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12Sep/11Off

Feeling Statistics

By Kevin

Mankessim Market

Trading Commodities?

A couple of months back, I was in Ghana to work on a Microfinance Project under Global Brigades. It was an amazing experience to be working in one of the communities in Ghana, so closely with the locals in such a short time. There were the stuff you expected - lack of access to clean water, or electricity (mostly because of the expense rather than the lack of infrastructure in the case of Ghana). But there were also things I didn't quite expect - the widespread use of mobile phones, the fact that the young university students had Facebook accounts and how Akon and Rihanna were singers familiar to them.

It is also one of the first time I see so many kids at the same time, gathered together and so many young people around - this is when I realised that is what the first steps of development looks like. This is the point of time when access to medicine is improving, public health education more widespread and economic conditions were picking up following positive economic reforms. Indeed, it is when the population pyramid beginning to show marked effects of falling infant mortality (was 76 in 1990, fell to 47 in 2009) and child mortality (was 120 in 1990, fell to 69 in 2009) in the past 10 years. In Ghana, I actually felt what these statistics meant and saw for myself what it says about the lives of people.

Everyone I spoke to was optimistic about the future and the development of their country though some of the older ones were more skeptical about how much their lives would improve. The university students in particular were full of energy and ready to take the ideas they've picked up and use them out there at work if the opportunities come by. With so many youngsters and kids, teaching becomes an extremely important job and teachers are held in high esteem. The other important development statistics appear to be in favour of the country; literacy is climbing, and so is urban development. I can only hope that things continue to improve. Perhaps learning about the situation of countries through their statistics works only to the extent you can imagine the conditions of the people and the situation there. After a while, it just becomes something rather lifeless (just as I've experienced after researching through the key growth indicators of more than 10 European markets) - but be reminded of how those figures comes alive, and you'd probably appreciate them better.

30Oct/10Off

Demand & Supply

By Kevin

D&S

Raise Prices

KOI Bubble Tea is cheaper in Toa Payoh than in town. Fans of KOI would immediately point out that it is untrue, given that the menus and the pricing of the products in the outlets are the same (or is it already different to reflect the demand differentials?).

As it turns out, when a firm refuses to raise prices at times of huge demands, supply will continue to stay below demand (shortages ensues) and while consumers enjoy the good at same prices, the ones who are more willing to pay the high price would jostle their way through, pit their patience in waiting lines with the less willed customers and even throw out their attitudes to buy their bubble teas. This is the implicit costs of the product when there is a shortage. And even when things are less tough than what I described, the fact that the area surrounding KOI at Illuma has turned into some sort of mini crowded park shows how the implicit costs have manifest itself as waiting time. Those willing to pay more would spend more time waiting (then again it may be influenced by the 'exchange rate' of time).

This brings me back to the point of why KOI bubble tea are more expensive in town: the queues are longer! When you factor in the implicit costs of stuff, you'd understand the reality of demand and supply. Our market has lots of friction despite being largely efficient and transport/transaction costs sometimes messes up price signals (from our perspective). I believe that a good way of solving the 'problem' here is to raise prices of the bubble tea in the town areas (in short run) and then try to raise the capacity of their production so that the supply of KOI bubble tea would increase in town if they would like to keep the current prices.

Price discrimination in different branches may actually be a combination of cost differentials, a genuine effort to price discriminate as well as demand differentials. In fact, other bubble tea shops practice that. Sweet Talk at Teck Whye Crescent is priced lower than the Sweet Talk at Lot 1 or Bukit Panjang Plaza (if I'm not wrong) and MacDonalds long offered value meals at slightly different prices in different branches. It is normal and paying more supposedly reduce your waiting time. If you rather pay it with your time, then feel free as well.

22Sep/10Off

Shocializing

By Kevin

Shopping Bag

Trash the Bag

Shopping, contrary to what economist might think, is a social affair. Purchasing decisions are not exactly made independently but often with reference to the purchases of friends and people around you. And that's why The Economist thinks that a third generation kind of websites are going to turn e-commerce into a more 'real' shopping experience.

