Monday, July 31, 2006


Steven D. Levitt’s recent post reminded me of the urban legend a professor of mine told me while I was studying securities analysis at the University of Delaware.

I remember when he wrote the name, and I sat their confused for a moment as to the origin of the name. I then heard him pronounce the name in a less ethnic tone that made it sound like the product it was derived from. It’s still such a vibrant memory from college. I just wish I could remember the
Black-Scholes model as well.

Friday, July 28, 2006

great minds

Wow, I just now started reading Freakonomics, and have realized that the authors, whose blog I subscribe to, use the same study that I mentioned yesterday.

As much as I like to think that great minds think alike, we came to the same study for different reasons. But I still love the coincidence. Has anything like this ever happened to you?

Thursday, July 27, 2006

dating update

As it turns out, I’m not crazy. In the working paper, What Makes you Click, by Günter J. Hitsch, Ali Hortaçsu, and Dan Ariely © at MIT, they state that in strategies, “a man with a low attractiveness rating may not approach a highly attractive woman if the probability of forming a match with her is low, such that the expected utility from a match is lower than the cost of writing an e-mail or the disutility from a possible rejection.” My point in reciting their example is that if economists believe that there might be a “disutility” from getting rejected, then the disutility does exist for some people.

The authors decide to assume that such strategies aren’t used, although that’s merely for their study. And even supposing the strategies aren’t used they “cannot ultimately reject the possibility that some strategic behavior is present in the data.” All of this means that they know some people have disutility from getting rejected, and that it does exist, but that it’s hard to measure as well as the fact that people still prefer attractive mates. Moreover, the authors cite that the “market equilibrium” matches each mate to another. And of course, the reason I’m reading this and other paper is to help me find out what market I might be dealing with.

Therefore, the intense and constant rhetoric that I face from my fellow peers and friends about “nothing to lose” is an inherently flawed argument. The fact is that there is something to lose; it’s just not as big a cost to most. Also of note is the fact that past experiences and data do impact current events and possibly forecast what may happen in future ventures. Consequently, if we assume that I’ve been on the “dating market” for 8 years (since I was 15), then we can safely say that my current ratio of 0::21 (in girls who said yes to total girls asked out) is abysmal. Mind you, I’m not counting two girls because they are arguable cases. In short, neither of these girls wanted to “date” for more than two days. Trust me; you’ve probably been there too.

Some interesting statistics in this paper… “In our data, 71% of men’s and 56% of women’s first-contact e-mails in our data are rejected, i.e. do not receive a reply.” Those are not the kind of numbers I was hoping for. Fear of rejection, oh yeah, you can bet I have it now. And if you think that someone through the service might contact me, try on this finding… “56.4% of all men in the sample did not receive a first-contact e-mail at all, whereas only 21.1% of all women were never approached.”

In the end, here’s the major correlation. .71 (insanely significant) is the age correlation that the authors observed. Added, .33 (also significant) is the looks correlation. Therefore, age and looks do in fact matter, i.e. you need to be a good looking man if you would like to have a good looking woman. The authors even go far as to provide an attribute tradeoff. Therefore, it would take an ugly man (someone in the lowest decile of looks) an additional income of $186,000 a year would be needed for that man “to compensate for his poor looks,” against the good looking man who makes $62,500.

As for woman, their income factor does not have as much effect, so a ridiculously large sum of money would be needed if they would want to compensate for their poor looks. However, “these results should not be taken fully literally—functional form assumptions, distributional assumptions, and sampling error will generally influence the precise income compensation numbers.”

Personally, the utility for me as to a possible match from an online personal or dating service does not outweigh the disutility that I receive from the possible crazy people who might want to interact with me. Also of note, in mentioning that the market equilibrium will find each person a match, I believe that there is a possibility that my preference might not be in line with what would be the easy market-match mate for me. Simply put, I may not be attractive, funny, tactful, or rich enough to date the girls that I’ve asked.

My question to anyone who would like to respond… Do you know of someone whom you think has “too high” of a standard in just asking out someone? I’m not speaking of the break-ups; I’m speaking of just approaching and asking someone out. Do you know of someone who won’t ask someone out because they don’t like the way they look, and you think they’re crazy and need new glasses? In my own experience, I have yet to see anyone I know have overtly high standards just for asking someone out on a date.

