Yearly Archives: 2012

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Pay Differentials between Men and Women by Major

February 16, 2012 in Daily Bulletin

Catherine Rampell recently took a look at data released by PayScale and used it to comment on gender in the workplace:

  • Women still only earn about 81% of men’s income for similar work.
  • The gap between male and female pay is largest in the highest paying professions.
  • The differences in pay also vary by the major that the individual studied.

Centives re-produced the data in an easily sortable format below: Read the rest of this entry →

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How Numbers can be Manipulated

February 15, 2012 in Daily Bulletin

As the United States heads into another Presidential election season, and the partisan rhetoric begins to rev up, Sanderson at the Chicago Tribune reminds everybody that the statistics and numbers that we’ll all soon be hearing can easily be manipulated. He points out that:

  • In January 2011 Illinois increased the state’s income tax from 3% to 5% – a 2% increase. However it would be just as accurate to say that the increase from 3% to 5% was a 67% increase.
  • A few years ago another headline pointed out that the social security benefits increase would be the smallest in 4 years. What wasn’t as widely reported was that social security benefits are tied to inflation and so the headline could just as easily have read that inflation was the smallest it had been in 4 years.
  • If a company tells you that people who switched over to their services saved, on average $100, the numbers are likely inflated because the people who wouldn’t save money by switching wouldn’t have switched in the first place.

For many more fascinating examples like this, some of which show how you might be manipulated in your everyday life, read through Sanderson’s thoughtful and balanced post over here.

Source: The Chicago Tribune

Via: Freakonomics

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How Much Would It Cost To Build The Death Star?

February 15, 2012 in Editorial, Top

Building a massive space weapon is all very well, but you have to find the materials to build it with. It’s easy to say that “sure, the Death Star would be expensive” but is there actually enough iron in the Earth to make the first Death Star? Centives decided to find out.

We began by looking at how big the Death Star is. The first one is reported to be 140km in diameter and it sure looks like it’s made of steel. But how much steel? We decided to model the Death Star as having a similar density in steel as a modern warship. After all, they’re both essentially floating weapons platforms so that seems reasonable.

Name: HMS Illustrious

Volume: 28,591.2 m3

Mass: 22,000 tonnes

Scaling up to the Death Star, this is about 1.08×1015 tonnes of steel. 1 with fifteen zeros.

Which seems like a colossal mass but we’ve calculated that from the iron in the earth, you could make just over 2 million* Death Stars. You see the Earth’s crust may have a limited amount of iron, but the core is mostly our favourite metal and is both very big and very dense, and it’s from here that most of our death-star iron would come.

Name: Death Star

Volume: 1,440,000 kilometres3

Mass: 1.08 x 1015 tonnes

But, before you go off to start building your apocalyptic weapon, do bear in mind two things. Firstly, the two million death stars is mostly from the Earth’s core which we would all really rather you didn’t remove. And secondly, at today’s rate of steel production (1.3 billion tonnes annually), it would take 833,315 years to produce enough steel to begin work. So once someone notices what you’re up to, you have to fend them off for 800 millennia before you have a chance to fight back. In context, it takes under an hour to get the steel for HMS Illustrious.

Oh, and the cost of the steel alone? At 2012 prices, about $852,000,000,000,000,000. Or roughly 13,000 times the world’s GDP.**

But then again, you can just take out a loan from the entire planet and then default on them in the most awesome way possible.

(For the record when converting between iron and steel, Centives assumed a medium steel of 99.5% iron)

*Centives erronously reported this figure as 2 billion, not 2 million. Our thanks to commenter Shaun for pointing out this error

**Centives erroneously reported this figure as $8,100,000,000,000,000, which was off by a magnitude of 100. We’d like to thank commenter Ianvl for pointing this out. Despite our original error, the cost of the death star still comes out to be 13,000 times the world’s GDP as we originally reported. Sincere apologies for the mistake.

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Women and Chocolate

February 14, 2012 in Daily Bulletin

Slate reports that on this day of romance and love up to 45 million pounds of chocolate will be given from men to women. But why did women come to be associated with chocolate? Slate took a look at the history of chocolate and gender:

  • Studies analyzing whether or not women objectively enjoy chocolate more than men have been inconclusive. They have however suggested that American women enjoy chocolate more than women outside of America which would indicate that cultural factors are at play.
  • Effective marketing is the most likely reason for the link between women and chocolate. Marketers do this by either suggesting that a woman’s life remains unfulfilled unless they are given chocolate, or they portray chocolate and sexuality as a transactional arrangement between men and women.
  • Advertizers might have chosen to market chocolate in this way due to the increasing liberalization of women. Chocolate was a demonstration that women didn’t need a man to take care of them since chocolate fulfilled their every need. Unlike alcohol or sex chocolate is seen as a culturally appropriate thing for women to indulge in. Conversely, chocolate companies began selling men on the idea that sexuality could be bought with chocolate.
  • There is a historical precedent for the relationship between chocolate and sex. The Aztecs believed that it enhanced the virility of men.

To read more about chocolate and women through the years; to find out why men drank coffee while women drank chocolate; and to see examples of advertizers linking chocolate with sexuality, click here.

Source: Slate

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Are Rising University Tuitions Justified?

