In an article praising the recent performance by an older golfer during the British Open tournament, Thomas Friedman considers how unique Tom Watson's performance was. It was a singular achievement because Tom Watson was 59 years and therefore the oldest golfer among the competitors, but also lost in a play-off. Most of the field was comprised of golfers at least two decades younger.
However, the most fascinating part of the article is the way in which he chooses to distinguish golf from many other sports events. one of those is that golfers tend to play as individuals and not in team events and where ability is demonstrable to all. the playing surface for golf is also largely created to be an obstacle unlike for other sports events. But the most unusual one is the fact that playing professional golf requires that one wins in order to earn money. While this is not unique to golf, this is a poignant distinction about how sports prizes are distributed.
The lesson here is that the manner in which sports prizes are organized for team events leave scope for a lot of free riding. i wonder what the pay differential would be like if team players were paid by certain objectively identifiable deliverables. Granted that certain Formula One teams also pay huge salaries, a good number of them also pay for finishing and placing among the points. On the other hand, I think that the pay structure for team sports recognizes that a element of team work is useful and that athletes ought to see their success as a product of joint work.
Thursday, July 30, 2009
Is Public Sector Wage Hike the Cure for Corruption?
Mark Gimein's piece in the Bigmoney.com has given me some reason to think about how to design systems of compensation for workers in the public sector to improve service delivery and reduce corruption. Mark uses the recent indictments and arrests of public service professionals in New Jersey to argue that the problem could be solved by raising substantially the compensation of public servants in the US. In my reading, he suggests that this principle perhaps has general application.
First, I am generally cautious at an supposedly incisive account for sorting out public problems that concludes with the need to merely spend more money. But I am really surprised with the comparisons that Mark makes by saying that public servants in the US should be brought as close as possible to private sector pay I order to reduce the temptation to accept bribes. Later in the story he unbelievably suggests that a raise in the pay of public servants would in turn ratchet upwards the cost f bribes and perhaps reduce their number.
To my mind, I see the fact that public service professionals frequently bear discretionary power for which there is little oversight as the main driver of the tendency to abuse that power. I suspect that there's little link between this and the absolute income per se. By stating that the US$ 171,000 pay for the governor of Illinois makes the individual particularly susceptible ti trying to sell a senatorial seat, Mark is obviously overstating the case. What I see here is that Governor Rod Blagojevic merely tried to capitalize his very broad discretion. That would most likely happen even if he earned US$ 1 million.
Because the piece makes interesting reading, this blog post will not summarize it fully. Instead I will comment on the link between lower corruption and higher wages for public sector workers that the author cites.To my mind, I suspect that the direction of causality is not only unclear but would be stronger for a high income nation because of the ability to develop more robust oversight mechanisms. While the influx of wealthy people into public service in the US is laudable, I would not dare say that I am convinced that this has reduced the degree of corruption in public service. Perhaps Mark Gimein should tell whether any town would want Madoff for mayor.
First, I am generally cautious at an supposedly incisive account for sorting out public problems that concludes with the need to merely spend more money. But I am really surprised with the comparisons that Mark makes by saying that public servants in the US should be brought as close as possible to private sector pay I order to reduce the temptation to accept bribes. Later in the story he unbelievably suggests that a raise in the pay of public servants would in turn ratchet upwards the cost f bribes and perhaps reduce their number.
To my mind, I see the fact that public service professionals frequently bear discretionary power for which there is little oversight as the main driver of the tendency to abuse that power. I suspect that there's little link between this and the absolute income per se. By stating that the US$ 171,000 pay for the governor of Illinois makes the individual particularly susceptible ti trying to sell a senatorial seat, Mark is obviously overstating the case. What I see here is that Governor Rod Blagojevic merely tried to capitalize his very broad discretion. That would most likely happen even if he earned US$ 1 million.
Because the piece makes interesting reading, this blog post will not summarize it fully. Instead I will comment on the link between lower corruption and higher wages for public sector workers that the author cites.To my mind, I suspect that the direction of causality is not only unclear but would be stronger for a high income nation because of the ability to develop more robust oversight mechanisms. While the influx of wealthy people into public service in the US is laudable, I would not dare say that I am convinced that this has reduced the degree of corruption in public service. Perhaps Mark Gimein should tell whether any town would want Madoff for mayor.