Wednesday, July 26, 2006

Tax Cuts & 401k

Greg Mankiw put up the article that he and Robert Carroll wrote for the Wall Street Journal about the United States Treasury release on their study of permanent tax cuts.

The big points show that not constraining on spending while giving tax cuts is not. In their own words, “Tax relief is good for growth, but only if the tax reductions are financed by spending restraint.” Arnold Kling made sure to mention that, “Lower taxes on dividends and capital gains promote growth, even if they require higher income taxes.”

Personally, I probably lean a little more left than my libertarian friends, and as usual they are correct. However, let me ask some questions. If lower taxes on capital gains and dividends promote growth, then am I correct in assuming that this means we need to invest more? If so, then how are most people (middle class and beneath) going to arrange their earnings accordingly? Is it plausible for them to do so while at the same time getting a significant return? Do social security and government wage taxes take away a significant amount of money for these people to invest?

I would also like to know (most likely through a polling) if the majority of Americans want to keep social security because they see it as a guarantee of their money saved later. Even though investing through a 401k yields a higher return, the stories that are out there of people losing their savings are quite disheartening.

In the end, it’s about my inquisition on the gap between the richer citizens and the poorer citizens, and the relevance of arguments which state that the gap is widening.

Tuesday, July 25, 2006

nature v. nurture

Greg Mankiw blogs about the nature-nurture debate using a previously written research paper and another working paper that was recently released. Personally, I loved thinking that anyone could nurture a child into a new life, but I may not be as right as I thought I was. As Mankiw states,
“In both papers, nature is stronger than nurture for determining the educational attainment of adopted children, although both nature and nurture have some role. And in both papers, nature completely dominates over nurture for determining income.”

Well, even though I’m not adopted, I’m scared to death that my parents weren’t college graduates. Hopefully this means that if I have a child, he/she will be better off than I or my parents. Unless, of course, I adopt them.

Monday, July 24, 2006

human competition

In a much needed break from working; I had a great weekend with my friend Josh, and our mutual cohorts. While I did well within groups for a time, in the recent past (after graduating from the University of Delaware in 2004) I have found that my role within normal group dynamics has become awkward again.

This is a natural anxiety that stems from an over-zealous eagerness to see old friends. One of the problems that surfaces from my social anxiety and desperate need to impress friends is that I talk WAY TOO much. And, in the end, I forget to do the important thing that
Scott is always mentioning, which is to ask the questions and reach a “common point of interest.”

Talking too much and not asking questions though is a cyclical self-inflicted wound. In my mind, the incentive to talking is to show people my prowess in different arenas of culture and politics. Unfortunately, there are two bad externalities from this. 1) I monopolize the conversation and risk alienating others from it. And 2) When in a drinking environment (and I not being a person who particularly likes alcohol), all around nerdy type topics are not exactly going to get people interested in you, or have the laughs come rolling.

The question --
that Scott Ginsberg asks -- is, "how am I unique?" What makes my product (simply put, me) palpable? But I think an important underlying principal is to not be different for the sole sake of being different. Rather, to find what interests I and other people have in common, and to explore those interests.

Regrettably, I find myself at a competitive disadvantage. While at Klondike Kate’s (pictured above in Newark, DE) during the weekend, I remember only one friend finding it in any way amusing that I could remember -- at such a “party down” time of the night –-
Senator Ted Stevens (R) – Alaska comments about the internet being a “series of tubes” humorous. Not to mention that I don’t wear ankle socks.

So, I have a few questions. How do you interact personally (sans internet) with people who have similar interests when you don’t live in a largely metropolitan area? What do you do in order to remind yourself that you may be talking too much? Also, how do you recover in the conversation in order to try and bring in the other voices? And ultimately, apart from people who have bad social skills (and crazy or racist beliefs), do you think that there are people out there with certain interests (eg. my love of Formula 1 racing) that will never find other friends of similar interests without help from the internet?

Friday, July 21, 2006

blog crush

Ironic that yesterday I made a post about one of the working papers I read on dating. When I first searched about the topic on Google, I found out about Jacqueline Passey’s blog. I subscribed to her feed because she seemed -- and truth be told, is -- so interesting. A few days ago, Jacqueline posted about her new portrait that she’ll use for her website.

First, let me just admit that I know I’m “Johnny come lately,” on this (her comments section is PACKED with good reviews about the photo). However, I’m smitten with Ms. Passey. One of my prevailing interests with the latest photo is that she reminds me so much of someone who I had such a huge crush on when I was in college. You have to trust me when I tell you that the resemblance is uncanny.

Unfortunately, with history being the dictator that it seems to be (e.g. see:
Middle East Crisis), I will never go out with Jacqueline Passey. As it turns out, I’m not terribly attractive, an award winning economist (although I try really hard there), or a well accomplished gambler. All the same, I will be happy to keep dreaming, thank you.

Wednesday, July 19, 2006

so far I've read

Like I said on Blogicology, I’ve decided to do some research on working papers that deal with dating. So far, from what I’ve read, Raymond Fisman, Sheena Iyengar, Emir Kamenica, and Itamar Simonson write in their study that

Assuming straightforward behavior, we also find significant differences in attribute weights across genders, with males putting more weight on physical attractiveness and females putting more weight on intelligence. Further, we find that males place negative value on ambition and intelligence above their own self-rated levels.

The most significant part of their paper is that women become more selective with a larger group of men, whereas males will select more women to go out with if they have a larger group to select from.

The researchers find that that females, in general, may become more selective because their utility cost for dates is concave (more dates become costlier to them). They suggest a few reasons, most notably that there might be a “social stigma” by dating too many men.

Monday, July 17, 2006


A friend of mine who works in Thailand for Wycliffe just sent me some correspondence. She definitely has my prayers and support, and I am really thankful that I’m witness to the kind of personality that’s needed to take oneself out of your comfort zone in order to travel to the other side of the world to translate The Bible so other people just have the chance to read it.

It’s also that kind of bravery that makes me such a huge admirer of Glenn Greenwald. He stands up to criticism day in and day out.

Sunday, July 16, 2006

Cape Gazette

Have you ever noticed that only local papers hate land developers and homebuilders? It would make sense considering that the only people really affected are those buying the homes and having said homes built next to them.

Once again, in this article, you see that Georgia Leonhart has the story. Of course, as is the work on the “local beat,” this may have been a departure on the work she’s done in the past.

Point is, I’ve heard it from a reliable source that when they called K Hovnanian Homes to ask for comments, The Cape Gazette called only 2 hours before the article went to print. I guess that’s the caliber of reporting you get with your local papers.

Here’s what I want to know, what do you think about your local papers?

Thursday, July 13, 2006

NASCAR's Taking Over

The racing world is in a buzz about Danica Patrick’s signaling of a future move to NASCAR. As Juan Pablo Montoya has made his move into NASCAR with Chip Ganassi, why the heck shouldn’t Patrick want to move into NASCAR? Everyone who has a license to drive anything with four wheels on it wants to move into NASCAR. Why? Well, if you read that article about Montoya, you’ll see that it mentioned, “The elite F1 community tends to look down its nose at NASCAR's relatively unsophisticated style of racing, so Montoya's migration will give the series an air of credibility.”

As much as even I love Juan Pablo Montoya, NASCAR will never gain anymore credibility with me than it already has. The real reason for this is because at heart I am a nerd. Please, someone tell me of another motor sport where the website goes into
this much detail on what EACH team is doing. Not only that, but Formula 1 has something that NASCAR, the NHRA, and the IRL (and Champ Car) will never have, the world. It should be no secret that the US secludes itself in everything sport related.

Formula 1 has the un-enviable task of living up to itself every year. The historic past of the series continues to force every team to pump in as much money as is humanly possible in order to be crowned the best team and best driver in the series. Even many of the test drivers continue to hang around while they could be in another series as a #1 driver. Olivier Panis, Ricardo Zonta and Pedro de la Rosa come to mind as excellent examples of drivers who understand the prestige in being part of Formula 1. Yet, in the US, NASCAR has become the Hansel to Formula 1’s
Derek Zoolander.

So, what holds back Formula 1 in the US? A couple things really. First, let’s start with the cars. The typical F1 car looks nothing like a street car, and therefore seems to be less applicable then a stock car from the Nextel Cup. The caveat to that perception is that Formula 1 cars through the years have made more headway for the cars that we drive today on the road. Stock cars in fact still use carburetors. In fact, let’s take this
excerpt from Wikipedia:

The cars are rear-wheel-drive, high-powered, low-tech hot rods with a roll cage chassis and thin sheet metal covering, and are powered by carbureted engines with 4-speed manual transmissions. The engines are limited to 358 in³ (5.8 L), with cast iron blocks, one camshaft and a pushrod valve train. However, significant engine development has allowed these engines to reach exceedingly high levels of power with essentially 1950s technology.

Excellent, so this further proves that the racing that is done is for a nostalgic value. Essentially, it’s all about hot rods from the 50s and 60s. Meaning that, present day application is only applicable for people who like to work on their 50s and 60s hot rods.

Crashes are a big part of NASCAR. And even though there’s a rubberneck blood lust to crashes themselves, I still would like to see motor sports without them, as it creates fewer cars finishing the race, and obviously an inherent danger to the drivers. Yet, while it’s a COMPLETE faux-pas to touch another car in Formula 1, many tracks in NASCAR (Bristol being my favorite example) allows for a race paradigm that has cars bumping each other out of the way inherent to that track’s ideology. More exciting? Great, then why don’t you decide to “bump” that Ford Excursion next time it cuts off your Nissan Maxima on the highway?

I have a perfect example of the difference in paradigms. In NASCAR, Robbie Gordon was talked down to and made fun of by drivers for MULTIPLE seasons before he was finally relinquished of duties for the #31 Cingular car. On the Formula 1 side of things, famed Japanese race-driver, Yuji Ide, was taken out of his race seat after only four races this season for the Super Aguri team. The rumor mill had that the
FIA (the governing body of Formula 1 and the World Rally Championship) stewards politely asked the team to demote Yuji Ide until he gained more test time to become comfortable in the car.

It all boils down to excitement and ratings. But I don’t believe that the interest in NASCAR is in any way “simple” because their points system is about as complicated as the technical regulations for Formula 1. I believe the over-the-top points system in NASCAR is also one of the reasons why no one really cares at the end of the year who the champion is. Another reason why NASCAR fans may feel latent to the eventual champion is because the season itself lasts too long (over thirty races scheduled in 2006). Then again, why don’t they take off the restrictor plates at Daytona and Talladega so that we can stop having those enormous wrecks?

As much as I worry about the future of Formula 1 in America, I am thankful in finding out that even if America finally goes ahead and completely rejects it, the motor sport will still exist in large part because of the rest of the world’s support for it. I just hope a cable network still carries coverage of the races when that happens.

Wednesday, July 12, 2006

afraid to blog

This is why I’m still afraid of blogging. I understand the exchange of different ideas and viewpoints, which are best, illustrated by Greg Mankiw and his academic counterparts, like Arnold Kling, Bryan Caplan, and Tyler Cowen. But what Glenn Greenwald has had to go through for stating his own opinion scares the living daylights out of me.

I wonder if economists ever had arguments inch themselves to the sort of comments that people leave for Glenn Greenwald. I know that, personally, I would not be able to take it if people found it necessary to wish upon me such things as they have Glenn.

A move

Well, many thanks to those of you who either came here of my asking you, or followed the link from Blogicology. Currently, I’m not completely sure if I’ll post as much as I did on Blogicology, but I do know that I have outlived my usefulness there. As has been the case in the past, William has simply gone far above and beyond in publishing his own site. It’s a lot of hard work that I feel unworthy in being a part of. Of course, if Will every once and a while wants to link to me, I’ll more than welcome it. Nevertheless, he’s more in touch with what people want to read. And I, personally, want to follow in the footsteps of my hero, Greg Mankiw, which is why I’m on blogspot anyway.