Sunday, May 31, 2009

Chicago parking: private metering, public/private enforcement

The City of Chicago recently sold the right to manage its parking meters for the next 75 years to a private company, for a payment of $1.15 billion. The city retains the right to make parking laws and enforce them, although some aspects of enforcement are now shared. Not surprisingly, there's some trouble in the Windy City: Long a Driver’s Curse, Chicago Parking Gets Worse .

Not only have meter rates gone up, enforcement seems to have become more aggressive. Aside from the fact that Chicago looks to parking fines for revenue in tough economic times, there appear to be market design reasons for this.

Here is the agreement between the city and the contractor. Section 3.2e on page 40 reveals that the contractor as well as the city may issue tickets to illegally parked cars at meters.

So now there are two motivations for issuing tickets; the city issues them to raise revenue from parking fines and to enforce the parking laws, and the contractor issues them to increase meter revenue by discouraging people from parking without paying or parking after the payment has expired.

The city can raise revenues from fines by aggressively enforcing laws, e.g. about how many inches you may park from the curb. The contractor can raise revenues by ticketing cars promptly after meters expire. (Both the city and the contractor have an interest in enforcing the laws that say you must park between the lines.)

Some problems with getting new meters (which accept credit cards) to work properly have compounded the angst.

What to do? Carry lots of quarters when you drive in Chicago, at least until things settle down.

Saturday, May 30, 2009

Harvard's "Z-list," waitlist admission with a difference

Even Harvard gives favorable attention to legacies (children of alums), you are no doubt shocked to learn. But, right around this time of year, as offers are made off the waiting list, some of those alumni children, and others with certain special late-season Harvard offers, are being given a potentially hard choice: The Back Door to the Yard Z-list: A legacy-heavy special admissions program .

The Z list students are admitted after a year delay, on the unusual condition that they don't attend college anywhere else in the intervening year. The Crimson story (from several years ago) described the program, and found that it included a substantial proportion of legacy students. (emphasis added):

"This group of students, known within Byerly Hall as the “Z-list,” are plucked off the waitlist any time from May to August—after they have accepted offers of admission at other universities—and informed that if they are willing to take a year off, they can enroll at Harvard the following September.Harvard admissions officers say they choose to “Z” students—it’s a verb—when there is a consensus that the College cannot bear to reject them but there is simply no bed available for them immediately after they graduate high school.“There’s no formula to this and there’s not much in common [between Z-list students],” says Director of Admissions Marlyn McGrath Lewis ’70-’73. “It makes us feel we made some effort to get them here.”But if you talk to enough of these students whom the admissions office makes a special effort to bring to Cambridge, you’ll find they do have something in common: Their parents went to Harvard."
...
"Other top colleges have special admissions programs in which applicants are asked to take time off or enroll elsewhere and then transfer, but no other Ivy requires students to take a year off and gets them to come in such high proportions—a testament to the College’s perennial superiority in admissions.And if a year off makes students more mature and better able to contribute to the College, then the Z-list allows Harvard to placate powerful parents without diluting the quality of its class."
...
"“A very high percentage are alumni cases,” agrees Susan G. Case, a college counselor at Milton Academy, which in some years has sent Harvard a quarter of the Z-list all by itself. “There isn’t necessarily an academic pattern, but it’s usually institutional needs. That’s a phrase they use internally.”"

Legacy admissions in public schools

California leads the way again: here's some school choice news from LA. 'Legacy' admissions OK'd in public grade schools, Calif. weighs pros, cons of alumni preference policy.

"Emulating a controversial practice at many colleges, two high-achieving public school districts in California are giving preference to the children of alumni.

"The Beverly Hills Unified School District and the Santa Monica-Malibu Unified School District have adopted legacy admissions policies for children of former students who live outside their enrollment boundaries.
The policies appear to be the first in the nation at public schools, education observers say.
The programs vary slightly, but leaders of both districts say they hope to raise money by forging closer ties with alumni who may be priced out of their hometowns as well as with grandparents who still live there.
In each district, nonresident legacy students will make up a tiny percentage of the student population, officials said.
...
Many universities and colleges have long offered preferences to the children, grandchildren, and siblings of alumni, accepting them at greater rates than applicants overall, sometimes with lower grades and SAT scores.
Universities' arguments for legacy admissions - to nurture connections with alumni and their checkbooks - have been upheld as constitutional.
But the policies can cause campus controversy, leading some schools, including the University of California in 1998, to vote to abolish them.
...
Beverly Hills adopted its legacy policy on a 3-2 vote last spring, allowing the children of anyone who attended city schools at least four years and whose grandparents have lived in the city for at least a decade to apply for permits. Eleven students, among 5,100 enrolled in district schools, attend school under the program.
Fenton said he proposed the idea to reconnect the district with grandparents who live within its borders and no longer have a direct stake in the city's schools yet are asked to vote on school measures, such as a $334-million facilities bond passed in November."
...
"To round out classes and maximize state funding, the 12,000-student Santa Monica-Malibu district has long offered permits to the children of district, city, and community college employees, siblings of current students, and others who moved away.
After those, it also has given permits to some nonresident students without connections to the district.
But the board voted unanimously in April to give alumni children priority over this last category of students, starting next school year.
...
"Critics are skeptical.
"It would be more efficient from a fund-raising standpoint to auction off education slots on eBay than to create a legacy preference," said Michael Dannenberg, director of education policy at the nonpartisan New America Foundation."

Friday, May 29, 2009

Opposite of repugnance: Protected transactions

I've been thinking lately about transactions that are the opposite of repugnant, i.e. transactions that, as a society, we often seek to promote, for reasons other than efficiency or pure political expediency.

In yesterday's post I mentioned monogamous marriage between a man and a woman, which in many countries and U.S. states is promoted over other forms of marriage (such as polygamy or same sex marriage).

Home ownership in the US is an obvious one, in this post-housing-bubble financial crisis, in which there have been Federal bailouts of the various Government Sponsored Entities like Fanny Mae and Freddy Mac, set up to promote home ownership.

Food production by small farmers, not only in the US, but also in Europe and Japan: we protect this by subsidies, price supports, government supported crop insurance programs, etc.

Fishing by small fishing boats: if we were only interested in protecting fish to keep fisheries sustainable, we might regulate fisheries by imposing seasonal limits on how much could be caught. But in many cases we also set daily limits (e.g. some fishermen on Cape Cod are limited to catch no more than 400lbs of scallops a day). This makes large, factory fishing uneconomical, and protects small local fishermen.

The right to purchase guns probably falls into this category in the U.S.

Of course, as with repugnant transactions, protected transactions may involve a lot of complications, like providing public goods and protecting rights. But it may be that to better understand which kinds of transactions may come to be regarded as repugnant, it will help to understand which kinds of transactions are sometimes protected.

Update: looking at the comments, commuting alone in a car seems worth including on the list of protected transactions in the U.S. (And thank you to Dubner at Freakonomics for his generous plug of this blog...)

Thursday, May 28, 2009

Airport slot auctions in the Washington Post

Today's Washington Post has an editorial regretting the obstacles thrown up to auctioning airport slots, and in favor of good market design: Airport Slot Auctions--A good idea to relieve air traffic congestion is snuffed out.

HT: Scott Kominers

Miscellaneous repugnant transactions

Germany to ban paintball
"The German government is planning to ban paintball and laser shooting games in reaction to the recent school massacre in which 15 people died.
Under legislation agreed by the ruling coalition of the chancellor, Angela ­Merkel, using air rifles to shoot paint-filled pellets at opponents is likely to be made illegal, and would be punishable with fines of up to €5,000 " (HT Muriel Niederle)

Over at Knowledge Problem: Price gouging: Is it wrong? Should it be against the law?