Monday, July 27, 2009
The Vanishing Envelopes of China
Looking at Chinese progress throughout the last two decades, it looks as if it has a very competent government and public service generally. Now, this story in the NYT is one that reminds about the ridiculous things that happen in that otherwise impressive economic growth story. It chronicles the life of Xue Longlong and the loss of his certificates due to what officialdom describes as misplacement and which increasingly looks like something really corrupt. As the story states, it appears that the ability to validate academic qualifications rests entirely with public sector workers and that records throughout a student's career are kept in a single file kept throughout one's life. The risk associated with these seem to escape the bureaucracy or perhaps some in its understand that once all the records are in one place, then it is easier to purvey them corruptly.
To my mind, this suggests a simple lesson that should be clear to any bureaucracy. Highly centralized systems may appear effective in getting people to do big building projects but it is not necessary to keep the record of millions of students in one place and in a single institution. I am at a loss when I consider China's population and imagine that any one person's records can only be verified through a single office. This is a failure of centralization taken too far because academic qualifications should be verifiable from the institutions that offered the courses. In which case, there would be a distributed network of offices bearing different records that could be used to build a composite picture. To my mind, there's good reason for the rise of a number businesses that would reliably verify academic qualifications.
The most surprising bit is that the China's private sector continues to rely upon the public officers to confirm individual capability when it ought to be clear to them that these are corrupt. The best way out is for them to show less respect for the brown manila envelope an ask Mr. Xue Longlong's University to verify his academic qualification. To continue to insist on the production of that Brown envelope allows the corrupt market to thrive.
To my mind, this suggests a simple lesson that should be clear to any bureaucracy. Highly centralized systems may appear effective in getting people to do big building projects but it is not necessary to keep the record of millions of students in one place and in a single institution. I am at a loss when I consider China's population and imagine that any one person's records can only be verified through a single office. This is a failure of centralization taken too far because academic qualifications should be verifiable from the institutions that offered the courses. In which case, there would be a distributed network of offices bearing different records that could be used to build a composite picture. To my mind, there's good reason for the rise of a number businesses that would reliably verify academic qualifications.
The most surprising bit is that the China's private sector continues to rely upon the public officers to confirm individual capability when it ought to be clear to them that these are corrupt. The best way out is for them to show less respect for the brown manila envelope an ask Mr. Xue Longlong's University to verify his academic qualification. To continue to insist on the production of that Brown envelope allows the corrupt market to thrive.
Wednesday, July 22, 2009
Amazon and Remote Deletion
Farhad Manjoo of Slate Magazine covers here the recent deletion of certain book titles from the Kindle by Amazon without prior consultation with the owners of the gadgets. To my mind, this shows an exceptionally broad remit that Amazon retains for itself regarding a gadget that it sells expensively and which I have written exuberantly on this blog. While Amazon has explained that the deletion of the books from the Kindle gadgets was occasioned by the fact that digital titles had been mistakenly published and may have been in breach of intellectual property rights, I am truly amazed at this degree of brazenness.
As a person who is seriously considering the purchase of the Kindle 2, I am taken aback by the enormous power that Amazon not only had but which it has unilaterally wielded against its own customers. This reminds me of the behaviour of firms that tried to impose unrealistic Digital Rights Management systems on purchasers of CDs. The bigger question in my mind though is on who really owns the Kindle devices and the digital books that are read on them. As the article under reference states, the service contract suggests that Amazon interprets this as its property.
Well, Amazon is entirely entitled to its interpretation but I think that when I eventually purchase a Kindle 2, I will continue to fully assume and claim property rights to the titles that I have paid for just as I am convinced of my ownership of the number of books that I have bought from the Amazon store. Nobody should sneak into my library and take away titles from my shelf just because the titles were mistakenly sold to me. I would fully appreciate a note perhaps reminding me that the title was sold to me erroneously and that I should consider adherence to the law by returning it for a full refund. That's just sound etiquette and one that Amazon should consider before acting with stealth like it did. This is the first regulatory issue regarding the rights of Kindle users.
