Other Writing

I have a piece up at Forbes in part inspired by chapter 8 of “The Logic of Life”. It asks why governments are so determined to back losers rather than winners in industrial policy:

There’s a more sinister logic behind the pattern of government favoritism. Namely, firms in emerging, competitive industries have virtually no incentive to lobby for government hand-outs, while firms in aging, shrinking industries have the most to gain.

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First published in Business Life magazine, September 2007

It’s been a long time since the heady days of the late 1990s, when email was enough of a novelty to carry the plot of a romantic comedy. How times have changed: email is now an essential business tool. It is also the source of frustration and controversy. Does email actually make us more productive?
It’s not obvious that it does. First, there is the avalanche of emails offering penis enlargements, stock tips and the odd million dollars from Nigeria. Then – and probably more of a waste of time – there are the interminable work discussions into which you’ve somehow been copied. They’re useless and yet you feel you can’t afford to ignore them. Finally there are the clumsy, slowly-typed miscommunications that could have been handled quickly and more smoothly face-to-face. It is all worth it?
Marshall Van Alstyne, an economist at Boston University, thinks he may have an answer. Van Alstyne and various colleagues have been conducting research based on extremely detailed data from an executive recruitment firm – including 125,000 email messages sent and received over a period of ten months. Rather than looking at simple correlations, such as “does more email mean more work gets done?”, the researchers are looking at the pattern of email networks and the completion of specific tasks.
The first surprise is that an email exchange is often more productive than a conversation, because email helps people to juggle many different tasks. That seems to be because a conversation demands that two people are focussing on the same thing at the same time. Sure, you can do your nails while talking on the phone, but beyond that you need to drop what you’re doing and surrender to someone else’s priorities. Email doesn’t make that demand: the recipient can read it when the time is right.
The second surprise is that email’s real value doesn’t seem to be in communicating with Tokyo or even with someone on the other side of London. The most productive workers are not the ones who send the most email or whose external networks are the largest: they are the ones with the largest email network inside the same firm.
It’s ironic: we are always complaining that our colleagues send us an email rather than walking ten yards and talking to us. Yet it turns out that this apparently-frustrating behaviour is precisely the most productive way to use email. Sometimes common sense and economic sense don’t point the same way.

First published in Waterstones Book Quarterly

Life often seems to defy logic. When a prostitute agrees to unprotected sex, or a teenage criminal embarks on a burglary, or a heavy drinker downs another whiskey, we seem to be a million miles from rational behaviour. None of it makes any sense – or does it?
Using some remarkably clever techniques and imaginative perspectives, a bold new breed of economists is busily demonstrating that life makes more sense than anyone would have thought. Using every clue that comes to hand, from a laboratory brain scan to the hidden patterns in old maps, they are discovering that there is a surprisingly rational basis to the seemingly irrational world around us. Read the rest of this entry »

Feature story, FT Magazine, 26 January 2008

In 1737, John Harrison, a self-taught clockmaker from Yorkshire, stunned London’s scientific establishment by presenting an idiosyncratic solution to the most important and notorious technological problem of the 18th century. He was hoping to win a then-fabulous prize of £20,000 (about £5m today) for anyone who could devise a way for a ship’s navigator to determine its longitude and therefore its position at sea. Harrison’s approach was to build a clock that would keep Greenwich time faithfully; by comparing local time (measured using the position of the sun) with the time in London, the navigator would know how far east or west the ship had sailed. The theory was sound, but given the rolling of ships and changing temperature and humidity, the leading scientists of the day – including Sir Isaac Newton – reckoned that a sufficiently accurate clock would be impossible to build. Harrison proved otherwise.

The longitude prize, sponsored by the British government, was not unique. Prizes were also offered in France for a functional water turbine, and for a method of preserving food for Napoleon’s armies. The latter prize quickly inspired the tin can, more of a blessing than food snobs might acknowledge.

But such prizes then fell out of fashion. For commercial innovations, we now rely on patents to encourage and protect innovators. Basic research is funded not by prizes but by grants.

And yet two centuries after tinned fish hit the market, the way we look for solutions has come full circle. Governments, private foundations and even corporations are rediscovering the value of offering prizes for good ideas. Rather than paying for scientific and engineering effort as they have done for the past 200 years, idea-hungry patrons are returning to the 18th century, and paying for results. Read the rest of this entry »

The Times (London) has published two nice extracts from the Logic of Life, plus me reading from the book. Read the rest of this entry »

As a columnist (which is fancy for “journalist in jammies”), I ought to personify the conventional wisdom that distance is dead: All I need to get my work done is a place to perch and a Wi-Fi signal. But if that’s true, why do I still live in London, the second-most expensive city in the world? Read the rest of this entry »

Slate is publishing two excerpts from “The Logic of Life“. Here’s the second one:

Perhaps a more positive way to express the trend is that women’s entry into high-powered careers has given them the option to get divorced if the marriage isn’t working out; and the recognition that that option is important is one of the factors encouraging women’s entry into high-powered careers.
That may sound a little abstract, but economists Betsey Stevenson and Justin Wolfers discovered a chilling example of the way that the increased availability of divorce empowered women.

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Slate is publishing two excerpts from “The Logic of Life“. Here’s the first one:

Ever since John von Neumann’s game theory promised to help us understand love and marriage, economists have been interested in how people choose their partners and how relationships work.

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First published in Business Life magazine, August 2007

The new football season is upon us, bringing the traditional complaints that the big clubs are getting ever richer and more successful at the expense of the fans’ enjoyment. Europe’s sports ministers are even pressing for action. Who, after all, wants to see a predictable football match?
Ironically, the European model of sport – global, very open, highly unequal – seems more American than American sport does. American sports leagues tend to be highly regulated, closed to newcomers, and redistributive. Sport does not always imitate life.
Many people intuitively feel that football should be a little more American, with more redistribution of television and gate revenues. Yet our intuition can sometimes deceive us. Both economic theory and the data suggest that an uneven sporting struggle may not be as bad for fans as many of us believe.
The assumption that people value an evenly-matched contest is challenged by the game’s statistics. Think of Arsenal’s unprecedented “invincible” season in 2003-04; the club won 84 per cent of its premier league matches and lost none. Hardly fair on Arsenal’s opponents, but every match was a sell-out. The small chance of a defeat was presumably enough to keep Arsenal’s many fans interested.
In any case, their dominance also allowed them to play great football. That is important: sports fans care about quality as well as the odd surprise.
That’s just one example, but Stefan Szymanski of Imperial College London, one of the world’s leading sports economists, has done a more rigorous analysis of attendance over 25 years at English second-tier football matches. He finds that that in seasons where inequality between the top teams and the bottom teams is higher, the audience for football is not smaller and perhaps a little larger.
That shouldn’t be too surprising: more fans turn up when their team is winning, so in seasons when the bigger teams are winning more often, average attendance should rise.
Similar reasoning suggests that some sport regulator genuinely trying to make the largest number of fans happy would favour the big teams, because the big teams have more fans.
The statistics certainly suggest that the rise of the mega-teams such as Manchester United, Barcelona, and Real Madrid has boosted global interest in the sport rather than killing it. Giant-killing feats are a good story but they disappoint millions of loyal big-club fans. Upsets are necessary but if they happen too often they would not be upsets. And if you really think that football is predictable, the bookies will be happy to take your bets on this season’s champion.

First published in Business Life magazine, July 2007

Let’s face it, we’re fat. Half of all British adults are overweight or obese, which is good news only for the manufacturers of outsize trousers. Other countries are also suffering from rising obesity. So if you wanted to propose a policy to slim down the western world, what would it be?

That depends on what you think the problem is. Trust the economists to have an opinion about that. Armed with a big box of clever statistical tools and a keen sense of the costs and benefits of anything – even a cheeseburger – they have something to say that is worth hearing.

The clever statistics are essential. After all, is a kid who spends 40 hours a week watching television fat because he’s been watching advertisements for fast food, or fat because he isn’t outside playing football? Or is he watching so much television because he was already fat and so doesn’t enjoy playing outside?

The economists Shin-Yi Chou, Inas Rashad, and Michael Grossman realised that local networks all over the United States have different patterns of fast-food advertisements. They have used this difference to show that fast-food advertising does indeed make children, especially teenagers, fatter.

Another neat piece of analysis is from Henry Overman of the London School of Economics, along with three co-authors. They look at the common complaint that sprawling suburbs make people fat because they encourage too much driving. On the face of it, that seems to be true: fat people live in the ‘burbs. But Overman’s team tracked 6000 people over time to show that the suburbs don’t cause obesity. They simply attract overweight people, while compact pedestrian-friendly cities attract the slim and fit.

Obesity even lends itself to cost-benefit analysis, and it does seem that the incentives are starting to push people away from dieting. Because of new cholesterol-busting drugs, it simply isn’t as dangerous to be fat as it once was. (Sure, it’s bad for you, but it used to be worse.) I have heard more than one economist argue that that’s a reason for the rise in obesity: since it’s not such bad news to be fat, why not eat the odd chocolate bar that once you would have resisted?

Add to that the fact that the time and expense of making unhealthy food has plummeted. The Harvard economist David Cutler, with two colleagues, points to the potato as an example. It was once boiled or thrown into stews because making chips was a chore. Thanks to industrial processing, freezing and vacuum packing, we can enjoy chips in seconds and for just a few pennies. If you really want to slim down the nation, perhaps you should forget advertising and worry about microwavable chips.