Cars as mobile battery packs for hire

The Economist’s Babbage (i.e. their Science and Technology section) has a great article on the possibility of electric cars being used as battery packs for the power grid at large.  Here’s the idea:

At present, in order to meet sudden surges in demand, power companies have to bring additional generators online at a moment’s notice, a procedure that is both expensive and inefficient. If there were enough electric vehicles around, though, a fair number would be bound to be plugged in and recharging at any given time. Why not rig this idle fleet so that, when demand for electricity spikes, they stop drawing current from the grid and instead start pumping it back?

Apparently it’s all called vehicle-to-grid (V2G).  That (wikipedia) link has some great extra detail over the Economist piece.  If you want more again, here is the research site of the University of Delaware on it.  If you want more again (again), I’ve included links to the UK study by Ricardo and National Grid referenced in the Economist piece below.

After reading about the idea of V2G, a friend of mine asked a perfectly sensible question:

If having batteries connected up to the grid is a good thing for coping with spikes in demand, then why wouldn’t the power companies have dedicated batteries installed for this purpose?

I presume that power companies don’t install massive battery packs to obviate demand spikes because the cost of doing so exceeds the cost they currently incur to deal with them: having X% of their gross capacity sitting idle for most of the time.

In particular, the energy density of batteries isn’t great, and batteries do have a fairly low limit on the number of charge-discharge cycles they can go through.

Interestingly, another part of the cost associated with battery packs will be in the form of risk and uncertainty [*], which are exemplified by precisely this idea.  If a power company were to purchase and install massive battery packs at the site of the generator only to see a tipping-point-style adoption of electric vehicles that, when plugged in, serve as batteries for hire situated at the site of consumption (i.e. can offer up power without transmission loss), they would have to book a huge loss against the batteries they just installed.

Technological innovation and adoption is disruptive and frequently cumulative, meaning that any market power created by it is likely to be short-lived, which in turn creates a short-run focus for companies that work in that space.  For an infrastructure supplier more used to thinking about projects in terms of decades, that creates a strong status quo bias:  by not acting now, they retain the option to act tomorrow once the new technologies settle down.

Anyway, I’m a huge fan of this idea.  For a start, I’ve long been a huge fan of massively distributed power generation.  Every household having an ability to sell juice back to the grid is just one example of this, but I think it should be something we could aim to scale both up and down.  Imagine a world where anything with a battery could be used to transport and sell power back to the grid.  My pie-in-the-sky dream is that I could partially pay for a coffee at my local cafe by letting them use some of my mobile phone’s juice for 0.00001% of their power needs for the day.

More realistically, the other big benefit of this sort of thing is that because the grid becomes better able to cope with demand spikes without being supplied by the uber generators, the benefit to the power company of maintaining that surplus capacity starts to fall.  As a result, the balance would swing further towards renewable energy being economically (and not just environmentally) appealing.

At a first guess, I suspect that this also means that it is against the interests of existing power station owners for this sort of thing to come about, which ends up as another argument in favour of making sure that power generators and power distributors are separate companies.  The distributor has a strong economic incentive to have a mobile supply that, on average, moves to where the demand is located (or better yet, moves to where the demand is going to be); the monolithic generator does not.

Back in December 2007 (i.e. when the financial crisis had started but not reached it’s Oh-God-We’re-All-Going-To-Die phase), Doctors Willett Kempton and Nathaniel Pearre reckoned a V2G car could produce an income of $4,000 a year for the owner (including an annual fee paid to them by the grid, about which I am highly sceptical).  The Economist quite rightly points out that V2G, like so many things in life, would experience decreasing marginal value, but apparently it wouldn’t fall so far as to make it meaningless:

Of course, as the supply of electric vehicles increases, the value of each to the power company will fall. But even when such vehicles are commonplace, V2G should still be worthwhile from the car-owner’s point of view, according to a study carried out in Britain by Ricardo, an engineering firm, and National Grid, an electricity distributor. The report suggests that owners of electric vehicles in Britain could count on it to be worth as much as £600 ($970) a year in 2020, when an electric fleet 2m strong could provide 6% of the country’s grid-balancing capacity.