As a person who is seriously considering the purchase of the Kindle 2, I am taken aback by the enormous power that Amazon not only had but which it has unilaterally wielded against its own customers. This reminds me of the behaviour of firms that tried to impose unrealistic Digital Rights Management systems on purchasers of CDs. The bigger question in my mind though is on who really owns the Kindle devices and the digital books that are read on them. As the article under reference states, the service contract suggests that Amazon interprets this as its property.
Well, Amazon is entirely entitled to its interpretation but I think that when I eventually purchase a Kindle 2, I will continue to fully assume and claim property rights to the titles that I have paid for just as I am convinced of my ownership of the number of books that I have bought from the Amazon store. Nobody should sneak into my library and take away titles from my shelf just because the titles were mistakenly sold to me. I would fully appreciate a note perhaps reminding me that the title was sold to me erroneously and that I should consider adherence to the law by returning it for a full refund. That's just sound etiquette and one that Amazon should consider before acting with stealth like it did. This is the first regulatory issue regarding the rights of Kindle users.
Monday, July 20, 2009
If Tap Water is Better Why Ban Bottled Water?
An article in the NYT here reports the fascinating case about a small town of Bundanoon in Australia that has effectively banned the sale of bottled water within its jurisdiction. I agree with some of the intended effects but think that a number of presumptions have been made and the policy prescription unduly restrictive and probably ill-considered.
I maintain the view that in many developing countries, bottled water is an urban luxury while in high-income countries, the purchase of bottled water is a reflection of preference for a marked product. It is also true that many people ascribe to bottled water, a level of superiority to tap water that it neither has nor deserves. water is an increasingly important resource and the extraction by bottling companies is receiving widespread attention. The main concern is that bottled water leads to the a large number of plastic bottles and the transportation all over the wold leads to the emission of pollutants and earth-warming gases.
This is a plausible argument that is acceptable by many people but like in earlier blog posts such as this one, I depart company when it argues for banning of bottled water. To rehash the arguments, it has been demonstrated that tap water suffers a bad reputation when in reality it is safe enough to drink in most places in the world. What bottled water marketers perhaps should be compelled by policy is to internalize the costs of the pollution that comes from the containers (whether glass or plastic). I am not sure that these two should be treated as perfect substitutes when one is consumed as a luxury product. Indeed, the best way for bottled water to pay its way is for the city fathers of Bundanoon to support the creation of a carbon tax which would then ensure that bottled water finds its rightful prices. A ban is very statist and altogether unwise. If the belief is really that tap water is better, then why ban the inferior product?
I maintain the view that in many developing countries, bottled water is an urban luxury while in high-income countries, the purchase of bottled water is a reflection of preference for a marked product. It is also true that many people ascribe to bottled water, a level of superiority to tap water that it neither has nor deserves. water is an increasingly important resource and the extraction by bottling companies is receiving widespread attention. The main concern is that bottled water leads to the a large number of plastic bottles and the transportation all over the wold leads to the emission of pollutants and earth-warming gases.
This is a plausible argument that is acceptable by many people but like in earlier blog posts such as this one, I depart company when it argues for banning of bottled water. To rehash the arguments, it has been demonstrated that tap water suffers a bad reputation when in reality it is safe enough to drink in most places in the world. What bottled water marketers perhaps should be compelled by policy is to internalize the costs of the pollution that comes from the containers (whether glass or plastic). I am not sure that these two should be treated as perfect substitutes when one is consumed as a luxury product. Indeed, the best way for bottled water to pay its way is for the city fathers of Bundanoon to support the creation of a carbon tax which would then ensure that bottled water finds its rightful prices. A ban is very statist and altogether unwise. If the belief is really that tap water is better, then why ban the inferior product?