At MR, Tyler Cowen reports:
"Love Land, a sex theme park set to open this October in China won't have the chance to lose it's virginity. Chinese bureaucrats ordered the park destroyed after details of the park's featured attractions were leaked.
The story is here. The rest of the article relates:
The park was to have giant-sized reproductions of male and female anatomy, and offered lessons in safe sex and the proper use of condoms. There was also an exhibition about the history of sex, as well as workshops offering sex techniques.
The entrance to park featured a giant pair of women's legs clad only in a red thong. Those legs are now closed forever. Officials would only say that the concept of the park was vulgar, and deemed unnecessary. Bulldozers and wrecking ball were seen destroying the exhibits as onlookers tried to get a peak.
China considers the topic of sex taboo, even though illegal prostitution is at an all-time high in the country. "

Fertility treatments in Britain: a post actually headlined Repugnant Transactions follows a story in the Guardian, Thousands of women leaving UK for fertility treatment, • Women losing patience with NHS waiting lists • Eggs and donated sperm in short supply, study says.
"Couples here are able to exploit the fact that, in some countries, women who choose to donate eggs can be paid, said Culley, with some donors in America receiving up to $10,000. In Britain, by contrast, tight regulation of fertility means egg donors receive only expenses.
"All the evidence is that cross-border reproductive care is growing. Women here do this for all sorts of reasons," she said. "There is a serious shortage of eggs, donated sperm is in shorter supply than before, the cost can be cheaper abroad and some people want IVF which they can't get on the NHS."
...
"Isobel O'Neill, a fertility counsellor in Glasgow, said couples seeking a donated egg who visit the Glasgow Royal Infirmary are told there is a six- or seven-year wait for one on the NHS. Even those willing to pay at the private Glasgow Centre for Reproductive Medicine, where she also works, face a delay of up to a year."

California High Court Upholds Gay Marriage Ban
"The California Supreme Court upheld a ban on same-sex marriage Tuesday, ratifying a decision made by voters last year. The ruling comes at a time when several state governments have moved in the opposite direction.
"The court’s decision does, however, preserve the 18,000 same-sex marriages performed between the justices’ ruling last May that same-sex marriage was constitutionally protected and voters’ passage in November of Proposition 8, which banned it.
The court’s opinion, written by Chief Justice Ronald M. George for a 6-to-1 majority, noted that same-sex couples still had a right to civil unions. Such unions, the opinion said, gives those couples the ability to “choose one’s life partner and enter with that person into a committed, officially recognized and protected family relationship that enjoys all of the constitutionally based incidents of marriage.”
Justice George wrote that Proposition 8 did not “entirely repeal or abrogate” the right to such a protected relationship. Instead, he said, it “carves out a narrow and limited exception to these state constitutional rights, reserving the official designation of the term ‘marriage’ for the union of opposite-sex couples as a matter of state constitutional law.”
The 18,000 existing marriages can stand, he wrote, because Proposition 8 did not include language specifically saying it was retroactive."

Update, hugging: Jorge Ortiz directs my attention to a story in today's NY Times that I had overlooked, some high schools are banning hugs:
"And schools from Hillsdale, N.J., to Bend, Ore., wary in a litigious era about sexual harassment or improper touching — or citing hallway clogging and late arrivals to class — have banned hugging or imposed a three-second rule. "

An innovative early paper on repugnance: Ravi Kanbur, "On Obnoxious Markets", July 2001. Revised version published in Stephen Cullenberg and Prasanta Pattanaik (editors), Globalization, Culture and the Limits of the Market: Essays in Economics and Philosophy. Oxford University Press, 2004.
Professor Kanbur argues that extreme outcomes, and asymmetric and inadequate information, and inequality are big components in making markets obnoxious, and I agree.

I'm personally reluctant to set out a theory of what makes markets repugnant since I always find markets that don't fit into any simple framework. Same-sex marriage, for example, is a transaction that many people find repugnant (and is now once again illegal in California, see above), but it is no more extreme, or subject to asymmetric information, or unequal than heterosexual marriage, which is just about the opposite of a repugnant transaction, what we might call a "protected" transaction.

Signaling for attention: email version

Seriosity.com thinks it has a solution to email overload. They offer firms a signaling service based on an artificial currency ("serios"). Potential message senders are endowed with a fixed supply of serios per week, and they can spend them to indicate their estimate of the value of the message. The company demo suggests that managers may not read underfunded messages, and will read highly endowed messages first. (It isn't clear what the equilibrium would look like in a dynamic environment.)

But creating scarce signals is not a bad idea, see e.g. the mechanism for Signaling on the Economics Job Market , which allows each candidate to send up to two signals.

From their website:
"Attent creates an economy with a scarce new currency (Serios) that enables users to signal the importance of their outgoing email by attaching value. Recipients can use the Serios received to prioritize their attention to messages, and in return use their Serios to assign appropriate weight to their responses."

HT: John Cawley

Wednesday, May 27, 2009

Where did all the MD license plates go?

When I was a child, it was commonplace to see cars with license plates indicating that the car belonged to a medical doctor. Where did they all go?

It isn't that they aren't still available to doctors who want them, e.g. here is the MA application form, complete with a picture of an MD license plate: Application for Medical Doctor (MD) Plates . So why have doctors reduced their use of this kind of signaling?

My guess is the answer has to do with changes in markets that changed the value of sending such a signal. Here are some conjectures:

Housecalls play a much smaller role in medical practice than they did when I was a child, and so the need for docs to park in odd places and rely on their plates to ward off parking tickets has decreased.

The reputational benefits of being a doctor have decreased.

Drug addicts started to break into cars with MD plates, looking for drugs to use or sell.

Feel free to leave other conjectures as comments...

Tuesday, May 26, 2009

Hal Varian on ad auctions

Muthu Muthukrishnan at Google in NY has a nice post about Hal Varian, Google's chief economist and a pioneer of the economics of the internet (among other things*). Here is a youtube video in which Hal gives an elementary explanation of Google's ad auction. MR points to this article about Hal in Wired: Secret of Googlenomics: Data-Fueled Recipe Brews Profitability.

Here is Hal's recent paper Online Ad Auctions, forthcoming in the May 2009 AER Papers and Proceedings. Here is Hal's earlier paper, Position Auctions, published in the 2007 International Journal of Industrial Organization. One nice thing about both these papers is that they explicitly take note of the link between ad auctions and the matching literature.

*Hal is the original Renaissance economist. Aside from his academic work on subjects from the internet to public goods provision, he's an author of bestselling texts and business books, and was for many years a NY Times columnist. One of his columns, When Economics Shifts From Science to Engineering, August 29, 2002, on the subject of market design, was about a paper of mine. When I marveled at how succinctly he was able to summarize, he told me that his secret (quoting Elmore Leonard) was to "leave out the parts that people skip."

Monday, May 25, 2009

Waiting lists and late college applications

Students who may be waiting to see if they will be offered positions from some colleges' waiting lists should also be aware that other colleges are still accepting applications.

The Common Application .org has posted a list of 67 of their members who are still accepting applications (including the University of Chicago):
Augsburg College, Berry College, Canisius College,Carroll College, Cazenovia College, College of Mount Saint Vincent, College of Santa Fe, College of St. Benedict-St. John's University, Colorado State University, Converse College, Creighton University, Culver-Stockton College, Curry College, Dominican University of California, Franklin Pierce University, Green Mountain College, Gustavus Adolphus College, Hofstra University, Illinois College, Illinois Institute of Technology, Keystone College, Lasell College, Lawrence Technological University, Loyola University New Orleans, Lynn University, Manhattan College, Marquette University, New England College, Nichols College, Notre Dame de Namur University, Oglethorpe University, Pacific University, Prescott College, Regis College (Massachusetts), Regis University (Colorado), Rollins College, Russell Sage College, Sacred Heart University, Sage College of Albany, Salem College (North Carolina), Seton Hall University, Seton Hill University, Southern New Hampshire University, St. Lawrence University, St. Norbert College, SUNY Fredonia, SUNY Oswego, TCU (Texas Christian University), The College of Idaho, Thiel College, Thomas College, University of Chicago, University of Dallas, University of La Verne, University of Maine, University of Maine at Machias, University of Massachusetts Boston, University of New Haven, University of Tampa, Utica College, Valparaiso University, Wabash College, Webster University, Westminster College (Missouri), Westminster College (Utah), William Jewell College, Xavier University

David Warsh on Auctions and Politics

David Warsh, the Boston-based economic journalist whose weekly internet column Economic Principals talks about economics and economists, writes about last week's NBER Market Design Working Group Meeting, which he attended.

Market design has blossomed in the last decade, in directions that would have been hard to predict. It has also made enormous progress in one of its oldest streams, auction design. This first NBER conference on market design had as its main theme the progress that has been made in auction design, by economists and computer scientists, since the first spectrum auctions in 1994. Warsh writes about that, and the political processes involved in persuading governments to adopt the new auction technologies (not to mention simply communicating them): Auctions and Politicians.

Sunday, May 24, 2009

Market for textbooks

The Washington Post has a story on the educational software company Aplia, founded by Paul Romer: An Economist, an Academic Puzzle and a Lot of Promise. It makes a number of interesting observations about the design of the textbook market, and how interactive software that gives students immediate feedback, and lets them participate in experimental economics style interactions, complements the traditional textbook and lecture style of instruction.