If you’re interested in the study by Ricardo and National Grid, the press release is here.  That page also has a link to the actual report, but they want you to give them personal information before you get it.  Thankfully, the magic of Google allows me to offer up a direct link to a PDF of the report.

The ever-sensible Economist also raises the upfront cost of capital installation by the distributor as something to keep in mind:

There is, it must be admitted, the issue of the additional cost of the equipment to manage all this electrical too-ing and fro-ing, not least the installation of charging points that can support current flows in both directions. But if the decision to make such points bi-directional were made now, when little of the infrastructure needed to sustain a fleet of electric vehicles has yet been built, the additional cost would not be great.

I can’t remember a damn thing from the “Electrical Engineering” part of my undergraduate degree [**], but despite the report from National Grid, I’m fairly sure that there would still be significant technical challenges (by which I mean real engineering problems) to overcome before rolling out a power grid with multitudes of mobile micro-suppliers, not to mention the logistical difficulties of tying your house, your car and your mobile phone battery to the same account and keeping track of how much they each give or take from any location, anywhere.

If I were a government wanting to directly subsidise targeted research to combat climate change I’d be calling in the deans of Electrical Engineering departments and heads of power distribution companies for a coffee and a chat.  I’d casually mention some numbers that would make make them salivate a little and then I’d talk about open access and the extent to which patents are ideal in stimulating innovation. [***]

[*] By which I mean known unknowns and unknown unknowns respectively.

[**] Heck, I can’t remember a damn thing from the “Electronic Engineering” or the “Computing Engineering” parts, either.

[***] But that’s a topic for another post.

Mark Kleiman on Mexico’s drug violence

Mark Kleiman has an interesting idea on how to fight Mexico’s drug violence.  It’s short enough to quote in full:

Drug-related violence has claimed 35,000 Mexican lives since 2006, and the level of bloodshed is still rising. With legalization not in the cards and an all-out crackdown unlikely to succeed, good options seem to be scarce.

Here’s a candidate, based on a strategy of dynamic concentration:

Mexico should, after a public and transparent process, designate one of its dealing  organizations as the most violent of the group, and Mexican and U.S. enforcement efforts should focus on destroying that organization. Once that group has been dismantled – not hard, in a competitive market – the process should be run again, with all the remaining organizations  told that finishing first in the violence race will lead to destruction. If it worked, this process would force a “race to the bottom” in violence; in effect, each organization’s drug-dealing revenues would be held hostage to its self-restraint when it comes to gunfire.

This is parallel to David Kennedy’s “pulling levers” strategy to deal with gang violence.

Would it work?  Hard to guess. But it might.  That’s more than you can say for any of the other proposals currently on the table.

It’s a nice idea, but it would probably suffer somewhat in the politics.  If, in order to ensure the downfall of the most violent gang, the government needs to divert resources from fighting other gangs, it may look to some as though they were going easy on crime in one area in order to fight it properly in another.  It could also be tainted with a brush of tacitly legalising the trade for all non-violent traffickers.  Still … cool idea.

The perverse incentives of Queensland traffic law

In the Australian state of Queensland, a violation of traffic law is punished by a fine and the awarding of points.  Points for a conviction stay on your licence for three years.  If you ever have 12 points at the same time, you’re in trouble.  I’ll come to that in a moment.

