Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

A storm by any other name

A couple of interesting facts relating to meteorological nomenclature:

First, a ‘cyclone’ is any “system of winds rotating around a centre of minimum barometric pressure,” according to the OED. Once those winds reach hurricane speeds (64 knots), the storm is called a ‘hurricane’ in North America; a ‘typhoon’ in the Northwest Pacific, west of the International Date Line; a ‘severe tropical cyclone’ in the Southwest Pacific, west of 160°E or the Southeast Indian Ocean east of 90°E; a ‘severe cyclonic storm’ in the North Indian Ocean; and a ‘tropical cyclone’ in the Southwest Indian Ocean.

Secondly, the American National Oceanic and Atmospheric Administration (NOAA) names cyclones in a number of different regions several years in advance. If the list of names assigned for a season runs out (there are 21 assigned names per year) subsequent storms are named after the successive letters of the Greek alphabet. Short, distinctive names are used because doing so was found to produce fewer errors than designating storms on the basis of latitude and longitude. Sometimes, a storm is “so deadly or costly” that the NOAA retires the name, for reasons of emotional sensitivity.

Biotechnology and Canadian novelists

Nearly done with the book, it seems fair to say that Oryx and Crake is the kind of novel that demonstrates how fiction can better educate a person for the future than textbooks or well-meaning non-fictional treatises.

It’s an ugly and disturbing book, but it may also be an important one.

The bike search

The first day of bike searching has yielded no success. I investigated the Bike Dump on Catherine and learned that they only have a single dingy old hybrid for sale – for $265 – and will get no more for weeks. A shop on Bank Street was no better, nor was another in the Byward Market.

Tomorrow, I will try the Bike Co-Op. Also, I will keep trawling Craiglist. I want to get something soon enough that I will have a chance to explore before cold and ice makes cycling here hazardous.

PS. All this demonstrates, once again, the inefficiency of moving often. It means you need to do time consuming things over and over again. Also, you need to suffer all the inefficiency of not knowing which places are likely to provide what you are seeking, as well as the loss associated with selling it all at the end (or frantically giving it away, as became the case in Oxford).

Types of goods

In economic theory, most things you can buy are ‘normal goods.’ This means that, as the price rises, people buy less of them. Conversely, people buy more as the price falls. This is all quite self-explanatory but it is interesting to note that there are other types of goods that operate in different ways.

The most common example may be inferior goods. The richer people get, the less they spend on inferior goods. This includes most kinds of discount items: once people can afford something better, they make the switch. Inferior goods reflect this property both at the micro level (an individual gets a big raise and buys less cheap IKEA furniture) and at a macro level (the mean income in a state rises and demand for low-cost gruel falls). Long distance bus trips are a classic example of an inferior good, as anyone who has spent more than twelve hours in a smelly, noisy coach can easily understand.

A somewhat perverse counterpoint to inferior goods can be found in Veblen goods. Named after the economist Thorstein Veblen, these are products for which the demand actually rises as the price does. This is essentially on account of their exclusivity. People buy Velben goods (such as Rolls Royce cars and $50,000 cell phones) precisely to demonstrate that they can. Of course, this makes them a godsend for those hoping to part status conscious rich suckers from some of their wealth.

A final possibility, which may not actually exist, is a Giffen good. To qualify, the good needs to be inferior (in the sense described above), there must be a lack of close substitutes, and the good must comprise a significant share of the purchaser’s budget. With these goods, price rises also lead to people buying more, though for a rather different reason. People who have become too poor to buy a better option fall back on a worse option. The failure of economists to find any well-defended empirical examples suggests that this kind of good may exist only in the minds of academics.

Both Giffen goods and Veblen goods exist because of possible characteristics of the buyer, rather than of the good itself. Whereas Giffen goods are easy to reconcile with ‘rationality’ as understood by economists, Velben goods do so only when they are viewed as inputs in the manufacture of the commodity actually sought: such as social status or prestige.