"Students seemed to like Aplia's engaging and easy-to-use software, as well as the feedback. Professors liked Aplia even more. It allowed them to leverage the grade-grubbing instincts of today's college students to get them to do homework -- but without having to spend countless hours reading and correcting the assignments. They also got reports from Aplia identifying which students were having the most trouble with the material and which concepts were stumping the class as a whole. "
...
"By relieving instructors of the considerable burden of reviewing homework assignments, the technology makes it possible for universities to require professors to teach more students, either by increasing class sizes or the number of classes they teach. More important, it frees instructors to spend more time preparing for class, working with individual students and even doing their own research. "

It may also allow publishers to circumvent the secondhand market for textbooks, as the software license can be separated from the book.

HT: Greg Mankiw

Saturday, May 23, 2009

Markets for hunting

In New England, battles about repugnant transactions often pit social liberals against social conservatives, with the liberals trying to make some transaction possible that the conservatives believe should be banned, as in debates about Same sex marriage in Iowa, and New England.

But there are other kinds of transactions that liberals find repugant and conservatives defend. One of these concerns buying and selling permission to shoot captive game in game farms: Slaughter to some, game to others: Hunting preserves offer captive animals

"For the privilege of killing two boars, Cabral's father and grandfather paid $1,200. By their reckoning, that gets them enough bacon, pork chops, and ham to last their families nearly a year.
"I see it like I'm going grocery shopping," said Russell Mulgrew, Cabral's grandfather.
Not everyone shares that view. Opponents, including some hunters, say captive hunting is anything but sporting for one simple reason: There is no fair chase when the animal has no hope of escape.
As commercial interest grows in Maine to expand these preserves and opposition ratchets up across the country, a deep-seated ethical debate over the ranches is being pushed into the public eye.
"It's morally and ethically wrong to enclose animals and charge a fee to kill them. It's a theme park environment where the prize is a dead animal," said Robert Fisk Jr., president and director of Maine Friends of Animals.
New England's captive parks attract hundreds of hunters each year. In Maine, 388 animals were killed in 2005, although that fell to 262 by 2007. The parks rarely make headlines unless it's about someone notable - such as Massachusetts' former governor William F. Weld boasting about shooting a wild boar in 1991 but initially failing to say that it was in a New Hampshire game park.
Vermont banned new game preserves late last year, largely over concerns about disease, especially chronic wasting disease, a contagious, fatal neurological illness among deer. An effort to outlaw seven existing shooting ranches in Maine for ethical reasons, which was supported by Fisk's group, failed last month. Two other Maine bills are pending: one to permit a new game preserve and the second to expand the variety of animals at others. New Hampshire has two game parks, but no new ones are allowed.
Big-game shooting preserves are prohibited in Massachusetts, Connecticut, and Rhode Island. Still, it is estimated that there are more than 1,000 game ranches in at least 28 states, according to the Humane Society of the United States, which has an ongoing campaign to end captive hunting. Debates over the ranches have surfaced from New York to North Dakota in recent years."

In England, a legal ban on hunting foxes with dogs (the whole picturesque business, but no fun for the fox) seems to be falling into disuse:

Death knell for hunting ban as police abandon monitoring operations:
"Police forces are to stop monitoring hunts in a change of policy that sounds the death knell for the hunting ban, The Times has learnt."
...
"Richard Brunstrom, Chief Constable of North Wales and the Acpo spokesman on rural affairs, said: “Hunting is definitely not a policing priority. It is not illegal to wear a red coat and ride a horse in a public place.” The new guidance undermines one of the most controversial pieces of legislation introduced by the Labour Government, which took up 700 hours of parliamentary time. Since the Hunting Act came into force in 2004, there have been eight prosecutions, of which only three have been successful, with one pending. Hunting has thrived. Mr Brunstrom said that police had to chose which areas of law enforcement to devote scarce resources to. He said: “If you look at hunting, the penalties do not include a prison sentence for offenders. This puts the Hunting Act to the lower rather than the higher end of offences. Parliament had the chance to include imprisonment as a sentence but did not do so.” "
...
"A spokesman for the League Against Cruel Sport said: “We fought for 80 years for the hunting ban and, while we accept it is not a high priority for police, a ban was the will of Parliament and is the will of the people and we are going to press for more prosecution cases to be brought.” "

See also The hunt ban: a bad law with nowhere to run

Friday, May 22, 2009

More on open source software

I recently wrote about the new take on Open source software proposed by Michael Schwarz and Yuri Takhteyev. Now, while reading David Pennock's reflections on the recent NBER Market Design Working Group Meeting, I followed his link to Paul Graham , on science, art, and engineering, who (in passing) has this to say:

"It seems surprising to me that any employer would be reluctant to let hackers work on open-source projects. At Viaweb, we would have been reluctant to hire anyone who didn't. When we interviewed programmers, the main thing we cared about was what kind of software they wrote in their spare time. You can't do anything really well unless you love it, and if you love to hack you'll inevitably be working on projects of your own."

Graham thus views open source as akin to the scholarly publishing that professors do, which is also uncompensated open source work. Like programmers, we also get rewarded for it in our day jobs.

Second life for Second Life?

One of the most interesting uses of the internet as a place to work and play and buy and sell and advertise was explored by Second Life , a virtual world in which individuals and companies can purchase and develop virtual real estate, and host customers and guests. On Second Life you could have an avatar that represented you personally, and you could develop an island for yourself or your company. Many companies opened islands to see what would happen, and the news agency Reuters opened a bureau in second life. But The Reuters Second Life bureau is now closed, and some of the early enthusiasm for the site has faded.

One reason for this is that the site became increasingly sexualized, and the management is now taking steps to segregate sexual content from other kinds of commerce: Red Lights Might Save Second Life:
"In a move obviously meant to attract more mainstream users to Second Life and salvage some of the realm's lost momentum, Linden Lab will soon be moving mature content to a secondary continent within the virtual world. This has got to be a relief to all those businesses that wasted precious resources building digital offices and outlets in the pixel-based universe over the last few years.
Once touted as an essential locale for hip businesses to open up their doors, Second Life saw something of a real estate boom as companies such as Dell and IBM rushed to build their presence on Second Life's sprawling landscape. But once built, these massive corporate structures turned out to be little more than vast wastes of time and money--gigantic ghost towns in a non-existent gold rush."

The latest news is that it is now possible to take the technology private, and host your own, private Second Life: Second Life Lives Behind a Firewall.
One of the early users of this technology is Case Western Reserve University: Case Western Reserve U. Debuts Private Version of Second Life (for some reason, the isolated version of Second Life is codenamed "Nebraska." ):
"Case Western is the higher-education test site as Linden Lab, the company that runs Second Life, develops the so-called Nebraska version of the virtual world. The concept is to provide all the functions of Second Life, but to let institutions install the platform on their own servers, in their own data centers, and behind their own security systems. The new platform is “completely disconnected from the main Second Life environment,” according to a Second Life blog.
But why would a school like Case, which already has eight islands in Second Life, want to bother with a stand-alone system?
A medical school interested in performing research involving personal medical histories could use a private environment, Mr. Johnson said. Another function would be programs that focus on both adults and kids. Right now, adults need to undergo background checks to access the Second Life teen grid. One use Case envisions for the Nebraska environment would involve the campus Hispanic club providing mentors to Cleveland public-school students in the online virtual world, said Wendy Shapiro, the university’s senior academic-technology officer.
Oh, and another thing: When you host your own universe, you get “God” privileges.
“You can control everything,” said Ms. Shapiro, sounding excited at the prospect. “You can control who comes in, who gets kicked off. You can control whether people walk or fly.”"

Thursday, May 21, 2009

Delaying kindergarten entry

The Telegraph discusses the problem of "summer born children," who would be younger than their kindergarten peers if enrolled according to the usual school schedule: Does it pay to delay the start of your child's schooling?. The article focuses on the American experience:

"A survey by the US Department of Education in 2007 found that 14 per cent of children aged 5 to 6 had delayed entry into school, or had parents who planned to delay their entry. In some areas - most often those where parents can afford an extra year of pricey pre-school - the level can reach as high as 25 per cent of the classroom.
The practice is more common among boys and tends to be concentrated in some geographic areas, though nearly absent in others. “Middle-class parents are savvy about wanting to know what the trends are and wanting to make sure that their kids aren't outside the norm,” says one education professor.
That's what comes across in a recent post on a parenting blog from an anxious mother in New Jersey. “I am thinking of holding my daughter back so she is emotionally ready for kindergarten,” she wrote, “but I'm also thinking about it because I worry that she will be the youngest since everyone else is holding back.”
“It's pernicious,” says Morrison, who is concerned, as are many other educators, about the effects on the rest of the student body.
Already, teachers must reckon with children who are 12 months apart in age - a big difference when they are just 5 years old. “On every dimension you can think of, you are going to have kids stretched out along a continuum,” says Beth Graue, a former kindergarten teacher, who studies school readiness at the University of Wisconsin. “You've got to accept that you are going to have gigantic five-year-old girls and tiny five-year-old boys who are going to want to do different things.” When some children begin school a year later than their peers, the range - and the challenge for the teacher - is that much bigger."