Somebody I know, let’s call him Semaj, has recently got himself up to 11 points.  He doesn’t dispute that he broke the law for all of them; he did.  Most of them came from speeding, but the last three points came from driving through a yellow light.  In Queensland, just like everywhere else on the planet, you must stop at a red light; but for a yellow light, you must stop if you are safely able to do so.  Some people believe that the yellow light should just be to warn drivers that the red is coming and have no penalty tied to it, but that’s not what I want to focus on.  To really rub salt in the wound, the light was still yellow when Semaj left the intersection and the only other car in the area was that of the police officer that booked him.  That’s what those in the business call a “dick move” by the cop, but it’s not what I want to focus on either.  What I want to focus on is …

***

Perverse incentive #1

The punishment for not stopping for a yellow light when you were safely able to is the same as that for not stopping at a red light:  AU$300 and 3 points.  This is absurd, because it fails to make the punishment proportionate to the severity of the crime.  By doing so, the government offers an incentive to people to treat them as equivalent.  To illustrate the point, let me take the idea embedded here in Queensland law to a logical, but ridiculous conclusion:

The violation of all laws should be punishable by the same penalty. A serial rapist-murderer should be locked away for life. Therefore, overstaying your parking for just one minute should lead to your being locked away for life.

See?  Absurd.  Clearly there are gradations of severity and, just as clearly, there should be corresponding gradations of punishment.  If the punishment for running a red light is a fine and 3 points, then the punishment for running a yellow should be a smaller fine and 1 point.

***

Anyway.  Moving on.  Semaj now has 11 points on his licence.  The oldest of his points is only one year old, so he has two full years before any of them are removed.  If he gets even a single point over the next two years, he will be faced with the following choice when he turns up at the Department of Transport to pay his fine:

  • either give up his licence for three months;
  • or go on a probationary licence (with a limit of two points instead of 12) for a full year.

After this, he will be returned a regular full licence entirely clear of points.  Hopefully you can now see …

***

Perverse incentive #2

Semaj is in a position where he would be better off by breaking the law.  The government is giving him an incentive to break the law.  If Semaj follows the law, he will have a one-point buffer for two years, then a three-point buffer for a year before returning to a full licence.  That’s three years in total.  If he deliberately gets caught for a one point infraction tomorrow, he can have a two-point buffer for one year and then go immediately to a full licence.  The cost to him will just be the fine for tomorrow’s infraction; maybe $100.

Who wouldn’t take that option?  It’s crazy.  If you’re going to have a point system with the possibility of a probationary licence, then the length of the probationary period should be long enough that someone in Semaj’s position wouldn’t actually prefer to be on it.

***

As I’ve said before, I believe that all fines issued for misdemeanours should not be for a fixed amount, but for a percentage of the transgressor’s income. When faced with the prospect of a $400 fine, somebody earning $20,000 a year will pay attention, but somebody earning $200,000 will not care nearly as much.  The two people therefore face different incentives when it comes to obeying the law.

Of course, none of this comes close for the most ridiculous traffic law in Queensland.  That most dubious of prizes goes to this piece of nanny-state-run-amok trash:  Drivers on P-plates (that’s a “provisional” licence) “under 25 years of age can only carry one passenger under the age of 21 years who is not an immediate family member, when driving between 11pm on a day and 5am on the next day.”

For reference, the very earliest that somebody in Queensland can move from a provisional to a full licence is at the age of 20.  That is two or three years into university.  Most Queenslanders, if they go to university and don’t take a gap year, would turn 21 in their fourth year.

The “peer passenger restriction” of provisional licences is designed to prevent distraction (from drunk louts in the back seat) to the driver and so, presumably, lead to fewer accidents and thus fewer fatalities.  Whether it ultimately succeeds in reducing road deaths is an empirical question.  I don’t have access to the data, but to my mind there’s a fair possibility that we’ll actually see more road deaths from this, because …

***

Perverse incentive #3

By forcing university-age people to not share a car, the Queensland government is:

  • abandoning the idea of a designated driver; and
  • encouraging more traffic onto the roads at just the time of day when people are least likely to pay full attention to the road (what, did they think that those kids would stay home?).

Both of those effects will serve to push up the accident (and thus, fatality) rates.

If you want to keep drunk 20-year-olds off the roads, then give them a way to avoid them.  Improve public transport.  Lift the licencing restrictions on taxis.

***

Idiots.

