30 September, 2015

Plane reading, Sept 30 2015

Expert takes worth reading on economics, technology, and other interesting topics from the last week.  Plus recent news on Uber and on-demand/autonomous vehicles:

Economics and business in emerging markets

  1. Alphaville, on China SOE "privatization" of a salt company is really just ownership by different SOEs
  2. Alphaville, on bad debt in Indian banks - mostly in the highest areas of loan growth
  3. Brad DeLong, narrating the Krugman/Hamilton debate on the likely impact of China slowdown on United States
  4. NYTimes, on "India is the new China" for tech company investment/expansion due to mixture of untapped potential and openness to partnership

Economics and inequality

  1. Brookings, on research showing that externally focused misbehavior in schools raises lifetime earnings even after accounting for negative impact on learning... but only for non-poverty students
  2. Chris Blattman, on the astonishingly positive results from a Nigerian business plan competition that handed out about $60m worth of $50,000 prizes
  3. Tyler Cowen, on the London Review of Books' review of  "effective altruism" movement.  Prof Cowen links to Scott Alexandar on the same topic, who distinguishes between "man vs nature" stories when the reality of changing existing systems is more usually "man vs man."  I think that framing works for org change more broadly
  4. Tim Taylor, on wage inequality by region in the United States.  Note that it's highest in large cities with high economic activity
  5. Robert Reich, on "Economics is too important to be left to economists."  A much broader discussion than implied by title, including the observation that "Our democracy is directly threatened when the rich buy off politicians. But no less dangerous is the quieter and more insidious buyoff of institutions democracy depends on to research, investigate, expose, and mobilize action in support of the public interest."
  6. Tyler Cowen, on a study showing British cross-sectional inequality is much different than lifetime inequality.  "The poorest in any given year are not always poor for their entire lives... those who, over the whole of their life, are in the lowest 10%, [likely] only spend an average of a fifth of their lifetimes at the bottom...Whereas 36% of individuals receive more in benefits than they pay in tax in any given year, only 7% do so over their lifetimes. Over half of all redistribution is simply across peoples’ lifespans; the young pay in while they work, and take out when they retire."  I've seen a similar analysis in the US before as well, don't remember where
  7. Tyler Cowen (this time in MITReview), on how use of technology to monitor workers and improve productivity exacerbates wage inequality
  8. Bloomberg, on Dunning/Krueger type implications for investment decisions by uneducated people exacerbating inequality

Economics and politics (aka Public policy)

  1. Tyler Cowen, on Slate's February interview with John Pfaff.  Research demonstrates that prison population growth is actually driven by increase in felony pursuit by district attorneys from 1/3 to 2/3 between 1994 and 2008, not longer prison sentences.  Big implication for policies and politics of incarceration, since 88% of the increase was driven by drug trafficking - and the median amount of drugs on convicted traffickers was 48 pounds.
  2. Hein de Haas, on how growing spending in border control is fueling smugglers more than the other way around.  Very interesting.
  3. NYTimes Editorial Board, on the increasing price of access for both Democrat and Republican supporters
  4. Ryan Decker, on the generalization challenge that use of real-world datasets often produce results than can be quite situation-dependent.  One example is on the impact of raising minimum wage
  5. Futurity, on research showing zero relationship between concealed carry gun permits.  On one hand, it was done by Texas A&M which presumably would tilt pro-gun.  On the other hand, it showed zero relationship.
  6. Larry Ferlazzo, narrating the carnage in the LA public schools and plans to massively expand its use of charters
  7. WashingtonPost, on the forced shutdown of a New York co-op started under the ACA due to pending insolvency, a structural issue
  8. Mark Thoma, excerpting from an IMF interview with outgoing head Olivier Buchard on "Less obvious problems with macroeconomics" including the paradox about needing government intervention in markets in an efficient way 
  9. Simon Wren-Lewis, on arguments in UK that austerity support is a smokescreen for reducing government size rather than genuine mistaken view on econ
  10. NYTimes, on temporary visas primary use becoming visiting IT workers who train on the job and bring it back with them to India and elsewhere
  11. Alphaville, on a brain-teaser to demonstrate impact of tax code on encourage/discourage leverage

