Welfare economics ran into market failures because of economic man. The view that all transactions are performed by an individual actor looking only after his own interest is relevant for the pursuit of private goods, but not public. If the problem isn’t structured from the point of view of a group, then it all falls apart due to freeriding. If the economic analysis isn’t contained within a sphere of voluntary reciprocity, then the desire for each and every to fulfill only their needs tells a story of everyone taking and no-one giving.
But we don’t live as the caveman did defending a little hilltop. We live in families, tribes, cities and countries. We participate in work life and school life and sports life and associational life. When our diplomatic family would show up at a new post halfway around the world, we’d be met at the airport and driven to our housing by a couple from the embassy. Co-workers would be sure we knew where to shop, how to get the kids in school, and other pressing local customs. I was recently reminiscing with a military guy who nodded knowingly when I relayed how, for years, I had missed the strong ties of service personnel when I got out into the work force.
And because these are lifestyles, the assumption of the group and its obligations can be taken for granted. The compacts of who takes care of whom at different stages of life, over decades, makes for messy accounting. But that doesn’t mean it can’t be tracked. It just means we have yet to do so. It’s taken forty years, since a little rebellion in the 70’s, to name a labor wedge. And now there’s credit for sweat labor. And then there are the Wikipedia contributors, and many more cooperative types making cool stuff.
The independent actor, however, is so ingrained in the US psyche that the conceptualization of a group as a consumer and supplier slips easily out of the analysis. To further muck up the landscape, an institution thought to be public, acts as an economic man with regard to anyone outside the group. Take the teachers’ unions actions regarding COVID as an example. The focus is on the public health and well-being of the teachers, and the teachers alone. The initiatives of their efforts do not include the public health of the school children nor their families. There is no consideration of other public objectives or benefits to keeping children in the classroom. The services the unions are negotiating are only public to dues paying members.
Economic man is a lonely notion. Have no fear, he lives in groups! But his behavior traits are accurate and, as it turns out, groups can be selfish too. To keep it all straight, one must declare an anchoring point of view in any analysis.
All we’ve heard for the last several years is how the price of housing is going up. Up. UP! And for the most part that is true. Whether it is because Millennials are finally getting on their feet and need a place to have their own families, or whether the baby boomers are not moving to the lower priced condos and giving up their family homes, there is no doubt that there is a housing squeeze.
But seriously, for as long as I can remember, except in deep recessions, people have thought housing is expensive. Because it is! It is the largest portion of people’s monthly budget. And this distraction about the cost of a home is the most uninteresting fact one can take away from home prices. House prices are a rich reflection of the revealed preferences of a community.
An economist in the early part of the twentieth century by the name of Paul Samuelson came up with the idea that when consumers chose different products, they reveal what best suits their needs. This differed from theories up to that point which placed the burden on policy makers to decide which goods provided the greatest utility to consumers.
Samuelson’s relationship with economics is lengthy. This excerpt paints the broadest brush of his brilliance. “In receiving the Nobel Prize in 1970, Mr. Samuelson was credited with transforming his discipline from one that ruminates about economic issues to one that solves problems, answering questions about cause and effect with mathematical rigor and clarity.”
One economist, his junior by twenty years, heard the clarion call for greater mathematical representation of economic theory. Zvi Griliches contributed to a publication called Economic Statistics and Econometrics published in 1968. In a paper called Hedonic Price Indexes for Automobiles: An Economic Analysis of Quality Change, Zvi pulled apart the prices for automobiles so that he could show how much consumers were paying for improved engines or length of the vehicle or other features. By comparing the components of the cost of vehicles he distinguished between inflation and consumers revealing a preference for higher quality provided by advanced technology.
But back to real estate. The economist credited for using this statistical method (taking the price of a complex product and using data to divvy out the weighted values of its various components) was Sherwin Rosen in his 1974 paper Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition. Now this is exciting! The price of a house can tell you how much one school district is favored over another. It can tell you the value effects of violent crime, or proximity to mass transit.
The implicit prices tell us that we trade in public goods as well as private goods. We shop for city services and good roads, for youth programming and parks, as well as for good schools and safe streets. The implicit prices tell us how groups of people choose bundles of public goods. Real estate prices are incredibly rich with feedback.
Most coursework taught in a classroom setting under the guise of real estate is centered on one of three aspects: appraising, financing, and legal underpinnings. In fact, most of the reports generated around real estate feature these same three topics. The recent sales data is sliced and diced along with market times and the rates offered by the mortgage brokers.
Cornell University proves to be an exception in its course offerings which include a wide range of topics on all aspects of real property. In addition to the oh-so-common Finance and Investment class, there’s a taxation course and one on hospitality real estate finance. There is analysis of transaction and deal structuring, and advanced project management for real estate development. There is an emphasis on flushing out the business side to real property.
But the courses designed to teach the work which happens(ed) in the home has been severed from the neighborhood and become Policy Analysis & Management (PAM). The evolution of the 1920’s department of the Department of Household Management is depicted in the flow chart below. Clearly 1969 was a breaking point from the quaintness of home, a throwing off of the apron in favor of an upwards and onwards momentum to a more distinguished framing.
Another course offered at Cornell is Urban Economics and Real Estate Markets. The course description reads: “A theoretical understanding of the economic forces affecting urban land market change and development is needed for decision-making in the real estate profession… The two core models at the center of the course are the model of urban spatial structure that stems from the work of Alonso, Muth and Mills…” (Alonso, William (1964) Location and Land Use. Cambridge: Harvard University Press.)
A few years before the functions of health and human services were being detached from the geography of cities and suburbs, Alonso noted that the location of a central business district (CBD) created a spatial relationship within a city which affected real estate. While a model based on jobs and income and the commuting of a workforce was used and developed in the interplay of real estate uses in a city, the jobs of a homemaker in educating and feeding and educating her children found a new home in the Health and Human Services Departments across the nation.
Kids go back to school tomorrow after a two-week holiday break. There’s been little chatter in our area about school closures due to the new virus making the rounds. The kids do wear masks while in school and are asked to stay home if they are feeling ill. But there have been no further formal responses to the pandemic.
School performance and school boundaries are a significant consideration to families looking for a home. People can be open to several districts or specifically interested in one particular school. But the list is in place, and it delineates the possible selection of homes. Or at least this is true for those attending public schools, which runs about 88% of the student population in Minnesota
This number is reflective of the number of kids who attend private schools nationwide. One standout statistic is the range of spending per pupil. Vermont had the highest per student spending at $23,205, whereas Utah had the lowest at $8,352. Their graduation rates were different as well. Vermont pulls in a rate of 89.1 whereas Utah only has 86 percent at their lower rate of spending.
In Minnesota we’re right in the average at $13,456/pupil.
Nature had been a disrupter long before the tech giants took up residency in northern California. The world-wide pandemic both challenged old ways of life and taught us we were more equipped, perhaps than most people thought, at using technology for daily tasks without the need of travel and face-to-face contact.
Just like with the tech sector, some disruptions proved the old ways were too good to let go. Printed books were thought to go the way of stone tablets, yet more than a decade after Nook and other on-line readers were launched, soft cover novels are still sold at airport newsstands. On-line k-12 school has not proven to be an improvement in so many ways. Both teachers and pupils fail to connect, learn and be mentored for larger life issues.
Workers who transitioned to the work-from-home venue have embraced the change. From recaptured commuting hours to flexibility, they rightly feel they are better off sitting in front of a computer in a residential setting rather than a commercial one. Hence it is not surprising that the leases on downtown office space are not being renewed.
