of life
In today's WSJ there's a report about one of the hardest problem for society in my opinion, More Kidneys For Transplants May Go to Young . Related organization is trying to change the rule to distribute kidneys for transplant to recipients, here is the excerpt from WSJ:
The News: A new policy by the body that rations kidneys for transplant would favor recipients who have more years to gain from a new organ.
The Impact: Older people who have long waited for a kidney but have low life expectancy would lose out.
What's Next: The policy is being tweaked to satisfy both sides and will later be submitted for federal approval.
The basic idea of this reform is from the following sentence:
The value of 5 more years for a 90 years old patients is less than the value for 50 more years for a 9 years old one.
Is it reasonable? How about, if I made some changes like this
The value of 5 more years for a 90 years old patients, a Nobel laureate who still contributes to academics actively, is less than the value for 50 more years for a 9 years old one, who will become a serial killer in his 19.
Of course this the above is just a satire. However, one thing that matters is we can never compare life value among people. The value is subjective. It is never correct to compare people's life only base on their age.
One solution to this problem, as currently adopted, is to allocate those kidneys according to waiting time. Some people think its not efficient. But it is fair in some sense. Time is what everyone owns and everyone owns the same. Base on this fact it is fair in some sense, but may only be fair in some sense.
Another is to allocate by money. Patients who can spend the most to buy a kidney get the one, just like how black market works. It is efficient, and government can use the money to help developing more advanced medical technology. However, it is not fair for some people. Is that mean poor people deserving to die? No one will have the guts to adopt this kind of policy.
The other is reported as follows:
...the healthiest kidneys would be distributed through a formula that relies largely on net benefit, while the formula for kidneys coming from older or sicker donors would give greater weight to time on dialysis. In effect, this system would tell older people who have been on dialysis a long time that they could still have a shot at a kidney, but the chances would be much better if they took a lesser-quality one. Patients, working with their doctors, could calculate the odds and decide how poor a kidney they were willing to accept...
This one is sort of a mix and may be more practicable. It further separate kidneys to good and bad, and give different weights on them base on different systems.
I don't think there will be any solution that will satisfy everyone, because everyone is special to himself and to people who cares about him. Various novels/movies have made story on this kind of topic, such as my favorite film John Q, or the novel My sister's keeper.
I hope a nearly-perfect solution can be found soon. And I believe it won't be based on simple life value calculation or comparison at all.
The News: A new policy by the body that rations kidneys for transplant would favor recipients who have more years to gain from a new organ.
The Impact: Older people who have long waited for a kidney but have low life expectancy would lose out.
What's Next: The policy is being tweaked to satisfy both sides and will later be submitted for federal approval.
The basic idea of this reform is from the following sentence:
The value of 5 more years for a 90 years old patients is less than the value for 50 more years for a 9 years old one.
Is it reasonable? How about, if I made some changes like this
The value of 5 more years for a 90 years old patients, a Nobel laureate who still contributes to academics actively, is less than the value for 50 more years for a 9 years old one, who will become a serial killer in his 19.
Of course this the above is just a satire. However, one thing that matters is we can never compare life value among people. The value is subjective. It is never correct to compare people's life only base on their age.
One solution to this problem, as currently adopted, is to allocate those kidneys according to waiting time. Some people think its not efficient. But it is fair in some sense. Time is what everyone owns and everyone owns the same. Base on this fact it is fair in some sense, but may only be fair in some sense.
Another is to allocate by money. Patients who can spend the most to buy a kidney get the one, just like how black market works. It is efficient, and government can use the money to help developing more advanced medical technology. However, it is not fair for some people. Is that mean poor people deserving to die? No one will have the guts to adopt this kind of policy.
The other is reported as follows:
...the healthiest kidneys would be distributed through a formula that relies largely on net benefit, while the formula for kidneys coming from older or sicker donors would give greater weight to time on dialysis. In effect, this system would tell older people who have been on dialysis a long time that they could still have a shot at a kidney, but the chances would be much better if they took a lesser-quality one. Patients, working with their doctors, could calculate the odds and decide how poor a kidney they were willing to accept...
This one is sort of a mix and may be more practicable. It further separate kidneys to good and bad, and give different weights on them base on different systems.
I don't think there will be any solution that will satisfy everyone, because everyone is special to himself and to people who cares about him. Various novels/movies have made story on this kind of topic, such as my favorite film John Q, or the novel My sister's keeper.
I hope a nearly-perfect solution can be found soon. And I believe it won't be based on simple life value calculation or comparison at all.
