Category: Opinion

Toll Index September 2024

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The September value of the Border Crossing Toll Index (just out) adjusted for number of weekdays, time, month and MAUT-policy-regime fixed effects (Figure 1) came at 100.6 continuing an improving trend of several months as can easily be seen in Figure 2 (smoothed). For the newly defined Toll Index see here.

Additionally Figure 3 shows the IZA/Fable SWIPE consumption index (raw in blue and adjusted for inflation in red). While neither goods transportation nor consumption is particularly strong they are both on a clear positive trend indicating that the Fall assessment of the German government which expects a .2% contraction for the year might be overly and unnecessarily pessimistic.

Figure 1

Figure 2

Figure 3

Flattening the COVID-19 curve: What works

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“…policies preventing close contacts in large groups, such as public events, private gatherings, and schools are the most effective in reducing new infections… mediated by changes in population mobility patterns, which are consistent with time-use and epidemiological factors…“

From our column at voxeu.org on our paper (joint with K. Tatsiramos and B. Verheyden)

On google scholar (all sources).

Will video kill the academic research seminar?

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The COVID-19 pandemic is impacting academic activity in a massive way. Conferences are cancelled for months in the future and research seminars are halted. Research seminars are starting to recover by moving online and future events are being re-designed as online meetings.

The website of the American Economic Association features a list of world wide, open, online seminars and events. The reason people are opening their seminar is because a typical payment plan of a video streaming platform will throw in unlimited scale for free with a moderately priced subscription. So seminar organizers feel that they can maximize the reach of their seminar for free. Make no mistake: it may well be that there is no substitute for a face to face but scale and cost reductions are interesting and hence online meetings might stay with us even after the coronavirus pandemic.

What does a world in which all seminars are online and open look like? If I can attend any seminar in the world from my home office does it even make sense that I too organize one? After all the reason I pay to fly out a speaker is to expose my local research group to quality research but now this exposure is abundant.

What does it mean for me as a presenter to present in one seminar and not another if seminars are online and open? As a presenter I choose where to present based on the perks of flying out (flight class, hotel, restaurants, museums, culture) and the quality of the place I am visiting i.e. of its local audience. But now the former is gone and I can get any audience anywhere without (alas) unfortunately knowing who is or will be in the audience…

People use a handful of video streaming platforms most of which are in the AWS cloud. So this is almost as if they use one single platform. Soon we will have to have a directory of the seminars as well (like AEA did) so your seminar will be just another entry in a calendar with a speaker and your logo. You cannot even be sure that your own researchers will attend yours and not another. So why would people still organize them?

If organizations continue to see a benefit competing for speakers (something unclear as yet) a compensation system for speakers might emerge to offset the absence of traveling perks. But why will organizations do so? A single platform might emerge facilitating the matching of seminar speakers to “research seminars” where speakers are compensated financially for a “performance” and an institution (the “organiser”) pays a fee to advertise on the stream thus also acquiring the right-off way for its own local research groups to interact with the speaker whereas all others are passive attendants…

Video might indeed kill the academic research seminar as we know it.

  • Update1: 20200328: HELP! “a weekly Zoom seminar where scholars present their ideas”

Coronavirus, telecommuting and the labor market

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Before the coronavirus pandemic nobody wrote the words “social” and “distancing” in the same Google search query. Now there is a Google topic called “social distancing” and starting in March 9 as much as about 20% of all search queries which contained the word “social” also contained the word “distancing” in the US. Similarly with the words “rules” and “lockdown”.

In fact chances are that as you are reading this your are in some form of lock-down (make sure you know your regional rules) and most certainly your are practicing some form of telecommuting. I studied the regularity by which Germans log Google search queries containing the word “stau” (traffic jam) in a paper published at PLOS ONE. They type it together with a source of traffic jam information (e.g. radio or tv station or a website), or together with a highway number revealing their itinerary in some way. Here is what this looked like the last seven days on an hourly basis now (blue) and the same time interval three weeks ago:

On the average this is about a threefold reduction in such searches (more on the peaks) which correlates well with the fact that driving on German highways has been much more pleasant of late.

Similarly there is a 57% reduction in flights world wide! If we could find a way to fly less without affecting productivity we might even save the planet.

