The Economics Of Kidnapping

August 30, 2014 in Daily Bulletin

Derek Kravitz and Colm O’Molloy took a look at the murky world of hostage negotiations:

  • “Kidnap and Ransom” (K&R) insurance has become a booming industry as companies increasingly insure their executives in conflict ridden areas.
  • A periodic premium is paid, and if a kidnapping happens, the ransom is paid by the insurer.
  • Total premiums have risen from $50 million ten years ago to at least $250 million today.
  • The average ransom paid is around $3.75 million. Premiums can be as high as $1,500 per employee, per day.
  • Exact numbers are difficult to find as those ransomed typically sign non-disclosure agreements in an attempt to prevent other groups from being encouraged to try kidnappings.
  • The practice is controversial. According to one estimate Al-Qaeda and other groups have made more than $125 million through ransom payments to fund their operations.
  • Yet the practice continues to grow – big news pieces about piracy, terrorist, and other risks has pushed companies to purchase more of the policies.
  • Kidnappings used to mostly be associated with Latin America. But kidnappings in the Middle East have grown from 4% of the world total to 17% in the last decade.

Read about the business, the “kidnap reports” that organizations can buy, the details of one K&R insurer, and more over here.

Source: The Guardian

Panda May Have Faked Pregnancy For Food

August 28, 2014 in Daily Bulletin

Laura Smith-Spark wrote about an entrepreneurial panda:

  • Ai Hin, a giant panda, was meant to star in the broadcast of a Panda birth.
  • The panda was selected after it had shown signs of pregnancy such as changes in hormone levels and eating preferences.
  • However scientists later confirmed that the panda was not pregnant.
  • It is theorized that pandas sometimes fake pregnancies because those that actually get pregnant get preferential treatment such as air conditioning and more food.

Read more here.

Source: CNN

How Big Roller Coaster Prevents Children From Going To School Early

August 27, 2014 in Daily Bulletin

Apparently there’s a roller coaster lobby. They’d prefer that children had more play time writes Benjamin Freed:

  • In Virginia a 1986 law makes it illegal to start class before America’s Labour Day.
  • The law was designed to give theme park owners an extra week of crowds.
  • One major theme park operator made over $200,000 in political donations in what is seen as an effort to keep the law on the books.
  • 324 free tickets are also recorded as being given to the lawmakers that are willing to report such things.

Read about some of the other lobbying done, what the Governor has to say, and more over here.

Source: Washingtonian

The Economics Of Malaysia Airlines

August 26, 2014 in Daily Bulletin

Jessica Plautz caught up with Malaysia Airlines:

  • The carrier is now estimated to be losing $2.2 million a day as planes fly empty.
  • The airline was unprofitable even before the twin disasters of MH17 and MH370.
  • Malaysia Airlines has doubled the commission it offers to travel agents who book routes on their flights.
  • It has also slashed prices – a flight from Kuala Lumpur to Beijing costs $238. Other carriers charge over $500.
  • If the airline has to shut down because of the crash it won’t be the first. Three years after flight 103 from London to New York was bombed in the 80s, the airline Pan Am went bankrupt.

See photos of the empty planes and terminals, and read more over here.

Source: Mashable

An Algorithm For Predicting Supreme Court Rulings

August 25, 2014 in Daily Bulletin

David Kravets wrote about an equation created by researchers to predict Supreme Court rulings:

  • The model has a 70% accuracy rate when predicting the rulings of Supreme Courts going back 60 years.
  • In contrast a Supreme Court fantasy league (seriously) has found that its power players have an accuracy rate of about 75%.
  • Fantasy SCOTUS and creators of the algorithm will soon be holding a competition to see which one is more accurate.
  • If effective, the model could be used to help litigators determine their trial strategy.
  • The model uses information about the justices such as the party that appointed them and the year they were born as variables.
  • It also takes into account information about the case and the general disposition of the court among the 90 variables it tracks.

Read about the model, how it works, why it’s better than models before it, and more over here.