Japan's Coming Population Growth
I sometimes play a very simple game with friends who travel frequently throughout the world. The game involves asking them which cities they have visited over their adult lives and try to tick off those against my very modest list of cities visited in international travel. I invariably find that in spite of its being the world's second largest economy, a very small number of people known to me have visited any city in Japan. My index of isolation is far from perfect because the people I encounter tend to have travelled mostly within Europe, South Asia and North America.
However, even my very unsophisticated algorithm of the correlations between the travel destinations of my acquaintances got me thinking when I read this today. Daniel Gross argues there that in spite of a growing demographic crisis in the form of a shrinking population from low fertility rates, Japan seems to be reluctant to allow for immigrants. Indeed, the issue of the population problem is discussed broadly but the real options of a flexible immigration policy or raising the fertility rates go unresolved.
I am suspicious of most linear forecasts suggesting that the world's population growth rates threaten human survival. Most of these claims tend to be based on a preacher's approach towards controlling populations in Africa, Latin America and places in south Asia where populations are undeniably poor. To my mind, Japan seems to be facing some danger but it ought not to be overstated because fertility rates could kick off with the right incentives and immigration policy could also be adjusted to ensure that the appropriate choices are made by individuals. On this instance though, one must see that the obsession with cultural purity in a scientifically advanced society is part of the problem. Still, its no problem if a society wishes to have robots help it maintain industries and work going. My bet though is that in the next decade or two, Japanese immigration policy will be gradually eased to allow for immigration from the region and among those who departed earlier. Sometime in the future, something will have to give and I suspect the domestic politics will not keep the options bottled up for too long.
However, even my very unsophisticated algorithm of the correlations between the travel destinations of my acquaintances got me thinking when I read this today. Daniel Gross argues there that in spite of a growing demographic crisis in the form of a shrinking population from low fertility rates, Japan seems to be reluctant to allow for immigrants. Indeed, the issue of the population problem is discussed broadly but the real options of a flexible immigration policy or raising the fertility rates go unresolved.
I am suspicious of most linear forecasts suggesting that the world's population growth rates threaten human survival. Most of these claims tend to be based on a preacher's approach towards controlling populations in Africa, Latin America and places in south Asia where populations are undeniably poor. To my mind, Japan seems to be facing some danger but it ought not to be overstated because fertility rates could kick off with the right incentives and immigration policy could also be adjusted to ensure that the appropriate choices are made by individuals. On this instance though, one must see that the obsession with cultural purity in a scientifically advanced society is part of the problem. Still, its no problem if a society wishes to have robots help it maintain industries and work going. My bet though is that in the next decade or two, Japanese immigration policy will be gradually eased to allow for immigration from the region and among those who departed earlier. Sometime in the future, something will have to give and I suspect the domestic politics will not keep the options bottled up for too long.
Friday, July 17, 2009
Banks and Compensation
I have argued on this blog before that the financial crisis was caused primarily by regulators who slept on the job in addition to the idea that government will not let some banks to fail. I am less convinced that the remuneration that firms choose to pay their employees should concern anyone other than shareholders. In the last week, there has been confirmation that Goldman Sachs and JP Morgan, both investment banks, are back to high profitability and are prepared to pay bonuses and perks that are no different from the behavior that their critics loath.
I have little sympathy for the argument that such high pay is harmful to the financial system because it does increase the propensity for reckless risk taking. To my mind, the reason for high profitability in an industry is because of a unique ability or insufficient competition. That both JP Morgan and Goldman Sachs are making profits that are considered too high should lead to proper diagnosis of the problem. First, that many financial services firms and investment banks needed cash from government means that their managers are certainly not as bright as they believe. Secondly, it is possible that the distribution of profits favours a few firms in that industry and this to me makes more sense.
As Graham Bowley of the NYT states here, the recent crisis nearly decimated a large number of firms and that has allowed JP Morgan and Goldman Sachs to become the preeminent bakers for the moment. It is not clear that they will maintain this position but the fact that the crisis has led to a new industry with new opportunities exploited by the two shows that the markets are working decently. That these firms were propped up with public funds does not bother me much now because they have paid back. More competition is always better and regulatory policy should concentrate on this side of the business.