On the other hand Google search interest in telecommuting has surged world wide as you can see in the comparative graph below, which shows ninety days of searches on the topic of “telecommuting” now (in blue) and a year ago. There is as much as an eight-fold surge as one can see by just eyeballing the graph.

As a result “traffic jams” moved from the road to the internet, a fact which has led Netflix and Youtube to lower video quality in Europe in order to not overload infrastructure. I think in the weeks ahead as more and more people join the ranks of home-office (not every socioeconomic entity was able to respond as quickly to the coronavirus shock) we might see the investment gap exposed, especially in Germany.

First signs show the coronavirus pandemic already impacting the labor market worldwide. In the graph below we see 90 days of searches on the topic of “unemployment benefits” world wide now (in blue) and a year ago.

In the US from March 14 to March 21 there has been a surge of 1064% in Initial Unemployment claims (that’s one thousand and sixty four percent)!

Those who want to make the argument that less driving and less flying will benefit the planet as we are doing home office ought to factor in that video-conferencing and all digital tech is based on large farms of servers running 24/7. It would be interesting to estimate the numbers so here is an interesting research question: what is the net environmental benefit (say in terms of CO2 emissions), per unit of welfare produced, from reducing traveling while increasing compute-center electricity consumption to offset that reduction?

Taxing times

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Taxing times, by Michael Gold – The Economist Intelligence Unit

Contains a reference to my data tax idea, some quotes of mine and is an interesting read in its own right.

I have written about the Data Tax in:

#BREXIT: Vox Populi

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Why the parliament expresses the “will of the people” better than any of its MPs including its PM and better than the brexit referendum

In 1907 Francis Galton published a paper in Nature titled Vox Populi. In it he discusses how the collective judgement of the crowd is better than that of the average individual (a fact which goes back to a simple mathematical identity, also known as diversity prediction theorem, which states that the squared error of the average of all predictions is smaller than or equal to the average squared error of all prediction because from the latter we need to subtract the diversity of the individual predictions to get the former). In what we would, today, call policy recommendations of his paper, Galton states:

The result is, I think, more creditable to the trustworthiness of a democratic judgement than might have been expected.

On the other hand, consider as Marquis de Condorset might have done in the 18th century, three voters Peter, Paul and Mary ordering three different alternatives, let’s say: Remain, Deal Brexit and No Deal Brexit. Here is how their preferences might be:

Peter: Remain, Deal Brexit, No Deal Brexit

Paul: Deal Brexit, No Deal Brexit, Remain

Mary: No Deal Brexit, Remain, Deal Brexit

All three are opinionated “patriots” who want “the best” for the UK. Peter wants to remain but if not feasible he wants an amicable divorce. Paul wants a divorce but if possible an amicable one and Mary wants no compromises: either leave “proud” or don’t try it at all.

It is irrelevant who is “right” or “wrong” but we can assume whatever contributes to the opinion of each individual does so consistently. In other words they might change their minds but each time you ask them they have an ordering which puts the three options in order. Their personality, gender, hormonal levels, socioeconomic status, childhood etc all might play a role. Now let’s examine which option has majority. Remain is preferred over Deal Brexit by a 2/3 majority (Peter and Mary), Deal Brexit is preferred over No Deal Brexit by a 2/3 majority (Peter and Paul), No Deal Brexit is preferred over Remain by a 2/3 majority (Paul and Mary). So the “democratic process” picks Remain over Deal, Deal over No Deal (hence Remain is better than No Deal) but it also prefers No Deal over Remain. So it prefers Remain over No Deal and No Deal over Remain!

So what gives? The mess the UK is in has some simple mathematics which if paid attention to could help bring emotions down and make some very simple thoughts which might lead to some very reasonable decisions. A referendum is too crude a tool to use to make important decisions especially with a turnout of 72% and a Leave to Remain outcome of 51.89% to 48.11%. Marquis de Condorcet will tell you that when the Leavers say that the referendum is “the will of the people” they are just bullshitting the public opinion. If you posed seemingly equivalent formualtions of the same question you could very well get contradictory outcomes such as leaving is better than remaining and remaining is better than leaving. On the other hand Galton will tell you that the parliament as a collective has a better chance at figuring things out than any MP (or citizen) including the PM.