If schools are tournaments, this could make sense:
"The notion that small differences in age might make a big difference on the field is familiar terrain to Malcolm Gladwell, The New Yorker magazine writer and bestselling author. In his latest book, Outliers: The Story of Success, Gladwell studied ice hockey teams in Canada, where the game is high on the list of national priorities.
By the time kids are just 9 or 10, they are already being selected for elite teams, extra training and top coaching, and at that young age, those born nearest to the January 1 cut-off date - the oldest in each year's grouping - are usually the best, with the extra few months giving them a real advantage on the ice. With more special attention, that advantage seems to stick: Gladwell found that in any grouping of elite hockey players, 40 per cent were born in the first three months of the year. "

This sounds a bit like the reverse of unraveling, the process by which transactions become earlier and earlier in some markets. That process can feed on itself; if everyone else is recruiting early, maybe you had better do so also. It sounds like holding children back from school entry could potentially have the same dynamic: if the other children will all be a year older, maybe you should hold yours back too, especially if you're raising a future football player...

Wednesday, May 20, 2009

College admissions essays: who writes them, and who reads them?

In England, as in the U.S., college applications require an essay. In England, as in the U.S., some students hire professional help, some plagiarize from the internet, and many get some advice from teachers and parents. In England, unlike in the U.S., students also have the right to see the letters of reference that their high school teachers write for them.

In reaction to all this, the University of Cambridge doesn't read the essays anymore, and may not pay much attention to the letters of recommendation: Personal statements mean nothing, says Cambridge admissions head.

"Many toil for months, writing draft after draft with care and attention. Some simply cut and paste somebody else’s work from the internet. Others order tailor-made versions online for as little as £24.99.
However they do it, writing a personal statement extolling their virtues and love of study has become a rite of passage for teenagers applying to university.
Now it turns out that many of them need not have bothered.
The University of Cambridge has admitted that it pays no attention to applicants’ personal statements when deciding whom to interview or offer a place.
“With the profusion of companies and websites offering to help draft applicants’ personal statements for a fee, no admissions tutor believes them to be the sole work of the applicant any more,” said Geoff Parks, the university’s straight-talking director of admissions. Much simpler just to ignore them.
“We certainly don’t assign any marks to personal statements,” he added. “I have been told by students after they have been admitted that their schools write the personal statements. Reading a very good personal statement doesn’t tell you anything about the student because you cannot be sure that it’s the work of the person concerned.”
Although the university may use the personal statement as the basis for discussion during an interview, it is not used to judge the student. At all.
Personal references from teachers are also treated with a huge pinch of salt. Now that students can ask to see their references, teachers have stopped saying anything interesting or controversial, Mr Parks suggests."
...
"A survey of 50,000 university applications two years ago — many of them for places on medical sciences courses and at Oxbridge — found that a significant minority of students had plagiarised them from the internet. The giveaway was the 234 applicants who all began their medical school application with the same anecdote about setting fire to their pyjamas at the age of eight."

The head of admissions at Oxford, however, says they still pay attention to essays, to help them distinguish among their applicants more than they can by just looking at grades and standardized exams.

Tuesday, May 19, 2009

University admissions in the UK

I've been trying to understand the semi-centralized application process for British universities, run by an organization called UCAS (Universities & Colleges Admissions Service).

It offers a common application process through which applicants can apply for up to five programs of study, with some restrictions. For example, "If you are applying for dentistry, medicine, veterinary medicine or veterinary science, you can apply for a maximum of four choices in any one of these subjects." And you can apply to only one of Oxford and Cambridge.

Students apply (mostly) by mid January, and Universities make their decisions in a decentralized way, and mostly report them back to students and UCAS by the end of March. Offers of acceptance may be either unconditional or conditional on the student achieving certain grades in upcoming exams.

Students who receive at least one offer can make a firm acceptance, an insurance acceptance, or decline. A firm acceptance is a commitment to attend (and a firm acceptance of a conditional offer is a commitment to attend if the student's grades meet the acceptance conditions). A student may firmly accept only one offer, but if that offer is a conditional one, may additionally choose to accept an additional offer as an insurance choice:
"You can accept an offer as an insurance choice if your firm choice is conditional. Your insurance choice can be conditional (CI) or unconditional (UI) and acts as a back-up to your firm choice, so if you do not meet the conditions for your firm choice but meet the conditions for your insurance choice, you are committed to that course. "
An insurance choice is also a commitment, and so students are advised that they don't need to make one.

Students are given individualized reply dates, depending on when their last decision from their five applications was received. Offers not accepted by the reply date are considered to have been declined.

Students who don't receive any offers or who decline all of those they do receive may apply to courses that still have vacancies, one additional application at a time, through a process called Extra. And, later in the year (in the summer), students who still don't have places, for example because they didn't meet the requirements of a conditional offer, can apply for vacant places through Clearing.

Here's a newspaper account from last year's Clearing process:
"Clearing fortnight is always an emotional rollercoaster. There are, after all, few sleepless nights to rank alongside the one before you get your hands on that ominous bit of paper showing your A-level results. But if you find yourself facing a column of grades lower than you’d expected, all is not lost: of the 413,000 university applicants given firm places last summer, nearly one in 10 (39,000) secured them through Clearing.
Find your course online
Thanks to the wonders of modern technology, finding a last-minute place has never been easier. Whereas applicants would once have spent days trying to secure a berth at university – waiting for individual prospectuses to reach them in the post, then painstakingly wading through in search of viable substitute courses – the internet has revolutionised this process.
Today everything can be sorted out within hours: a visit to the Ucas online Track service will confirm whether you have scraped in, or have indeed lost your place, while the Clearing website offers a handy A-Z of courses looking to fill vacancies. "

This year, early newspaper reports reflect worries that cutbacks may mean that relatively fewer places will be available at Clearing: Students face chaos with no clearing places.

Sunday, May 17, 2009

Piracy and armed merchantmen

Why is this headline such an outlier? Cruise ship opens fire to beat back Somali pirates

One reason is that ship owners are concerned about the longer term effects of escalating the level of violence in their encounters with pirates. But, it turns out, there are some market design reasons too (emphasis added):

"There have been calls for commercial ships to be allowed to carry weapons to deter increasingly bold pirate gangs, who are armed with automatic rifles and often rocket-propelled grenades.
But ships with arms onboard are not allowed to dock at non-military ports.
To bypass this rule, some operators are hiring private security teams who board as the ship enters a risky stretch of water and leave once the danger has passed.
Andrew Mwangura, head of the East African Seafarers' Assistance Programme in the Kenyan port of Mombasa, criticised the Melody for carrying guns.
"There are a number of other methods which can be used to deter the pirates, having weapons on board is dangerous because it raises the stakes for the pirates," he said.
"There is a far higher risk that a crew member of a merchant vessel, or a passenger, could die if the pirates feel they must fight harder to win the ship." The International Maritime Bureau said piracy incidents nearly doubled in the first quarter of 2009, almost all of them off Somalia. There were 18 attacks off the Somali coast in March alone.
Pirates have made millions of dollars from seizing ships and taking crews hostage. A Greek ship was released on Saturday after a £1.3 million ransom was paid.
But just hours earlier a German grain carrier was grabbed in the Gulf of Aden. "

School choice in Belgium and England

School choice remains a hot topic (both academically and politically) in England and Belgium.

Estelle Cantillon will be giving a paper "School Choice Procedures: How They Matter? Theory and Evidence from Belgium," at a June conference in England: School choice in an international context: learning from other countries' experiences .

François Maniquet has written a paper (in French: Inscriptions dans les écoles : quelques enjeux et quelques solutions ) proposing that a centralized choice algorithm using either the deferred acceptance algorithm or top trading cycles should be employed in school choice in Belgium. Here is some coverage in the Belgian press (also in French): D’abord respecter les préférences scolaires; Solution centralisée pour les inscriptions

Fleeting expletives and wardrobe malfunctions: FCC vs Fox Television and CBS

Can television broadcasters, particularly of live events, be fined if the FCC deems some of the language offensive?

