Rhino horn! Homeopathy! Psychics!

A few weeks ago, the South African government announced that it was appointing a team to reconsider the ban on the trade in rhino horn. In short, the idea is that SA could kill two birds with one stone by capitalising on what is effectively an extremely lucrative market. Since a single rhino horn is estimated to fetch $500,000 on the Asian black market, government stock piles of the stuff (from culling and thwarted poaching operations) could actually bring in substantial revenue towards conservation efforts.

Take things a bit further and you could easily argue that the ability to legally farm and "harvest" these animals generally would bring the same positive effects that hunting does for wildlife conservation. That is, it establishes a profit motive that incentivises the preservation of valuable animal species.

Save a horny friend?

The libertarian journalist, Ivo Vegter, penned a provocative column shortly thereafter in support of the government announcement. Unsurprisingly, the essay captures some of the essence of free-market environmentalist thinking. Contrasting the fortunes of sheep with dwindling rhino numbers, he writes that the ban on rhino horn has undermined market incentives for managing these animals:

If they want rhino horn, let's sell them some 

Sheep aren't endangered, because farmers farm them. They have a vested interest in making sure that they breed and stay healthy. The profit motive ensures that sheep are either kept alive (in the case of the woolly kind) or get killed less frequently than they get born (in the case of the eating kind).

Most economists would fully appreciate the logic of utilizing these types of incentives and market signals. I readily agree with the notion that ending the ban on rhino horn could be a boon for the rhino population. However, I do have problems with a subsequent paragraph:

Many environmentalists and armchair liberals are of the view that “we” merely need to educate the backward Orientals about the lack of medicinal qualities of rhino horn. This is rich coming from a group that routinely advocates the use of unproven herbal remedies. It is also supremely condescending. Imagine the Chinese coming to Africa and telling us to stop using muti, or better yet, instructing wealthy elites about the superstition that homeopathy works. We'd tell them to mind their own business and sod off back to China, and rightly so. Even if the Vietnamese and Chinese are wrong about rhino horn, re-educating half a billion people is as tyrannical as it sounds. And even the communists failed at that.

Apart from being wonderfully ironic in highlighting his own condescension -- something, it must be said, that Ivo does not lack for when discussing "greens" or "liberals" -- this paragraph merely serves to sidestep some very important ethical issues. The morality of selling unproven (say nothing of cruelly obtained) substances for human well-being cannot be simply disentangled from its economic outcomes. Indeed, a commentator draws attention to the matter by asking: "How can it be it ethically conscionable to sell, at huge profit, a remedy that has been proven to have absolutely no efficacy? SA should peddle rhino horn to cancer patients . . . shall we also farm and sell African potatoes to people who believe they will cure AIDS? How about exporting a few of our local evangelists to exploit the gullible in exchange for miracle cures while we are about it?" (posted on Wed, 5 Oct 2011 at 12:12)

Ivo responds, but I rather think he draws a line on the wrong side of this issue. To quote the truism: Two wrongs don't make a right... And just because some new-age salesmen are able to peddle their snakeoil wares to Western consumers -- under false pretences and without accurate labeling -- does not provide satisfactory justification for encouraging (or even allowing) others to do the same. Moreover, suggesting that it does, is simply to argue your case by association.

In another sense though, Ivo is quite right because inconsistency can be a maddening thing. The difference between us, is that I would like to see consistency achieved via some form of standard regulation -- at the very least in terms of evaluating product claims and policing false advertising -- rather than a free-for-all. Given the vast asymmetries of information involved, these are the type of situations where Government (and, yes, civil society at large) can play a crucial role in improving market outcomes; by providing accurate information on product effectiveness and regulating products that might otherwise thrive on fraudulent claims. More to the point, this why precisely we expect our doctors and drugs to be licensed in modern democracies, and why we have empowered state authorities to do so on our behalf.

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I was reminded of all this today when I saw this morning's xkcd strip, which might accurately be described as what happens when homeopathy gets into the book publishing business:

Sad, but true.

