What I've been reading

1. Flash Boys

This book is quite good, although I have some concerns and issues.  I also think the moral of the story is one that's been missed by our politicians.  Look for a longer upcoming review on this blog.

2. Cuckoo's Calling

As a big fan of the Harry Potter books, I wanted to give this book a shot.  (Even after reading A Casual Vacancy, which wasn't good.)  This book is OK, but I've stalled.  I find myself wanting to read other books instead.

3. The Economic Naturalist

This book came out several years ago, but I finally obtained a copy after some economists at the teaching conference I attended mentioned it provided useful examples to use when teaching.

They were correct.  The book asks a series of interesting questions and uses logic and economic reasoning to try to discover the answer.  I recommend this book.


4. Think Like a Freak

I thought Freakonomics was wonderful and Superfreakonomics was the worst book I've ever read.  They're online content is reasonably good, though, so despite my displeasure with their last book, I took a chance on this one.  I wasn't disappointed.  It's much more like Freakonomics, where they tackle small problems.  My 12-year old (who reads more than anybody I know - adults or children - liked it as well).

They claim this will improve your thinking.  I'm not certain about that, but it is a quick, fun, and interesting read.

5. The Curmudgeon's Guide to Getting Ahead

Outstanding advice.  I'm making my children read it!

6. Political Trivia

OK, so it may seem a bit odd that I'm reading my own book.  That said, I'm planning to update it with questions from the past year along with a few new categories.  This review is helping spot where more questions are needed.

In the queue:

* The SU freshman reading compilation on humor.

* A Good Walkthrough Spoiled: The Best of Mike Tanier at Football Outsiders

* Rush Revere and the Brave Pilgrims: Time-Travel Adventures with Exceptional Americans

* Nothing Like a Dame: Conversations with the Great Women of Musical Theater

Assorted Links

1. An analysis of what the Hobby Lobby ruling will mean.

This ruling is important.  I don't object at all to using contraceptives.  Honestly, I think those who have these objections based on religious beliefs are wrong.  But I think it is their right to have those beliefs, and it will be dangerous if religious freedoms are trampled here.  As a general rule, the marketplace should decide what's offered, not the government.  This is especially true when dealing with religious beliefs.

2. Australia offers asylum seekers $10,000 to leave.

Excerpt:

The Abbott government is offering asylum seekers on Manus Island and Nauru detention centres up to $10,000 to abandon their hope of resettlement in Australia and voluntarily return to the country they fled from.

The revelation comes as the High Court on Friday issued a stunning rebuke to the Abbott government's border protection policy, striking down its decision to to refuse to issue permanent protection visas to boat arrivals found to be refugees.

This can't end well, right?  I read this and then imagine what would happen if the US offered $10,000 to illegal immigrants to leave. Yikes.

3. Jayson Lusk summarizes new research on the issue of local food vs. environmental quality.

Note: Jayson will be giving a talk at Susquehanna University on Wednesday, October 22nd.  More information coming soon.

My most viewed video: Game Theory - 3-player games

I made this video solely for my game theory class (25 students), but it's become my most-viewed video.  That's not saying too much at only a few hundred views, but given how few students I have in the class vs. the number of views, I thought I'd share it here as there must be something exciting about this video, right?

Quoted in a Pittsburgh Tribune Review story on Obama's stimulus initiatives

Link here

The overall economic effect of these plans is likely to be marginal, however, because advanced research and development jobs go to skilled workers, most of whom have college degrees, said Matthew Rousu, associate professor of economics at Susquehanna University. It suffers from some of the same weaknesses as the 2009 stimulus act, which pumped billions into environmentally friendly technology research, supporting jobs for workers whose skills and training already were in demand, he said.

“If you're looking at a jobs program, a far better program would simply be to spend a lot of federal money to fix Pennsylvania's bridges, for example,” Rousu said. “People working on bridges have a much higher unemployment rate than, say, the scientists who are more likely to obtain research and development jobs.”

Economics of Broadway Musicals: Links and Commentary

1. NY Times article on how "A Gentleman's Guide to Love and Murder" is trying to capitalize on winning the Tony Award for best musical.

A very interesting read.  Here's one excerpt:

The big difference in these new ads, as shown in a 30-image slide show at the SpotCo meeting last week, is that they relentlessly hammer home the idea that “Gentleman’s Guide” is the best musical of the year.