"Taboo language," particularly when broadcast over Federally regulated radio spectrum is a contentious class of repugnant transactions. Some of the relevant jurisprudence was discussed in a memorably titled (and clearly and informatively written) article by the OSU law professor Christopher Fairman: "Fuck," 28 Cardozo Law Review 1171 (2007).

There have been some pretty funny "workarounds" to avoid the wrath of the FCC, such as the frequent use of the neologism "frak" on the now-ended tv series Battlestar Galactica.

All this is brought to mind by the recent Supreme Court review of the case FCC v. Fox Television Stations. The FCC derives its authority to regulate language from regulations regarding sexual content. So the question before the court is, when someone like Bono says that an award is "fucking brilliant," does that statement have sexual content? (Judge for yourself, at around minute 5:40 in this video of the 2003 Golden Globes award in which U2's song "The Hands that Built America" won a best song award for the film The Gangs of NY.)

It's entertaining to read a carefully worded NY Times account of the recent Supreme Court decision sending the case back to a lower court. The column, called Gentlemen Cows in Prime Time, doesn't use any of the offensive words, and the title of the column is explained in the text:
"In 1623, the English Parliament passed legislation to prohibit “profane swearing and cursing.” Under that law, people could be fined for uttering oaths like “upon my life” or “on my troth.” In the Victorian era, the word “bull” was considered too strong for mixed company; instead, one referred to “gentlemen cows.” Times change, notwithstanding the fervent wishes of prescriptivists to keep dirty words dirty. "

Another account in plain (Anglo-Saxon) English: You Can't Say That On Television, makes it easier to understand the context of the case.

The Supreme Court also sent back to a lower court the case of Janet Jackson's Superbowl "wardrobe malfunction." The FCC had fined CBS, an appeals court eventually overturned the fine, and now the issue is up for grabs again: Court Sends Janet Jackson Case Back for Review.
"The high court on Monday directed the 3rd U.S. Circuit Court of Appeals in Philadelphia to consider reinstating the $550,000 fine that the Federal Communications Commission imposed on CBS over Jackson's breast-baring performance at the 2004 Super Bowl.
The order follows the high court ruling last week that narrowly upheld the FCC's policy threatening fines against even one-time uses of curse words on live television.
In a statement, CBS said the Supreme Court's decision was not a surprise given last week's ruling and expressed confidence the court will again find the incident was not and could not have been anticipated by the network.
Last year, the appeals court threw out the fine against CBS, saying the FCC strayed from its long-held approach of applying identical standards to words and images when reviewing complaints of indecency.
The appellate court said the incident lasted nine-sixteenths of one second and should have been regarded as "fleeting." The FCC previously deviated from its nearly 30-year practice of fining indecent broadcast programming only when it was so "pervasive as to amount to 'shock treatment' for the audience," the court said.
The FCC appealed to the Supreme Court. The case had been put off while the justices dealt with a challenge led by Fox Television against the FCC's policy on fleeting expletives.
The case is FCC v. CBS Corp., 08-653. "

Saturday, May 16, 2009

Open source software

A new NBER working paper discusses the creation of "open source" marketplaces:
Half a Century of Public Software Institutions: Open Source as a Solution to Hold-Up Problem by Michael Schwarz, Yuri Takhteyev #14946 http://papers.nber.org/papers/W14946 (and an ungated version here)

As the title suggests, the paper is about (avoiding) the problem of holdup that would arise if you make a lot of complementary investments in particular software, but are then vulnerable to arbitrary increases in its price. Part of the paper's considerable charm is a long section on the history of open source software (which, because it is not proprietary, avoids much of the holdup problem). Two sections which I excerpt from below concern the 1950's, and the 1960's-'70's.

SHARE and FORTRAN
"Early on, however, IBM also had a different idea for reducing customers’ programming expenses: encouraging the clients to share software with each other. It pursued this strategy by setting up an association for its users in 1952, with a mission of helping IBM customers help each other (CampbellKelly 2003). The association was later renamed “SHARE,” the new name explicitly representing the objective of sharing knowledge and software..."

An early contributor of shared software was United Aircraft:
"To understand United Aircraft’s interest in getting other organizations to use their software for free, and in fact their readiness to put additional resources into modifying it to suit the needs of some of the other SHARE members, we must consider, first of all, that United Aircraft already had an assembly program (UASAP) that it had written for its own needs, and quite likely had made a complementary investment into software written for it. If UASAP were accepted as the standard by other members, United Aircraft could benefit from the future software that other organizations would write for it and at the same time get to keep the software that it had written for UASAP."


ARPANET and Unix
"While modern open source institutions diverge substantially from scientific institutions, both in how they attract external funding and in their handling of credit, they share important characteristics and have clear historical links, the ARPANET project being an important opportunity for a transfer of institutions."

"Among the less successful projects funded by ARPA in 1960s was a new operating system called “Multics.” Multics promised to deliver features that were of interest to AT&T and that IBM had been willing to provide in its software (Ceruzzi 2003, p. 156). AT&T’s Bell Laboratories then joined the Multics project with the hope of accelerating it and steering it closer to AT&T’s needs (Ceruzzi 2003, p. 155, also Salus 1994, p. 26). The Multics project failed, likely due to its excessive complexity. However, a number of Bell Labs researchers produced a simplified version of Multics which they called “Unix.” Unix proved an immediate success."
...
"In 1973 Unix was rewritten in C, a new language also developed at AT&T. While FORTRAN and COBOL had already enabled portability for certain kinds of software, a combination of C and Unix made it possible to write almost any software in a way that would allow it to be moved between computers. Doing so, however, required access to the source code, because different binary software had to be generated for each machine and modifications to the source code were often required. Being able to move software between computers also meant being able to use it on later computers, increasing the time horizons for software users. While much of the software written in 1960s (including all of the ARPANET software) was hardwarespecific and could be expected to become obsolete eventually, most of the software written for Unix in 1970s can be used today. Increased time horizons made access to source code even more important, as some users could now plan to use their software for decades."

The paper goes on to trace how changes in copyright law and the rise of cheap personal computers influenced the open source movement, including the marketing effort that led to the name "open source" replacing "free software".

Friday, May 15, 2009

Auctions of airport slots: dead in the water, again.

The latest news on plans to auction off takeoff and landing slots at NY's LaGuardia airport: DOT scraps auction plan for NYC airports .

NYC's airports are the most congested in the nation, but plans for an auction have been politically troubled from the start (see some of my related earlier posts). What is the nature of the politics? Perhaps some of the airlines that fly in and out of NYC airports actually like the congestion, since it keeps out new competition by preventing airlines that don't presently have any slots from getting any.

Freakonomics has a non-auction suggestion for relieving the congestion: Shut Down LaGuardia.

Non-simultaneous trades in basketball

One of the pleasures of market design--a pleasure it shares with good gossip--is being able to explore in detail the rules by which other people live. The NBA Salary Cap FAQ is full of such details.

It turns out that some details involved in managing an NBA team have something in common with the non simultaneous kidney exchange chains I recently blogged about. This is because NBA teams can exchange players, but the Salary Cap imposes some constraints:

What are the rules regarding trades?
"Teams under the salary cap may make trades as they please, as long as they don't end up more than $100,000 above the salary cap following a trade. But if a team is over the cap, or they are under the cap and a trade would take them more than $100,000 over the cap, then an exception is required. An exception is the mechanism that allows a team to make trades or sign free agents and be over the salary cap. Since teams are usually over the salary cap, trades are usually accomplished using exceptions."