People wanting to read even more about goods and economic theory can look into the distinction between rivalrous and non-rivalrous goods and excludable and non-excludable goods. The two ideas together define public goods and common property goods, the existence of which make even the most hard-nosed economist recognize the efficiency of governmental action to regulate markets.

Heavy reading

I need to alternate my reading material a bit. Taking breaks from reading about Iraq and climate change in the newspapers, I have been reading Fugitive Pieces, which is beautiful but full of anguished Holocaust imagery, and Oryx and Crake, which is depressingly plausible, despite probably being intended as an Orwellian satire. One wonders whether any implausible elements included in the latter relate more to the likely course of technological development, or the dynamics according to which technology and society interact.

Having a clear-eyed view of the world, and its future possibilities, is essential for good planning and ethical behaviour. That said, having too much of the heavy cloth of reality wrapped around you can make it awfully hard to swim.

Pressure and the price of gas

The tendency of gasoline to increase in price during the summer is well known. Partly, this reflects increased demand (which leads to an increased quantity sold at an increased price, given a particular supply curve). Partly, this is the consequence of how summer gasoline is a different blend of hydrocarbons. The reason for this is the need to prevent too much pressure from building up inside gas tanks as more of the liquid turns to vapour in the summer heat. This is standardized in terms of Reid vapour pressure (RVP): the pressure of any particular gasoline blend at 100°F (37.8°C) expressed in kilopascals, calibrated to a standard atmospheric pressure of 101.3 kPa.

RVP is used to specify which blends of gasoline are acceptable for sale at different ambiant temperatures. Gasoline with an RVP of over 14.7 will fairly easily pressurize gas tanks and gas cans in summer heat. It will also boil if left in open containers. As such, regulations require summer gasoline to contain less butane than the winter sort. This is on account of how butane is relatively inexpensive (making companies want to include more of it), but is also the most active contributor to vapour pressure. As such, the butane content of summer gasoline must be very low – one factor behind the higher price.

I learned all this from R-Squared, an energy blog that seems to be commonly cited. The blog makes one other important point: anyone considering storing cheap winter gasoline for use in the summer should consider the dangers of having the butane therein turn to vapour and start pressurizing the container in which it has been stored.

Hired guns

I heard a lot fair amount about mercenaries when I was at Oxford, but this is the most interesting thing to happen in relation to them in decades. The degree to which war has been privatized would probably shock Eisenhower.

What remains to be seen is the degree to which the United States will respect the sovereignty of the democratic government that all the entire second Iraq war was meant to create.

Two months in Ottawa

Today, it seems like a good idea to provide a brief personal update, rather than a few hundred substantive words on a random topic. Life at the moment is quite heavily dominated by work – which is proving to be interesting, as well as important. I have finished one big project already, and have moved on to a collection of smaller things. At the moment, I am digging out my hazy recollections of parabolic functions and calculus. My co-workers are engaging and helpful and, while I remain largely ignorant about the mechanisms by which this organization functions, much of what I studied as an undergrad and master’s student is directly applicable to the work we do. There seems to be a reasonable chance of converting my one year contract into an indefinite position, on the basis of a competition taking place during the next few months.

My level of integration into Ottawa life is roughly where it was a month ago, though I will hopefully be getting a bike on Saturday and I have joined the Ottawa Hostel Outdoor Club. Once my membership materials arrive, I am hoping to start doing some weekend hikes with them, with the possibility of cross country skiing later in the year. Having met so few friends here thusfar is frustrating, though it has been as much a product of my time usage as anything else. Until I have a reasonable circle of Ottawa friends who I didn’t know before coming here, I don’t think I will really feel like I live in this city.

In mid-October, it seems as though Tristan and Meaghan will be coming to visit me, which should be excellent. Having Emily here back in August was amazing. At the end of the October, I am going to a conference in Montreal, then staying for the weekend. For Christmas, I hope I will get the chance to spend a reasonable amount of time in Vancouver. It seems unlikely that any substantial quantity of work is going to be ongoing at that time, anyhow.