I agree with their strategy.  On a personal note - I saw this show about 2 weeks ago (just before it's Tony win) and it was fantastic!  Here are the obligatory pictures:

We also saw another show mentioned in the article - If/Then, which was also fantastic.  It doesn't hurt when your seats are this good:

Many people think it is expensive it is to see Broadway musicals.  I (somewhat) disagree.  While it's not cheap, you can get great seats at the TKTS booth for a discount on the day of the show for far less than what you'd pay for equivalent seats for a Broadway touring company.  You also see more talented performers (on average) on Broadway.


2. Here is a post on BroadwayWorld.com discussing the weekly costs for various musicals and their "break-even" points.  

Excerpt on assumptions needed:

• Producers announce recoupment very shortly after actually recouping • A show recoups because its box office receipts minus a certain amount of expenses per week equals the initial investment, and this amount per week is the 'weekly nut'. And I assume that if a show does not meet its weekly nut, that loss is added back to the money it has to recoup (e.g., If MEMPHIS in total lost 20k before it won BEST MUSICAL it had to recoup back its original investment plus the 20k it lost from simply running). • I've taken 9% off the grosses for tax, thanks Mikem • My % of "gross potential" figures should be considered +/1 about 4% because I wasn't too precise with this particular calculation. 

This is an interesting read.  One note I'll add is that some musicals make significant amounts of money after they're off broadway by selling their rights to local theatre groups.  (Suessical the Musical has done extremely well with this.)  So even if a show loses money on Broadway, it might still earn money overall.

Legal analysis of California's education ruling, and other links

1. Analysis of California legal ruling, but Pacific Legal Foundation.

I fear the unions will still fight this, but this is good news.

2. Eric Cantor loses in the primary to an economics professor.

I love it when economics professors win!

3.  Food stamp fraud busted

Excerpt:

The FBI announced Tuesday in Savannah, Georgia that eighty-eight people have been charged in "one of the largest federal food program frauds ever prosecuted." Fifty-four of the defendants were charged with conspiring to open "purported grocery stores" specifically for the purpose of defrauding the Women, Infant, and Children (WIC) and Food Stamp program.  

4. Sheldon Adelson giving money to help prevent online gambling in PA.

He owns significant shares in a Pennsylvania casino.  But, of course, this isn't about keeping competition out.  This is for the kids.  Yeah, right.

Misplaced outrage - London flat prices

Link here

Excerpt:

A ridiculously tiny flat listed for rent in North London has caused a furor and is set to be investigated by the local council, according to The Guardian.

The “fully furnished” Kings Cross studio was listed for rent online earlier this week for more than $1,234 a month, despite the fact the single bed is practically touching the sink. 

The outrage here is completely misplaced.  The reason that flats in London are so expensive are the horrendous laws regarding public spaces and building.  London is a wonderful city, but the amount of land where residents are prohibited to build is stunning.  Further, there are few sky-rises.  I'm pretty certain there is plenty of money that could be made by building 10-20 story apartment buildings, but the local zoning laws make it prohibitive.

(Here is a google maps shot of London.  In this screenshot there are three 3 parks that are all about the size of Central Park.)

The price of this flat is high because there are too many government regulations.  Somehow I doubt the local government council will be able to figure that out, unfortunately.

Learning economics through pictures - diminishing marginal utility "fail"

Hat tip to Susquehanna University student Courtney Conrad.

This picture is a joke (I hope), but it allows us the opportunity to talk about diminishing marginal utility.  This promotion doesn't recognize it.

The idea of diminishing marginal utility is that consumers will value a 2nd item less than the first item.  One good example: What's more important, a family's first car or their second?  It's naturally the first car.  Without the first, the family can't use a car at all.  Going from one to two can be incredibly helpful, as two people can drive at once, but it's not as important as obtaining the first vehicle.  The same concept holds when discussing the first and second pieces of pizza, televisions in a house, and almost all items.  That's why economists call it the law of diminishing marginal utility.

Usually, "buy one, get one 50% off" promotions are done because firms recognize that a 2nd unit is not worth as much to the consumer.  The promotion pictured above doesn't recognize the law of diminishing marginal utility.