Also worth reading is the "tooltip text" that you can see if you hover over the image on the actual xkcd site. It explains the inspiration for this particular strip thusly: "I just noticed that CVS has started stocking homeopathic pills on the same shelves with -- and labelled similarly to -- their actual medicine. Telling someone who trusts you that you are giving them medicine, when you know you're not, because you want their money, isn't just lying -- it's like an example that you'd make up if you had to illustrate for a child why lying is wrong". [UPDATE: See this post.]

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Let me leave you with one more story that has been making the rounds in the run-up to Halloween, which highlights that fine line between deception and self-delusion. A group of skeptics (not the climate change kind!) has been offering a million dollar prize to anyone that can prove, under scientifically acceptable standards, that they posses paranormal abilities. Not content to see their money go unspent, the skeptics have publicly courted a number of high-profile TV psychics (e.g. Britain's Sally Morgan) and invited them to take up the challenge.

And, would you believe it, none of these self-proclaimed psychics have responded to this wonderful opportunity to earn international fame and scientific respect... say nothing of the cool seven-figure cheque. I know, I know... Unbelievable. The brilliant Derren Brown sums up the situation thusly:

You’d think psychics would be very eager to prove they can really do it. There’s a million dollar prize fund to be won by any psychic who can show under reasonable and controlled conditions (which they can decide upon in conjunction with the scientists) that what they do is real. This is money that could be kept or given to charity of course, not to mention the likelihood of also receiving a Nobel prize and the ability to give the world vital new knowledge that would change us forever. Imagine that! If I woke up to find that I could really do it, I’d be a selfish and odd creature to offer it only to TV viewers and theatre audiences. I’d be out there, doing every test I could until the scientific establishment sat up and listened. You’d be forgiven for doubting my sincerity if I said I had better things to do. 

"I  see  hear dead people. LOL!"

As far as "forcing" he likes of Sally Morgan to take the test, this seems to be most unsatisfactory solution and one that would impinge on any number of individual rights. However, there is the lingering sense that it is simply very wrong to charge grieving people for a service that amounts to little more than selling them outright lies at particularly vulnerable times in their lives. (Although, perhaps comfort is more important than truth in some circumstances?) In that sense, I'm glad she's being called out... Though I don't hold any hopes of either side being convinced.

THOUGHT FOR THE DAY: You often hear it said that economics is not a morality play. Perhaps there's some cold comfort in learning that, apparently, neither is the psychic business.
___
[*] I do wonder about the practicals implications of actually farming these animals, and whether doing so would actually lead to a collapse in poaching. After all, poachers would still be able to capture substantial "rents" through their illegal actions, so long as breeding and raising a fully grown rhino remains an expensive exercise. That, however, is a subject for another day.

Cover Thursdays - Ni' Zilund edition

In search for a unifying theme for this week's Cover Thursdays post, I suppose that I can do no better than tip my hat to the Rugby World Cup in New Zealand. Options for Kiwi bands are fairly limited -- let alone covers decent thereof -- but I think that I've got two songs here that you will enjoy...

First up, a very nice find by The Primate (keep up the good work, meneer). Boy & Bear get kinda bluegrassy on Crowded House's "Fall at Your Feet":



Next, The Naked & Famous see their synth-drenched "Punching In A Dream" given the ol' acoustic guitar and xylophone treatment by Antipodean fellows The Mission In Motion:



PS - If you are confused by the subject line of this post, then I suggest heading here for a little exercise in the Kiwi vernacular.

Support NZ for the World Cup... It's the right thing to do

So, South Africa bow out of the Rugby World Cup in a most frustrating and even inexplicable way. Yes, there is is justified cause for anger at the incompetence of Bryce Lawrence (which, let's be honest, was already something of a celebrated topic). However, the Springboks's failure to land the killer blow, despite complete dominance across nearly all facets of play, says as much about their own limitations as an attacking side, as it does about the sheer bloody-mindedness of Australia's fantastic defence or the curious ineptitude of Mr Lawrence.