What is the Traded Player exception?
"The Traded Player exception is the primary means used by teams over the cap for completing trades. It allows teams to make trades that leave them over the cap, but it places several restrictions on those trades. Trades using the Traded Player exception are classified into two categories: simultaneous and non-simultaneous. As its name suggests, a simultaneous trade takes place all at once. Teams can acquire up to 125% plus $100,000 of the salaries they are trading in a simultaneous trade. For example, a team trading a $5 million player in a simultaneous trade can receive one or more players whose salary is no more than 125% of $5 million, plus $100,000, or $6.35 million in return.
A non-simultaneous trade may take up to a year to complete. "

What is a non-simultaneous trade?
"A trade in which more than one player is traded away can only be simultaneous; non-simultaneous trades are allowed only when a single player is traded away (although teams can sometimes find ways to configure multi-player trades as multiple single-player trades which are non-simultaneous).
Here is an example of a non-simultaneous trade: a team trades away a $2 million player for a $1 million player. Sometime in the next year, they trade a draft pick (with zero trade value itself) for a $1.1 million player to complete the earlier trade. They ended up acquiring $2.1 million in salary for their $2 million player -- they just didn't do it all at once, or even necessarily with the same trading partner.
In the above example, after the initial trade of the $2 million player for the $1 million player, it was like the team had a "credit" for one year, with which they could acquire up to $1.1 million in salaries without having to send out salaries to match. ....
"Here is a more complicated example of a legal non-simultaneous trade: a team has a $4 million Traded Player exception from an earlier trade, and a $10 million player it currently wants to trade. Another team has three players making $4 million, $5 million and $7 million, and the teams want to do a three-for-one trade with these players. This is legal -- the $5 million and $7 million players together make less than the 125% plus $100,000 allowed for the $10 million player ($12,600,000), and the $4 million player exactly fits within the $4 million Traded Player exception. So the $4 million player actually completes the previous trade, leaving the two teams trading a $10 million player for a $5 million and a $7 million player. From the other team's perspective it's all just one big simultaneous trade: their $4 million, $5 million and $7 million players for the $10 million player. "

HT Steve Leider (who we're trading, non-simultaneously, to Michigan next year)

Thursday, May 14, 2009

Organs for transplant in Japan

The London Times reports on the shortage of transplantable organs in Japan, where deceased donation is very limited due to the legal requirement of cardiac death. The article is about future possibilities of cloning human organs in sheep. Nearer at hand, the article describes how the organ shortage in Japan is made more serious by the decreasing availability of organ transplants overseas, through growing restrictions on "transplant tourism": Japanese scientist claims breakthrough with organ grown in sheep:

"The reason for Professor Hanazono’s sense of urgency — and for the entire organ harvest project being undertaken at the Jichi Medical University — lies many miles away in Tokyo and with a historical peculiarity of the Japanese legal system.
Japan defines death as the point when the heart permanently stops. The concept of brain death — the phase at which organs can most effectively be harvested from donors — does exist, but organs cannot be extracted at that point.
The long-term effect of the legal definition has been striking: organ donation in Japan is virtually nonexistent, forcing many people to travel abroad in search of transplants. In the United States, the rate of organ donors per million people is about 27; in Japan it is under 0.8.
The effect, say paediatricians, has been especially severe for children. The same law that discounts brain death as suitable circumstances for organ donation broadly prevents children under 15 from allowing their organs to be harvested.
To make matters worse, international restrictions on transplant tourism are becoming ever tougher, making Japan’s position even more untenable. To avert disaster, say doctors, Japan either needs the science of synthetic organ generation to advance faster than seems possible, or it needs a complete rethink on the Japanese definition of death. "

Wednesday, May 13, 2009

Market for concierge health care

Is it hard to get an appointment with your doctor, who must see patients every fifteen minutes? Perhaps you are in the market for concierge health care (as described in these two stories, one from 2005 and one from this past Sunday):
For a Retainer, Lavish Care by 'Boutique Doctors'
Despite Recession, Personalized Health Care Remains in Demand

"One promise made to patients paying for concierge service is that waiting will not be a part of their health care experience. Patients are guaranteed that phone calls will be returned promptly, appointments will be scheduled on a same-day basis if necessary, and appointment times will be honored. ...
"A relatively simple tradeoff is responsible: the extra fees collected from patients let concierge doctors, who leave regular practice for concierge medicine, slash their caseloads. Before Dr. Kaminetsky became a concierge doctor five years ago he had 2,500 patients in his practice - a standard number for most primary care internists. His list now numbers 600. "

"The practices typically charge at least $1,500 a year, with the most elite services asking $25,000 or more per family. The fees cover a thorough physical exam and enable physicians to limit the number of patients they see so they can provide premier service. "...

"Critics of concierge medicine consider it elitist and say it has widened the already significant class disparities in American medicine. They also say it has exacerbated the shortage of primary care physicians by leaving more patients to be treated by a shrinking pool of doctors.
But advocates counter that the concierge movement reflects deep exasperation with the two-hour waits and 10-minute appointments of conventional primary care. Given the burnout among physicians who must see more than two dozen patients a day, they say the concierge model may sustain doctors who would otherwise hang up their stethoscopes.
Dr. Thomas W. LaGrelius of Torrance, Calif., who leads the Society for Innovative Medical Practice Design, a professional association of concierge physicians, estimated that there were 5,000 such doctors in the United States, out of an estimated 240,000 internal medicine physicians and related subspecialists. "

Tuesday, May 12, 2009

Horse meets versus horse meat

The question of Why can't you eat horse meat in the U.S.? takes on special force when the horses in question are retired race horses. The NY Times reports that the slaughter of such horses for human consumption arouses special repugnance.
The article Ignoble Endings Far From Winner’s Circle reports(emphasis added):

"The most significant source of racehorse deaths is the slaughter industry, one driven by overbreeding and demand from the lucrative global meat market. According to the American Society for the Prevention of Cruelty to Animals, more than 100,000 American horses are slaughtered each year in Canada and Mexico to satisfy horse meat markets in Europe and Asia.
The slaughter of domestically bred horses represents a breach of the American covenant between horses and humans: horses bred for sport, industry and agriculture are not part of our food chain. They are not supposed to meet death in a slaughterhouse."
...
"Many owners, faced with the choice of keeping retired horses and continuing to pay for their feed and care, instead opt to sell them at auction for $300 to $500 a horse, not realizing or not caring that if they are exported they can eventually be slaughtered.
“We’ve got lots of work to do here,” Waldrop said. “The problem is far from being solved. There is a high demand for horse meat around the world, and they create a market for horses that competes with our efforts to adopt and retrain these horses.”
The last of the horse slaughterhouses in the United States were shut down in 2007. But at least four states — Montana, Illinois, North Dakota and Tennessee — have either proposed or contemplated legislation to reintroduce horse slaughter. Two bills stuck in committee in the House and the Senate would make it illegal to transport horses across state lines or to foreign countries for the purpose of slaughter. The industry should push Congress to pass pending anti-slaughter legislation."

In a related story, concerned with wild horses also, see Pickens Once Raced Horses, Now Works to Save Them

HT: Muriel Niederle

Monday, May 11, 2009

Market for adultery, in a recession

In an earlier post, I mentioned a website that caters to married people seeking an affair. It turns out that the business is countercyclical:
Adultery business cashes in on world's recession worries
"At the Ashley Madison agency, which revels in the motto, "Life is short. Have an affair," the global economic downturn is proving a boon for business. "

"Membership has soared from one million to 3.6 million in just 12 months, and he expects another surge after the company launched a service allowing members to access the site from their mobile phones. The innovation is aimed at would-be cheaters who are nervous about leaving evidence of their infidelity on their computer at home or work.
Mr Biderman said that many couples who would otherwise have divorced were seeking affairs at the moment because of the cost of hiring lawyers and the difficulty of selling the marital home. "

Sunday, May 10, 2009

Marriage and dating online in Korea

Soohyung Lee has a paper about an online marriage market in Korea, whose findings are similar in some respects to those in the papers described in my two earlier posts today, and different in others: Preferences and Choice Constraints in Marital Sorting: Evidence From Korea.

Like the paper by Hitsch, Hortaçsu, and Ariely, Lee's paper considers detailed transactional data from an online site, this one aimed at marriage rather than more casual dating, and uses the data to estimate preferences for mates, based on a variety of observable traits. Like both Hitsch et al. and the paper on Indian marriages by Banerjee, Duflo, Ghatak and Lafortune, Lee's paper looks at stable matches produced by a deferred acceptance algorithm based on the estimated preferences, and compares them to the observed marriages in population data. Unlike those two papers, the findings in Korea are that the simulated stable matchings look different than the population matchings; they are less assortative on some dimensions (such as employment in the same industry).

The paper suggests that some aspects of Korean marriage data therefore reflect choice constraints on who meets whom, and that as these constraints are relaxed (perhaps by increased use of internet matchmaking), some aspects of Korean life may change.

Market design update (5/12/09): Professor Lee sends me the following email describing how her work has proved useful in the design of the matching site, which uses an algorithm to suggest several possible dates to each participant:
"FYI, the matchmaking company partially adopted my estimates to adjust its matching algorithm. Previously, it assumed all men and all women have the same preference ranking. Under the revised algorithm, it classifies men and women based on their characteristics and allows them to have heterogeneous preference rankings (which I find in my estimation).
With the revised algorithm, the company was able to increase the probability of a proposal turning into an actual first date by a factor of 2. "

Marriage and dating online

Günter J. Hitsch, Ali Hortaçsu, and Dan Ariely have a paper about online dating and matching forthcoming in the AER: Matching and Sorting in Online Dating.