February 14, 2012 in Daily Bulletin, Signature

On Pileus, Marc Eisner takes a look at the argument that tuition costs have risen too much, too quickly. He argues that students are getting something in return for the higher fees:

  • The most striking thing about the evolution of the university experience over the years is the change in the services provided.
  • Not too long ago university students were given fairly limited support and complete freedom. They were expected to come to their own decisions and adjust their own schedules. Course catalogues had to be picked up, and advisors were rare. Moreover the living facilities were basic with community television rooms and bland food the norm.
  • Now students have PhDs helping them through every step of the university process. The advisor’s approval is seemingly necessary for every little decision. Living conditions have also significantly improved with personal televisions and computers the norm, meaning that the university has to provide cable and internet. The quality and variety of the food has also significantly increased.

Eisner concludes by noting that the inflation adjusted $5,500 tuition he paid for a year of education reflected the quality of service that he received. To read more about the differences in the college experience between the past and present, the political implications of this change, and how this is interpreted from the university’s perspective, click here.

Source: Pileus

Via: Newmark’s Door

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Valentine’s Day Cards for the Economist in You

February 13, 2012 in Daily Bulletin

Fosslien has posted Valentine’s Day cards that draw upon the principles of Economics. They include such glorious prose as:

  • “I think you’re fantastic, for what you’re supplying, my demand’s inelastic.”
  • “I shorted the market and went long on you”
  • “Love is so foolish, but I could care less, if you’re stock then I’m bullish”

To read more of the charming poetry as well as the beautifully elegant and simple cards that accompany them, click here.

Source: Fosslien

Via: Marginal Revolution

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Health Care Benefits, Employers and Entrepreneurship

February 13, 2012 in Daily Bulletin

The Economist recently took a look at employee benefits and noted that:

  • Part of the reason why wages in America have stagnated is that employers have increasingly incorporated lucrative benefits as part of an employee’s compensation package.
  • The biggest benefits relate to health care. As life expectancy increases and the cost of health care rises, a commitment by the employer to provide health care is worth a lot.
  • However, unlike pensions which have increasingly become potable, health benefits do not transfer from one employer to another. This discourages employees from switching their jobs which is a problem because job mobility has become increasingly important in today’s economy.
  • Statistics show that if not for employer health benefits job turnover rates would be 25% higher. The current state of affairs also discourages self-employment and entrepreneurship.

To read more about why job mobility is important in today’s economy, as well as the historical developments behind this phenomenon, click here.

Source: The Economist

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How To Beat Carnival Claw Machines

February 12, 2012 in Daily Bulletin

  • The difficulty of ‘winning’ in a claw game varies by machine. Manufacturers can adjust several variables to make the game either more or less difficult. They include: changing the length of time allowed for each attempt, changing the strength of the claw’s grip, cramming together the prizes so they are more difficult to pull out, or making it so that the claws only keep hold of the prize every X attempts.
  • Claw machine operators generally aim to award $3 in prizes for every $10 spent.
  • The best way to ensure success is to watch others play to better understand the idiosyncrasies of the machine. Then, when you’re ready to begin, have a friend stand beside the machine so that they can help you better gauge depth.

To read more about the laws relating to claw machines (you can call them “claws”), and the more colourful name that Europeans give to the devices click here.

Source: Slate

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Why Businesses Have Allowed for the Consumerization of IT

February 12, 2012 in Daily Bulletin

RIM’s failures in the smartphone market have largely occurred because of the consumerization of IT. The New Yorker recently took a look at why this has happened and what it means:

  • R.I.M.’s devices became popular because of their appeal to corporate IT departments. Blackberry phones offered reliability and security that corporations could easily control.
  • This made a lot of sense because the demand for a lot of the most advanced technology has been driven by corporations over the years. Examples include: telephones, the internet, and personal computers.
  • The trend over the last decade however has been the consumerization of IT. Employees bring in the technology they prefer to use and businesses adapt to suit them.
  • Corporations have allowed for this trend partly because it means that employees stay connected with their workplace for longer periods including weekends. It also reduces costs since employers no longer have to provide the technology.

To read more about RIM’s failings as well as some other technologies that were adapted by consumers rather than businesses, click here.

Source: The New Yorker

Via: The Economist

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The Fast Food Industry and Apples

February 11, 2012 in Daily Bulletin, Signature

At Slate Matthew Yglesias wonders why Chipotle Mexican Grill doesn’t get the same kind of attention and accolades that a company like Apple would for stunning growth. He argues that this is because folding burritos is not immediately as glamorous as manufacturing the next mobile revolution, but notes that: “finding ways to get better food more conveniently is exactly the sort of thing you’d expect a wealthy society to be focused on.” His article points out:

  • Chipotle’s growth has been stunning. It has expanded its stores both within the United States and across the world. Chipotle’s stock has risen by 500% in five years.
  • Chipotle’s innovations in burrito-making are similar to the iPhone. In neither case did the company invent the product (burritos or smartphones) but they refined them to focus on speed and experience.
  • Chipotle uses a cooking method for its meat that requires a lot of time, but is extremely precise.

To read more about Chipotle’s performance as well as what American politicians seem to think about it, click here.

Source: Slate

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