Joining South Africa on their own flights home are the likes of England, Ireland, Scotland and Argentina. Post-mortems are already underway, but still to be decided is the little matter of who will actually win this damn thing. For neutral supporters, the next question that arises is: To which nation should we pledge our support for the remaining semi-final and the final encounters?

The first semi is a Henman if ever there was one. (In its original, literal form that is... 10 weeks ago I don't think anyone would have predicted these two contestants.) Thus, a vastly improved Welsh side, brimming with self-belief will take on the ever-mercurial French... who appear to have taken a leaf out of their national football counterparts' book by staging a player revolt mid-World Cup campaign. The only difference is that the French rugby side have managed to salvage at least one famous victory and now somehow find themselves in the last four, while Raymond Domenech's (former?) men imploded in rather spectacular fashion and were out by the group stages. Viva la Revolution, liberté, égalité, fraternité and all that, but I'm backing the Welsh for this one. I'll be happy to reward professionalism and structure over maddening inconsistency any day.

Did they even have colour photos back then?

In the second play-off, hosts New Zealand seek to finally recapture the title that has eluded them since they won the inaugural tournament in 1987.  They've been dealt a potentially devastating blow through the loss of key playmaker, Dan Carter, while captain Richie McCaw appears to be playing on one leg. However, fate may have handed them some strange recompense through the injury of back-up flyhalf, Colin Slade. Odd as this may sound, the latter's replacement, young Aaron Cruden, would seem a much safer bet than the woefully out-of-his-depth Slade. Harsh, but fair I'm afraid. Facing New Zealand, of course, is the same Australian side that bundled South Africa out during this weekend's quarter-final. Aus have some outstanding young talent of their own, not least the players that featured most prominently in the victory against SA: David Pocock, James O'Connor and skipper James Horwill. However, they are thin on depth if injury does strike and there remain big doubts about their set-piece, and the BMT of flyhalf Quade Cooper among other things. It's a big call, but I'm still backing New Zealand for the win that will see them through to play Wales in the grand finale.

And the final itself? Well, you'd have to pick New Zealand again wouldn't you?

Okay, I hear you asking, but do you want them to win? So, with a very clear conscience, allow me to answer: "Yes".

As much as anything, I've grown tired of the ongoing tragi-comedy that sees that the planet's consistently best team dumped out of the World Cup. Bloomsboy put it rather poignantly: "Watching the spectacle of another France-NZ upset in the final would be a bit like succumbing to the morbid fascination of the World Trade Centers falling." A rugby fan first and foremost, I feel no shame in saying that the Kiwis have played most of the very top stuff I have ever watched. If there was such a thing as cosmic rugby justice, New Zealand should win this thing.

But forget speculative pleas to the rugby gods. Anyone who can tell me that Mrs. Karma cares for the game of rugby when the likes of Ben Cohen and Justin Harrison have World Cup winner medals, but Christian Cullen doesn't, is an idiot or a liar. Quite possibly both.

No, much more than balancing the scales of sporting justice, I hope that New Zealand winning the World Cup would finally put an end to the inane excuses that other rugby nations -- and South Africa in particular -- have become comfortable with in shrugging off mediocre results. Another year without a Tri-Nations trophy? ("Ja, but at least we can win a World Cup, hey!") Thirty-three percent average against our arch-rivals since 1995? ("Two World Cup trophies, boet!")

Suitably lame explanations for lame results.

It may provide comfort to opposition supporters, but New Zealand's failure to win a World Cup has actually become an albatross around the neck of other rugby nations. For, as long as the ABs can't get their hands on the Web Ellis trophy, we can dupe ourselves into thinking that we're actually doing pretty well... when we actually aren't.

With some important exceptions, New Zealand have clearly set the standard in modern rugby terms. I certainly believe that South Africa (and maybe even a few other nations) could overtake them, but not while the four-year mindset persists. Until the Kiwis bury their World Cup hatchet, a misplaced superiority complex will simply be doing us more harm in the long-run than good. Let order be restored and the slates be wiped clean. Because only then can we focus on consistently being the best rugby nation in world... full stop. Not just having a go every four years.