However, the possibility of a new crisis that devastates the market and leads to a widespread economic crisis still exists. So while governments are unhappy with the new bonus plans, I have little respect for this view. All they need to state categorically is that there will be no future bailouts irrespective of the cause and leave investment banks to their devices. Reigning in poorly designed incentive schemes in banks is the work of shareholders.
I have little sympathy for the argument that such high pay is harmful to the financial system because it does increase the propensity for reckless risk taking. To my mind, the reason for high profitability in an industry is because of a unique ability or insufficient competition. That both JP Morgan and Goldman Sachs are making profits that are considered too high should lead to proper diagnosis of the problem. First, that many financial services firms and investment banks needed cash from government means that their managers are certainly not as bright as they believe. Secondly, it is possible that the distribution of profits favours a few firms in that industry and this to me makes more sense.
As Graham Bowley of the NYT states here, the recent crisis nearly decimated a large number of firms and that has allowed JP Morgan and Goldman Sachs to become the preeminent bakers for the moment. It is not clear that they will maintain this position but the fact that the crisis has led to a new industry with new opportunities exploited by the two shows that the markets are working decently. That these firms were propped up with public funds does not bother me much now because they have paid back. More competition is always better and regulatory policy should concentrate on this side of the business.
However, the possibility of a new crisis that devastates the market and leads to a widespread economic crisis still exists. So while governments are unhappy with the new bonus plans, I have little respect for this view. All they need to state categorically is that there will be no future bailouts irrespective of the cause and leave investment banks to their devices. Reigning in poorly designed incentive schemes in banks is the work of shareholders.
Thursday, July 16, 2009
Time for Book Publishers to Study Napster
Anyone who observes the market development of electronic books cannot help but wonder about two things. The first is which of the various platforms such as Amazon's Kindle or the alternatives will carry the day. Secondly, one is struck by the fact that Napster's effects on the music industry are not properly heeded by book publishers today. In spite of the fact that the industries are not the same and the effects of digitization are not the same, there are ways in which the complete refusal to consider new formats shows that there is lack of thought by book publishers.
While I have written on this blog here and here on my thinking about Kindle and what effects it would have on the book publishers markets. Writing in Slate Magazine, Jack Shafer illustrates the wrong-headed thinking that characterizes the responses from book publishers with their obsession with higher margins from hardback and other copies of books. To my mind, in spite of the evidence that there is consumer appetite for electronic formats in books, the industry's giants seem to be prepared to die defending their longstanding business models. I admit that there are no certainties about how big the e-book industry will eventually become but that the option for buying books in this format is one that cannot be rolled back.
To my mind, the majority of books are being read in formats that are comfortable today but the spread in the proportion of books available electronically will drive more intense readers towards digital formats. All these mean that the industry will not remain the same and that the Kindle and its competing gadgets will only get better and provide cheaper products while people ask why a hardback really has to cost US$ 25. Whatever happens, my bet is that consumers will win and e-books will continue to take up an increasing proportion of books that are sold. While Napster did not live to appropriate all profits from sale of digital music, no doubt it changed the music industry by destroying a comfortable business model. As these book publishers are spending time defending their paper-based markets, they are letting the gadget sellers as Amazon and its competitors to define the market. That cannot be good news. Let's watch.
While I have written on this blog here and here on my thinking about Kindle and what effects it would have on the book publishers markets. Writing in Slate Magazine, Jack Shafer illustrates the wrong-headed thinking that characterizes the responses from book publishers with their obsession with higher margins from hardback and other copies of books. To my mind, in spite of the evidence that there is consumer appetite for electronic formats in books, the industry's giants seem to be prepared to die defending their longstanding business models. I admit that there are no certainties about how big the e-book industry will eventually become but that the option for buying books in this format is one that cannot be rolled back.
To my mind, the majority of books are being read in formats that are comfortable today but the spread in the proportion of books available electronically will drive more intense readers towards digital formats. All these mean that the industry will not remain the same and that the Kindle and its competing gadgets will only get better and provide cheaper products while people ask why a hardback really has to cost US$ 25. Whatever happens, my bet is that consumers will win and e-books will continue to take up an increasing proportion of books that are sold. While Napster did not live to appropriate all profits from sale of digital music, no doubt it changed the music industry by destroying a comfortable business model. As these book publishers are spending time defending their paper-based markets, they are letting the gadget sellers as Amazon and its competitors to define the market. That cannot be good news. Let's watch.
