In an election year polling data about the views of the electorate always steal the headlines. But are opinion polls reliable anymore? Will Oremus noted:

• Pew Research Center, arguably the most respected polling organization, found that fewer than one in 10 people now respond to their surveys. 15 years ago it was 36%.
• This might be because people are less willing to pick up calls from unknown numbers in the age of caller ID. And when they do they may be less willing to discuss their political views.
• Subsequent analysis done by Pew suggests that Pew respondents are more likely to be smokers, internet users and on food-stamps.
• This is likely to bias polling results in certain areas.
• Overall though polling now is likely more reliable than it was 30 years ago, when phones were uncommon enough to require pollsters to go door-to-door to ask people their opinions.
• It may be that the 1990s and early 2000s were the golden years for accurate polling – we may never reach the kind of accuracy we did then.

To read more, including ways that Pew’s sample population is similar to the wider American population, what this may mean for Barak Obama and Mitt Romney, why a lot of the people who are likely to pick up calls from Pew callers are ineligible to give their opinions, what nonresponse bias, coverage bias, and Bradley effect mean, why higher response rates don’t necessarily mean better data, and some reflections on the future of polling, click here.

Source: Slate

Strawberries in yogurt? Soon it’ll be the other way around.

The New York Times noted that it took about a century for the light bulb to receive mainstream adoption. Inventions don’t work the way we think they do. They take time and refinements. With that in mind they listed the 32 innovations that will change our tomorrow. Some of the more interesting include:

• Airplane cabins are dry and have thin air because of the materials they are made of. They are too weak for highly pressurized interiors and the dryness mitigates rust. Carbon fiber though is the future and shares none of these problems. In some designs humidity has tripled.
• Every person moves their body in distinct and unique ways. Even the way you answer your phone is difficult to reproduce by others. In the future these will form the basis of your passwords rather than the relatively weak, easily guessable methods we use now.
• A flavourless additive is being designed that can be added to any alcohol which then prevent hangovers the following day.
• Stick-on teeth sensors will alert you when there’s plaque buildup, and automatically schedule appointments with dentists when necessary. They’ll be cheap enough to replace daily – which you’ll have to if you take good care of your teeth.
• Our food will soon be packaged in other foods. Current packaging is wasteful. In the future your yogurt will come inside a strawberry – which you can either wash and eat, or throw away.

To read the entire list which is divided into six categories: Morning Routine, Commute, Work, Play, Health and Home, and get a glimpse of how our relationship with our clothes, our pets, and even our dreams will soon be transformed, check out the interactive page here.

Source: The New York Times

Via: Marginal Revolution

The Taxi services of many major cities operate on a medallion system. Jeff Horwitz and Chris Cumming explored the (mostly negative) consequences of this in New York City:

• The medallions were first issued in the 1960s and their supply hasn’t increased by much. In fact, New York even went 60 years without issuing a new one.
• When the medallions were first issued they were worth 150 inflation adjusted dollars. Today buying one can cost as much as $1 million.
• Cab drivers start off their 12 hour shifts owing, on average, $130. This explains the bad service – they race around and refuse to go to far off locations because they have to work long hours just to break even.
• Cab fares have risen but the income of taxi drivers has fallen because of increasing medallion costs and fuel costs.
• The medallion owners have lobbied to end initiatives that could increase the number of cabs on the streets – including a plan to shift to hybrid taxis.

To read many more details, including how the medallion system fares in other cities, what the finance office in Washington DC had to say about implementing such a system in Washington, what the Mayor of New York has to say about it, the history of taxi drivers, the number of medallions in NYC, why taxis are cash cows, what the average pay for a cab driver is, how the medallion owners lobby to get a cut off fare hikes, and why this inertia is inherent to the medallion system, click here.

Source: Slate

Robert Cooter wrote a book about the relationship between laws and economic development titled Solomon’s Knot: How Law Can End the Poverty of Nations. Some highlights of an excerpt posted online with his permission include:

• There is a double trust dilemma in innovation. The innovator must trust the financier not to steal the invention, and the financier must trust the innovator not to steal the money.
• In a way this dilemma has been around for centuries. In the fifth century two Kings exchanged their children as hostages to one another to ensure that they didn’t betray each other.
• Laws can play a role in helping to develop that trust between parties.
• Most economies start off with a relational basis of finance. You trust your family members and they trust you and so you can cooperate.
• However relational finance doesn’t scale for large scale businesses and across large economies.
• This is not to suggest that relationships become irrelevant. Indeed they have become more important than ever through the internet where online reviews of buyers and sellers play a crucial role.

There are other interesting thoughts and reflections scattered throughout the chapter including our favourite:

• Economic and biological evolution differ in an important way. Economic evolution leads to individuals copying the original innovator – it “emulates the most fit through profit detection, whereas biological evolution eliminates the least fit through natural selection.”

You can get the entire book here, and you can check out the entire excerpt to find out more about the links between biology and economics, why establishing trust in modern business is like exchanging hostages, what China’s administrative structure shows us, the role that relationships play in diamond exchanges, and what the industrial revolution demonstrates to us about the evolution of finance.