So... unless you happen to be Australian, Welsh or French... get behind the All Blacks for the Rugby World Cup 2011. Forget that they deserve it, we need it as much as they do.

Bryce Lawrence Reffing Flowchart

A very interesting paper...

From the latest American Economic Review:

Environmental Accounting for Pollution in the United States Economy

By Nicholas Z. Muller, Robert Mendelsohn, and William Nordhaus

ABSTRACT

This study presents a framework to include environmental externalities into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An integrated-assessment model quantifies the marginal damages of air pollution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste combustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added.

Unless you're on a university server, you'll probably find that the article is gated. [Update - The working paper version is accessible here.] Fortunately, there are a number of good summaries available on the net. Bottom line: We severely underpay for the goods and services provided by major industries, given the measurable effect that air pollution from these industries has on human health and productivity.

Crucially, the environmental damages that drive these results have nothing to do with any kind of long-term climate change effects. They are simply the local damages that result from compromised air quality and are happening right now.

Lest it be unclear, this most certainly isn't about turning our back on coal (or even agriculture, another industry with a surprisingly high un-costed air pollution damages figure). Or markets in general. It is simply about trying to account for full costs and thinking about the best ways in which we can do that. That's all that good economics is about.

A little bit of Friday awesome

That is all.

Have a good weekend everyone.

Easter Island - History revisi(onis)ted?

I've just handed in a fat micro assignment and thus finally seen the back of a hellish two weeks. Twelve-hour days (plus) have become the new norm... and then working on weekends as well. Who said university life was lark? Still, I'm acutely aware that I need to keep the odd post going so that I don't lose my readership entirely. In that spirit, I recently came across a fascinating debate concerning Easter Island.

"What's so important about Easter Island?", you may find yourself asking. Well, in short, people have long used it as cautionary tale of the human risks associated with environmental degradation. A once-stable and relatively prosperous civilization suddenly imploded as the supporting systems of their natural environment began to fail. Worse still, these wounds were self-inflicted; it was the islanders that caused the very environmental damage that brought about their demise. This idea was perhaps most memorably outlined by Jared Diamond, in his 2005 book Collapse.

Earlier this month, however, the British environmentalist Mark Lynas (whom I've mentioned favourably before) wrote a blog post that sought to overturn this standard, "ecocide" account of Easter Island's downfall. Drawing on some new archaeological research, Lynas shaped to explain why many of the traditional ideas on the subject are completely wrong. Most importantly, he claimed that the Easter Islanders were actually good stewards of their environment and were thus largely blameless for the fate that befell them. Instead, the tipping point for environmental collapse came with the arrival of European settlers, who brought the disease and invasive species (most notably rats) that ultimately decimated the indigenous plant and animal life. As Lynas's post was one aimed at refuting the orthodoxy, it probably won't surprise to learn that Jared Diamond was the primary focus of much the criticism.

So what happened next?

Well, Diamond responded to this stinging critique by penning an excellent rebuttal, which describes in some depth why the revisionist view is highly implausible (to put it kindly), and why the traditional account continues to provide the most compelling thesis. Ever the scholar, Diamond's tone is never less than respectful and thoughtful, although the evidence he cites is rather damning. I was particularly struck by his concluding paragraph:

The islanders did inadvertently destroy the environmental underpinnings of their society. They did so, not because they were especially evil or deprived of foresight, but because they were ordinary people, living in a fragile environment, and subject to the usual human problems of clashes between group interests, clashes between individual and group interests, selfishness, and limited ability to predict the future. Does that remind you of any problems that we ourselves face today? That’s why we find Easter’s story so gripping, and why it may offer us lessons.

Sage words indeed.

PS - Kudos must also go to Lynas for publishing Diamond's reply. (I believe he is currently seeking a response from some of the researchers that he initially quoted. ) This is what scientific and, I daresay, moral progress looks like. No room for sacred cows... but no indulgence of second-rate science either.

First journal submission

In other news...