On other issues, video games appears to train people to make faster decisions. They're said to be better with collecting bits of information and data (visual and audio) around them to aid them with decision making. It's perhaps one more good excuse for you to start gaming. My advice though, is that you leave the gaming to those times when you're especially stressed but have absolutely nothing to do - such as waiting for an important result, decision, during the days between papers when you've already studied so hard and with nothing more to study. Spend those times when you're bored learning something and thinking up routines for yourself to complete.

2Sep/10Off

Bad to be good

By Kevin

Weigh Balance

Right amount of selfish and selfless

Recent studies showed that people are not only irritated by selfish people, but also those who are exceptionally selfless. In a recent paper published by Craig Parks and Asako Stone titled, "The Desire to Expel Unselfish Members From the Group", being selfless doesn't make you any more popular than selfish people. The Economist explains this idea of too much virtue becoming a vice in the eyes of people.

People are a fussy lot. It's hard to please them. They like those who are like them but a little nicer and prettier and quietly despise those people who are a little meaner and less beautiful than them though the process fuels their own ego and makes them secretly happy as well. But they think the extremely selfish and mean people are irritating and want to be away from them; now we all know they do that to those who are extremely selfless and nice as well. People care about comparisons, they care about relative positions. I've long ago wrote about 'Reference Anxiety' and I explained the dilemma between happiness and equality.

Everyone likes the idea that others are also human, and large deviations from what they themselves are, or have, or experienced, is just unhumanly. That's why it's okay to cheat on your Xbox games and those gamer-saints can just remain holy.

2Jun/10Off

Economist Special Reports

By Kevin

Water Glass

Water. Anyone?

The Economist have special reports frequently in their weekly issues and often they go in depth into topics that we'll get in touch with at some point of our lives. Most importantly, for academic, students and teachers, these reports are opportunity to get a clear picture of topics you've always wanted to read up more on and be updated on that field.

Very often you'd also find them cross-disciplinary, covering economics, geography, science and definitely General Paper. Take the recent report on Water for example. It raise natural water issues studied deeply in geography but also propose policy (economics) and technological (science) solutions. It is also great that nowadays these reports are available for download free because they are sponsored by some big company. This are materials that anyone can access, even those who are not subscribers of The Economist magazine.

The Economist is not always about economics and you just got to get in touch with the content they offer to understand how good it is. I'm glad they've came up with an economic solution to offer their content to a wider audience.

29Apr/10Off

Been Out

By Kevin

Door

Gone for a while

For some time I seem to be missing from ERPZ, though probably as much as Martin or Scherzo, or Yuan Jun for that matter. Work has been really busy and life in general after the 15 academic years of the past introduces new challenges. But it remains important to be optimistic about the future and things to come, while appreciating all that you're currently blessed with.

As one mature, you learn that things should be shared rather than fought over, and you have to wonder if you're really hurting others or yourself when you get into fights. One should appreciate the fact that collaboration and combining strengths can produce far more returns in long run than doing too much fighting though competition may sometimes bring greater benefits to everyone in aggregate. Cost and benefits of things have long been hard to balance and somewhat confusing to us. Maybe that is why, we need to be conscious.

Sometimes, it's important that we ponder about life, through current affairs.

20Mar/10Off

Coercion of Free Markets

By Kevin

Rich & Poor

Trading Goods...

Inequality is a market failure. We do pick this up in A Levels but then there's little discourse on that. Not only do we dwell little on the solutions - which ranges from progressive taxation to welfare handouts - we ultimately ignore how inequality undermines the ultimate roles of markets, which is the efficient allocation of resources. I've always grasp the idea rather intuitively but then fail to deliver it in a philosophical and economics framework. I've pointed out the lack of philosophical musings in today's study of Economics when I introduced Michael Sandel's lecture on Markets and Morals.