Friday, March 9, 2007
Is that the tomb we are looking for? assumption and reality
Today on WSJ there's an article (The Numbers Guy, which can be read for free) talking about the lost tomb of Jesus. Basically it said there's a tomb found in Jerusalem in 1980 with ten names on their coffins/ossuaries. Those names, by incident or fact, belong to Jesus family. A statistician, Andrey Feuerverger from University of Toronto, argued that there is 1/600 chance those names will come to a family that is not belong to Jesus, based on his assumptions and calculations.
To build a model for something, usually we need assumptions. For example, if an economist wants to figure out how people spend their money, first of all she has to make some assumptions on their type thus behavior. An usual assumption is about their attitude toward risk, such as people are risk averse or risk loving. Conditional on this assumption, she can go on to explore what they gonna behave in this virtual world. The best thing about modeling is, it can assume away those complicated but unimportant factors and extract the true essence that induce the result. Take the spending example, of course we spend some bucks on things we don't really need, but that is certainly not our regular pattern. When economist make a model on spending behavior those incidental purchase will be assumed away, to make sure the model can be more clear to grab the most important behavior, such as money spent on insurance. If we want to include as many factors as possible in the model, it will get more close to reality, but it will also get more complicated as reality.
As a result, a good model is one which makes some reasonable assumptions and neatly derives the result. On the other hand, the risk is also coming along with the assumption it made. In this tomb story, Andrey Feuerverger made his calculation based on many assumptions, and that is where people attack him. Just as the following quotes from this article, it is also what model-maker should be aware of:
"As you pile on more assumptions, you're building a house of cards," says Keith Devlin, a Stanford mathematician and NPR's "Math Guy."
To build a model for something, usually we need assumptions. For example, if an economist wants to figure out how people spend their money, first of all she has to make some assumptions on their type thus behavior. An usual assumption is about their attitude toward risk, such as people are risk averse or risk loving. Conditional on this assumption, she can go on to explore what they gonna behave in this virtual world. The best thing about modeling is, it can assume away those complicated but unimportant factors and extract the true essence that induce the result. Take the spending example, of course we spend some bucks on things we don't really need, but that is certainly not our regular pattern. When economist make a model on spending behavior those incidental purchase will be assumed away, to make sure the model can be more clear to grab the most important behavior, such as money spent on insurance. If we want to include as many factors as possible in the model, it will get more close to reality, but it will also get more complicated as reality.
As a result, a good model is one which makes some reasonable assumptions and neatly derives the result. On the other hand, the risk is also coming along with the assumption it made. In this tomb story, Andrey Feuerverger made his calculation based on many assumptions, and that is where people attack him. Just as the following quotes from this article, it is also what model-maker should be aware of:
"As you pile on more assumptions, you're building a house of cards," says Keith Devlin, a Stanford mathematician and NPR's "Math Guy."
Thursday, March 8, 2007
Unforgettable mistake
In today's WSJ there's a story, The High Bar For Redemption ,about one man who has been convicted before and is fighting to get into New York state bar. Here is the excerpt from WSJ:
The Issue: A twice convicted felon completed law school after serving time in prison, but has been denied admission to the New York bar nine times by state justices.
The Dilemma: What counts as redemption and who gets to decide?
The Bottom Line: Bar admission standards vary from state to state, and within states are often subjective.
Actually he has already been admitted to join New Jersey bar, but still fighting for his position in New York. What made me interested is the following sentence from the article:
"Last month, Mr. Wiesner formally asked the Manhattan federal court not to revoke his admission there. His emotion-packed pleading quoted author William Faulkner: "The past isn't dead; it isn't even past."
What reminds me from this, is the other report from WSJ last weekend, The Weekend Interview, with Nobel laureate Myron Scholes who is famous for his hedge fund Long Term Capital Management (LTCM), which went belly-up in the late 1990s. He said following words in this interview, which implies pretty much the same thing as above lawyer:
...He says he feels like the woman in the local paper who, whatever she does, will always be remembered for one thing: "Mrs. Jones, who was falsely accused of the ax murder of her husband in 1944, recently had a garden party for 10 of her friends."...
Maybe we should be more careful on every step since people seems not that easy to forget at all...
The Issue: A twice convicted felon completed law school after serving time in prison, but has been denied admission to the New York bar nine times by state justices.
The Dilemma: What counts as redemption and who gets to decide?
The Bottom Line: Bar admission standards vary from state to state, and within states are often subjective.
Actually he has already been admitted to join New Jersey bar, but still fighting for his position in New York. What made me interested is the following sentence from the article:
"Last month, Mr. Wiesner formally asked the Manhattan federal court not to revoke his admission there. His emotion-packed pleading quoted author William Faulkner: "The past isn't dead; it isn't even past."