I finally submitted my (co-authored) paper to a journal yesterday.

Title: 

Electricity Prices, River Temperatures and Cooling Water Scarcity

Abstract: 

Thermal-based power stations rely on water for cooling purposes. These water sources may be subject to incidents of scarcity, environmental regulations and competing economic concerns. This paper analyses the impacts of water scarcity and increased river temperatures on German electricity prices from 2002 to 2009. Having controlled for demand effects, the results indicate that the electricity price is significantly impacted by both a change in river temperatures and the relative abundance of river water. An implication is that future climate change will affect electricity prices not only through changes in demand, but also via increased water temperatures and scarcity.

All told, I'm pretty happy with it. We'll see what the reviewers think, though... As I understand it, these things take their time and I'm only expecting hear back at the start of next year. Still, a big relief to get it out the door.

Happy birthday to Stickman's Corral!

Well, a day late... but that can probably only be described as fitting.

Of course, recent postings have taken a severe backseat, as you might have observed. To be completely honest, I'm not sure whether I'll ever be able to get back into (semi) regular blogging activity if my workload continues to be this heavy. Hopefully that isn't the case, though... I've been told by almost everyone that the first semester of PhD is the worst.

But, enough blagging. You didn't stop by to hear excuses for current blogging inactivity. You came to see a review of the year passed! (If you didn't; unlucky just go with it.) So, without further ado...

The top five posts over the last twelve months, in terms of unique page views, have been:
1) Why we need maths in economics (317 page views)
2) Movember* (266)
3) Meat and Veg(etarianism) (129)
4) Facts vs Beliefs (114)
5) Should pregnant women be banned from smoking? (110)
* Somewhat depressingly, (2) has virtually all been traffic directed from "movember" image web searches... And, almost certainly for the logo itself rather than my steamy latino pose.

The five most commented on posts are fairly similar:
1) Facts vs Beliefs (24 comments)
2) Should pregnant women be banned from smoking? (21 comments)
3) Meat and Veg(etarianism) (11 comments)
4) Mises's action "axiom" or false dichotomy? (8 comments)

5) And then a bunch with six comments...

If these staggering </sarcasm> numbers weren't enough for you, in terms of readership by country we have:
1) United States (1,871 page views)
2) South Africa (728)
3*) Norway (519... although we should really exclude this as they're mostly mine)
3) United Kingdom (470)
4) Canada (173)
5) Australia (145)

Thanks to everyone that has ever stopped by The Corral for a visit! 

My own favourite posts are bit harder to nail down, especially in the little time I have available here. Still, alongside some of those already mentioned, here are a couple that I probably did enjoy writing more than others:

• Basically, all those that I have listed in "The Zen of Stickman's Corral" box in the upper right-hand corner.
• Putting a Price on Nature and the Defining Sustainability posts
• South Africa and water pricing
• Leonard Cohen covers (more the sentiments expressed in the body of the test than the cover versions themselves)
• Free will in a world of Mad Men
• Hippie Baptists and Libertarian Bootleggers
• More on Norway, Liberty and Labels

The lessons that I have learned from blogging very closely parallel my general experiences in the blogosphere. And, on the whole, they are certainly positive. 

• It really is a great resource for testing and expanding upon ideas; both in the sense of how others respond, and making sure that you understand an idea well enough to write it down in plain language for all to see. (Not that I always managed this...)
• Blogging takes up a lot of time. For me anyway. That may simply be due to the fact that I am something of a stickler for facts and have an uncanny knack for stretching a story out. Being on the long side of winded is not my favourite personal trait, but at the same time I don't wish to let go of it completely! I'm hoping that keeping this blog has actually moved me towards some kind of middle ground.
• It's hard to attract a big, regular audience unless you focus on specific, narrow themes. Jumping between completely unrelated topics kills your readership. My feeling is that people mostly visit blogs because they expect certain themes to be consistently addressed (even though the applications can vary widely); not to hear someone's everyday ramblings on whatever interests them. Unfortunately, I tend towards the latter... but so be it! (Although, I certainly have written posts simply because I thought that it would interest one particular person who might have been reading.)