I've always pose the question to my Economics student, if a person earns $1000 a month and another who earns $1 a month both needs a glass of water. The rich guy is willing to pay $10 for the water while the poor one is willing to pay $1. The market thus allocates the water to the rich man. We all know that this allocation is problematic and it doesn't seem efficient; how is it that, in terms of willingness to pay, a person who is only willing to part with 1% of his monthly income gets the good when another is willing to part with 100% of his monthly income for it? So what exactly is the problem of inequality?

Once again, Michael Sandel points this out in the second lecture presented in this video. You don't exactly have to watch the lecture in order to grasp the point but the idea is that when inequality (in terms of unequal distribution of income) exists, effective demand cannot properly reflect the ideal sort of demand signal transmission that would allow the market to allocate resources efficiently. In extreme cases, free markets becomes not entirely free. In other words, people are not transacting out of their free will but coerced by their own economic circumstances. We see this very often in the case of poor people in developing countries who are forced to sell organs, resort to prostitution, act as surrogate mothers, become a runner for crack.

Gary Becker is not wrong about the rationality of these people. They're making rational choices but it is often that their choices is very much limited. That unfeeling market processes coerce us into certain decisions is something close to the hearts of all of us. Often, however, we can't quite work out what is so unjust about that because we believe that to a large extent, we determine our riches. Somehow, deep in our hearts we know that some other decisions that we made caused us to be in the state we are in such that we are coerced into making that next decision. The fact that this argument comes back to us shows how each and every decision made in the marketplace by us are not independent. This makes for a determinism argument in a market setting where free will is supposed to reign.

There are much wider implications of all these arguments and I shall explore them if I get the chance.

16Mar/10Off

Morality of Markets

By Kevin

I've previously introduced Michael Sandel's lectures on Justice in Harvard. I haven't finished the series despite great interest in it but I recently watched another of his lectures, one at Chautauqua where he talks about the Morality of Markets. In some sense, I was particularly interested in this issue and believe that all those trained in Economics should be made to study it. After all, Adam Smith was a Moral Philosopher. The philosophical element of Economics is becoming lost in our study of it today.

Markets Corrupts?

That is what makes this particular Michael Sandel lecture extremely insightful. He starts with the idea that we're now plagued by market triumphalism and he tries to question what is wrong with that. As often in his lectures, he poses a scenario either hypothetical or based on actual proposals in the real world and then solicits opinions from the audience. He eventually surfaces his points and ideas from the responses of the audience and does a brilliant summary of the issue.

He gives a good and important point in his conclusion of this lecture that explains why we should not allow markets to expand indefinitely in our lives. In other words, there are areas where markets can, indeed serve the best interests of the societies especially when we all can agree that the market system gives an accurate and fair valuation of the good or service involved. Unfortunately there are values out of the consideration of the market that we might cherish and therefore we should not allow particular goods or services to become commodities to be traded and transacted. The danger of the markets is that it leaves its mark on the commodities that are traded; the values that we cherish becomes diluted, corrupted by the market system.

The example of paying a child to read is important in illustrating this. We should cherish reading not because of the monetary gains but the intrinsic value derived from joy of reading and learning. Therefore when we start paying children to read, it sends out the wrong messages and distorts the valuation of reading. The trick then, perhaps is a solution around this limitation of the market, to be able to remove that mark that market leaves on the thing traded. Unfortunately there's no easy solution and possibly none. This is a strong argument against markets and while it is applied to a small group of tricky issues, they are worth pondering over.

Michael Sandel makes Political Philosophy and Moral Philosophy not only accessible to the public and ordinary, non-philosophy students but also makes extremely relevant connections between traditional Western Philosophy and the issues plaguing us in the modern world. It's really fortunate that we are able to access his lectures even though we are not studying in Harvard or in America. There are other videos of his public lectures available on FORA.tv.

12Mar/10Off

Wrong Concoction

By Kevin

Counterfeits

Same?