They write
"Using a novel data set from an online dating site, we first estimate mate preferences and then use the classic Gale-Shapley algorithm to predict matching outcomes. Online dating exists to facilitate the search for a partner. Our results suggest that the particular site that we study leads to approximately efficient matching outcomes (within the set of stable matches), and that search frictions are mostly absent. Hence, the site appears to be efficiently designed."

Their dataset allows them to look at all the clicks and messages of a subset of participants. So they can see which profiles people look at, and whom they choose to contact. This allows them to form estimates about preferences (on the assumption that if you browse two profiles and contact one of them, you prefer the one you contacted.) And they can observe when email addresses or phone numbers are mutually exchanged, which gives them their proxy for matches.

They compare the matchings they see both to marriages in the population at large (from Census data), and to stable matchings obtained by running the deferred acceptance algorithm, using the estimated preferences. They write:
"We saw that both actual marriages and the predicted matches from the Gale-Shapley model exhibit strong intra-ethnicity sorting patterns. However, even in the absence of search frictions it is not obvious whether same-race preferences alone cause sorting within ethnicity groups: because other attributes, such as income and education, are correlated with race, preferences over these other attributes could lead to intra-ethnicity sorting as well. To investigate what fraction of the predicted endogamy patterns is driven by same-race preferences, we remove these preferences from the utility specification and simulate the corresponding stable matches. Tables 10 and 11, panel (IV), show that intra-ethnicity sorting is strongly diminished, although small degrees of endogamy remain. These results suggest that racial sorting is mostly due to the same-race preferences; preferences for non-race attributes can not quantitatively account for the small fraction of marriages across different ethnic groups."

Marriage market in India

A recent paper by Abhijit Banerjee, Esther Duflo, Maitreesh Ghatak and Jeanne Lafortune studies marriage in Bengal: Marry for What? Caste and Mate Selection in Modern India .

The nature of this marriage market (in which courtship begins with ads and letters) allows the authors to gather data on preferences for mates, by interviewing matrimonial advertisers about their preferences over the letters they receive, and then to follow up to determine eventual marriages.
"First, the parents or relatives of a prospective bride or groom place an ad in the newspaper. Each ad indicates a PO box (provided by the newspaper), and sometimes a phone number, for interested parties to reply. They then get responses over the next few months (by mail or by phone), and elect whether or not to follow up with a particular response. While ads are placed by both sides of the market, "groom wanted" ads represent almost 63 percent of all ads placed.
When both parties are interested, the set of parents meet, then the prospective brides and grooms meet. The process takes time: in our sample, within a year of placing an ad, 44 percent of our sample of ad-placers whom we interviewed, were married or engaged although most had placed only a single ad. Of those who got married, 65 percent met through an ad, the rest met through relatives or, in 20 percent of the cases, on their own (which are referred to as "love marriages")."

They find that preferences for caste are very high (emphasis added):
"These alternative estimations methods lead to very similar qualitative conclusions: education, beauty, light skin, and high incomes are preferred. But the most striking result is that the preference for mating within one's own caste is strong: for example, we find in one specification that parents of a prospective bride would be willing to trade off the difference between no education and a master's degree to avoid marrying outside their caste. For men seeking brides, it is twice the effect of the difference between a self-described "very beautiful" woman and a self-described "decent-looking" one."

But they find that the cost of satisfying these preferences is not large, since supply and demand are well balanced within each caste, so that assortative matching that takes account of caste does not look different than simulated assortative matching on other observables when caste is ignored.

Overall, they conclude that matchings are stable, in the sense of the two-sided matching literature, i.e. they find that search and matching frictions are low enough, or preferences well enough aligned, so that matches simulated by the deferred acceptance algorithm are hard to distinguish from those they observe.

Update: the paper is now an NBER working paper http://papers.nber.org/papers/w14958

Saturday, May 9, 2009

Repugnant transactions concerning brides

From the sale of child brides in Saudi Arabia to the difficulty of enforcing the laws against Suttee (self-immolation on the husband's funeral pyre) in India, marriage is a fertile area of contention about practices that many find repugnant even in cases that the parties themselves may not.

In Saudi Ariabia, a small victory for social liberals in the contest with social and religious conservatives over whether sales of children into marriage are a repugnant transaction: Victory for Saudi girl, 8, sold by her father to a 50-year-old man
"The girl, who has not been named and who has been living with her mother in the city of Onaiza, was given to the older man in marriage by her father to pay off a debt." ...

"The case has reopened the debate in Saudi Arabia on whether a minimum age for marriage should be introduced. After the first two petitions failed, the Saudi newspaper columnist Amal al-Zahid wrote: “The trafficking of child brides — a most reactionary practice that takes us back to the days of concubines [and] slave girls” should be outlawed. She added that the country was incurring “behavioural abnormalities and problems of which only Allah knows”.
Human rights groups in Saudi Arabia and abroad have condemned the practice of child marriages. "
...
"Some attempts are being made to strengthen women’s rights. The Justice Ministry is reported to be considering reforms to impose a minimum age for marriage and to end abuses of the system by fathers of girls.
In February King Abdullah appointed Norah al-Fayez as the Deputy Minister for Women’s Education, the first woman minister in the kingdom. It has also signed up to the UN Convention on the Rights of the Child.
Despite such efforts, many traditionalists in positions of influence in government and religious life are becoming more strict in their observance of Islamic law. The country’s highest religious authority, Grand Mufti Sheikh Abdul Aziz al-Shaikh, has said that it is not against Islamic law to marry girls under the age of 15."

In India, suttee has been illegal since the 1800's, but in some Indian communities it continues to be thought of as a source of honor, and it has been difficult to entirely eradicate, in part because some instances seem to be voluntary decisions by the wives.

Like the sale of child brides in Saudia, the prospect that some of these instances may not be voluntary casts them in a different light, and changes the debate from one that might resemble the controversies involving assisted suicide to the more straightforward debates about human trafficking and murder. But the discussion is complicated by the fact that, in both Saudi Arabia and India, there is a not insubstantial community that finds such transactions appropriate.

Friday, May 8, 2009

Austin Hoggatt: 1929-2009

Austin Hoggatt, professor emeritus at the Haas School, dies at age 79

"Hoggatt served as the director of UC Berkeley's Computer Center from 1961-62. At the business school, he co-founded the Management Science Laboratory with Professor Fred Balderston in 1968 and served as its chairman. Haas School Professor Thomas Marschak said the lab, which was funded by the National Science Foundation, was the first to run computer simulations in game theory and experimental economics with human-to-computer interface.
...
"He was a pioneer in computing even before the field of computer science had emerged," said Marschak, who remembered Hoggatt collaborating with German Nobel Laureate Reinhard Selten on experimental economics and with faculty colleagues Julian Feldman and Edward Albert Feigenbaum, who went on to do groundbreaking research in artificial intelligence.
Hoggatt and Balderston co-authored an influential book, "Simulation of Market Processes," that was based on computer simulations they had conducted on the lumber industry. "The book was a breakthrough because this kind of analysis of an entire industry was not possible before the advent of computers," said Marschak."

NYC school chancellor Klein on kindergarten waitlists

NYC school chancellor Joel Klein has a straightforward description in the current issue of The Villager of the waiting list situation for Manhattan kindergartens. (He can't magically make overcrowding go away, but he can explain clearly what is going on. NYC seems to be pretty fortunate in some of its top public servants...) Here are his comments in their entirety.