Something I also want to mention specifically is music. I was hoping to put together a downloadable playlist of all the songs that I've linked to over the course of the year... but who has the time? I hope that you'll settle for YouTube links:

• Arcade Fire - "Suburban War"
• Smokey Robinson - "The Tracks Of My Tears" (live 1965)
• Pavement - "Gold Soundz"
• Neil Young - "Cortez The Killer", followed by the Dave Matthews Band version live in Central Park (with Warren Hayes)
• Sam Cooke - "Bring It On Home To Me" and "You Send Me"
• Goldfish - "Get Busy Living"
• Kings of Leon - "Fans" (BBC Radio 1 Live Lounge)
• Madrugada - "Majesty" (Live at the Tralfamadore)
• Elliott Smith - "Junk Bond Trader"
• Muse - "Map of the Problematique" (live at Glastonbury)
• The National - "Terrible Love" (live on Pitchfork TV)
• The Gossip - "Careless Whisper" (Wham! cover)
• Gnarls Barkley - "Reckoner" (live Radiohead cover)
• Eddie Vedder - "My City of Ruins" (live Bruce Springsteen cover)
• Tegan and Sara - "Dancing in the Dark" (live studio Bruce Springsteen cover)
• Gaslight Anthem - "9 Crimes" (live Damien Rice cover)
• Gaslight Anthem - "I Do Not Hook Up" (Kelly Clarkson cover on BBC Radio 1 Live Lounge)
• The Subways - "Staring at the Sun" (TV on the Radio cover)
• TV on the Radio - "Mr Grieves" (a cappella Pixies cover)
• Frightened Rabbit - various tracks including "Keep Yourself Warm", "Poke", "Heads Roll Off", "Swim Until You Can't See Land", "Fast Blood", "The Wrestle, The Loneliness & The Scream", etc...
• The Lemonheads (feat. Liv Tyler) - "Hey, That's No Way To Say Goodbye" (Leonard Cohen cover)
• Judy Collins - "Suzanne" (Leonard Cohen cover... some controversy surrounding this one, as apparently it should have been Nina Simone's version)
• GAYNGS - "By Your Side" (Sade cover)
• Bon Iver - "I Can't Make You Love Me" (live on The Late Show with Jimmy Fallon)
• Angus Stone - "River" (Joni Mitchell cover)
• Eddie Vedder - "Trouble" (live Cat Stevens cover)
• We are Scientists - "Hoppipolla" (Sigur Rós cover)
• Birdy - "Shelter" (The xx cover)
• Red House Painters - "Have You Forgotten"
• Yeah Yeah Yeahs - "Diamond Sea" (Sonic Youth cover)
• Crash Test Dummies - "Androgynous" (The Replacements cover)
• Steve Earle - "My Back Pages" (Bob Dylan cover)

Not a bad collection, if I say so myself! (With a little help from the odd Poncey guest post and suggestions by others.)

And with that, I have some GMM estimation techniques that need looking at.

See you soon,

o-[-<

Like a kid on Christmas eve...

The Rugby World Cup 2011 starts tomorrow... BOOM!

Good times... GOOD times.

Will South Africa become the first team in the tournament's history to successfully defend the title? Is 2011 a few years too early for Australia's team of gifted youngsters? Can this New Zealand side finally put a 24-year hoodoo to rest on home soil? Most importantly, will Stickman's cable subscription hold out and provide the coverage he deserves needs to stay in touch with all the key games... despite his residing in a far-off land where the primitive locals are ignorant of the intricacies of the scrum, the savage beauty of the crash tackle, the deft touches required to put the inside man into space... and where combining the words "hooker" and "prop" in a sentence is likely to only invite accusations of sexual depravity? (Uncivilised boors!)

My tentative answers to the above questions are: 1) "I fear not"; 2) "probably"; 3) "well, they won't be staying on home soil otherwise";... and 4) "by God, I hope so!".[*]

Really, all other sports are just for laughs. This is what I'm talking about: