Monthly Archive for November, 2007

A rose by any other name …

Today’s prize for amusing me goes to Megan McArdle for this beauty of a post:

Some freelance socialist not only stole my bike from in front of my house, but left the lock. The deliberate taunting seems highly unnecessary. 

Megan, if you read this, I feel your pain.

A tight race in Bowman

The overall result may not be in doubt, but spare a thought for Andrew Laming (Liberal, incumbant) and Jason Young (Labor) in the Queensland seat of Bowman.

Before the election, Laming held the seat with an 8.9% margin.  It was safe, but not that safe and by the time of the election, the betting markets were leaning towards Labor (thank you, Simon Jackman). Turnout on the day was 85.25%.  With those votes counted, the primary count went to Laming (33,833 vs. 32,498), but the two-candidate preferred count is going to Young (36,693 vs. 36,672).

That’s a margin, on current counting, of just 0.014%.

The pre-poll, postal, absent and progressive votes are still being counted, but you’ve got to feel for those guys.  If Laming hasn’t worn holes in the carpet then I’m a monkey’s uncle.

Update 29 Nov 2007:  With a bit under 2,000 extra votes counted, Young appears to have squeezed a little extra traction from one fingernail.  He’s now got a margin of 0.040% (37,690 vs. 37,630).

Fat = lower wages on average?

Via Steven Levitt, here’s an interesting paper by Roy Wada and Erdal Tekin:  “Body Composition and Wages

This paper examines the effect of body composition on wages. We develop measures of body composition – body fat (BF) and fat-free mass (FFM) – using data on bioelectrical impedance analysis (BIA) that are available in the National Health and Nutrition Examination Survey III and estimate wage models for respondents in the National Longitudinal Survey of Youth 1979. Our results indicate that increased body fat is unambiguously associated with decreased wages for both males and females. This result is in contrast to the mixed and sometimes inconsistent results from the previous research using body mass index (BMI). We also find new evidence indicating that a higher level of fat-free body mass is consistently associated with increased hourly wages. We present further evidence that these results are not the artifacts of unobserved heterogeneity. Our findings are robust to numerous specification checks and to a large number of alternative BIA prediction equations from which the body composition measures are derived.

Our work addresses an important limitation of the current literature on the economics of obesity. Previous research relied on body weight or BMI for measuring obesity despite the growing agreement in the medical literature that they represent misleading measures of obesity because of their inability to distinguish between body fat and fat-free body mass. Body composition measures used in this paper represent significant improvements over the previously used measures because they allow for the effects of fat and fat free components of body composition to be separately identified. Our work also contributes to the growing literature on the role of non-cognitive characteristics on wage determination.

Looking very briefly through the paper, they don’t seem to be looking at what I would have thought an important factor:  relative obesity.  Wada and Tekin don’t seem to postulate a mechanism for how body fat leads to lower wages on average.  While I’m happy to accept that it may come about because of lower productivity, it also seems reasonable to ask if it’s also partially because of a selection bias by employers.  On that basis, looking at how much fat a person is carrying relative to their community average would seem to be important.

Update:  I’m obviously assuming both causality and direction of causality here, but my comment still holds.  A strong result on my suggested extra regressor would, to me, seem to provide evidence of that causality.

Carbon tariffs

Well, well.  It would appear that Nicolas Sarkozy is threatening China with “carbon tariffs.”  It comes as no surprise that:

His idea already has supporters in the European Commission, particularly among officials charged with defending the interests of European industry.

In other words, the criticism of China is not really based on a perceived risk to the global environment, but that by acting first and China not following, the EU feels that European industry suffers unfairly.  It’s difficult to see how this would be legal under WTO rules.

The stated justification for the threatened action was:

“We cannot have one response from Europe and one from Asia, one from the north and one from the south,” he said. “China can and must play its full part.”

“I will defend the principle of a carbon compensation mechanism at the EU’s borders with regard to countries that don’t put in place rules for reducing greenhouse gas emissions,” Mr Sarkozy said.

This might be morally defensible if (and I really have to stress that ‘if’) the EU were to hand the Chinese government every cent they took in tariffs from Chinese exporters, thus allowing Europe to claim that they really were acting on behalf of the planet and not just their domestic industry.

However, we still have the very large problem of sovereignty.  Why should the EU get to dictate policy to China and to impose it arbitrarily if China doesn’t comply?  Even if China were to agree that (a) climate change is real and (b) humankind can and ought to do something about it, it does not follow that China and the EU would agree on an acceptable cost to impose on polluters, not least because China is still a developing country.

The point is that for every tonne of CO2-equivalent emitted in the EU, Europe gets more goods for consumption, but for every tonne emitted in China, we get more goods for consumption and another couple of people lifted out of poverty.

This message was driven home Tuesday by an article in a Communist party newspaper that said 95 per cent of carbon dioxide emissions from the era of the Industrial Revolution through the 1950s came from today’s developed countries.  Rich nations’ per capita emissions of greenhouse gases are also far above those in the developing world, the overseas edition of the People’s Daily newspaper said.

Now, if the world can agree on some sort of framework for reducing greenhouse gas emissions that also includes some restrictions on China and India, it seems sensible enough to me to allow carbon tariffs as punitive action against non-compliant states, but that’s pretty much the only way I’d support it.

I suppose that you might argue that if one country refused to ratify some treaty and other countries judged that by failing to do so, that country was placing other countries in peril, then taking action against them – in this case, imposing carbon tariffs – might be justified under “self defence.”  It’d be a tough sell, since the danger would not be imminent, but you might try it.  The problem then would be that if the stand-alone country were one of the UN security council’s permanent members, they could veto any attempt at multilateral action.

Identity theft

While everyone is focused on the HMRC accidentally misplacing CDs with the personal details of 25 million British citizens, I thought I’d relate the following little story.  I was in a major bank on Hampstead High Street [*] today.  While I was there, I overheard a staff member talking to another (the manager?) about a recent spate of thieves who put card readers on the ATMs (cashpoints).  She had just discovered that one of the ATMs outside the branch had been tampered with again.  I then had this conversation with the personal banker I was seeing:

Me:  Would you take cash out of the teller machine outside?

Personal Banker:  Me?  No way.

Me:  Where would you take cash out?

Personal Banker:  I’d use the cashpoint inside the bank, but never outside.

Hmmm …

[*] For those that don’t know, Hampstead is one of the wealthier parts of London.