Monday, July 13, 2009
Charities Using Naming Rights
Many people find it difficult to ignore pleas for assistance to citizens of poor countries in Africa, Asia and Latin America. At the same time, it is often difficult to demonstrate convincingly that this private assistance makes a big difference and this has led to cynicism about what real difference one can make. However, a number of philanthropists are matching dollars to big but useful ideas in a way that is making a difference and exploiting market mechanisms. In this article by Nicholas Kristof of the NYT, it is clear that in spite of the broad cynicism about charity from the countries whose citizens have higher incomes, there are new approaches to delivering assistance with better results than before.
To my mind, the most impressive is the offer for naming rights to wells in countries where a given charity has sunk a number. I find the replication of naming rights together with specific GPS coordinates an interesting way for verifying that the project does exist. Given the lucrative contracts that companies have had for Stadiums and other sports facilities, I think that this illustrates the growing sophistication of these charities in harnessing new opportunities. Giving credit where it is due, i am not sure whether the proliferation of wells is not always the best way to deliver water to rural villages.
However, I think that the possibility of extending naming rights to portions of tropical forest, coral reefs or fragile lands may be an idea that private sector firms may explore as green messages help in communication of environmental awareness.
To my mind, the most impressive is the offer for naming rights to wells in countries where a given charity has sunk a number. I find the replication of naming rights together with specific GPS coordinates an interesting way for verifying that the project does exist. Given the lucrative contracts that companies have had for Stadiums and other sports facilities, I think that this illustrates the growing sophistication of these charities in harnessing new opportunities. Giving credit where it is due, i am not sure whether the proliferation of wells is not always the best way to deliver water to rural villages.
However, I think that the possibility of extending naming rights to portions of tropical forest, coral reefs or fragile lands may be an idea that private sector firms may explore as green messages help in communication of environmental awareness.
Thursday, July 09, 2009
Pixar Movie Beats the Analysts
To try and slam any Wall Street analyst at this time is obviously to come to the party while the tables are being cleared. My only hope would be that Wall Street technical analysts would by now have had some decency to be more humble and less hubristic about forecasts of whatever nature. And yet it appears that they have continued to give aggressive forecasts and made calls that gullible investors take seriously, or not.
This article from the NYT reports about Richard Greenfield a celebrated analyst has had to eat humble pie after making a forecast on the movie Up. To my mind, the admission is still qualified by the statement that the single movie's success does not mean that Disney will do well all around. That in my view is a more reasonable statement than the crunching of numbers and technical analysis stating how much a movie will gross. With respect to the training and professional capability of Mr. Greenfield and other analysts, they do not always understand businesses that they pontificate about as well as the managers of those businesses do. And the moral of this story is that it should be fine for a professional to say, "I do not know" as opposed to presenting dubious forecasts. Leave that to witchdoctors.
Still, I am curious about what the revenue forecasts from Epagogix would be for this movie.
This article from the NYT reports about Richard Greenfield a celebrated analyst has had to eat humble pie after making a forecast on the movie Up. To my mind, the admission is still qualified by the statement that the single movie's success does not mean that Disney will do well all around. That in my view is a more reasonable statement than the crunching of numbers and technical analysis stating how much a movie will gross. With respect to the training and professional capability of Mr. Greenfield and other analysts, they do not always understand businesses that they pontificate about as well as the managers of those businesses do. And the moral of this story is that it should be fine for a professional to say, "I do not know" as opposed to presenting dubious forecasts. Leave that to witchdoctors.
Still, I am curious about what the revenue forecasts from Epagogix would be for this movie.
Wednesday, July 08, 2009
Doubt and Certainty
" If a man will begin with certainties, he shall end in doubts but if he will be content to begin with doubts, he shall end in certainties". Francis Bacon
Tuesday, July 07, 2009
How Should Movies be Ranked?