The story doesn’t stop there however. As employees go to even greater lengths to profit from the new flexible arrangement by moving to lower cost states and capturing higher quality of life attributes, employers are making noises of adjusting salaries. Why pay coastal salaries to those who live mid-country? The market is adjusting and where the new balance will settle is still in play. But it is important to note that the private salary is priced out with consideration to the employee’s access to public goods at different locations.
The future of downtown space is also in play. Which groups will see the benefits of high density, proximity to arts and music venues, walkability to all the new restaurants which are bound to reopen once we finally conquer the virus? Will lower rents bring in a new wave of occupants?
I have to say that when the credits for The Woman in the Window scrolled across our TV screen last night I was left underwhelmed. I am an Amy Adams fan, so it was easy to click on the film tile when it appeared on the Netflix selection rollout. A fire was lit. Dinner was on our plates. We were ready for a nice Friday evening at the movies.
The plot is more or less predictable. There’s a build up to a horror scene, which I’d prefer to miss. But today, scenes of Amy Adams dealing with various situations throughout the film had my brain retelling her tale. Her character is struggling with agoraphobia which is present as an outcome of a severe mental health breakdown. Her acting is the only flicker of light that holds the movie together.
I have no way of knowing the actress’s motivation in taking this role. But her skill in it made me extrapolate all sorts thoughts about the fears which are crippling so many activities in our society. The fear to leave one’s house becomes representative of the fear to take on a venture, the fear to move across the country, the fear to create and build upon something new.
Mental health is at the crux of many issues in this country. It is a complex and difficult topic, and not one people often want to tackle. Instead of your typical representation in a homeless figure, this movie takes the life a professional women to show how crippling a mental health crises can be. Amy flushes out the many angles of this experience in her portrayal of Anna Fox.
You’ll have to watch the film to see if she can turn her life around.
In addition to being good exercise for your body, walking massages the mind. Jean Jacques Rousseau was known for walking. A search will happily provide you with pages of suggested JJ Rousseau walks.
Toward the end of his life he wrote a collection of ten essay’s which are thought to be some of his most lyrical writing.
The closing lines of Troisieme Promenade sure are pretty:
Mais la patience, la douceur, la résignation, l’intégrité, la justice impartial sont un bien qu’on emporte avec soi, et dont on peut s’enrichir sans cesse, sans craindre que la mort même nous en fasse perdre le prix. C’est à cette unique et utile étude que je consacre le reste de ma vieillesse. Heureux si par mes progrès sur moi-même, j’apprends à sortir de la vie, non meilleur, car cela n’est pas possible, mais plus vertueux que je n’y suis entré.
I recently switched to an iphone after years of android use. It has been fun to compare their functionality. The ease of the transition is a tribute to Apple’s focus on the user experience. There is one feature, however, that I miss. It is Google Lens. My last phone was Google Pixel and the Google Lens icon is at the lower right hand side of the screen when you open a jpg. For instance, as I sort through some old travel photos from my youth, I often want to know where a shot was taken. Check Google Lens- Presto! It matches the image to ones on Google Maps.
I tried all sorts of methods to store and open this image from Iran on my new phone but gave up, and went back to my Google Pixel. Tapping on the picture on my old device summoned up web results which identified the location in seconds. The 4000 BC etching is located under a fortified wall at Rey Castle, near Teheran. Subsequent postings by the collective of google map supporters offered views of the image and surrounding landscape from multiple angles.
More than likely I’ll discover how to use Google Lens on my new device. But the fact that so many features are user friendly and this one is not made me reflect on how we are at the mercy of structures easily within our reach. And how we don’t make time (partly because we may not appreciate the benefits) of structures which we have yet to discover.
During the lockdown my family and I started a daily walk routine as it is good exercise and it was one of the few activities open to us. We used aps to monitor distances and times, and struck out looking for new scenic trails. I’m not sure how many times we shook our heads in disbelief that we had only now discovered so many pleasing miles in our figurative back yard.
On a recent trip to Calgary I discovered the ease and reliability of public transit. It was forced on me by the difficulty to secure a rental car in the era of Covid. This reminded me of when I took my kids on the Great Northern Railroad from Minneapolis to Glacier National Park. The line runs from Chicago out to Seattle skirting the northern most border of the US States. It appealed to me as it gave me a break from road tripping with young children and I thought it would make an impression on them. Many of the other passengers from places like Minot, Culbertson and Wolf Point used the rail frequently. It was their preferred form of transportation.
The dominance of some IT structures has made me wonder about other patterns in my life which have steered my activities. Where else have decisions kept me from advantageous experiences? What other take-it-for-granted services are people not using optimally which would make their lives better? And how can we reveal those little connectors to better engage a just-next-door infrastructure we have yet to discover?
I was a little irritated with the library folks during the whole Covid thing. I felt the restrictions on library access carried on well past the point of other ‘returning to normal’ trends. The buildings were completely closed to traffic for over a year and when they did reopen, patrons were allowed 15 minutes to retrieve their materials and leave. Finally, in recent months the branches have been open (with masks) for people to linger.
I had swung into a branch with tall airy ceilings and well spaced furniture to review a book that had popped into one of the blogs I follow. Skimming a book can give me a pretty good indication of whether I’ll want to devote time for the full read. In this case, I simply wanted to re-shelve it but given the sensitivity to the virus, I walked it back to the entrance area and book return.
I approached the lady peeking out from behind a large pump bottle of sanitizer gel (if I never smell sanitizer again it will be too soon), rubber gloved hands folded over each other just below her sky blue mask, with seemingly nothing to do. She pointed over to the book return conveyor belt. But next time, she said, I should go ahead and shelf the book myself. The protections, it seems were just for her. Protecting the next patron from virus germs I could have left on the book, did not rise to her concern. Gels, masks, gloves were for some show, but not the one that protects the public.
In order to reveal how people really feel on an issue, calculate what they will give up, if anything, to achieve their ideal.
In the last few weeks, I’ve been listening to a lot of city council people make their pitch for the upcoming election. What has struck me is the number of individuals stressing that city councils are non-partisan in nature and the goal of the (mainly) part-time citizen council is to oversee basic city services. Basic as in getting the streets plowed and the garbage picked up. There is a definite less frills more nuts and bolts type of vibe.
Which is as refreshing as a jump in the lake after twenty minutes in a sauna.
One vibrant gal from a suburb which was built in the 50’s, you know the ones with the oversized, heavily treed lots partially covered by one level homes, won me over immediately when she expressed interest in hearing from all sides of an issue. Her family moved to the area when she was one and she, in turn, had raised her kids blocks from a park with maples and oaks. In her view her role is to preserve what is good about the city so others would settle in, as her family had done.
One issue she mentioned relating to housing was the desire to catch homes that need repair before they deteriorate to the point of being irredeemable. The typical municipal reaction to this is to enforce a truth-in-housing review of homes at time of sale, along with a possible repair obligations. A policy that’s a nice, if not evanescent, thought with absolutely zero effect.
Only a small sliver of the housing in a city is sold in a year. Distress in a building is a process which happens over decades. A roof, for instance has a 22-25 year lifespan. Damage from a leaky roof would result following many years of deferred maintenance. Putting the spotlight on the properties going to market continues to leave those which need help in the shadows.
The concern is real even if the solution is opaque.
Similar homes can have a range of pricing depending on how well they have been kept. Ones with new mechanicals command higher prices. Most properties have some sort of mix; a new hot water heater, old furnace, and ten year old windows. These settle in the middle of the range. And at the lower end the buyers realize they will need to jump right in and start making updates. But in all three scenarios the home is habitable. It is a viable shelter for the new owner. And the price is substantially greater than the price of a lot in the same neighborhood.