A new equity and transparency in school admissions
By Joel Klein
"Registering your child for kindergarten is often stressful — many of you are preparing to send your son or daughter to school for the first time. Reports of kindergarten wait lists for the fall at public schools in District 2 have added to the anxiety this year. I want to assure families in the community that we’re taking steps to enroll all students who have applied for kindergarten as quickly and fairly as possible.
Let me begin with the facts. A total of six District 2 elementary schools have wait lists for their zoned students: P.S. 6, P.S. 59, P.S. 183 and P.S. 290 on the Upper East Side; and P.S. 3 and P.S. 41 in the West Village (although there is one combined wait list for these two schools). In all of District 2, a total of 242 students are on a wait list at the school they are zoned for. This is a much smaller number than recent news accounts have reported.
These wait lists are the result of two changes we made to the kindergarten admissions process this year. First, we eliminated the practice of first-come, first-served admissions that many schools used in the past, which gave an advantage to well-connected parents who knew when a particular school would begin registering students, and had time to wait in line that first day. Instead, this year each school accepted kindergarten applications until March 6; schools then admitted students based on a clear list of priorities, with the highest being given to the students living within the school’s zone.
Second, we asked all schools to maintain wait lists of students to whom they could not immediately guarantee a seat. Every spring it is common for schools to receive more applications from zoned students than they can actually enroll. The difference this year is that schools registered only students to whom they could guarantee a seat and placed all other applicants on a wait list. This change gives parents a clearer picture about their children’s chances of being able to attend a particular school. It also lets us immediately identify schools that are experiencing a surge in demand and work with them to find ways to accommodate it. In the past, these issues were not addressed until September.
If you’re a parent of a student on a wait list, however, you’re understandably frustrated and confused; it’s reasonable to want to know now where your child will attend school in September.
The answer is that she will almost certainly attend her zoned school. This is because three factors are reducing wait lists even as you read this. Let’s use P.S. 3 and P.S. 41, where there are currently a combined 90 zoned students waiting for a seat, as an example.
We are considering relocating the pre-kindergarten programs at P.S. 3 and P.S. 41 to nearby locations for the 2009-’10 school year. This move will open as many as 75 additional kindergarten seats at the schools, which we will offer to students on the wait list within the next week.
Second, 26 students who are zoned for P.S. 3 and P.S. 41 qualified for kindergarten gifted and talented programs this year. Many of these students either have a seat at one of the schools or are on the wait list, but will instead choose to enroll in the gifted program that we will offer them next month.
Finally, some families who accepted kindergarten placements will ultimately decide to enroll in a nonpublic school or a school outside New York City. This happens every year as families weigh their educational options, but this year’s application deadline gave families an additional incentive to apply to their zoned school — even if there was only a small chance they would want their child to attend.
All of this means that many of the students currently on the wait list at P.S. 3 and P.S. 41 will receive a placement at one of the two schools by the end of next month. Any students who remain on the wait list are still guaranteed a kindergarten seat. These students will receive a placement at a nearby school by the end of June and will be able to remain on the wait list at P.S. 3 and P.S. 41. Seats will likely open up for these students before the start of the school year, since families often move over the summer.
The combination of these three factors will also reduce or eliminate wait lists on the Upper East Side and Upper West Side. There, too, the few students who do not have a placement by the end of next month will receive one at a nearby school.
No explanation I can give will fully make up for the stress and inconvenience of being placed on a kindergarten wait list. But whether you have a child on a wait list or not, I hope you can recognize that we’re trying to bring equity and transparency to an admissions process which did not have either before this year. The families we welcome into our schools every year deserve nothing less, and the placement of every child is important to us. "

HT Parag Pathak

Thursday, May 7, 2009

Same sex marriage in Maine

New England is now clearly the region of the country most hospitable to same sex marriage (not even counting the honorary New England state of Iowa): Maine Governor Signs Same-Sex Marriage Bill . And Maine continues the trend of having its elected politicians, not just judges, reverse this ancient repugnance.

"Gov. John Baldacci of Maine signed a same-sex marriage bill on Wednesday minutes after the Legislature sent it to his desk, saying he had reversed his position because gay couples were entitled to the State Constitution’s equal rights protections.

“It’s not the way I was raised and it’s not the way that I am,” Mr. Baldacci, a Democrat, said in a telephone interview. “But at the same time I have a responsibility to uphold the Constitution. That’s my job, and you can’t allow discrimination to stand when it’s raised to your level.”
Yet gay couples may not be able to wed in Maine anytime soon. Laws typically go into effect 90 days after the Legislature adjourns, which is usually in late June. But opponents have vowed to pursue a “people’s veto,” or a public referendum, in which Maine voters could overturn the law. "

Wednesday, May 6, 2009

Markets for hair, blood plasma, and eggs

A recession report from the Detroit News is headlined Michiganians mine bodies for cash to make ends meet. It reports on a number of legal ways you can monetize your body.

You can sell your hair on TheHairTrader.com, and it looks like some sales have been in the $2,000 range.

You can sell blood plasma at $50 a shot, apparently as often as once a week, judging from the seller interviewed in the story. Here's a site called bloodbanker.com on which you can search for a clinic near you.

If you are young and female you can donate eggs to help couples with fertility problems. Perhaps the lingering repugnance of selling eggs is reflected by the first of these two pricing notes.
Conceiveabilities.com states on their web site that
"ConceiveAbilities strictly adheres to the guidelines as established by the American Society for Reproductive Medicine (asrm.org) which state egg donor compensation more than $10,000 is unethical. Simply stated, a reputable agency will adhere to the guidelines and those that don’t should be viewed with extreme skepticism. "
Egg.donor.com states
"What fees are paid to the Donor?An Egg Donor's fee can range from $5,000 to $15,000. Exceptional and repeat Donors will often receive higher compensation. "

HT Jeffrey Condon

Tuesday, May 5, 2009

NYC school choice; various updates

The NYC high school choice process (for schools at all levels) is entering its late stages. On the high school front, although the large majority of students are matched to high schools they ranked highly on their preference lists, in a system the size of NYC (with approx 90,000 new high school students each year), there are many students who are not well matched (and for whom the upcoming appeals process may provide some relief).
The Daily News has a story featuring several such students: Education Department fails to place thousands of students in any high school on their list of picksRead more: Education Department fails to place thousands of students in any high school on their list of picks.
"Education Department spokesman Andrew Jacob said the percentage of eighth-graders who went unmatched has improved to 9% from 16% in 2004, when choice was implemented.
The number of students who got their first choice has improved to 51% from 34% since the same year, Jacob added.
"We want all of the 86,000 students who applied for high school to be able to attend a school that's right for them," he said. "Any student who's unhappy at the end of the second round can appeal it."

The problem is that the system is stretched to capacity, so that schools with excess capacity are those which are undesirable in some respects. The things that market designers know about the difficult problems of school choice don't fix this underlying problem of resources.

The NYCDOE provides a bit of information on the different kinds of high schools here, a very brief description of the admissions process here, and information about each high school here.
There are also brief descriptions of the very different, still decentralized processes for pre-kindergaten, elementary schools, and middle schools.

Waiting lists for public school kindergartens, in NYC and in England

If being on a college's waiting list is nerve wracking, having your child on a public kindergarten waitlist is positively infuriating: Kindergarten Waiting Lists Put Manhattan Parents on Edge

"The Department of Education would not say how many schools had waiting lists or how many children were on them, explaining that officials were still reviewing the information that principals in Manhattan were required to submit earlier this week (principals in other boroughs must do so by Friday). But parent advocates and public officials in pockets throughout the city said in interviews that they had heard more complaints this year than ever from panicked parents who were told that there may not be seats for their 5-year-olds at their neighborhood schools.
The notion of a waiting list for students living within a school’s zone is not unprecedented in New York; last fall, 34 schools outside Manhattan capped their enrollment, turning away neighborhood children. But this year, after a change in city policy to standardize kindergarten admissions and encourage registration earlier in the year, the waiting lists seem to have proliferated, making their way into Manhattan neighborhoods where parents often make expensive real estate decisions with a specific school in mind.
David Cantor, the chancellor’s press secretary, said that schools previously had grappled with supply and demand in an ad-hoc way, and that the Bloomberg administration’s approach was more fair. Children who are still on waiting lists at the end of June will be offered slots at other schools in their district (there are 32 across the city), and parents can keep their children’s names on the lists through the summer in hopes that spots open up. City officials expect lists to shrink as some students choose gifted and talented programs, whose placements are to be completed in mid-June, or other options.
Before, Mr. Cantor said, “students remained on wait lists without a school unless a parent knew how to navigate the system.”
“This administration’s position is that equity of access and transparency for every parent is essential,” he added. “This year, for the first time, we stepped in to quantify wait lists, assist schools in managing their wait lists, and will ensure that children have a placement offer by the end of June.”

Something similar is happening in England. The Telegraph reports Thousands of children face being denied a place at their local primary school this year following a sharp rise in demand caused by the recession and increased birth rates:
"Competition is so intense that many families will have to accept their second, third or even fourth choice school, possibly several miles from home. Some four and five year-olds could be left without any place for September. Almost a third of councils across England surveyed by The Daily Telegraph were struggling to cope with demand, with many forced to create more places by building temporary classrooms.
The problem has been blamed on rising birth rates coupled with the economic downturn, which has forced some parents to abandon fee-paying schools for state education."
...
"In Bristol, about 300 children were left without a place at any of their preferred primary schools when the first round of offers was made in February, although most have now been found a school."