General economics and business

  1. Robin Hanson, on intuition failures in economics.  Must read.  Discusses how early commitment to price or quantity impacts whether competition is based on price or quantity.  Somewhat counterintuitively, research shows e-commerce may raise prices depending on search costs, as better buyer/seller matches are found.  Example, MIT study of the used books market.  Berkely on how search costs relate to pricing.  Also here.  And here.  
    • Under current pricing models, it seems like on-demand cars have low enough search costs to prevent price dispersion - but that just my intuition!  In a fragmented market with more opaque pricing and optionality, it's conceivable that on-demand rides could escape the "law of one price" in a way that's healthy for both platforms and drivers.  More on this in a couple weeks; it's of course possible that my intuition is not well developed on Uber...
  2. David Warsh, on narrative misunderstandings of the economic history behind the 2008 banking crisis and what may be coming next
  3. Adam Ozimek, on the coming irrelevance of behavioral economics due to increased monitoring capabilities.  Extend this much farther; real-time monitoring in all aspects of life will obviate a large amount of regulatory and legal overhead - if we want to let it
  4. Slate, reporting that lab-grown meat is currently more energy intensive than naturally grown meat (which is, basically, solar-powered).
  5. Alphaville, on research confirming that lower interest rates don't actually spur business investment.  Instead, it spurs foreign firms to borrow from foreign investors using local currency in order to exploit the yield spread between local currency assets and dollar liabilities
  6. Alphaville, on easing credit limits doesn't spur borrowing by high credit-quality borrowers, rather increases spending by low-quality risks.  Good for economy in short-term, bad for banks
  7. Brad De Long, exploring "peak human" possibility by using "peak horse" as analogous.  In past, tech has replaced machinery to make people more productive.  Will AI replace low-intellectual-skill labor?  After cars, there was little use for most horses.
  8. Chris Dillow, on initiation ceremonies increasing organizational commitment
  9. Troy Carter, mythbusting music streaming economics

General technology and business 

  1. MIT/Sloan, on learning to compete better using ordinary resources instead of overspending for temporary advantages.  While their choice of Quirky as an example is unfortunate (filed for bankruptcy last week), the core message is strong
  2. Mark Suster, on how unicorn and growth-at-any-cost mentality is ruining startup cultures
  3. NYTimes, on the increasing complexity and density of computer code in cars.  Nice piece, though the numerical comparison to lines of code in Facebook and the LHC are spurious
  4. Andrew Thompson, on non-FinTech trust-based uses of blockchain to combat counterfeit art, drugs, and other high-value items 
  5. PostGazette, on local US Attorney led initiative to combat health care fraud using a big-data driven task force - and it's lack of support from HHS in DC.  A business idea is to combine big data and qui tam lawsuits - but the concentration of wealth that fraud provides often raises litigation costs quite high.  Qui tam recovery limits of 15-25% may be enough if the government joins the action, but limits of 30% often make proceeding alone cost prohibitive for the relator
  6. VentureBeat, narrating how to square the circle between Morgan Stanley's view that browser traffic is growing at 2x the rate of app traffic with other evidence that apps capture 80-90% of mobile online time.  Both are right; Morgan Stanley focuses on "unique visitors" while others are focused on actual time.  To me, this suggests mobile web may be "onboarding" growth in use
  7. Peter Evans, a chart showing "In the past 5 years, no less than 6 large alliance groups have been established to shape the future of the Internet of Things/ Industrial Internet. They join 4 others that have been active since 2000."
  8. TechCrunch, on Salesforce's Dreamforce conference and "Data Driven Everything Remains Elusive"
  9. PostGazette, on Kraft/Heinz experiencing a "fake" SEC filing.  After a series of "fake" flight plan filings disrupting United this summer it would be interesting to inventory the opportunities to "hack" trust-based filing systems in society (such as local court dockets) that we might expect more of over the coming years
  10. Wired, on implications of pending FCC rules that may cause mfrs to lock down WiFi routers and other restrictions on software defined radios
  11. TechCrunch, on Premise - a company using (paid) crowdsourcing to gather economic data.  I really like this idea
  12. Beerud Sheth (TeamChat, Webaroo, eLance), on bots are the new app and messaging replacing OS as the platform
  13. GOOD, on MIT's camera capturing light *as it travels*.  Sort of.  Must watch this video.
  14. TechCrunch, on Apple's new vision for privacy policies.  Pretty impressive, a template other companies should follow *if they really want users to be able to control their privacy.* 
  15. BusinessInsider, on a kickstarter so men can shave with a frickin' laser.  Mazel tov, BI.
  16. Google, publishing analysis of using supply-chain thinking to disrupt the for-profit fraud market

  1. AirFacts, on the benefits of learning to fly: increases humility, community, STEM skills, psychological resilience, diversity exposure, and risk/reward evaluation.
  2. Leslie Korn, an overview of biomechanical mechanisms behind circadian rhythms.  Ten years ago I bought a blue light from Apollo Health to help adjust on my frequent trips to Germany from Pittsburgh.  In 2007 Apollo was bought by Respironics, which itself was bought by Philips in 2008.  I cannot recommend this blue light enough
  3. LA Times, on crowd physics (not psychology) being the root cause of stampedes like Hajj
  4. New Yorker, on Pope Francis and Vatican reform.  "The Catholic church is estimated to own twenty percent of all real estate in Italy, and a quarter of all real estate in Rome."
  5. Dealbreaker, updating on a home renovation in the Hamptons for anyone who remembers that Jon Corzine once stood between David Tepper and a Goldman Sachs partnership.  Things worked out well for Tepper, including buying Corzine's "dreamhouse" from his ex-wife and demolishing it, marble bathrooms and all.
  6. Stuart Taylor, on deliberate exaggeration of the "1 in 5" number for campus sexual assaults.  This topic is personal to me, in part because I was trained by PAAR as one of only a handful of male assault advisors at Carnegie Mellon circa 1997/1998 (now called survivor support network)
  7. Charles Green, on the business case for trust.  His story of a time McKinsey brought in a competitor to fix a failed project speaks volumes; I had a colleague tell me once about personally handing a refund check to a CEO, unasked, when the firm heard the client had hired Accenture to re-do a mediocre project
  8. Adam Grant (Wharton) on the benefits of not always running a cost benefits analysis (aka unexpected utility, or serendipity)
  9. FastCo, on LondonUnderground finally publishing a geographically accurate map... because someone asked for one using FOIA and LU responded with a map their engineers have used for year
  10. Volkswagon's alleged anti-corruption system.  The best (only) example of effective self-policing I know of is aviation's ASRS.  A neutral third party (NASA) takes reports, anonymizes them, and initiates investigations to ensure corrective action.  If enforcement action begins on an individual who self-reported, he can "claim" a one-time (per violation type) get-out-of-jail-free card due to his demonstrated constructive attitude as long as he meets certain criteria

Uber etc... soon to be renamed something like on-demand (mostly car-based) logistics

  1. TechCrunch, reporting that Didi Kuadi (China) has invested about $30m in Uber rival Ola (India).  And is partnering with LinkedIn.  Basically, DidiKuadi is uniting Uber's rivals under one umbrella
  2. Steve Waldman, floating the idea to use 1099 status to protect against antitrust violations - in essence, forcing Uber to use contractors who multi-home
  3. WashingtonPost, on chicanery with gas pump hidden pricing.  We've seen this a lot with airlines, hotels, and other capacity-constrained commoditized markets... will we see it with on-demand rides?
  4. TechCrunch, reporting that Lyft has moved its customer service HQ to Nashville, TN
  5. Slate, on the launch of UberPool in China
  6. TechCrunch, on the launch of UberEvents - which allows events to offer prepaid ride credits to attendees.  Makes sense, especially if they can hit a sweet spot for spend analytics/ROI including moderate protections from abuse.  Also easy feature for competitors to copy; would be interesting to think about 80/20 cost structure in targeting small number of high-attendance events with large marketing budgets vs large number of small-attendance events (bar trivia night)
  7. SideCar, on its on-demand logistics infrastructure
  8. TheVerge, on Amazon's launch of Flex service.  Amazon and Sidecar may provide significant competition for independent drivers, impacting input costs to services like on-demand transportation and food delivery.  It's not clear whether Amazon and Sidecar's driver payments are net or gross of mileage reimbursement.  $22/hr seem high net, about right for gross if averaging 15 miles/hr in a city during a shift.
  9. SherpaShare, helping drivers manage earnings/expenses/taxes from multiple platforms.  Map of city-by-city earnings/trip is here, while interesting that shouldn't be the most relevant metric for drivers.  If I drove, I'd want to know (a) $/hr paid and (b) total VMT/hr driven
  10. Wired, on labor complaints filed against other on-demand driver users including DoorDash, GrubHub, and Caviar
  11. PostGazette, on Pennsylvania's PUC denying Uber permission to operate UberBlack.  Oddly, the PUC approved UberBlack for Philadelphia suburbs in 2013, and the Philadelphia Parking Commission was able to approve its use inside the city because it is the only first class city in state.
  12. TechCrunch, on London proposed rulemaking for on-demand rides favoring existing cabs
  13. TechCrunch, on Elon Musk saying Teslas will have ~700 mile range and be fully autonomous within about three years... about three years before regulatory approval for on-road autonomy

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