Its summer in the northern hemisphere and the blockbuster movies are now showing in theatres throughout the world. There are a number of guesses about what movies will do well in the theatres (perhaps with pirates too) and the rest. However, an important feature of these is the extent to which sensible economics is usually put aside in the comparison of which movies are most successful. Zachary Pincus-Roth writes in the Slate Magazine about the inappropriate comparisons on the gross revenues from movies without accounting for inflation.
So many people continue to believe that the highest grossing movie of all time is the Titanic when this is not at all true. As argued there, to compare the nominal revenue figures for movies made over six decades apart is hugely problematic. Depending on the chosen metric, such as nominal or real revenues, the overall number of tickets sold or the population base for the sales, the ranking of the pictures considered varies quite a bit.
However, this merely shows that journalists should be more cautious in taking up the best parameters to suit the point being made. In spite of this, it altogether incorrect to rank movies made years apart on the basis of nominal revenues. As the story concludes, a number of reasonable algorithms can be drawn to provide plausible ranking of movies. In my reckoning though, it would be helpful to consider what proportion of the entertainment budget of households is spent on movies and weight that accordingly.
Finally, it is also worth considering to what Epagogix, a company that uses sophisticated models to predictive the box office takings of a movie, consider inflation.
So many people continue to believe that the highest grossing movie of all time is the Titanic when this is not at all true. As argued there, to compare the nominal revenue figures for movies made over six decades apart is hugely problematic. Depending on the chosen metric, such as nominal or real revenues, the overall number of tickets sold or the population base for the sales, the ranking of the pictures considered varies quite a bit.
However, this merely shows that journalists should be more cautious in taking up the best parameters to suit the point being made. In spite of this, it altogether incorrect to rank movies made years apart on the basis of nominal revenues. As the story concludes, a number of reasonable algorithms can be drawn to provide plausible ranking of movies. In my reckoning though, it would be helpful to consider what proportion of the entertainment budget of households is spent on movies and weight that accordingly.
Finally, it is also worth considering to what Epagogix, a company that uses sophisticated models to predictive the box office takings of a movie, consider inflation.
Thursday, July 02, 2009
Professional Tennis Makes Drug Testing a Joke
Institutions that manage professional sports are still overwhelmingly opposed to the use of steroids and performance enhancing substances. The idea behind this is that the use of such substances results in unsportsmanlike behaviour or outright cheating. But it is essential to note that the incentives to cheat in professional sports today exists primarily because of the financial and reputational rewards that attach to athletic excellence.
With this fairly commong background, it appears that some sports management bodies are far more thorough in vetting for drug use than others are. Similar to the claim by Bill Gilford in the Slate Magazine, it is clear that the organizations that more throughly vet and test athletes are at a disadvantage because a larger proportion of the athletes there are bound to fail the tests. It is therefore very curious that a disproportionate number of professional tennis players are caught for use of these prohibited drugs.
As Gilford explains, while it is possible that professional tennis players are probably more honest than others, the advantages that are conferred by the substances would be relevant for this sport too. While I am wont to give the professional players the benefit of doubt, the very poorly designed testing regime for tennis is one that raises the possibility that a number of cheats are getting away. A better regime would obviosuly step up the number of tests and include a testing regime that is timed to ensure that the substances that are being tested for can be reliably detected.
With this fairly commong background, it appears that some sports management bodies are far more thorough in vetting for drug use than others are. Similar to the claim by Bill Gilford in the Slate Magazine, it is clear that the organizations that more throughly vet and test athletes are at a disadvantage because a larger proportion of the athletes there are bound to fail the tests. It is therefore very curious that a disproportionate number of professional tennis players are caught for use of these prohibited drugs.
As Gilford explains, while it is possible that professional tennis players are probably more honest than others, the advantages that are conferred by the substances would be relevant for this sport too. While I am wont to give the professional players the benefit of doubt, the very poorly designed testing regime for tennis is one that raises the possibility that a number of cheats are getting away. A better regime would obviosuly step up the number of tests and include a testing regime that is timed to ensure that the substances that are being tested for can be reliably detected.
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