EclectEcon

Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca


. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Saturday, May 14, 2005

Concert (and CD) Reviews:
Buddy Wasisname; Thompson-Patterson Jazz; Eva Cassidy

Review #1
Thursday night, my son and I went to see and hear Buddy Wasisname and the Other Fellers. It was an evening and money well-spent. The songs were hilarious, and the energy and antics of Buddy make the show well-worth seeing. Also, his monologues [including how he personally caused the 2003 electrical blackout] were extremely well-done. My only problem with the group is that sometimes I can't make out the words as they're singing. And non-Canadians might not appreciate the nuances of some bits ["We don't want those folks in Mississauga to be unemployed and come to Newfoundland looking for work."] Finally, I think it would be better if they used "I'se the b'y" [the de facto Newfoundland Provincial Anthem] to open or as an encore; "Saltwater Joy" is a nice song but a wimpy encore number.

Overall, though, the energy, facial expressions, and antics of the group make the show a trememdous hit. They sang three songs from the album, "Flatout", including "Sarah", which I had said was one of my favourites. Their musicality has greatly improved since they cut that album.

We had a terrific time.

Review #2
Roy Patterson (guitar) and Don Thompson (Bass and Piano) played at the Wandering Minstrel in Stratford on Friday. Unfortunately, they had to spend the afternoon and early evening setting up their recording equipment and didn't have the opportunity to spend as much time rehearsing and planning together for the concert as they had counted on. They were still really good, but I didn't think they were as good as they had been when we heard them play together last summer.

The last song of their first set, and the first two numbers of the second set had many flashes of brilliance, however, that brought back memories of their previous Wandering Minstrel concert. If I get a chance, I'll try to drag my son and his wife to hear them again tonight. After last night's concert and after being able to spend more time together going over that one, I expect that tonight's concert will be back at the superb level we heard last summer. There's an excellent chance that from these two concerts, they will be able to put together a pretty decent CD (assuming the sound engineers can edit out Friday night's thunderstorm!). For details about reservations for tonight's concert, click here. Mark Rowsome, proprietor of the Wandering Minstrel, has a big selection of their CDs available at good prices.

Update: I did go to Saturday night's concert as well, and it was much better. They told me during the intermission that setting up and getting the equipment ready on Friday had indeed affected their performance; they also were quite chagrined that the balance was off for much of the Friday recording.

Review #3
While we were talking with Mark, he highly recommended the CDs by Eva Cassidy. We bought "Songbird" and listened to it on the way home (and again upon our arrival at home). Her arrangements of Autumn Leaves, Wade in the Water, and Over the Rainbow are first-rate. I can see why people like her music. Both Ms. Eclectic and I probably have more of a liking for the actual voices of Diana Krull or Barbra Streisand, but Eva Cassidy's voice has/had a nice true pitch to it. We both remarked several times that Cassidy's arrangements were fabulous but I wonder if they might sound even better if Streisand did them.

According to the album notes, Eva Cassidy died at age 33, in 1996, of cancer.
A sad loss, given what we heard on this album.

Update: Saturday, when we were at the concert, I bought her other collection-album, Wonderful World. It's just as good.

Supersize THIS!
Goliath Caskets for the Obese

Perhaps out of concern for my recent weight gain, Jack sent me a pointer to this article about Goliath Caskets; check out the site for pictures.

[A] seven-foot (2.1 meter) casket was built for a 900-pound (64 stone) man who died in Alaska.

... The expansion of American waistlines has forced US companies to make a number of adjustments. Airlines have increased their passenger weight estimates. Clothing stores are offering larger sizes. Furniture manufacturers are making wider chairs.

But nowhere are the consequences of the obesity epidemic more painfully obvious than in a converted hog barn on a country road in rural Indiana.

[Keith] Davis' father founded the company 20 years ago because he wanted to offer the families of the obese a more dignified coffin than the slipshod special orders he saw being made by the casket company he worked for.

He altered the coffin's design so it would not look like a train car and reinforced its structure so it would not bend or buckle under the extra weight. He built lids that could be propped open for full or half viewings and had foam inserts that made them easier to close. And he expanded the width from the standard 24 inches.

"Thirty-three inches were our biggest back in '90. We thought that was pretty big," Davis said.

"Then we started getting calls for bigger and bigger caskets so I went up to 48 inches. Now I'm making them 52 inches."

Jack says that cremation would help provide a solution, except that the openings to the cremation ovens are too small.

At any rate, I am pleased to see that Davis, the owner of Goliath Caskets, has a firm grip on the concept of opportunity costs:

"There's no reason for anyone in this country not to have a good diet. There's no reason to go out and eat a whole bag of ding dongs," he said. "If everyone went on a diet I could find something else to do."

Friday, May 13, 2005

Brian Ferguson Presents
A Canadian Econoview

Brian Ferguson, who has contributed a considerable amount to this blog and to many enjoyable e-mail exchanges between the two of us, as well as other bloggers, has begun his own blog, A Canadian Econoview. As you can tell from his many contributions to The Eclectic Econoclast, Brian is knowledgeable and clear-thinking on a full range of economic policy issues, but much of his expertise has been developed in the area of health economics. As an example, see this editorial by him in yesterday's National Post [$ Subscription required].

Here is one recent example of his analysis from his blog. When the Atlantic Institute for Market Studies recommended that Canadian provinces guarantee they will pay to send a patient to another province if waiting times are exceeded, Brian pointed out that this "second offer" policy has been tried, with some success elsewhere.

According to a BBC report published online in January, the Second Offer Scheme was instituted in April of 2003, to guarantee that Welsh patients who faced waits of over 18 months were offered alternative treatment in England. (Since devolution, those distinctions mean a lot more than they used to.)And according to this BBC report, published March 30, Welsh Health Minister Brian Gibbons said

that more than 6,000 people had taken up the assembly's second offer scheme - where patients waiting longer than the current 18-month target time can take up treatment in England - and it had had a "huge impact" on waits.
Brian lists a number of concerns but is cautiously optimistic about the Second Offer Scheme.

My feeling is that in order to make it truly efficient, the provincial gubmnts should also offer to ship patients to the U.S. if the waiting period for some procedures is too long. Shipping patients to a different province may not work very well if there are long waiting lists throughout all of Canada.

It Was Not My Fault

I gained five pounds last month.

But it was not my fault.

First, there was the post-Easter sale of 1-pound chocolate Easter bunnies at Wal-Mart. The price was such a bargain that I bought at least ten. Whatever weight I gained from eating those was Wal-Mart's fault.

It certainly was not my fault.

Next, there was the terrific sale at McDonald's on double cheeseburgers. I ate there early and often. Whatever weight I gained from eating those double cheeseburgers was McDonald's fault.

It certainly was not my fault.

Then our local drug store proprietor gave us a box of candies. We fully intended to pass it along to a friend we were planning to visit, but she was ill, and so we brought them home and I ate them. He shouldn't have given us that box of candies, and she shouldn't have been ill. If I gained weight because of those candies, it was their fault.

It certainly was not my fault.

Finally, one evening recently, Ms. Eclectic wasn't home for dinner, so I wandered up the street to the local pizza establishment. Well, I'll be. They had a two-for-one special on all-meat pizzas. I couldn't resist, so I bought two. I ate one that night and the other the next day for lunch. If those pizzas contributed to my weight gain, it was the fault of Godfather's Pizza.

It certainly was not my fault.

And if I have a heart attack because of my having eaten these things, it will be because there are too many fast-food outlets around.

It certainly will not have been my fault.

I think I will sue somebody.

Property Rights and Fish Farms

A couple of weeks ago, I posted about the meeting of diplomats to deal with the problems of declining fish stocks. Well, it should come as no surprise to learn that they reached no decision. [h/t to BF, though the link may be expired by now]

Bureaucrats, scientists and conservationists from around the world emerged from a four-day conference Thursday with no clear action plan to combat illegal fishing in international waters. Delegates agreed on the crisis facing global fish stocks, but the more than 300 delegates from 45 countries failed to reach a consensus on how to move forward.
This is a clear example of the Tragedy of the Commons, as I posted before. Without well-defined and enforced property rights, there will be over-fishing and depletion of the fish stocks. What I mean by property rights, in this context, is not specific ownership of specific fish, but legal entitlements to take a certain amount of fish from the sea. If these entitlements cannot be enforced easily, others will take the fish (as is happening), and fish stocks will shrink.

My expectation, as a result, is that it will likely be (or soon become) cheaper to find ways to fight disease and to improve quality on fish farms than it is to try to enforce fishing limits on the open seas. As fish farming becomes even more clearly established, fish will be more like cattle -- bred and raised solely for profit, and we will not worry about shortages and stock depletion. The reason will be that property rights to fish-farm fish are well-defined and easily enforced.

Thursday, May 12, 2005

Are Children an Inferior Good?

An inferior good is one for which the demand declines as income rises, ceteris paribus. Does the demand for children decline as incomes increase? It is impossible to answer this question by looking directly at cross-sectional data because higher income families also tend to have lots of other differences from lower income families. Also, the demand for children, as related to household income, exposes the importance of looking at both income and substitution effects. [link via Tyler Cowen at Marginal Revolution]:

The story told here attributes the secular decline in fertility to the tenfold rise in real wages that occurred over this time period. This increased the cost, in terms of foregone consumption, of raising children.
The presumption behind this argument is that as real wages increase, parents have to give up more money to stay home to raise children or to hire child care, thus raising the opportunity cost of "purchasing and maintaining" children vis a vis other consumer goods and services. Hence, what appears to be an income effect is really a substitution effect: if the effective price of purchasing and maintaining children rises, potential parents will substitute away from children and purchase more of other things, like R.Vs or travel or home entertainment systems or....

This analysis suggests that the recent proposals of the Canadian gubmnt to increase subsidies for day care will reduce the cost of purchasing and maintaining children, and thus increase fertility if potential parents view the plan as an entitlement: something likely to last indefinitely, which it almost surely will, if passed. As I wrote when the budget was first proposed:

The big mistake: federal gubmnt funding for child care, which has likely created yet another costly entitlement programme. This is almost a moral hazard problem in that guaranteeing young couples that the gubmnt will pick up the day-care tab will induce more of them to have more children...; I don't see any reason to subsidize this activity any more than subsidizing the purchase of big recreational vehicles (Phil Miller refers to his children as "the durables").
So why was there a post-war baby boom if incomes were rising and if parents substitute away from consuming children as a result?
The baby boom is accounted for by the invention of labor-saving household capital or other labor-saving household products and management techniques, which occurred during the middle of the last century...the increase in the efficiency of the household sector needed to explain the baby boom is not that large.
Suggestion to parents. Don't tell your children they're inferior goods. Emphasize the substitution effect. But even then, don't tell them it was a toss up between them and a new car.

Capital-Labour Substitution:
Cuff the Kids

Kip Esquire has posted several items recently about the hand-cuffing of young children by law enforcement officials. Here is one of them. I share his view that hand-cuffing children seems draconian.

At the same time, I have seen young children [not mine!] get waaayyyy out of control and become extremely abusive and destructive. They can be restrained by an adult, but if labour is expensive, and if labour faces a possible threat of a lawsuit for physically abusing the children, it might be economically efficient to use handcuffs instead of humans to restrain the children.

As some law-enforcement officials use hand-cuffs on young children unreasonably, the costs of doing so will increase, via lawsuits. At this point, officials will have to make sure they have well-established guidelines for cuffing kids.

Capital-Labour Substitution:
Fortune Cookies and Lottery Numbers

A recent Powerball Lottery had 110 second-place winners -- about 105 more than organizers expected. It soon emerged that the winners had used numbers they received in a fortune cookie. [NYTimes, registration required]

"Our first winner came in and said it was a fortune cookie," said Rebecca Paul, chief executive of the Tennessee Lottery. "The second winner came in and said it was a fortune cookie. The third winner came in and said it was a fortune cookie."

Investigators visited dozens of Chinese restaurants, takeouts and buffets. Then they called fortune cookie distributors and learned that many different brands of fortune cookies come from the same Long Island City factory, which is owned by Wonton Food and churns out four million a day.

"That's ours," said Derrick Wong, of Wonton Food, when shown a picture of a winner's cookie slip. "That's very nice, 110 people won the lottery from the numbers."

The same number combinations go out in thousands of cookies a day. The workers put numbers in a bowl and pick them. "We are not going to do the bowl anymore; we are going to have a computer," Mr. Wong said. "It's more efficient."

Unfortunately, the article does not explain what Mr. Wong meant when he said, "It's more efficient." Did drawing the numbers require too much costly labour time compared with using a computer to add the numbers to the fortune cookies?

For more on lotteries, see this from Ted Frank.

On a related question, I wonder whether there has been an impact on the demand for fortune cookies since this story broke.

Buddy Wasisname
and the Other Fellers

In the early 1990s, I had the joy of visiting St. Johns, Newfoundland. While I was there, I had at least as much joy, hearing Buddy Wasisname & the Other Fellers. I immediately bought their album, Flatout, which appears to be difficult to come by these days, which is both unfortunate and understandable. I hope they plan a re-issue soon.

I love the songs, "Sarah", "Dear Mr. Ford", and their all-time classic, with which every Canadian can identify, "Peein' in the Snow" [Gazin' down the hole; it's the only thing that makes me feel like spring]. I was pleased to learn a few years ago that one of my friends and his sons also enjoy the music of Buddy Wasisname and the Other Fellers.

Image my joy, yesterday, when I was reminded that Buddy Wasisname and the Other Fellers will be in London, Ontario, tonight. I immediately ordered a pair of tickets and invited my son, David Ricardo Palmer, to join me. Here are a couple of links for Amazon.com and Amazon.ca whence you can purchase copies of their albums.

. . . . . .

Update: The concert was better than I had hoped! See my review here.

Wednesday, May 11, 2005

Vatican Officials Convicted:
A New Plot for Dan Brown?


Vatican radio officials convicted

A court in Rome on Monday convicted a Vatican cardinal and the head of the city-state's radio station for electromagnetic pollution.

They were given 10-day suspended sentences, which they have appealed.
...Residents of the Rome suburb Cessano near the station complained they could hear Vatican Radio broadcasts through their lamps because of electromagnetic disturbances.

"It is a great success and a great victory for those people who have been suffering for years," said Lorenzo Parlati, head of the environmental group Legambiente for the Lazio Region, which was part of the civil suit. It claimed the waves were harming the health of those living nearby.
Update: This link from the BBC also points out that they were assessed court costs and damages, which makes more sense. See below.
[h/t to BF and cmt for these links]

Is it really efficient to jail these guys? What is the public interest in deterrence that cannot be handled with civil damages?

Suppose Party A imposes a cost on Party B, but Party A is judgement proof (e.g., bankrupt or too poor to pay). The threat of jail time works as a reasonable alternative form of deterrence for people who might be like Party A in the future.

Alternatively, if Party A is an employee of a big, rich organization, then tort damages, payable by the employer, might be much more reasonable.

The only problem with payment of damages is who gets the money? The aggrieved parties (B)? the gubmnt? or how about The Eclectic Econoclast?

So Much for Two-Tiered Health Care

One of the big arguments against allowing private health care in Canada is that doing so would create a two-tiered health care system, with the poor receiving less-than-adequate care while the rich get everything. People making this argument often point to the U.S.

But it turns out that in the U.S., per capita spending on health for the poor exceeds per capita spending health for everyone in Canada [link via Newmark's Door]
The government's Medical Expenditure Panel Survey (MEPS) tabulates health care spending for a sample of over 35,000 Americans. One of the variables included in the survey is household income relative to the poverty line.

When the data for 2002 (the latest survey year available) are extrapolated to the full noninstitutional population, one obtains these results for persons below the poverty line:

Number of Persons: 35.6 million

Total Spending: $106.3 billion

Per Capita Spending: $2,986

Next, look at data on per capita spending on health care in various countries, as compiled by the OECD. In 2002, per capita spending in Canada was $2,931, in France it was $2,736, in Germany it was $2,817, and in the United Kingdom it was $2,160. The United States spends more on the average poor person than those countries spend on the average person.
Arnold Kling, who wrote the article from which the above quotation was taken, concludes

I suspect that severe substance abuse plays a big role in poverty, poor health, and mortality. My guess is that if substance abusers were excluded from the international statistics on health outcomes, the standing of the United States would improve considerably. If this is true, it still begs the question of whether our public health policies are inferior to those of other countries in the area of substance abuse.

I think it would be foolish to conclude that the United States does as well or better than other countries in providing health care to the poor. What the data do suggest, however, is that poor people in America do not suffer from a lack of total health care resources.
Let us hope that policy-makers in Canada pay attention to these data. A multi-tiered system, by attracting more resources, can easily end up providing more health care in total. Health care is not a fixed pie to be divided and prioritized; that model exists, though, in the minds of too many health planners who do not understand economics.

Droit de Suite

The EU has decided that in the future, all artists should receive a portion of the gains if their works increase in value.

Living artists should be allowed to earn royalties from the resale of their work and be protected from "cowboy" art dealers, MPs say.
A European directive due to come into force next year will, for the first time, give artists and their heirs a share of the resale price of works of art, known as droit de suite. It does not apply when an artwork is first sold.
This directive will have two interesting economic effects.

(1) It will surely affect the initial price received by an artist for a piece of art. If people expect that they will have to pay the equivalent of a sales tax on the resale value of their art, it will reduce their willingness to pay for the work when they purchase it. Of course if they think the tax will go to the artist, via droit de suite, that will probably have less of an effect than if they think the tax will go to the gubmnt. For a formal analysis of the dynamics of droit de suite, see this paper.

(2) Imposing droit de suite in some markets will create an incentive for people to resell their art in other markets.

The legislation was bitterly opposed by the Government for auction houses and dealers who said it would destroy the international art market in London because sellers would go to Switzerland and America where such laws do not apply.
Thanks to BrianF for the initial link. Also see The Atlantic Blog for a discussion.

On a related subject, a group of UK artists has formed a co-operative savings plan:

The UK trust would aim to cover 250 working artists, vetted by experts before they join the scheme. They would contribute 20 artworks over 20 years, to be sold when prices are judged to be right.

...In their first five years in the scheme, artists would contribute two works a year, with the rate falling to one after five years and then one every two years for the last ten.

When the works were sold, 20 per cent would go to the running of the trust and, of what remained, half would go to the artist who sold and the rest divided between other artists. Highly successful artists would capitalise on their own talent but also subsidise others who have not fared so well.
There is a very serious problem with shirking in co-operatives: I wonder how the scheme will be policed to keep artists from banking their stuff that doesn't sell.

Drink Whiskey
Fight Cancer

When I took the bar-alcohol-drinking knowledge quiz, I scored in a range called "bourbon", with the assessment,

... you're going straight for the bottle and a shot glass! It'll take more than a few shots of Wild Turkey or 99 Bananas before you start seeing pink elephants. You know how to handle your alcohol, and yourself at parties.

... You scored higher than 99% on liquor index
Now there is news [courtesy of BrianF] that drinking whiskey might help fight cancer.

The medicinal properties of antioxidants in red wine are well known, but delegates at a biochemistry conference were told that whisky offered "even greater health benefits".

Dr Jim Swan, a consultant to the drinks industry, said: "There has been much in the news about the health benefits of antioxidants in red wine. By contrast, very little has been said about malt whisky distillery science.

"However, research has shown that there are even greater health benefits to people who drink single malt whiskies. Why? Single malt whiskies have more ellagic acid than red wine."

Speaking at the EuroMedLab conference in Glasgow, he said ellagic acid absorbed rogue cells in the body. "So, whether you indulge in the odd tipple, or you are a serious connoisseur, whisky can protect you from cancer and science proves it," he said.
For some cautions and caveats, you can read the article, but I must say, I approve.

Famous Economists
from Carleton College

Phil Miller sent me this link recently.

Famous Carleton Economists
John Bates Clark* (1847-1938) played an important role in the development of marginal productivity by applying the Ricardian theory of rent to labor and capital. Among his works were The Philosophy of Wealth (1886), The Distribution of Wealth (1899) and Essentials of Economic Theory (1907). ... His favorite pupil at Carleton was Thorstein Veblen.

Thorstein Veblen (1857-1929) was the founder of the "institutionalist" school of economics and is Carleton's most famous alumnus....His most famous book, The Theory of the Leisure Class (1899) is still in print and widely read. It is both a brilliant work of theory and a biting satire which can be appreciated as much for its witty use of language as its theoretical originality.
When he sent the link, Phil expressed disappointment that my name wasn't included on the list [I graduated in economics from Carleton College in 1965]. The reason is simple and twofold:
  1. I was a horrible undergraduate student, finishing 21st in class of 18 economics majors [gruesome details deleted]. I concentrated on playing bridge (poorly) and the identity crisis. Another reason I did not do well was
  2. The professors were east-coast liberal interventionists, and I could not, for the life of me, figure out why I was so dumb that I couldn't see what was wrong with the Chicago school of economics.

I presume things have changed there in the past 40 years.

Here's something else: I liked the concept of interdependent utility functions, but I didn't think Veblen's work was all that brilliant.

*[note: the J.B. Clark Medal in Economics is named for John Bates Clark and not after Professor Medal, as I sometimes tell my students]

Tuesday, May 10, 2005

Did the AUT Defame Haifa University?

On May 26th, the British Association of University Teachers will be deciding the fate of their executives' proposed boycott of Haifa and Bar-Ilan Universities in Israel. As part of it's reason for the boycott, the AUT has said that Haifa University persecuted Dr. Ilan Pappe, a tenured member of its faculty.

Now Haifa has notified the AUT that it considers the AUT material concerning Professor Pappe defamatory to Haifa University. [[h/t to M.A. for the link]

The letter from the legal firm of Mischon de Reya says that the AUT decision "received the most perfunctory debate, was held at a time that made it impossible for most Jews to attend, requests for rescheduling of the debate were refused, and no delegates were allowed to speak against the resolution.

"The allegations against the University of Haifa are damaging to its reputation... false, and were not put to the university prior to the debate."

Therefore, the letter has two purposes, the firm writes: to provide information the AUT would have received if it had asked the university, and to warn the AUT that the defamation "is continuous," because the resolution appears on the AUT Web site.

The letter then goes on to refute each allegation made by the association concerning the university's treatment of Pappe. "Indeed, the university has shown great tolerance toward Dr. Pappe despite his own obvious contempt for it. Nevertheless and in this regard, no action has been taken against Dr. Pappe by the university, nor has any action against him been threatened."

As for discrimination against Arab students, the letter points out that some 20 percent of its student body is Arab.
In related news, on Saturday the Board of Directors of Canada's Society for Academic Freedom and Scholarship [SAFS] will be presenting a motion that I initiated to its annual general meeting, urging the AUT to rescind the boycott at its May 26th meetings.

I Had a Headache; Raise My Grade

During my past 68 years, or so, of teaching, I have heard many pleas from students begging me to raise their marks -- grandparent death, family member illness or accident, apartment fire, break-up with girlfriend or boyfriend, death of family pet, etc.

My policy is that once you write the exam, you get that mark. Students are not allowed to write a makeup exam to try to raise their marks. In most instances students approach me before the exam. In these instances, I ask for documentation, and then usually allow students to write a makeup exam if they did not write the original exam. I do not
  1. allow students to rewrite an exam if they have already written it.
  2. raise the students' marks, depending on the degree of trauma that might have adversely affected their performance.

In you think the second possibility sounds strange, consider this [h/t to BrianF]:

Death of family pet worth an extra mark or two at exam time

.... Waking up with a headache on the morning of the exam is as detrimental as the death of a pet; there is a 1 per cent allowance for a sore head. A bout of hay fever can get a pupil an extra 2 per cent, as can the "effects of pregnancy" - though not pregnancy itself.

Among the more serious problems are, for 3 per cent, the death of a close friend or witnessing a "distressing event" on the day of the exam.

An incapacitating illness for the candidate or close family member will earn an extra 4 per cent, as will a severe injury at the time of the exam.

For the maximum award of 5 per cent, pupils need to suffer terminal illness, the recent bereavement of an immediate family member, or a serious and disruptive family crisis.

The guidelines, set out by the Joint Council for General Qualifications, which represents examination boards in England and Wales, says it has attempted to set a code for the consideration of any negative factors for pupils at exam time.

So we don't know whether a student's mark reflects ability and knowledge in a given subject or ability and knowledge in how to work the system. To paraphrase what those teachers can expect to hear:

"I deserve a higher mark because I had a headache. Also, my grandfather is deathly ill, and he is very special to me. And my boy/girl friend and I had a really horrible fight last night when I was hoping to be studying. ...." etc.

After all, people respond to incentives, and educators would be fools to think students do not quickly learn how to work the system to get higher exam marks.

Outsourcing Medical Procedures from Canada

Waiting times for many medical procedures in Canada have become very long.* As a result, some people are engaging in medical tourism, traveling to India as tourists and, oh, by the way, having a knee replacement while they're there. [thanks to Jack for the pointer]


It's not a new concept. People from the Middle East have been seeking medical treatment in India for more than a decade. Lately, though, the number of Westerners coming here has started to pick up.

... A growing number of Canadians are choosing to sidestep the country's infamous waiting lists and jet to India for speedy medical treatment. They're joining thousands of foreigners -- mostly from the United States, Europe and the Middle East -- who have travelled here to get well. It's called medical tourism, because many foreign patients choose to recover at posh resorts.

Drawn by fast service and surgery for a third of what it would cost in the United States, more than 150,000 foreigners flew to India last year for joint replacements, heart bypasses, laser eye surgery and facelifts.

'You've got to understand: It's not the Vancouver General or the Toronto General. It's a different country, and that's the bottom line. But I've got a new knee and I don't have to wait until June of next year,' [said one person who was pleased with the experience].

It's not for everyone. The long flights, crushing crowds and frequent blackouts deter many. And then there's the safety issue: Many Western doctors don't like the prospect of Canadians going under the knife in India.

But with Canadian operating rooms backed up, some feel they have no choice.
It should come as no surprise that when faced with a trade-off between safety and subsidies on the one hand and timeliness on the other hand, some people opt for timeliness.

For a different take on medical tourism, see this piece by Alex at Marginal Revolution, which mentions less of the drawbacks that are indicated in the above quotation.

*BrianF attributes the growing waiting lists to some really dumb reductions in medical school admissions, beginning a year ago, because some policy makers actually bought the nonsense about asymmetric information and supply-induced demand as the cause of sky-rocketing medical costs for the province of Ontario.

Affiliation with the International Advisory Board for Academic Freedom, Bar-Ilan University

I have recently become a member of the International Advisory Board for Academic Freedom, Bar-Ilan University.

This affiliation, in a general sense, is consistent with my membership in Canada's Society for Academic Freedom and Scholarship. But I sought and received this affiliation primarily because I am appalled and dismayed by the anti-Semitic boycott by Britain's Association of University Teachers of Bar-Ilan University and of Haifa University.

Academics who also wish to seek affiliation with Bar-Ilan University, please see this.

Update: I get especially upset when I read things like this.

Monday, May 09, 2005

The Canadian Economy Is Overheating

My estimate is that the Canadian natural unemployment rate is between 7.1% and 7.4%, but it is almost certainly not less than 7%.

In March, the unemployment rate was 6.9%.

In April, the unemployment rate was 6.8%. [the quotation below is from this link, as well]

These are clear signs that the Canadian economy is overheating.
South of the border, signs of better growth are leading to higher American interest rates -- a trend Canada will eventually have to match, central bank governor David Dodge said Friday.

But Dodge also made it clear he isn't in as much of a hurry as his counterparts at the U.S. Federal Reserve.

The American economy has been growing more rapidly than expected during the last 18 months, Dodge noted following a breakfast speech to the Ottawa Chamber of Commerce.

"In those circumstances, of course, you would expect the Federal Reserve would be raising rates and over time, we will have to raise rates as well," Dodge said in reply to a question.
As I posted last week, I do not see how the Bank of Canada can continue to inflate the money supply by 10% per year and not overheat the economy. And even if Dodge does not take any explicit actions to raise interest rates, the Fisher Equation predicts that with rising inflationary expectations, interest rates will rise anyway.

Let's hope it isn't too late for a soft landing.

Why Do First-Generation Arab-Americans Do So Well?

An article by Moises Naim in the Financial Times ($ subscription req'd for more than the first two paragraphs) reports (h/t to Tyler Cowen at Marginal Revolution):

People of Arab descent living in the US are better educated and wealthier than the average American of non-Arab descent. That is one surprising conclusion drawn from data collected by the US Census Bureau in 2000. The census also found that Arab Americans are better educated and wealthier than Americans in general.

Whereas 24 per cent of all Americans hold college degrees, 41 per cent of Arab-Americans are college graduates. The median annual income of an Arab-American family living in the US is $52,300 - 4.6 per cent higher than the figure for all other American families. More than half of such families own their home. Forty-two per cent of people of Arab descent in the US work as managers or professionals, while the overall average is 34 per cent.
Tyler's explanation for the difference is

Islam is an excellent religion for motivating commercial success (yes I do know that many Arab-Americans are Christians).
But I think I prefer the explanation offered by The Emirates Economist:

My take is that if you are born in an environment where merit is not rewarded, then you'll be more likely to move to an environment where it is -- if you have innate or acquired abilities.

... Note that compared to recent immigrants in general, Arabs admitted to the U.S. are much more likely to be admitted because of their education -- as opposed, say, to political ayslum. And Arabs that have come to the U.S. primarily for non-economic reasons were also self selected - those with the means to escape from regimes that went totalitarian or countries with political violence.

... For whatever reason, Arab countries have not fostered economies where the rewards to productivity (increasing the size of the pie) are high -- and the rewards to rent seeking (getting a bigger slice of the pie) are low [emphasis added]. Contrary to the headline ["Culture is not the culprit in Arab poverty"], culture remains one of many potential culprits for why Arab countries are not developing as quickly as others.

Career Re-Development

What career seems reasonable for someone to choose after retiring from a senior position in Britain's Royal Air Force? Aircraft mechanic? Pilot? Business Management? Defence sales?

How about pole dancer? [Fess up. How many of you didn't realize I was asking about a female? (or are there male pole dancers, too?)]

Miss Hulme, who spent time as a senior aircraftwoman at RAF Aldergrave near Belfast, filled in an application form towards the end of her service stating that she wished to take up a course in pole dancing.

... Under MoD regulations, servicemen and servicewomen are entitled to retraining through a grant programme after they have completed five years' service.

A spokesman added: "The point of making this grant available is to improve their employment opportunities once they complete their service.

"What they choose to do is a matter for them as long as it is legal."
That's a pretty liberal attitude. Given that the programme is in place, I like the attitude.

Here's a fun mental counter-factual experiment. Do you think Miss [sic] Hulme would have chosen this career if she had had to borrow or use her savings for the £2,100 course? If not, why not? To remove the income effect, suppose she would have had to spend £2,100 of her own money on some kind of retraining programme; then do you think she would have chosen to train to become a pole dancer?

Or [h/t to BrianF] do you wonder whether she might have chosen to become a holistic healer?

Sunday, May 08, 2005

Holistic Health Centres:
Brothels in Disguise?

From the Toronto Star [courtesy of BenS]:

The City of Toronto licenses more than 200 brothels under the banner of holistic health centres, a Toronto Star investigation has found.

Licensed to offer alternative health treatments such as shiatsu, reflexology and aromatherapy, about three-quarters of the city's holistic centres operate as sex dens. ...providing services routinely offered in most of Toronto's city-licensed holistic centres — "nude reverses," "body slides" and "hand releases."

Almost as fast as the city hands out holistic licences, public complaints bring visits by inspectors from the same city department that investigates and lays bylaw charges — a license-and-prosecute revolving door that costs taxpayers $2.5 million a year.

...Since the first holistic licences were handed out six years ago, the city has licensed more than 300 operations. The number of individuals licensed to work in holistic centres has spiked from 1,200 the first year to about 2,660 today.

City inspectors admit most licences have been handed to operators and practitioners whose idea of holistic treatments amounts to masturbation, oral sex and intercourse.

When politicians make something illegal, it is not surprising to learn that, once again, suppliers and demanders find a way around the law by redefining the product and the activity.

...no matter what holistic centres call themselves, they are simply brothels.
"In the '60s they were massage parlours. Then they were body rub parlours. Now they are holistic centres.

"In China they call them beauty parlours. We can call them flower shops if we want to, but the fact remains they are brothels, and they will always be brothels."
Come visit Toronto -- Mustang Ranch North.

I wonder if someone in my hometown, Clinton, Ontario (population 3200), will establish a holistic healing centre near its mini-casino, "to help those with a gambling problem". As I wrote back in February,

I have a friend with a big old Victorian house near the Clinton Slots (a mini- casino with slot machines and a bit of OTB for horse races). Two weeks ago I mentioned to her, in jest, that their house would make a great brothel (note: the conversation began because she was playing a madam in a play I was directing). She thought the idea sounded pretty fascinating.

Separate, But Equal:
Dubai Stock Traders

Female stock traders on the Dubai Financial Market are complaining about their working conditions and the treatment they receive from the male traders. [see more here, at the Emirates Economist, quoting the Gulf News]

Female stock traders at the Dubai Financial Market (DFM) say the bourse's infrastructure facilities are poor and asked the authorities to find quick solutions. A cross-section who spoke to Gulf News said that the trading hall is in a mess and their main problems are a lack of parking and chairs.

... A.A., another 32-year-old UAE national, said: "We are facing many problems here. Mainly, the ladies who bring their children with them."There is no discipline here, and the presence of children creates more chaos and noise. Unfortunately, there is nobody here to monitor this." She said some females bring their housemaids as well.

...She pointed out that the male investors are also very pushy and rude."Most of the time they don't give us a chance to see the brokers. They push us away, and many times harass us as well. This situation is not good at all."

According to her, there should be a separate hall and brokers for women.

I do not understand how a separate trading hall for women will solve the problems of traders' bringing their children or housemaids to the bourse; nor do I understand how things can be kept separate but equal in this occupation. Perhaps it is an occupation that rewards people, regardless of sex, who are tall enough to see and who have sharp enough elbows to manoeuvre among the other traders.
 
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