When the deferred maintenance meets a threshold where the market no longer feels it is viable- the extra kicker maybe settling cracks in the garage foundation wall, then the price drops noticeably. It hovers only slightly about the lot cost– positioning it for a possible tear down. This is the point where a lot of equity goes wasted. If some of the core mechanicals had been better kept, or the kicker ‘last straw’ flaw been averted, one could dodge the price dip.
Here’s where the city could forestall the shift from habitable to the mainstream, to demolish and rebuild.
The city could first play a roll by abolishing any type of truth-in-sale which is a complete waste of time, and second by directing services towards homes that are on the tail end of a slide. Owners in these situations are likely to be better off living in another type of property. Perhaps they need help decluttering, or with estate sale services, or a variety of non-profits which help with such things. Perhaps health issues are keeping them from making the switch.
Offering information and connecting people to service providers could help them to move before the property becomes unacceptable to main stream buyers. This will not only keep the properties in better shape it will facilitate a difficult move for a resident to a residence better suited to their needs.
People move households a variety of times throughout their lives for a variety of reasons. Depending on your data source, Americans move every 7-9 years, with more frequent moves in young adulthood and more sedentary behavior in later life.
This makes sense. As folks move through different stages of life, both from an income stand point and a lifestyle standpoint, they want a different combinations of neighborhood amenities. These are not questions of ‘good’ things versus ‘bad’ things. These are simply mixtures of choices.
When you are young you may want to live near entertainment and restaurants. Once there are kids in the household, going out to shows and restaurants quickly takes a back seat to prioritizing daycare, schools, and after school activities. Stability of residence can be important at this stage as rearing children benefits from consistency.
If the norm is to move, to seek out new living arrangements that better suit new objectives, than wouldn’t incentives that lock people into a location be holding them back? Financial incentives such as rent control do exactly that. It discourages mobility.
And I’m not saying people who need help shouldn’t still receive help. I’m saying that paying people to live in the same set of living circumstance through all stages of their lives goes against the norm. Which leads one to believe it is a drawback in the long run, for a perceive protection in the short run.
Even as Covid-19 cases plummet, the MN Governor is not resting until more Minnesotans are vaccinated. Approximately 54% of the population has received one dose, and 45% is fully vaccinate. Eligibility for those in the 12-18 year old group just opened up last week. In order to boost the rates, the following incentives are being offer up (KSTP news):
The first 100,000 Minnesotans who get their first shot between May 27 and June 30 can choose a reward of their preference from a list of options, including:
Great Lakes Aquarium Pass — Eligible for one entrance to the Great Lakes Aquarium in Duluth. Valid until July 1, 2023. The Minnesota Department of Health will provide recipients’ contact information to the Aquarium which will mail tickets to Minnesotans who select this option.
Mall of America Nickelodeon Universe Pass — Eligible for a 30-point ride pass at Nickelodeon Universe that can be redeemed through September 1, 2021. The Minnesota Department of Health will provide recipients’ contact information to Mall of America who will send information to redeem the pass.
Minnesota Fishing License — Eligible for one individual Minnesota resident annual fishing license effective through February 2022. Must be redeemed by July 30, 2021. Recipient must be eligible to hold a Minnesota fishing license. The Minnesota Department of Health will provide recipients’ contact information to the Department of Natural Resources which will reach out to Minnesotans to complete their fishing license application.
Minnesota State Parks Pass — Eligible for one Minnesota State Parks annual pass. Minnesotans will receive the pass in the mail from the Department of Natural Resources. The Minnesota Department of Health will provide recipients’ contact information to the Department of Natural Resources which will mail the State Parks pass.
Minnesota Zoo Admission — Eligible for one adult admission at the Minnesota Zoo through September 8. The Minnesota Department of Health will provide recipients’ contact information to the Minnesota Zoo which will email information in order for Minnesotans to redeem their admission.
Northwoods Baseball League Tickets — Eligible for one reserved ticket to attend a Northwoods League baseball game during the 2021 season. The Minnesota Department of Health will provide recipients’ contact information to the Northwoods League and Minnesotans will call the ticket office of the team they select and provide their full name and address for verification to reserve their ticket. Tickets are based on availability at the time of calling. Participating teams include the Rochester Honkers, Willmar Stingers, Mankato MoonDogs, St. Cloud Rox and the Duluth Huskies.
State Fair Tickets — Eligible for two admission tickets to the 2021 Minnesota State Fair. The Minnesota Department of Health will provide recipients’ contact information to the State Fair which will email tickets no later than July 16, 2021.
Valleyfair Single-Day Admission — Valid for one Valleyfair admission ticket and the chance to purchase additional tickets for the same date at a discounted rate during the 2021 season. The Minnesota Department of Health will provide a unique code via email in order for Minnesotans to redeem this offer.
$25 Visa Card — Eligible for a $25 Visa Card to be used anywhere Visa is accepted. Minnesotans will receive the cards by mail or email from the Minnesota Department of Health or a State of Minnesota Vendor.
“We believe this is a good way to get some excitement back in it,” the governor said in response to a question about incentives in other states. “We did talk about that and continue to say ‘You know, are there other things we can do?’ I just think this one you’re not in a lottery. Like in those states it’s all or nothing. Somebody might get a million but there’s going to be a 100,000 getting nothing. Here in Minnesota, everybody is getting something.”
Minnesotans can verify their first dose and indicate their preferred reward online.
Some might think that the folks who rolled up their sleeves for their shots first missed out on internalizing these public incentives. Who wouldn’t want tickets to the MN State Fair or the Zoo? They should have waited. But more than likely the people who lined up first felt they were the most at risk, or that they engaged with people who were are risk. The Minnesotans who lined up first also privatized a benefit by getting vaccinated promptly.
It would be safe to assume that those who have yet to be vaccinated are less fearful of the virus. Maybe they are in an age group which has suffered few casualties. Maybe they themselves have few health concerns. The effort to schedule and go in for a shot has not seemed worth it to them.
Yet the public still gains when the vaccination rate climbs above 70%. So using the incentives listed above to pull these vaccine free bodies in for their shots provides a statewide benefit. And paying out incentives is actually balancing out the benefits received by the firsters.
On Friday, Governor Walz lifted the statewide mask mandate for those who have been vaccinated. His announcement coordinated with the CDC’s announcement to do the same. It took local politicians off guard, however, who turned around and extended the mandate in their cities. The claim is the risk is too great as the disparity gap is still too large.
The latest numbers show the counties in the metro are all hovering around 70%, which is the target number for herd immunity. But even out in the greater metro people at stores are wearing masks. I noticed this yesterday when I was picking up stuff for my garden. I asked at the first store and the clerk said they will continue with the policy “until everyone is vaccinated.”
Of course there are cascading stories on social media about how people are acting and how people should be acting. Discourse which battles the personal liberties versus public responsibilities debate is a national pastime– or at least a way some people need to process change in their lives. Talk it out.
But who is responsible for getting their constituents vaccinated? It’s hard not to question whether the local politicians crying fowl on disparities will be eating crow for how badly they’ve delivered safety to their constituents. Vaccines were first made available by special designation. Now they are easy to get everywhere- the state, pharmacies, community centers, health providers. If a local pol can’t handle the coordination of a free and vastly available public good, then– what?
It sets off the bat vibes that these leaders are primarily power players, and not practical cogs in the boring denouement of public life. And for sure we need power players now and again, but only, now and again. Excessive attachment to power, when pols see themselves above the nuts and bolts of public life, inevitably leads to the need for more masking.
The best take on why people aren’t showing face so far was from my daughter. “They don’t want to loose the mask because then people will think they are Republicans.”
Biden’s infrastructure plan includes $400 Billion to fund home based care for boomers so they may age in their homes. Several aspects of this expenditure strikes me as errant. Borrowing money to pay salaries is not infrastructure, it is a subsidy. It seems about as unwise as mortgaging your house to pay your gas bill. At some point your heat gets turned off and you loose your house.
Part of the plan is to extend care provisions to less wealthy people. I don’t find this problematic. It’s the part where in home care givers wages are supplemented. These folks are paid in the $12/hour range as the work is simply about oversight, and basic needs. The administration does not feel this is an adequate life wage for a worker, and for that reason it should (the moral imperative should) to be augmented with tax dollars.
Although all home care workers care in some capacity for the elderly and disabled, workers vary widely in their training and educational level. The $12 an hour wage cited in the Biden job plan refers to workers also known as home health aides, nursing assistants, and personal care aides, whose work does not require education beyond a high school diploma.
Creating a working wage job that does warrant being a working wage job takes on a shine of a planned economy.
Let’s consider another scenario. What if the home health workers raised their wages, and charged more to the boomers for their services. Families of the elderly may decide it’s not worth having grandma and grandpa live alone in a 3000 square foot home, and every month pay the utilities to basically store a lifetime of possessions. At this new rate of care, maybe it would be best if the eldest daughter(or the youngest son, or whoever is best suited) took in mom and dad. More than likely, when these now octogenarians were children, some lived in multigenerational homes.
Think of what happens as households combine. We have many more single family homes available to sell and the price of housing stays within reach of the moderate middle class. Instead of spending infrastructure money on salaries, spend it on helping families retrofit their homes to accommodate intergenerational living. Instead of keeping houses off the market and driving up housing costs, release the boomer’s single family homes back out into the market.
Always keep healthy food around was a pact we made to ourselves when my college roommate and I talked into the night on our lofted mattresses. It keeps a family together. It’s simple and it works.
Mealtime is a cattle call when the troops show up because they are hungry. Yes the TV is on, and people are checking their phones. But does that matter as much as everyone coming together at a designated point in the day? –I say no.
Spending time in the kitchen caught a bad rap in the ’70’s. Lurking about the measuring cups, blenders and double ovens had a status problem, it appears. I find it to be a great place, a refuge. A creative place where every year you learn how to make something new, like potstickers. Or discover how to rework the leftover pork tenderloin into a sweet and sour soup.
Then there is baking. The smell of cinnamon seeping through the house, whether from oatmeal raisin cookies, pecan rolls, or apple pie, it incapsulates the feeling of home. Why producers of such aromas were scorned for being “barefoot in the kitchen” is a bit of a mystery.
Fortunately it’s a bit passé to taunt women who choose to feed people for being weak and pathetic. In fact, women of the kitchen have linked to millions through the window of the internet. This cooker proudly entitles her site with 1500 recipes, Barefoot in the Kitchen. Thanks to technology the homey profession commands a private income as well as a familial service.
Even abroad women know the power of culinary expertise. This sweets chef has over 1.4 million subscribers and the video for a fancy treat of fine bread dough wrapped decoratively around a nut stuffing, all soaked in syrup, has 3.3 mil views. It was posted a month ago.
It appears there are many paths which lead to power and wealth.
Some words or phrases latch onto you like thistles while walking through blooming prairie grasses. They tag onto your pant leg until you notice them and pluck them off for a closer look. Labor wedge has such a nice visual, a separation between what a model is predicting and the empirical data, I think that’s how it wedged its way into my thoughts.
It seems to be a fairly new macroeconomic term, defined at the start of a paper by Loukas Karabarbounis, University of Chicago, as:
Do fluctuations of the labor wedge, defined as the gap between the firm’s marginal product of labor (MPN) and the household’s marginal rate of substitution (MRS), reflect fluctuations of the gap between the MPN and the real wage or fluctuations of the gap between the real wage and the MRS? For many countries and most forcefully for the United States, fluctuations of the labor wedge predominantly reflect fluctuations of the gap between the real wage and the MRS.
At different time periods, American households have found it advantageous to substitute out paid work for something else. They preferred to spend their time, perhaps at home, performing valued activities for their families. Or perhaps the value was found in associational life of another nature. De Tocqueville said years ago that Americans are apt at associational life.
More interesting are the measuring questions. How do we categorize where people have the opportunity to perform duties which build capital for themselves and, most probably, their communities? Where are they exerting energies in lieu of showing up for a paycheck?
Sorting by their economic benefit seems sensible. If the ambitions fall under health related activities (staying out of the workforce to care for an aging parent) then the credit goes to pubic health. If education (during these Covid times people are staying out the workforce to supervise their children’s education) is the goal then shuffle those hours to the public education column of the ledger. If governance (people are choosing to spend their time on park boards or citizen commissions instead of working) is where the hours are spent, then register the tally under civics, and so on.
A better understanding of these motives and ventures will smooth out the prickly problem of labor wedges.
Have you ever noticed that there are yes jobs and no jobs? Attorneys are likely to say, “No, that’s too risky.” What would we do if all entrepreneurs listened to their accountants when they called up to say, “No, we can’t afford that!” Then there are processing types of jobs who like to say, “No, that’s not included in your policy.” Luckily there are visionaries that say, “Yes, let’s build a skyscraper!” And keep saying yes to all the naysayers as they wade through setbacks and plan approvals. And there are journalists that say, “Yes, we can meet the deadline for that story!” Then there are the killjoys, “No, no, no drag racing is not allowed, even if everyone is home on Covid lockdown.” But seriously, do you think Elon Musk says yes or no?
When you read something like this:
Online registration launched at noon but was disrupted within an hour as the website was overwhelmed with a peak of 10,000 hits per second. The site closed to new registrants at 2 p.m. in order to serve people stuck in a waiting queue, but in the end connected more than 5,000 people with vaccine appointments this Thursday through Saturday.
The EPA has designated January as National Radon Awareness Month. “Test. Fix. Save a life.” is their tag line.
Those of us in the business of helping folks buy and sell homes, have been hearing about the health concerns emanating from radon seeping into homes for the past twenty years. In the first part of the 2000’s, health department officials encouraged buyers to test for radon at time of purchase. Radon was listed alongside a variety of other environmental concerns on the state of Minnesota mandatory seller’s disclosure.
Consumer response to radon did not match the government’s concern, and in 2014 the MN Radon Awareness Act went into effect. The variation in apprehension is best represented by the amount of space now dedicated to the topic in the seller’s disclosure. Lines 279-309 (2020 version) of the body of the disclosure speaks to radon alone–more lines than wells, septics, or any other topic. And two pages of information regarding the detection and harm of radon gas were tacked onto the end. Out of a twelve page disclosure virtually three pages, or one quarter of the document, is now devoted to radon (as opposed to foundations, or water penetration, or roofs).
The new disclosure established an industry standard which dictates the seller is obligated to mitigate a home which tests above the 4 cPi/L established by the EPA. It’s unclear if buyers request the install due to fear for their health, or because they don’t want to be the sucker-who-got-stuck-with-the-bill at a later date, when they go to sell.
Over the course of implementing tests and installations there have been some inconsistencies which have resulted in the need for a final arbitrator. For instance, a few years ago an inspector turned off the air exchange system that a seller had installed in his 1920’s home to enhance the heating and cooling functions. The EPA guidelines state that HVAC systems should be running as normal during the test. However, since this air exchanger was located in the attic (not in the basement) the inspector felt it was an extraneous appliance and turned it off.
The reading came in slightly over the benchmark of 4 cPi/L. As it had already been a contentious negotiation the seller refused any additional compensation. The buyer choose to use $1200 (compensation negotiated for a cracked clay chimney flu) on a radon mitigation system that would not be necessary had the exchanger been left running. They chose between fire safety and radon safety.
By early 2019 licensing of inspectors who perform radon testing was implemented to handle the inevitable variations in the use of the testing apparatus, including decisions regarding air exchangers. Since the MN Radon Awareness Act went into effect, a whole industry of inspectors (tests range from $180-$240) and mitigation installers (system installation ranging from $1000-$1800) as well as a bureaucracy to monitor and deal with complaints, has been established.
The story the Minnesota Health Department has been stressing is that cancer is the leading cause of death in the state. But the leader is all cancers. Mortality rates for cancer vary within demographic groups, but generally, lung cancer makes up around 25% of cancer fatalities. Radon is called out as the second leading cause of lung cancer after cigarette smoking. What they don’t say is that radon is lumped in with second hand smoke and accounts for just 12% of the cases of lung cancer.
Feel free to chime in if I’m doing my math wrong, but a quarter of all cancer cases is around 2500 (lung). Then twelve percent of that number is 2500 x .12 = 300. In other words, death due to radon isn’t even on this top ten chart. It accounts 38% of the souls that commit suicide.
From the keys on my calculator, I have death from radon registering in at no more than 5 per 100,000. Below this grouping of accidental deaths which make up 6% of all deaths (from MN Department of Health):
Falls (2.7%): 21.1 per 100,000 population
Accidental poisoning: (1.6%) 12.8 per 100,000 population
Motor vehicle (1.0%): 8.1 per 100,000 population
The average Minnesotan is four times more likely to die from a fall, twice as likely to be accidentally poisoned and slightly more likely to die in a car crash. The claim that more than 40% of homes in Minnesota are contaminating people’s lungs with radon gas and killing them is not jiving with consumers’ personal experiences.
Nationwide Agenda from the EPA
One has to assume that the MN Health Department is following a directive for radon procedures from the EPA’s national agenda. However the EPA offers not one article newer than 2003 on its website to validate research tying lung cancer to levels of radon in homes.
A paper from Korea, which looks at the topic using measures of radon in homes, was published in March of 2016 and is the most recent academic paper I could find. It too references almost exclusively research papers written prior to 2000. Ji Young Yoon et all (Department of Humanities and Social Medicine, Ajou University School of Medicine, Suwon, Korea) wrote “Indoor radon exposure and lung cancer: a review of ecological studies” which was published in The Annals of Occupation and Environmental Medicine. There had been no studies to date in their country. They found:
For Korea, we observed tremendous differences in indoor radon concentrations according to region and year of study, even within the same region. In correlation analysis, lung cancer incidence was not found to be higher in areas with high indoor radon concentrations in Korea.
Scanning the bio’s of the faculty at the College of Design at the UMN, not one cites an interest or expertise in radon. There seems to be a lack of interest in funding or pursuing this topic.
How can we be following guidance that doesn’t appear to have been updated or even reviewed in the last ten years?
That was then this is now
Furthermore there has been a dramatic decrease in lung cancer’s claim on lives.
The death rate from cancer in the US declined by 29% from 1991 to 2017, including a 2.2% drop from 2016 to 2017, the largest single-year drop ever recorded, according to annual statistics reporting from the American Cancer Society. The decline in deaths from lung cancer drove the record drop. Deaths fell from about 3% per year from 2008 – 2013 to 5% from 2013 – 2017 in men and from 2% to almost 4% in women. However, lung cancer is still the leading cause of cancer death.
The American Cancer Society estimates deaths from all lung cancer in MN in 2021 will come in at 1950. Twelve percent of this is 234.
Time has changed the circumstances but there has been no release, or at least, re-evaluation, of the protocol. It’s like everyone moved-on and no one told the bureaucrats. So they keep RADON at the top of their checklist of ‘to-do’s. Meanwhile a whole industry of inspectors, installers and licensing and compliance people are settling into a new market.
It’s that mindset that if, ‘We can save one life!’ Then it is all justified. Yet–if 2020 has taught any lessons it is, that even in lives, there are trade-offs.
In 2019 closed home sales in the 16 county greater metro area (Minneapolis Area Association of Realtors) came to just shy of 60,000 transactions. Take out new construction (10%) and townhomes (25%), and take out a few for opting out of radon testing assuming 36,000 test were performed. A radon test performed by a now licensed inspector averages $200. The (conservative) amount spent on radon testing in 2019 totals $7,200,000.
The MN Department of Health estimates that 40% of homes in MN will test over the benchmark set by the EPA as hazardous to one’s health, or 4 pCi/L. That would lead us to expect that 40% of the homes tested high and negotiated the installation of a radon mitigation system into their purchase. At an approximate average cost of $1200, that comes to a total expenditure for the state of MN to (36000 sales x .4 x $1200) $17,280,000.
Based on these numbers, Minnesotans spent nearly $24,480,000 on mitigating radon in 2019. The tag line from the ‘EPA Test. Fix. Save a life’ promotes an image of each install resulting in fewer deaths to cancer. But is that true?
The amount of money our metro community spent on radon is a flash in the pan compared to a state budget or even a (metro) county budget. But $24,480,000 for community associational groups, who are on the ground interfacing with those struggling with mental health and substance abuse, it is a pot of gold. And that’s where the money should be going. When a 70+ year old passes, it folds into the course of life. The impact of a father OD’ing, leaving young children behind, or the death if a youth, high on the latest street drug, will galvanize community effects that reverberate, even to the point of burning down a mile stretch of buildings.
Wouldn’t our communities be better off by spending that $24,480,000 on mental health to deter suicide? Wouldn’t this, for instance, help with community policing? I say yes.
Motivations and Spheres
The difficulty, of course, is that we can’t transfer the $24 mil from the radon pocket to the mental health pocket. Government used their ability to pressure a commercial endeavor to set up the radon industry. In fact, with the death rate for lung cancer dropping, it almost feels like the health officials are spurred onto be more aggressive. “We’re doing so well making widgets, lets make more!”
Unfortunately this is a business mindset, for work in the private sphere, one that seeks to expand and grow. The public good mindset is quite the opposite. Since the work in the public sphere is often performed to prevent something from happening–as in this case, to prevent lung cancer. Once that is accomplished, activities should cease, and resources reallocated to other demands of the public that now climb up to a higher priority.
In the meantime, the industry standard for radon testing, at time of a house purchase, has created paying jobs for inspectors and bureaucrats. Quite naturally, their motivation will be to support this new structure from a private point of view. It is not part of their employment to evaluate whether this the best use of societal funds. The inspectors and installers and continuing ed teachers and state licensures and public health workers will support the process because it pays the bills that support their families.
What happened to the feedback loop? Where in the system should there be a check to see if programs are on the right track? Feedback has been stifled because to criticize the noble cause of saving life has not tolerated.
What I am and what I’m not saying
I am not saying I have the expertise to validate or deny the tie of radon in homes to lung cancer.
I am pointing out that public health officials have struggled to get this issue to take traction in the public mind. I am saying that no research in the last fifteen years has validated our present path to safety (and one study has countered it). I am saying that an industry, in the private sphere, has sprung from these government actions, draining over $24,480,000/year from community funds for this issue. I am saying death rates from lung cancer have plummeted in the last ten years. I am saying there is no feedback loop to public officials to demand a review. I am saying it is no longer good enough to make one agenda and then push it through for a decade without any consideration that time alters all things.
For a generation there has been the activist approach in government. Select a cause; implement it nationwide; get the talking points out to all the communication outlets so it is heard in stereo; then never relent. I am saying that this is no longer good enough.