Historically, technological advancement combined with economics have helped to push civilization towards greater levels of achievements; yet too often, there are times when they are combined in the wrong ways that produces somewhat problematic results for the aggregate society. An example would be the problem of counterfeit products, which is recently featured in The Economist. Interestingly it has extended beyond just luxury goods, luxury consumer electronics to the more sophisticated stuff like cars, computer and machine parts. The chief argument against counterfeits is not so much that they are unsafe. As technology advance, counterfeits that are of low quality would naturally be abandon by the market anyways. The reason for the market's embrace is a result of their avoidance of taxes and the willingness to accept lower margins, which allows them to price way more competitively.

Another time when technological advancement is combined with skewed human intentions is the gender-based abortion that The Economist is hinting at. The distorted sex ratio have potentially disastrous consequences on society at large. Unfortunately the imbalance is already a fact and will take at least a generation to restore some balance so in the meantime we will probably have to put up with way lower rates of marriages (if rates sustain, it would only be because divorce rates have also been increasing; which implies re-marriages).

Well, more arguments for big governments, or if not, intrusive ones.

5Mar/10Off

Search and Research

By Kevin

Research

Looking Up the Web

It has been a long time since I wrote something about handling school work and such. I've been working on a couple of articles for some external parties and doing quite a lot of research and writing. The experience can be frustrating and tiring as I plow through loads of data, informative material and readings and then get lost in bits of thoughts here and there, never settling down to write. Such is research, you ask a few simple questions that you expect could be answered with a sentence or two but end up having loads of related answers and information that leads you to the fact that answers you're looking for is way more complex. Then you realise you have got to put together evidence for each of your claims and explanations. People were asking me how I manage all that stuff, I told them that you've got to work out a plan somehow.

So in this article, I'd be discussing my method of planning writing and research. It's by no means a definitive answer to managing your research or school projects but it might be an option you'd like to choose. I'm writing very generally about the kind of information research that leads to writing a paper/article; the sort that doesn't require you to don on a lab coat and hold up test-tubes.

Google

Ultimate Tool

I recommend that before you start using Google, lay out some fundamental questions your paper/article would answer or specific information it will provide. It can be as general as an overview to a topic, or as specific as the number of petrol kiosk in a particular town. After listing them out, mark out the more specific questions and then hunt for the data first. These are usually the data sets you are going to use to introduce a particular claim or to support your theories. If there's no such data available then you can find other proxy indicators or try and switch the type of evidence. It is important that you start off checking for the availability of the data you need or whatever you're going to write would be groundless anyways.

After gathering the data you need, hunt for general articles on the topic that you are working on. These are the articles that refer to other more specific sources for information, or sites like Answers.com and Wikipedia. They serve as a directory for the topic and also to alert you or anything about the issue/topic that you might have overlooked. Often, these can also be blog entries that link up articles of related topic, much like the ones on ERPZ. When you're clear you have a general idea of the topic and know briefly the issues involved, start planning your writing, listing the arguments, the progression of arguments and the sequence you present information to make your case. Often, some information you will need to provide are things you are not necessarily aware of, perhaps the revenue of a particular firm, the market share in an industry, or the response of a CEO to a recent affair. These are the stuff you didn't initially set out to include but subsequently find rather significant.

Armed with the plan, start searching specifically for the information you need and formulate/sharpen your arguments according to these information. Unknowingly, you have actually slashed down the amount of content that you've read. By using general articles as signposts for your planning, you have drawn up the parameters of your research, something difficult when you've not read up anything or done any research. This explains the preliminary research into key and essential data you need as well as the general articles to get you started. The rest of your writing would build around these anchors that you've found in the beginning.

Then, follow through your plan as you write. This works for any volume of research, those that takes days to weeks and possibly months. For the ones where data sets have to be built from scratch either through ripping apart official statistics or carrying out your own surveys, the process would be placed between preliminary research and the ultimate planning. So happy searching and re-searching!