Unlocking cars with computers

Back in the day when the original Palm Pilot was a hot new piece of technology, I remember BMW and a number of other car companies started selling cars with a keyless entry system based on an infrared transmitter in a key fob, just like a television remote control. Unfortunately, whatever sort of protocol the system used for authentication was quickly undermined and the Palm Pilot’s infrared transmitter suddenly became a key to all manner of expensive new automobiles.

Something similar has happened again. The KeeLoq system, used in the keyless entry systems of most car manufacturers, has been cracked by computer security researchers. A PDF of their research paper is online. The attack requires about one hour of radio communication with the key, which could be done surreptitiously while the owner is in an office or restaurant. The cryptographic analysis involved takes about a day and produces a ‘master key’ that can actually open a number of different cars. Having collected a large number of such master keys, it would be possible to intercept a single transmission between a key and a car (say, when someone is parking), identify the correct master key, and open the door in seconds. While this will not start the car – and there are certainly other methods available for breaking into one – it does create a risk for theft of objects inside cars in a way that shows no signs of forced entry. In many such cases, claiming insurance compensation is difficult.

Of course, mechanical locks also have their failings. One important difference has to do with relative costs. Making a physical, key-based access control system more secure probably increases the cost for every single unit appreciably. By contrast, improving the cryptography for a system based on an infrared or radio frequency transmission probably involves a one-off software development cost, with negligible additional costs per unit. As such, it is especially surprising that the KeeLoq system is so weak.

Not so jolly: the economics of gift giving

As anyone who has ever been disappointed by what they found under the wrapping paper knows, gift-giving can lead to the misallocation of resources. Gift givers misanticipate the value a particular thing will have for the recipient, and thus devote more resources to the purchase than the recipient would. Joel Waldfogel, writing in The American Economic Review back in 1993 discussed this and other related economic issues in a notorious article called “The Deadweight Loss of Christmas.” (Available through JSTOR and Google Scholar)

Imperfect knowledge and non-ideal choices

The paper includes the gloomy conclusion that “gift giving destroys between 10 percent and a third of the value of gifts.” On this basis, the paper estimates that the deadweight loss of holiday giving in the United States in 1992 was between $4 billion and $13 billion. The article does note one possible saving grace: when recipients are ill informed about the existence of things they might enjoy, a gift can be worth more than a transfer of the equivalent quantity of cash. Of course, providing the cash and the information would achieve the same effect, without the risk that the choice will be different from what the recipient would have done with the money themself.

Gifts from friends and significant others are most efficient (largely because they know the preferences of the recipient best), while “noncash gifts from members of the extended family” are most likely to be valued by the recipient at less than their cost of purchase. Recipients value gifts from friends at 98.8% of their actual value, while those from significant others are valued at 91.7%. Parents and siblings give gifts worth 85% of their cost, while aunts and uncles manage only 64.4% and 62.9%, respectively. These conclusions were reached largely on the basis of surveys given to Yale undergraduates (favourite targets for psychological and economic experiments). Waldfogel notes that a social stigma can exist against giving cash gifts, but it is weakest where aunts, uncles, and grandparents are concerned – not coincidentally, the least effective choosers of gifts.

The thought counts

I have a more wide-ranging response of my own. Thankfully, there is a phenomena that partially offsets imperfect gift choice losses: the extent to which the very status of something as a gift increases its value in the eyes of the recipient. I can think of scores of cases where a product or service that would not have been particularly gratifying if purchased for myself was especially welcome and meaningful when received from someone else. In many cases, this creates utility significantly greater than that which could be achieved through personal spending of an equivalent sum.

I was reminded of all this when I saw Waldgofel’s article mentioned on Marginal Revolution, an interesting economics blog.