The future of civil society (I hope)

In the Netherlands:

Potholes, stray garbage, broken street lamps? Citizens of Eindhoven can now report local issues by iPhone, using the BuitenBeter app that was launched today. After spotting something that needs to be fixed, residents can use the app to take a picture, select an appropriate category and send their complaint directly through to the city council. A combination of GPS and maps lets users pinpoint the exact location of the problem, providing city workers with all the information they need to identify and resolve the problem.

The application covers a wide range of familiar nuisances, from broken sidewalks to loitering youth (who will hopefully respond favourably to having their picture taken by concerned citizens). Compared with lodging a complaint by phone or in writing, BuitenBeter creates a nearly frictionless experience and will no doubt prompt a wider group of people to become active reporters of issues that need the city’s attention.

Besides giving people an easy way to send through detailed reports, city officials also believe the concept will create shorter lines of communication, and will facilitate quicker feedback from local government to citizens. Developed by mobile solutions provider Yucat, the BuitenBeter app will soon be available for Android and Windows Mobile phones, too. Eindhoven has signed on for a twelve-month trial, and Yucat hopes to roll out the system to other cities in the near future.

This is brilliant.  More!

Gray markets, PPP and the iPhone in China

Via Felix Salmon, I found this fantastic piece by “Bento” on the take-up of the iPhone in China.

Some background:  When Apple launched the iPhone in China, early sales numbers were disappointing.

Some background to the background:  Under Chinese law, WIFI-enabled phones are illegal, so Apple has to cripple the iPhones they sell in China.

From Bento:

The Chinese have long had access to iPhones. They are for sale at stalls in every cybermall and market in every Chinese city, and come in two varieties: The most expensive ones (at around 6000 RMB in Shanghai for a 16GB 3GS, or 880 USD, depending on your haggling skills) come directly from Hong Kong, where the factory-unlocked model is available from the Apple store for around 4800 RMB. That’s a nice arbitrage play by the stall owner, and everyone is happy. The cheaper model, at around 5000 RMB for a 16GB 3GS, was originally bought locked in the US or Europe, and has been unlocked by the stall owner’s hacker-genius cousin using 3rd-party software. This kind of iPhone is cheaper, because you are on your own when it comes to upgrades and iTunes compatibility.

The distribution model is extensive and robust, and in fact most Chinese buy their mobile phones from stalls like this. There are no iPhone shortages, as prices fluctuate to meet demand. The received wisdom is that around 2 million iPhones are in the Chinese wild; I’ve personally seen a good many of them here in Shanghai, where they are much in evidence among the eliterati. Still, this is a minuscule portion of the 700 million odd phones in use in China, of which a small but growing portion is smartphones.

What can Apple do to grow the number of iPhones on mainland China? Short of lowering prices in Hong Kong (not going to happen) it can do two things: Increase awareness of the iPhone via advertising, and bring the benefits of a Chinese-language App Store to Chinese iPhone owners.

To do either of these, you sort of need to sell the product locally first, though. Apple can’t really go round putting up banners in Chinese tier-3 cities urging consumers to head for the local iPhone aftermarket.
[…]
Apple … is not revenue-sharing with China Unicom, the local vendor, but selling the iPhones outright to them. It is up to China Unicom to flog them in China.

And that’s what China Unicom is trying to do. China Unicom stores all have iPhone banners up; I’ve passed several China Unicom road shows stopping by Shanghai extolling the iPhone. The iPhone is being talked about widely. But so is the fact that the China Unicom iPhone is crippled — the Chinese are sophisticated consumers; forget this at your own peril.

The upshot: anecdotal reports tell of aftermarket prices increasing for Hong Kong iPhones these past few weeks, as demand increased. Clearly, the advertising is working, even if China Unicom’s sales of wifiless iPhones are anaemic.

Arbitrage is clearly still happening — buy for 4800 RMB in Hong Kong, sell for 6000 RMB in Shanghai; that’s a 25% markup and well above any reasonable estimate of transportation costs — so Purchasing Power Parity (PPP) doesn’t even hold within the “one” country, but this is a great example of gray market imports.

Not raising the minimum wage with inflation will make your country fat

Via Greg Mankiw, here is a new working paper by David O. Meltzer and Zhuo Chen: “The Impact of Minimum Wage Rates on Body Weight in the United States“. The abstract:

Growing consumption of increasingly less expensive food, and especially “fast food”, has been cited as a potential cause of increasing rate of obesity in the United States over the past several decades. Because the real minimum wage in the United States has declined by as much as half over 1968-2007 and because minimum wage labor is a major contributor to the cost of food away from home we hypothesized that changes in the minimum wage would be associated with changes in bodyweight over this period. To examine this, we use data from the Behavioral Risk Factor Surveillance System from 1984-2006 to test whether variation in the real minimum wage was associated with changes in body mass index (BMI). We also examine whether this association varied by gender, education and income, and used quantile regression to test whether the association varied over the BMI distribution. We also estimate the fraction of the increase in BMI since 1970 attributable to minimum wage declines. We find that a $1 decrease in the real minimum wage was associated with a 0.06 increase in BMI. This relationship was significant across gender and income groups and largest among the highest percentiles of the BMI distribution. Real minimum wage decreases can explain 10% of the change in BMI since 1970. We conclude that the declining real minimum wage rates has contributed to the increasing rate of overweight and obesity in the United States. Studies to clarify the mechanism by which minimum wages may affect obesity might help determine appropriate policy responses.

Emphasis is mine.  There is an obvious candidate for the mechanism:

  1. Minimum wages, in real terms, have been falling in the USA over the last 40 years.
  2. Minimum-wage labour is a significant proportion of the cost of “food away from home” (often, but not just including, fast-food).
  3. Therefore the real cost of producing “food away from home” has fallen.
  4. Therefore the relative price of “food away from home” has fallen.
  5. Therefore people eat “food away from home” more frequently and “food at home” less frequently.
  6. Typical “food away from home” has, at the least, more calories than “food at home”.
  7. Therefore, holding the amount of exercise constant,  obesity rates increased.

Update: The magnitude of the effect for items 2) – 7) will probably be greater for fast-food versus regular restaurant food, because minimum-wage labour will almost certainly comprise a larger fraction of costs for a fast-food outlet than it will for a fancy restaurant.

Forever starting

I am a chronic starter.  It seems that every week or two I start something new.  This would be great, if only I then kept doing whatever it is that I start.

One of the things that I start doing on a regular basis is running.  Just about every year, usually about half-way through summer, I start running again.  Every year I keep a careful log of what I do, every year I try not to build up too quickly, every year I become tremendously enthusiastic, every year I dream of completing the London Marathon and every year, without fail, I stop running after a month and a half.

Forever starting running

(Click on the image for a bigger version.  Distances are in kilometres; rates are min/km)

I used to be a runner.  Back in 1992, my final year of high school, I ran four times a week on top of two weekly sessions of soccer training in the winter and cricket in the summer.  In the middle of that year I ran the Gold Coast Half-Marathon in 1:38:37 (4 min 40 sec per kilometre).  Later that year I ran a cross-country 8km in 32 minutes flat.  I was in the Queensland junior orienteering team.

I’ve always thought of myself as a runner (well, okay, a lapsed runner).  I’ve blamed everything I could imagine for my repeated failure to get into a habit again.  Diet.  Running too far.  Running too quickly.  Not enough time to rest between runs.  Too much time between runs.  Not running on the same days of the week.  Insufficient variety in my routes.  Not running with music.  Not running enough with other people.

I generally hold that with exercise (hell, with anything), what propels you forward is novelty in the short term, discipline in the medium term and habit in the long term.  The trick, then, is to find a way to deal with a chronic lack of self-discipline in the medium term when you’ve ruled out options like joining the military to have discipline imposed upon you.

Here’s an email I sent to some of my friends last year (21 Aug 2008):

It’s not that I get bored with the runs when I’m on them – I tend to vary my courses and occasionally run with a club. As far as I can tell, I just get to a point where I can’t be arsed going today, tell myself I’ll go tomorrow, end up only going in three or four days and then repeat the process with the lags becoming longer until I just forget about it altogether. I have tended to get quite tired after the first couple of weeks, which suggests that an inappropriate diet might be the cause, but I’m hesitant to use that as the explanation when the phrase “I’m a lazy bastard” is swimming gently across my forebrain. There’s also the possibility that I rapidly envisage absurdly ambitious goals when I first start and manage to discourage myself before I’ve even built the habit of running.

So. I’m looking for suggestions on how to keep it going this time. I’ve managed nine runs so far and all pretty evenly spaced (see attached). The 5km runs are on the Heath, the 7km runs are with a running club of 80+ people around Hyde Park and Kensington Gardens. Runs on the Heath are infinitely variable. I don’t start back at uni for six weeks and have no work planned, so it’s a perfect opportunity to build up a weekly ritual.

My friend Chris replied (22 Aug 2008) with:

My most successful tactic: grinding down the barriers of participation.

The thing that makes it hard to run is NOT the running. It’s the transition from comfort and inertia to physical discomfort and effort (usually in the dark and cold in England).  You have to look at what you need to achieve: in the first few months you are trying to achieve a HABIT. Nothing else. You’re not trying to achieve physical fitness, training, distance or anything else.

So looking at it as habit training, the best thing you can do is work on the habit above all else. It doesn’t matter a toad’s cloaca whether you go out and run 12k or 400 metres, if you stop a fortnight later. And as you know, stopping is never a decision to stop running. It’s a decision to take tonight off and go tomorrow instead. Then tomorrow. Then tomorrow…

The only way to succeed is to form the habit above all else, and the only workable way to form the habit is to make the habit easy.  So, change your goal. It’s not to go for a run, it’s to put your tights on and step outside the door. Make THAT what you do 3 times/week (or better, every Tues, Thurs and Sunday, since “3/week” gives you wiggle room).

So 3 times a week you will put your shoes and silver bodysuit on, and walk to the gate. What happens then is purely a matter of how you’re feeling at the time. Until you are standing at the gate, you are not planning anything else.

Pound down the delta between what you are doing now (vegging in a warm lounge room) and what you will be doing in 10 minutes (standing outside your door). Smash the crap out of that delta, because that’s your only enemy.

Which is eminently sensible advice, but as you’ll see above in the image, I stopped running two weeks later.  There was something missing.

Another friend, Anthony, also suggested last year that I

drop down a lot of cash on an event, such as Noosa Tri, which gives [you] some financial and pride incentives not to look like a fat unfit bastard on the day.

Again, excellent advice, but unless I have a basic belief that even with no training at all I can still cough and wheeze my way around the course, there’s a fair chance that if it’s all seeming a bit too hard I’ll just give up and call the cash gone.  However, it does lead into the classic economist’s way of solving any problem:  financial incentives.  In January 2008, Ian Ayres, Jordan Goldberg and Dean Karlan (two of them economists) lauched stickK.com.  It’s a site that will let you set up a contract on yourself (e.g. to lose weight).  If you don’t meet the terms of the contract, you forfeit money.

I think it’s a neat idea, but it’s never really sat well with me.  If your money is potentially going to a charity that you hate, then that’s just stupid.  If it’s going to a charity that you like, then your incentives are all screwed up.  So instead, I’ve decided on a different idea:

As soon as I finish writing this post, I’m going to go to the bank and withdraw £520.  I will then divide it across eight envelopes and give them all to a good friend, Dimitri, with strict instructions to return the money back to me piecemeal as he is satisfied that I have gone for a run.  The amounts returned will be increasing over time, so the first run will get me £30 back, the second £40 and so on up to the eighth run being worth £100.  There will be a time limit of three weeks on my claiming the money back and a limit of no more than four runs being claimed per week. Here are the benefits, as I see them:

  • Dimitri is a good friend and I trust him not to run off with my money.
  • If I don’t meet the requirements, I also trust Dimitri to not turn Good Bloke and give me the money back anyway.
  • He is pretty fit at the moment, having just competed in the London Triathlon, and is training regularly himself.
  • It’ll be up to Dimitri to judge whether he believes me when I say I went for a run.
  • The total amount of money is large enough that I will really want to get it back.
  • The incentive is increasing over time, so I won’t be tempted to just go for a couple of runs and call it quits.
  • The overall time limit combined with the restriction of no more than four runs per week will make sure that I don’t put it off and that I don’t end up hurting myself.
  • Possibly most importantly of all, it extends the period of novelty well into the period that would otherwise be solely governed by (a lack of) discipline.

Eight more runs will take me to 20 in total.  If it goes well and Dimitri is willing, I might then repeat the process.  After that, I should hopefully have been running for long enough that I can get myself out the door without the financial incentive.

How bad is human trafficking?

Adam pointed me to this review in the New Statesman by Brendan O’Neil of “Sex at the Margins: Migration, Labour Markets and the Rescue Industry” (Foyles, Amazon) by Laura María Agustín. Here is the core of the review:

Agustín points out that some anti-trafficking activists depend on numbers produced by the CIA (not normally considered a reliable or neutral font of information when it comes to international issues), even though the CIA refuses to “divulge its research methods”. The reason why the “new slavery” statistics are so high is, in part, that the category of trafficking is promiscuously defined, sometimes disingenuously so. Some researchers automatically label migrant women who work as prostitutes “trafficked persons”, basing their rationale on the notion that no woman could seriously want to work in the sex industry. The Coalition Against Trafficking in Women argues that “all children and the majority of women in the sex trade” should be considered “victims of trafficking”. As Agustín says, such an approach “infantilises” migrant women, “eliminating any notion that women who sell sex can consent”. Ironically, it objectifies them, treating them as unthinking things that are moved around the world against their will.

The reality is very different, the author says. Most migrant women, including those who end up in the sex industry, have made a clear decision to leave home and take their chances overseas. They are not “passive victims” who must be “saved” by anti-trafficking campaigners and returned to their country of origin. Rather, frequently, they are headstrong and ambitious women who migrate in order to escape “small-town prejudices, dead-end jobs, dangerous streets and suffocating families”. Shocking as it might seem to the feminist social workers, caring police people and campaigning journalists who make up what Agustín refers to as the “rescue industry”, she has discovered that some poor migrant women “like the idea of being found beautiful or exotic abroad, exciting desire in others”. I told you it was controversial.

One of Agustín’s chief concerns is that the anti-trafficking crusade is restricting international freedom of movement. What presents itself as a campaign to protect migrants from harm is actually making their efforts to flee home, to find work, to make the most of their lives in often difficult and unforgiving circumstances, that much harder. She writes about the “rescue raids” carried out by police and non-governmental organisations, in which even women who vociferously deny having been trafficked may be arrested, imprisoned in detention centres and sent back home – for the benefit of their own mental stability, of course. It used to be called repatriation; now, dolled up in therapeutic lingo, it is called “rescue”.

For all its poisonous prejudices, the old racist view of migrants as portents of crime and social instability at least treated them as autonomous, sentient, albeit “morally depraved”, adults. By contrast, as the author illustrates, the anti-trafficking lobby robs migrants of agency and their individual differences, and views them as a helpless, swaying mass of thousands who must be saved by the more savvy and intelligent women of the west and by western authorities.

It’s fascinating stuff and goes along with what I’ve previously said about prostitution:

[Slavery] aside (and that’s what people trafficking is – slave trading), you cannot simply save or rescue a prostitute. It is not a problem, if you consider it one, to be tackled. It is not something that you solve, once and for all. Prostitutes are people like everyone else and like everyone else, they think on the margin and respond to incentives.

In that entry I labelled human trafficking as slavery and I stand by that. Nevertheless, it would appear from Agustín’s work that the scale of the trafficking problem may be smaller than we commonly believe.

Thinking on the margin: prostitution (UPDATED)

One of the most important ideas in economics is that people think and act on the margin. By that I mean that we make our decisions as if we were looking at the costs and benefits of just one more. Just one more slice of pizza. Just one more minute on the bike in the gym. Just one more share of some stock bought. If we reckon the benefits of that one more to be greater than the cost of it, irrespective of what has come before and what may come after, we’ll typically do it. The point is that we optimise, or at least act as though we optimise. We may only optimise locally instead of globally (that last slice of pizza may have seemed like a good idea at the time, but it’s not much good for my health in general), but it’s still what we do.

The idea is by no means unique to economics. There is, at the least, an entire branch of mathematics devoted to it. But economists just love to point out that optimisation – and, therefore, thinking on the margin – applies to human behaviour just as well as it does to equations on a blackboard, and that realisation can sometimes lead to surprising, even counter-intuitive observations with serious consequences for public policy.

As I’ve mentioned before (here and here), Steven Levitt and Sudhir Venkatesh are currently finishing a paper on street prostitution in Chicago. They were able to study the provision of prostitution services during a predictable demand shock and discovered that the supply of prostitution services is rather elastic: a 63% increase in quantity was associated with only a 30% increase in price. More importantly, that increase came on three margins: an increase in supply from existing prostitutes (who, on average, only work 13 hours a week), a temporary in-migration of prostitutes from other areas and the temporary entry into the market of women who are not ordinarily willing to perform sex acts for money. Levitt and Venkatesh estimate that 43 of the 63% increase in the number of tricks came from existing prostitutes in the area and the remaining 20 from the in-migrating prostitutes and the temporary market entrants.

That third margin bears highlighting. Typical thinking about the topic holds that the choice to become a prostitute, if it is a choice at all, is a discrete [update:  I originally had “discreet”.  It’s certainly that 🙂] one; that women and a very few men first choose – or are compelled – to be a prostitute and only then consider what money they might make. The idea that some women might choose to start or stop being a prostitute in the face of a ten, five or even one dollar an hour change in the money available doesn’t make sense in this thinking. I believe that the reason for this is founded in a moral abhorrence at the very idea of prostitution – the belief that in addition to any social or economic conditions faced by prostitutes, the act of prostitution itself is immoral. Since it has become au fait, among Western intelligentsia at least, to never accuse people of direct moral failure, it has also become the norm to conclude that all prostitutes were misled or forced into their position and thus need to be rescued. The terrible issue of people trafficking naturally lends support to this idea.

I do not want to belittle the tragedy and travesty that is people trafficking. It is a truly awful phenomenon and the fact that it exists at all, let alone in countries that are supposed to be based on freedom of the individual as a founding tenet, is abhorrent. It needs to be stamped out.

My concern is to highlight that not all prostitutes are forced into their profession. There really are women who, faced with an outside option of $7/hour, are not willing to be a prostitute for $25/hour, but are willing to do so for $35/hour. I have no doubt at all that – and this is important – the same statement would be true if you multiplied all of those figures by 10.

The upshot of this is that, slaves aside (and that’s what people trafficking is – slave trading), you cannot simply save or rescue a prostitute. It is not a problem, if you consider it one, to be tackled. It is not something that you solve, once and for all. Prostitutes are people like everyone else and like everyone else, they think on the margin and respond to incentives. If your concern is that prostitutes live in poverty, that they are compelled into their work by economic hardship, then you must work to improve their outside options. But at the same time, you should recognise that you will not be stopping prostitution from happening; you will simply be raising the minimum asking price. That will lower the quantity demanded, but it will never remove it altogether.

Update (5 April 2008):

See my new entry here. It would appear that maybe even the figures for human trafficking are overblown.