What reminds me from this, is the other report from WSJ last weekend, The Weekend Interview, with Nobel laureate Myron Scholes who is famous for his hedge fund Long Term Capital Management (LTCM), which went belly-up in the late 1990s. He said following words in this interview, which implies pretty much the same thing as above lawyer:
...He says he feels like the woman in the local paper who, whatever she does, will always be remembered for one thing: "Mrs. Jones, who was falsely accused of the ax murder of her husband in 1944, recently had a garden party for 10 of her friends."...
Maybe we should be more careful on every step since people seems not that easy to forget at all...
Measure of enjoyment
Economics has been categorized as social "science". To be a science, it needs evidence that is universally acknowledged. To provide evidence, economist does 1) mathematical model that is mathematically correct; 2) statistical analysis that is statistically correct, on the topic that economist is interested. As a result, since economics is everything related to human choice and interaction, economist need to describe human behavior mathematically to build up their theory, and make everything to be quantified and measured if they want to do some numerical analysis and find evidence.
Of course this kind of method is subject to be criticized. However, in order to be a convincing subject, it is currently the best way to make a solid foundation for this field.
So here is the example. Two economists is trying to explore the difference between leisure time spent now and a century ago. To apply analytical method, they adopted a "measure of enjoyment" that surveyed among people in 1985:
Enjoyment of Various Activities in 1985
9.3 Sex
9.2 Play sports
9.1 Fishing
9 Art, music
8.9 Bars, lounges
8.8 Play with kids, hug and kiss
8.6 Talk/read to kids
8.5 Sleep, church, attend movies
8.3 Read, walk
8.2 Work break, meals out, visit
8 Talk with family...(see the rest in the paper)
Hat tip to Hal Varian. In his article he is intended to discuss the main finding from the paper above, that our leisure time, comparing to a century ago, has not varied too much. The main reason is, comparing to our ancestor, we do have less time on work but we spend more time on school instead. Is that mean we have more or less leisure, given we may have more fun in school? That's the reason why we need above measures to define leisure in an analytical way.
Of course this kind of method is subject to be criticized. However, in order to be a convincing subject, it is currently the best way to make a solid foundation for this field.
So here is the example. Two economists is trying to explore the difference between leisure time spent now and a century ago. To apply analytical method, they adopted a "measure of enjoyment" that surveyed among people in 1985:
Enjoyment of Various Activities in 1985
9.3 Sex
9.2 Play sports
9.1 Fishing
9 Art, music
8.9 Bars, lounges
8.8 Play with kids, hug and kiss
8.6 Talk/read to kids
8.5 Sleep, church, attend movies
8.3 Read, walk
8.2 Work break, meals out, visit
8 Talk with family...(see the rest in the paper)
Hat tip to Hal Varian. In his article he is intended to discuss the main finding from the paper above, that our leisure time, comparing to a century ago, has not varied too much. The main reason is, comparing to our ancestor, we do have less time on work but we spend more time on school instead. Is that mean we have more or less leisure, given we may have more fun in school? That's the reason why we need above measures to define leisure in an analytical way.
Wednesday, March 7, 2007
Has economist been too far from their turf?
If you are a subscriber of Wall Street Journal, you can read the following article discussing about an economist try to propose a prescription for autism. It is not free, though, and I will post discussion later about why WSJ is not freely available while the other main presses do.
Is an Economist Qualified To Solve Puzzle of Autism? - WSJ.com
And here is the excerpts:
Is an Economist Qualified To Solve Puzzle of Autism? - WSJ.com
And here is the excerpts:
In the spring of 2005, Cornell University economist Michael Waldman noticed a strange correlation in Washington, Oregon and California. The more it rained or snowed, the more likely children were to be diagnosed with autism.
To most people, the observation would have been little more than a riddle. But it soon led Prof. Waldman to conclude that something children do more during rain or snow -- perhaps watching television -- must influence autism. Last October, Cornell announced the resulting paper in a news release headlined, "Early childhood TV viewing may trigger autism, data analysis suggests."
Although the report is not free, the paper is available hereMy thought about this is, I feel some economists are really way too far. Maybe I am too old-fashion in some sense, but I really don't appreciate some researches that crossed boarder too much. In this autism case, I do think its a worthwhile try, but it should be accompanied with some experts from the other area. Economics is about human choice and human interaction. Is autism the result of choice and interaction? I don't think so. The evidence it relies on, as this report disclosed, is the instrumental variables method, a tool that has been widely used by economist. Basically it's a method that try to create natural experiment ex post. It has been widely used as well as widely criticized. I am not intend to judge it here, but I do believe if economist want to do something outside the turf and convince the others, we may need something more than IV methods. Maybe cooperate with the other experts could be a good start. Also, here is Steven Levitt's comment on this paper.
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