Source: The American

Via: Marginal Revolution

Are Facebook ads worth it? Ryan Holiday explained why he withdrew all ads from Facebook:

• People go to Facebook to interact with friends and so the ads get ignored. In contrast people go to Google to find things and the ads that it serves up might actually be what users are looking for.
• Everybody who’s tried out Facebook ads has given up on them eventually. Yet the company is still profitable because its success builds upon itself. People hear how big Facebook is, advertise on it, realize that the advertisements are worthless, and stop advertising. But the next group of companies are willing to buy up ads to try them out.
• Facebook will either have to start charging users money for their profiles, or it will have to figure out a way to get people to actually look at the ads. If not then revenues will plummet.

To read more including how Facebook is like a Ponzi scheme, the odd behaviour of investors in the lead-up to the IPO, Facebook’s sketch “sponsored story” platform, and what Zuckerberg may not even know, click here.

Source: Forbes

Via: Newmark’s Door

The proportion of Americans that move across states has halved in the past two decades. What explains this? Brad Plumer reports on the most likely explanation.

• A lot of analysts focus on why this might be a bad thing. Perhaps it’s a sign of America aging or perhaps it’s the recession.
• Yet data doesn’t fit these explanations. Instead it’s because of the changing nature of the job market, and the transformative influence of the internet.
• Jobs aren’t as location specific as they used to be. The service sector is more uniform than the older manufacturing sector meaning that there’s less of a reason to move.
• The internet also means that you can research a location before you move to it. Rather than moving and then looking for a job, now people find their job first and then move. This reduces the amount of needless moves.
• People also have the ability to research where they want to end up in the long run – and that’s where they move first, reducing the need to ever move.

To read many more details including why this explanation makes the most sense, the role that immigrants play, why Wall Street is sort of an exception, and why there’s no need to fret, click here.

Source: The Washington Post

Via: Marginal Revolution

There’s been a lot of discussion about the role that taxation plays in affecting business writes Matthew Yglesias. But what’s far more important is the licensing barriers that they face. Some examples of the odd requirements around the country include:

• In three states interior designers require 2,190 hours of training, and satisfactory marks on an exam. Interior designers in the other 47 states do just fine despite not having a licensing regime.
• The amount of training required to be a barber varies by state. In New York it’s 884 days. In New Jersey it’s 280. Yet the experience of getting your hair cut is the same in the two.
• In Oklahoma you have to be 21 years old to be a locksmith. In New Jersey you need a high school diploma. In Tennessee you need to pass two exams.

As a part of his plea for less stringent licensing requirements he notes that:

• Licensing regimes are often put into place by existing operators to make it difficult for newcomers to enter their field, thus reducing competition.
• Over time licensing requirements seem to increase.

To read more about the effect that licensing requirements have on business, which states do the best job of reducing them, why licensing isn’t always unreasonable, the cases where licensing plays an important role, why these rules seem random, and what states need to do, click here.

Source: Slate

Via: Marginal Revolution

After figuring out that robbing a bank wasn’t the way to finance our Death Star, Centives considered turning to cyber-crime. After all, that’s said to be worth billions isn’t it? Dinei Florêncio, a principal researcher at Microsoft, took to the New York Times to dash our hopes:

• In principle cyber-crime looks to be the perfect heist. You can be thousands of miles from the scene of the crime and all you need is a fairly cheap laptop. Anybody could do it.
• That, then, is the problem. Anybody could do it. And a lot of people do. This makes the returns from cyber-crime vanishingly small. There are only so many gullible users out there who will fall to Nigerian princes.
• Yet press-coverage would have you believe that cyber-crime is growing exponentially. This is because these estimates are based upon absurd statistical models that are biased upwards in significant ways.
• This is why cyber-crime billionaires don’t actually exist.
• This is not to suggest that cyber-crime is not harmful. For those that it affects it can be destructive.

To read more about how exactly these estimates are biased upwards, the survey where two people accounted for more of the alleged cyber theft than the entire sample, how we should actually measure the effects of cyber-crime, how media outlets are perpetuating myths that ultimately harm users, and how this relates to the tragedy of the commons, click here.

Source: The New York Times

Via: Newmark’s Door

Fred Hiatt described what he thought was the best way to significantly improve the educational system: use the power of choice. Highlights of his proposal include:

• Evaluating school teachers based on learning outcomes is difficult – there are too many variables to consider.
• Yet it is possible. After all companies evaluate their employees all the time while taking into account other considerations and inequalities.
• One way would be to give parents a list of schools that they could send their children to, and then let them decide.
• The schools themselves would be independent. They could hire and fire whoever they wanted. But if they weren’t a quality institution then students wouldn’t attend and it would quickly go out of business.
• The idea isn’t particularly new or innovative. This is what has been happening in New Orleans after Hurricane Katrina, and the results of this charter-school system have been astounding.

To read more including how things work in New Orleans, how a charter system and unions can co-exist, more operational specifics of how such a model would work, how such a system has worked in the District of Columbia, how the schools would operate, and why there’s no panacea in public education, click here.

Source: The Washington Post

Via: Newmark’s Door