Linknote — — 98 words

Economics

Sin taxes are less efficient than they look

Very interesting piece on the pros and cons of sin taxes (taxes on things like tobacco, alcohol).

Implied, but not quite explicitly mentioned here, is the fact that because such items tend to have low price elasticity of demand (in other words, price rises don’t change consumption habits all that much) — because they are usually addictive. As such, they are excellent revenue generators for governments.

This is an issue that’s well worth being on top of, as such taxes increasingly cover new things — like sugar and plastic bags.

Linknote — — 219 words

Economics — Politics — Social science

If you say something is “likely”, how likely do people think it is?

Very interesting analysis of how people perceive what probability is meant by phrases such as “likely” or “real possibility”. It turns out there is a lot of scope for misinterpretation.

However I would quibble with the following:

You are trying to assess the probability that the [product launch] doesn’t happen. The way to frame your bet might be: “If the product fails to launch, I receive $1 million, but if it does launch, I get nothing.”

Now imagine a jar full of 25 green marbles and 75 blue marbles. You close your eyes and select a marble. If it’s green, you receive $1 million, and if it’s blue, you get nothing. You know you have a one in four chance (25%) to get a green marble and win the money.

Now, which would you prefer to bet on: the launch failure or the draw from the jar?

An interesting thought experiment, but not quite true. People prefer to receive an amount of money sooner rather than later. So you’d still rather place the bet on the jar, even if you thought the probability of product failure was 25% — because you wouldn’t receive the money until the unspecified future date.

Thanks to my colleague Lauren Tormey for the tip.

Linknote — — 76 words

Economics

The endowment effect: Why you can’t let go of your possessions

Insights from behavioural science on why people overvalue possessions they already own.

Psychologists have also concluded that this overvaluation may stem from our sense of ownership itself. We value something more simply because it is ours. If we own a car, laptop, or watch of a certain model, we would similarly overvalue that same object owned by someone else because we own one ourselves.

Linknote — — 128 words

Economics — Technology

How much would I have to pay you to quit Facebook?

Many people may feel like they are addicted to Facebook. But it’s amazing to see just how little people actually value it.

Economists have been carrying out experiments to see how much people would have to be paid to do without certain types of websites. By this measure, social media appears to be the very bottom of the pile — worth almost 60 times less than search.

Their rough-and-ready conclusion is that the typical person would have to be paid about $17,500 a year to do without internet search engines, $8,500 to abandon email and $3,500 to quit using digital maps. Video streaming through sites such as Netflix and YouTube is worth over $1,150 a year; ecommerce $850, and social media just over $300.

Linknote — — 92 words

Economics — Human-centred approaches — Travel

The amazing psychology of Japanese train stations

How Japan uses behavioural science (nudge theory) to keep its railways flowing efficiently.

Tokyo is home to the world’s busiest train stations, with the capital’s rail operators handling a combined 13 billion passenger trips annually. Ridership of that volume requires a deft blend of engineering, planning, and psychology. Beneath the bustle, unobtrusive features are designed to unconsciously manipulate passenger behavior, via light, sound, and other means. Japan’s boundless creativity in this realm reflects the deep consideration given to public transportation in the country.

Linknote — — 137 words

Economics

Bertrand Russell’s chicken (and why it was not an economist)

How introspection can lead to greater understanding — and how it may not.

The chicken that is fed by the farmer each morning may well have a theory that it will always be fed each morning – it becomes a ‘law’. And it works every day, until the day the chicken is instead slaughtered.

…Economics is at a disadvantage compared to the physical sciences because we cannot do so many types of experiments (although we are doing more and more), but we have another source of evidence: introspection… why is the farmer doing this? What is in it for him? If I was the farmer, why would I do this? And of course trying to answer that question might have led them to the unfortunate truth.

Linknote — — 67 words

Culture — Economics — Technology

The dark art of stealing from self-checkouts

Anyone who pays for more than half of their stuff in self checkout is a total moron.

I have long wondered how much stealing goes on at self-checkouts. It turns out, quite a lot — but presumably not enough to make many retailers think twice about having them. What’s interesting is that many self-checkout thieves are apparently otherwise generally law-abiding.

Linknote — — 49 words

Business — Economics — Technology

Why Microsoft Office is a bigger productivity drain than Candy Crush Saga

> Computers can certainly continue the process of specialisation, parcelling out jobs into repetitive chunks, but fundamentally they are general purpose devices, and by running software such as Microsoft Office they are turning many of us into generalists.

Linknote — — 136 words

Business — Economics — Technology

AI don’t kill people, people do

Reflections on whether technological advances will ‘take our jobs’.

> …[I]n Western societies, technical advancement has allowed many of us to extricate ourselves from physical, dangerous and demeaning forms of work, and to create careers that are fulfilling beyond renumeration: creatively, intellectually, socially… “job satisfaction”.

Historically, technological advances haven’t meant humans losing jobs. But it has meant we have taken on increasingly complex and interesting jobs. Perhaps the future will bring us further job satisfaction.

That’s not a bad place to be at all. A reminder that we should be grateful for the luxury we have in being able to pursue a good career in the first place, rather than slaving away to make ends meet.

See also: [Why you shouldn’t follow your passion](https://duncanstephen.net/why-you-shouldnt-follow-your-passion/)

Linknote — — 119 words

Economics — Technology

Wealth inequality is even worse in reputation economies

Cory Doctorow on how reputation economies (like the rating system satirised in the Black Mirror episode Nosedive) have a series of undesirable effects.

…reputation is useless as a hedge against the real nightmare of a setup like Ebay: the long con. It doesn’t cost much, nor does it take much work, to build up sleeper identities on Ebay, fake storefronts that sell un­remarkable goods at reasonable prices, earning A+++ GREAT SELLER tickmarks, even for years, until one day, that account lists a bunch of high-value items on the service, pockets the buyers’ funds, and walks off.

Reputation works badly and fails badly – it’s a lose-lose situation all around.