Source: ArsTechnica

The Economics Of Super Bowl Performances

August 24, 2014 in Daily Bulletin

Jordan Weissmann wrote about some news coming out of the Super Bowl:

  • Typically performers of the Super Bowl halftime shows don’t get paid – the publicity bump they get is compensation enough.
  • Now the game organizers are exploring the idea of having the performers pay to have the right to perform at the event.
  • The logic goes that the Super Bowl deserves some of the income that the artists will get as a result of the show.
  • If this practice becomes institutionalized then in the future we might only see artists who desperately need a publicity bump and are willing to pay for it perform. This may well hurt the quality.

Read more here.

Source: Slate

Consumers Love Athletic Clothing. Athletics Not So Much.

August 22, 2014 in Daily Bulletin

Sara Germano wrote about the surge in demand for athletic clothing:

  • In a economy that continues to struggle, athletic apparel is a bright spot, expected to grow by almost 50% to $200 billion by 2020.
  • What’s odd though is that while demand for exercise clothing is high, consumers are increasingly avoiding exercise.
  • Instead wearing athlete clothing seems to be becoming fashionable, especially with millennials.
  • This business is known as “athleisure”.
  • Demand for yoga clothing, for example, is growing about ten times faster than participation in yoga.
  • Boots and flannels are also becoming popular with those who have no plans to go hiking.

Read about the peculiarities of the athleisure market, what wearers of the clothing have to say, and more over here.

Source: The Wall Street Journal

The Future Of Room Service?

August 21, 2014 in Daily Bulletin

The Economist looked at a robot serving guests at a hotel in Silicon Valley:

  • The robot is called “botlr”, has a bow tie, and can deliver food and other items to guest rooms.
  • As they don’t need to be awkwardly tipped, travelers may come to prefer robot bellhops.
  • In lieu of a tip Botlr does ask that guests tweet a thank you message.
  • The hotel experience in general is increasingly getting rid of humans. Check in and check out can be done online, phones can act as keycards, and concierges can be reached via Twitter.

Read about why the writer thinks that handing out tips to humans might just be worth it after all, what unions think of the robot, and more over here.

Read more of Centives’ coverage of room service here.

Source: The Economist

How One Movie Transformed Hollywood

August 19, 2014 in Daily Bulletin

Over at Cracked David Wong and Tom Reimann argued that 1995 film Waterworld transformed the movie industry:

  • The film was over budget to the tune of $175 million – making it the most expensive film in history at the time.
  • It was a disappointment at the American box office, failing to make back its cost of production.
  • But it was a smash hit overseas – as a mindless action flick people from all cultures could enjoy it, even if they didn’t speak the language or understand the cultural references.
  • That taught Hollywood that the real money was in making films that appeal to people all over the world – rather than deeper more introspective films.
  • Thus while in the past films rarely made international debuts – usually only if they were already successful in the American market – these days they open everywhere at the same time.
  • American moviegoers have seen the quality decline which is why theater attendance and domestic box offices have been falling.
  • But global revenues are up boosting movies like Transformers and Iron Man 3.

Read about the economics of the industry, why this is a natural consequence of globalization, how television is now the place to go for quality and more over here.

Source: Cracked

The Economics Of State Airlines

August 18, 2014 in Daily Bulletin

The Economist took a look at state airlines:

  • Even before the recent disasters Malaysia airlines was no different from most other state airlines in its struggles to be profitable.
  • Countries got into the habit of keeping state airlines because they were believed to be an important part of a country’s transport infrastructure.
  • However in an era of low cost carriers and competitive management, state backed carriers have failed to adapt.
  • This is because they are usually run with political motives in mind. Government cronies are appointed to manage the carriers and planes are forced to serve unprofitable routes.
  • They are also hamstrung with rules such as free rides for politicians.
  • Meanwhile they face higher costs than other airlines as they are usually too small to negotiate good prices on aircraft.
  • In addition to the bad press associated with firing thousands of workers, some politicians fear that shutting down state airlines will cause vital connection to other countries to disappear.
  • However countries such as Switzerland and Belgium indicate that the absence of an airline does not harm a country’s prospects.

Read about the bailouts that debt ridden Italy had to provide its airline, why Greece’s Olympic airlines was forced to deliver newspapers, and why abandoning state airlines might make countries better connected to the rest of the world over here.

Source: The Economist