According to research by Wallet Hub, here are the top five states in order:
‘Health & Safety’
‘Education & Child Care’
Raising a healthy, stable family sometimes requires moving to a new state. And the reasons for moving are often similar: career transitions, better schools, financial challenges or a general desire to change settings. Wants and needs don’t always align in a particular state, though. For instance, a state might offer a low income-tax rate but have a subpar education system. However, families do not need to make these kinds of tradeoffs. They can avoid such problems by knowing which states offer the best combination of qualities that matter most to parents and their kids.
The column on the far right is title ‘Social Economics.’ The full report is here.
The Chinese concept of “face” (aka 面子 or miànzi) refers to a cultural understanding of respect, honor and social standing. Actions or words that are disrespectful may cause somebody to “lose face” while gifts, awards and other respect-giving actions may “give face”.
For good or for bad, Americans’ preoccupation with being right and transparency, seems to have folks battling-it-out on every single issue. Calling people out in public. Pursuing them until they are fired. Demanding video to confirm or deny what did, or did not, happen.
There is more at risk than your own embarrassment when you act to loose face, those near you are affected as well. So they act accordingly.
Raising your voice with someone in public is strictly frowned upon. Causing a scene makes bystanders lose face through embarrassment suffered on your behalf. They may actually scurry away from the scene to save face! Even if you win whatever argument, you’ll lose as a whole.
Don’t misunderstand my allegiance to the individualism and pursuit of the truth facilitated by our democratic system. It’s just with a public health crisis impacting our economic activity, I’m wondering if there is something to learn from those who start all solutions from the communal vantage point. If, by allowing some people, or groups of people, a little slack in making the wrong decisions, we will move more quickly to plan B, C or D? By letting people save face we skip that time delay of digging-in to hold onto poorly conceived territory.
I sure don’t grasp the fine tuned logistics of Manzi. But the Chinese have a whole social capital structure in Guanxi-based corporate social capital tied into their business dealings. There is an understanding and acceptance that social transactions are a component of economic outcomes.
Allowing people to be wrong at times without a public airing seems to be a way to keep the whole machine purring gently. Can’t we just let some arguments die without an investigation? After all that’s how we live our lives. You’ll strike out as a parent if you berate your kid when he’s up to bat, and your marriage will be stinkier than the garbage that your husband forgot to pull to the curb if you make a scene out in front of the neighbors. We evaluate which battles to fight all the time.
Maybe saving face has a place on this side of the Pacific.
Lots of folks are speculating about what the world will look like once people emerge from the Covid induced hibernation. Zoom, Teams and other internet mediums have shown how it is possible to run companies and services remotely. But will people use this flexible employment opportunity and choose to live elsewhere?
One way to consider this is to look at why people moved before Covid-19. Porch.com is a home remodeling site and tracks this information. On average people relocate every seven years, and people don’t take it lightly. As Porch explains:
Moving is a hassle. From boxing up one home to finding another, facing a move can feel like scaling Mount Everest. It’s no wonder Americans have been moving at decreasing rates since the 1980s. In fact, the moving rate in America reached its lowest in 2018 since 1948, when the U.S. Census Bureau began tracking moving rates.
Buyers diligently write out a list of wants and needs when they start their home search. Some of these criteria change of the course of evaluating all the amenities that different areas have to offer. One in four (on Porch’s sample of 1000) said that more space was the greatest driver for a move. Realtor Magazine broke the other reasons down by percentages:
Desire for a larger home: 26%
Desire to own, not rent: 19%
New job or job transfer: 11%
Desire for a better neighborhood: 9%
Separating from a significant other: 6%
Establishing own household (e.g. moved out of parents’ house): 6%
Desire to be closer to family: 5%
Desire for a shorter commute: 5%
Only 5 percent (said) they made a decision based on commute times. A job relocation prompts a greater response. Still–few buyers consider distance from employment as a significant determinant. Perhaps we should consider how many types of jobs are really affected by the ability to dial-in from a home office?
Anyone involved in the construction or maintenance of built structures (plumbers, sheet-rocker, bull doze drivers, HVAC contractors) will always drive to job sites. Then you have all the service providers who interact face-to-face and hence are tied to location such as k-12 school teachers and administrators, nurses and hospital staff, lab workers. People who build stuff like workers in a production plant are also anchored by their workplace location.
That leaves white collar jobs such as attorneys, accountants, mortgage underwriters, IT workers, architects, engineers and actuaries. Many of these jobs have already provided opportunities for their workers to work remotely. And as some of these jobs grow to include management and partnership opportunities, it is less clear that the full-time remote option would be available. A transition to more of a business ownership role would require better proximity to clients and/or employees.
I speculate that remote work won’t send homeowners off to new locations as much as their home’s floor plan. With more time spent at home, the functionality of their living space comes sharply into focus. Many will decide they need more space. Or it maybe the issue of how the space is distributed. An accountant might be fine with spending one day a week wedged in a cinder block space in the basement laundry room of a 50’s rambler, but becoming a full-time home office worker will demand a more comfortable office with appropriate buffers from family life.
This should make We Work types of built-place solutions more popular, especially in neighborhoods with smaller homes which are more difficult to expand due to limited lot sizes. Suburban neighborhoods may have more elbow room, but residents here may feel overwhelmed with the increased together-time. Whereas suburbanites used to enjoy their anonymity, perhaps this will diminish when a bunch of them no longer depart to their other lives across town. Those who seek the old sense of distance and privacy may shift out to the third tier suburbs and beyond.
Maybe the post-Covid environment won’t be about people moving away from their present communities as much as employers reaching across the country into a larger pool of talent. There will be community upsides to more folks working from home as well. Keeping people out of cars and airplanes will give back more time for family work, free up roads from congestion, and reduce pollution. Overall the great work-from-home experiment of 2020 will contribute to increased productivity in both the private and public spheres.
This week’s local neighborhood newspaper reported on a mom type volunteer doing the homey thing and stitching up masks for anyone who needs a buffer from the virus. She puts a plastic bin of them on the sidewalk in front of her home, and only asks that you donate an extra cotton shirt if you have one to spare.
On Wednesdays, Moira Knutson sets out two big plastic storage totes on the concrete walkway of her home. One is empty, for donations of 100% cotton shirts, and the second is full of patterned masks. Anyone who happens to be walking by is welcome to take a mask from the bin, free of charge.
Like many people, Knutson was first motivated to sew masks for health care workers when the pandemic began but is perhaps unique in that she never stopped. By her “guesstimate,” she’s made about 2,000 masks since March.
Wikipedia was founded almost twenty years ago and has thrived on a volunteer-contributor model. A paper written by Benjamin Mako Hill while at MIT evaluates this form of collective action. His analysis studies why Wikipedia succeeded whereas seven previous attempts, which involved the general public giving of their time to build an online encyclopedia of knowledge, did not. The paper is called Almost Wikipedia: Eight Early Encyclopedia Projects and the Mechanisms of Collective Action.
Abstract: Before Wikipedia was created in January 2001, there were seven attempts to create English-language online collaborative encyclopedia projects. Several of these attempts built sustainable communities of volunteer contributors but none achieved anything near Wikipedia’s success. Why did Wikipedia, superficially similar and a relatively late entrant, attract a community of millions and build the largest and most comprehensive compendium of human knowledge in history? Using data from interviews of these Wikipedia-like projects’ initiators and extensive archival data, I suggest three propositions for why Wikipedia succeeded in mobilizing volunteers where these other projects failed. I also present disconfirming evidence for two important alternative explanations. Synthesizing these results, I suggest that Wikipedia succeeded because its stated goal hewed closely to a widely shared concept of “encyclopedia” familiar to many potential contributors, while innovating around the process and the social organization of production.
Note that last line: “…because its stated goal hewed closely to a widely shared concept of “encyclopedia” familiar tomany potential contributors.” The shared objective was clear.
Since then, the Covid Tracking Project—run by a small army of data-gatherers, most of them volunteers—has become perhaps the most trusted source on how the pandemic is unfolding in the U.S. The website has been referenced by epidemiologists and other scientists, news organizations, state health officials, the White House Coronavirus Task Force, and the Biden transition team. There are other reliable sources for pandemic statistics, but the project stands out for its blend of rich, almost real-time data presented in a comprehensible way. “I think they’ve done extraordinary work and have met an important need,” says Jennifer Nuzzo, a senior scholar at the Johns Hopkins Center for Health Security, which publishes its own set of pandemic data (and draws some information from the Covid Tracking Project). “They’re tracking things that aren’t being tracked.”
The project is a demonstration of citizen know-how and civic dedication at a time when the country feels like it’s being pulled apart. Yet it’s confounding that, almost a year into the pandemic, the Covid Tracking Project is doing what might be expected of the U.S. government. “It’s kind of mind-boggling that it’s fallen to a group of volunteers to do this,” says Kara Schechtman, one of the project’s early volunteers, who’s since become the paid co-lead for data quality.
Work–Not for a salary, but for the public
The crafter, the contributor and the Covid tracker all have something in common. They engaged their services once they found a worthy goal. This, in combination with extra time on their hands, as well as a skill that could clearly be leveraged toward a windfall result, motivates the workers to step up. Notice that the goals fall into public benefits such as (pubic) health, (public) education and (pubic) governance. And this just-in-time response, especially when the need is great, out performs the established bureaucratic system.
These are all examples or work in the public sphere.
Externalities can be difficult to calculate. What is the cost per person to a community exposed to smog, or the damages from water laced with lead in Flint? Often times these figures are settled in court. But management consulting companies can also be in on the game. Take this story about Purdue Pharma as reported in the New York Times.
When Purdue Pharma agreed last month to plead guilty to criminal charges involving OxyContin, the Justice Department noted the role an unidentified consulting company had played in driving sales of the addictive painkiller even as public outrage grew over widespread overdoses.
Documents released last week in a federal bankruptcy court in New York show that the adviser was McKinsey & Company, the world’s most prestigious consulting firm. The 160 pages include emails and slides revealing new details about McKinsey’s advice to the Sackler family, Purdue’s billionaire owners, and the firm’s now notorious plan to “turbocharge” OxyContin sales at a time when opioid abuse had already killed hundreds of thousands of Americans.
Later in the article they tally those deaths up to 450,000 since 1999. Those, of course, are just the fatalities. There are no numbers offered for the hours that went into counseling the addicts before they OD’ed, or all the lost productivity an addict can bear on their support group. Neither of these costs were the costs concerning the McKinsey accountants. The number crunchers were concerned with the amount necessary to buy Purdue Pharma’s distributers, the local pharmacies like CVs or Walgreens, out of the discomfort of grieving mothers.
The presentation estimated how many customers of companies including CVS and Anthem might overdose. It projected that in 2019, for example, 2,484 CVS customers would either have an overdose or develop an opioid use disorder. A rebate of $14,810 per “event” meant that Purdue would pay CVS $36.8 million that year.
I’m not sure how one of the most prestigious consulting company in the world came up with $14,810. I’d truly be curious to know what went into the formula to calculate this externality. What dollar transfers were tracked between the group of heartbroken survivors and their pharmacies following an overdose that added up to $14,810? How did the rebate get summed up and presented to Pharma’s management as a viable expenditure in the form of a rebate?
Maybe the point is that an accounting of this nature is already in play. If a market price was calculated for a social cost buyout in this scenario, most probably it is a frequent calculation. So what is the McKinsey method? Inquiring minds want to know.
Prevent or manage various conditions, including heart disease, high blood pressure and type 2 diabetes
Strengthen your bones and muscles
Improve your mood
Improve your balance and coordination
The faster, farther and more frequently you walk, the greater the benefits.
After a section about technique and goals and progress, Mayo says, ‘Starting a walking program takes initiative. Sticking with it takes commitment.’ You see this costless effort toward your health takes work. Work because if you don’t do it you will lose out.
In the is-it-private-or-is-it-public game, I agree that a home is a private good. The event which makes you a home owner is a closing, which in Minnesota, is usually held at a title company. On the chosen day the buyers and sellers sit down (pre-Covid) and the buyers sign up for a mortgage to finance the purchase while the sellers sign over a warranty deed. Done deal. No take-backs. The fees include a little state tax and filing fees so the documents are filed publicly in the county recorders office.
The process almost seems trivial but it so powerful. This singing over of a title and its public recording in a government office is the most significant feature of private wealth in the US system.
Interestingly, there are a whole assortment of local norms and customs revolving around closings across the United States. Most states either close at the table or over an escrow period. In Wyoming, however, real estate agents conduct the closings. Also specified and unique to almost every state is a foreclosure process. Most weigh heavily on consumer protection. And here is an interesting table breaking down all the nit picky processes and fees.
Owning a home is a staple of the American dream. Owning a home ties you to a community where you participate in measure of all public venues: public safety, pubic schools, public transportation, parks trails and the environment, governance and civic pride.
An exchange between women on the streets of Lisbon some forty-five years ago seems straightforward enough. Very free market! But there is more to the story than the image of one women clutching a porte-monnaie and another wrapping the fresh catch of the day. More than likely these two have known each other for years, perhaps the families have known each other for generations. Over those many interactions standards have been set, expectations established and met, and even some pricing adjusted if one had run into hard times. The social component of this exchange is in that picture too.
When I was a girl, I used to love the chaos of open markets like the Addis Mercato. The mish mash of it all. The skill of barter. My parents always ask for local advise before heading out in order to know the going ‘foreigner’ rate of things. That way we’d at least have some idea of an appropriate price to pay. A market brings together buyers and sellers who agree to an exchange. In this setting it is money in trade over a rickety wood stall for some durable good.
With Covid on everyone’s mind, it was recently asked: “What is the nature of a marketplace for a vaccine?” When it comes to health and saving lives we always get a little squeamish about accounting for things, for seemingly putting dollars to lives. But even if only in a hazy subconscious way, people still make these choices which involve resources.
Who is at the piazza for vaccines? The buyer is the worldwide citizenry, starting with the most susceptible and to those who have the greatest chance of being a spreader, to everyone else. Who benefits from the trade? Everyone. Who is the seller? Here’s the tricky part. The sellers are a collaboration of the scientific facilities who research and develop, the drug manufactures and some type of government agency.
If you question whether these are linked by an overlay, try to separate them. The researchers have knowledge but need funding. The pharmaceuticals can produce with knowledge, but can’t afford the researchers. The government representing the will (in theory) of the people and can use their money to pay the researchers, but is denied the ability to be a producer as history has shown that this is best left to the pharmaceuticals. But something is different in the mechanism of the interaction between these three. They are operating in a separate economic sphere.
So we’re stuck with all of them. Mother Nature has done a great job of providing the researchers the need they usually have to demonstrate. Hence, the funding process has gone well. Now the two other collaborators are weighing their investments, risks, and tradeoffs. The formal representatives of the people know the profits to the people from a fast turn around on a vaccine is high. There is a large and immediate benefit from scaled-up vaccine production.
Something is different for the pharmaceuticals. For although they share the umbrella objective of providing lifesaving Covid-19 vaccines, their stand alone sphere of economic activity is one that operates in the realm of the profit motive with assurances of property rights. Remember that, at least in the US, they do business in the private market sphere by design. Their incentives and risks are no longer in step with the two public sphere entities.
At these juncture points, where the two systems meet, it can be uncomfortable. At these seams, resources can by hijacked, which makes people warry. And this is true through the ever cascading layers of economic behavior within a system. Which explains the necessity to pull the players apart and figure out which stage is hosting their production.
If the women of Lisbon could figure it out, I’m sure we can too.
That’s the title of an article in Huff Post which pens some interesting history on the discipline. Go figure the first women admitted- Ellen Swallow Richards— to MIT is credited with generally credited with its development back in 1876.
Far from regressive the aim of the coursework is described here:
At the Women’s Laboratory, Richards turned her scientific attention to the study of how to make home life more efficient. According to the Chemical Heritage Foundation, “Richards was very concerned to apply scientific principles to domestic topics — good nutrition, pure foods, proper clothing, physical fitness, sanitation, and efficient practices that would allow women more time for pursuits other than cooking and cleaning.”
The categories under the umbrella of home economics today have expanded to seven: Cooking · Child Development · Education and Community Awareness · Home Management and Design · Sewing and Textiles · Budgeting and Economics · Health and Hygiene .
An enhanced understanding of these directly effect community engagement from health to housing, governance to safety. Such a shame to have lost fifty years of home focused education to a stigma.
When I was young 50th wedding anniversaries were common. The local golf course was the venue for gatherings and cake, and for testimonials from friends and relatives. Stories about the young couple’s meeting and courtship, and then marriage and the crazy baby years, were spun out over the white table clothed tables. Maybe there were even stories of difficult times and persistence. In today’s world an announcement about an anniversary surpassing the 30 year mark is commented upon, oddly with: WOW! Congratulations!!
This most basic public of two, (as the property they share is available to them both and actions of one effect the health, wealth and well-being of the other) continues to be threatened by a considerable risk of dissolution. “About 90% of people in Western cultures marry by age 50. In the United States, about 50% of married couples divorce, the sixth-highest divorce rate in the world. Subsequent marriages have an even higher divorce rate: 60% of second marriages end in divorce and 73% of all third marriages end in divorce.”
You would think the benefits of a longer life would be an incentive for all those folks to stick together. The CDC reports: “Previous studies have found that married persons have lower mortality rates than unmarried persons, attributable to either selectivity in entering marriage (i.e., healthier people are more likely to marry) or health-protective effects of marriage, or a combination of the two (1,2). ” Even in the COVID numbers we find “strong and stable families seem to be more resistant to the pandemic.”
Things only get worse as people age and live alone which leads to a crisis of loneliness. In Minnesota the total number of housing units is 2,477,753. With the total population at 5,639,632 the average number per household ends up at 2.49. So everytime you can think of a household made up of more than two people, there is someone living alone. The estimates I saw came in at 20-23% of the population. That’s a lot of singles.
So what gives when the advantages of coupling are out there for all to see. I’m starting a list:
With both parties in the work force, the short term transactional nature of business sub-plants the long term ambitions of a social contract.
Fear of being duped -don’t take it.
The transactional measure of giving ‘enough’ should be replaced by the social measure of giving their best effort.
Lack of celebrations that recognize couples in front of an audience.
No standards for friends and family to support or constructively comment.
Avoid failing at marriage by not getting married.
The data proves that marriage is good for us. So why folks don’t invest a little more work in staying together is odd to me.
Health care providers incorporate a variety of incentive methods to encourage healthy behavior. Many HMO’s will pay $25/mo toward a gym membership fee if their member goes to workout twelve times in a month. In effect they are internalizing the externalities of poor future health by inducing members to live a healthier lifestyle. The numbers must indicate that $25 is both enough to change behavior and in doing so avoid future medical procedures.
This transaction all occurs within the same group, those covered by an HMO’s policy. The trade of cash towards a gym fee benefits the same people who will then incur fewer medical costs in the future. But what about a hybrid trade that included beneficiaries outside the group?
Obesity in the US has been on the rise for a number of years. It is becoming a leading public health crisis as rates of obesity among Americans are running above 40% in all age groups. The CDC outlines a number of health effects that stem from carrying around excessive weight.
One remedy is weight-loss (bariatric) surgery. There are several procedures that help you lose weight which lowers your risk of medical problems associated with obesity. The cost of weight loss surgeries can range from $14,000 to $23,000 and are being covered more frequently by health insurance.
Since there are also downsides to surgery in general, what if the HMO tried an incentive program to get the member to a healthy weight? Say the cost was determined to be $20,000 for the surgery, and the member was considered to be 80 pounds overweight. Say the sum of the surgery could be divided up over a five year time span where the member received a portion for every 20 pounds lost, the HMO retained a portion and, a single mom in a third world country received food subsidies for a year.
A recent contest found that the most compelling argument that resulted in the highest philanthropic donations was a scenario structured in a similar fashion. I describe this structure in the post Philosophy and Philanthropy. Perhaps a late middle aged mom has served her family diligently, and in the process lost site of her own needs. Perhaps she has gained a bunch of weight that she can’t seem to shake, at least not for herself. But if you gave her the option to feed a single mom with five kids, maybe she would see her way to bringing her own weight in line.
Amy Finkelstein’s video for MRU about the economics of mammograms just popped into my email. She and her colleagues are wondering about the efficacy of the present policy for screening for breast cancer. The blurb following the video explains.
One in eight women will be diagnosed with breast cancer. The current recommendation is that women should receive annual mammograms starting at age 40. But who is actually following this recommendation, and does that affect the test’s efficacy? MIT’s Amy Finkelstein and two of her coauthors, Tamar Oostrom and Abigail Ostriker, explore this question in this video. This video is based on the following paper: Screening and Selection: The Case of Mammograms Liran Einav, Amy Finkelstein, Tamar Oostrom, Abigail Ostriker, and Heidi Williams https://economics.mit.edu/files/20062
Past studies suggested dividing women into two groups in order to tackle a public health response to cancer: those under age 40 and those over age 40. Once over forty years of age, women are considered at a higher risk and thus were encouraged to have mammograms on a regular basis. The Susan G Komen organization provides data on how screening has saved lives. “From 1989-2017 (most recent data available), breast cancer mortality decreased by 40 percent due to improved breast cancer treatment and early detection . Since 1989, about 375,900 breast cancer deaths in U.S. women have been avoided .”
It wasn’t long, however, that the drawbacks of misdiagnosis became apparent. False positive tests were causing patients unnecessary mental and physical costs. The fear and treatment associated with a false positive took time, energy and resources away from women who were in fact not likely to acquire the disease.
Amy and her MIT colleagues found that grouping by age was not specific enough. They observed that women who comply, and get screened, share habits that actually make them less likely to be prone for a positive test. Based on information from the medical community, women who disregarded screenings were more likely to eventually experience breast cancer.
By regrouping the women in consideration of their norms and lifestyles, the MIT professors are acknowledging that the public health of women in regards to breast cancer is multidimensional. They do not propose a new public policy but rather further insight into how the topic should be considered. Tamar Oostrom voices in the video: “our paper brings an additional dimension” to the issue.
When you think of the nature of people who would follow the recommendations and comply with regular testing, they are probably folks who can afford to be tested, both in the sense of the medical services expense and in the time it takes out of their lives. They probably have access to transportation to be tested. They have the willpower and ability to prepare and eat a healthy diet and exercise. It’s interesting to note that many if not all of these activities are tied into access to other public goods.
This video confirms a couple of things. Putting public resources towards a problem reaches a point of no additional returns, and can cause additional costs to the targeted group. Secondly, solving for the optimal amount of screening involves an understanding of how to distinguish groups and there access to other public goods markets.