Centives

Procter & Gamble is going to sell off its venerable Duracell brand. Max Nisen argued that this showed that the days of batteries are numbered:

• Sales of Duracell have been declining for a while and last year they shrunk 4.6%.
• People used to use batteries for their flashlights, music players, and gaming devices. The smartphone with its rechargeable battery has replaced all of them.
• TV remote controls also suck up a lot of batteries. But with systems like the Xbox and SmartGlass people are increasingly using other means to control their televisions.
• All of this is probably good for the environment. Batteries are usually thrown away and contain various chemicals that end up in landfills.

Read more about Procter & Gamble’s logic, and how second placed competitor Energizer is responding to the same market conditions over here.

Source: Quartz

Due to rising sea levels, several countries are threatened with extinction. Latif Nasser wrote about what this means for what is often the country’s most valuable resource: their water rights.

• The UN law of the sea defines a country’s waters as those within 200 nautical miles of its shore.
• These waters can be lucrative. The fishing rights alone can be worth several billion a year.
• There is a catch though. A country can’t claim the waters around a rocky outcropping that might formally be a part of its territory.
• Instead it must properly be defined as an island, which, among other things, requires that it be able to sustain human habitation on its own.
• The problem is that as sea levels rise, several countries may no longer meet the definition of an island, and lose the lucrative rights to their waters.
• As countries will likely erect artificial ocean barriers, one possible solution is to redefine islands to include those which allow for human habitation through manmade structures.
• Another is to freeze maritime boundaries as they currently exist so that they don’t constantly have to be remapped and the economic viability of small sinking states isn’t threatened.
• The United Nations could also recognize a new type of country: the deterritorialized state. These states could continue to call themselves a country, and hold onto their maritime rights, even if they no longer have any land to call their own.
• The problem with all of these solutions is that they would require changes in international laws. And since the countries that most need it have little geopolitical clout it is unlikely that they could effect change in time.
• Instead countries will likely have to sell their maritime rights, in exchange for land from other countries to establish a new state.

Read about Kiribati, a country that is currently living this dilemma, how it has tried to resolve it, how groups such as the Knights of Malta might lead the way, and much more in what is a well written and exhaustive article on the subject over here.

Source: The Boston Globe

Only 499 LaFerrari supercars, the most powerful street legal car built by Ferrari, were made. Jordan Golson wrote about what it took to buy one:

• It’s not enough to be a celebrity and to have a lot of money. Various famous people have had their requests turned down.
• The campaign to own a Ferrari begins well in advance of the car’s delivery. All 499 cars were sold before they were even announced.
• To own the car you have to show yourself to be a loyal Ferrari customer. To have any hope of getting one you have to have at least five other Ferraris – although more are recommended.
• But there are thousands of people that meet this criteria. You also have to get a letter of recommendation from the local Ferrari dealer.
• If high level corporate figures approve your application you’re merely told that you’ll get one without any clear idea about when the delivery will be made.
• While it may seem odd that Ferrari is rewarding loyal customers by giving them the privilege to pay the company an additional million plus dollars, since the cars will appreciate in value they’re a pretty good deal.

Read about what it’s like to be in the shoes of a prospective LaFerrari owner, why owners must be willing to accept it as a work of art, and not focus on things such as mileage, and why it’s a rather dangerous car to drive one over here.

Source: Wired

Studies in the west have found that taller people make more money than shorter ones, on average, due to subconscious biases. In China the preference for height is explicit and institutionalized, writes The Economist:

• In China your pay can, in part, be determined by your height. Taller security guards, for example, are offered more money than shorter ones because they are more intimidating.
• However discrimination exists in fields where height makes no difference. Job postings will sometimes include a height requirement, such as for being a cleaner.
• Even if a height requirement isn’t listed, Chinese applicants will note their height and weight on their resumes.
• For women each centimeter of height above the mean leads to a 2% increase in pay.
• The military’s preference for height has gotten to a point where soldiers are becoming too tall for the tanks they drive.
• This prejudice is exacerbating income inequality. Taller people are more likely to come from wealthy backgrounds. They then get nicer jobs, and raise their children in an environment that allows them to grow even taller.

Read about the university that has a height preference for students, the regional height differences within China, and what this all means for the country over here.

Source: The Economist

A couple posted data about how marriage affected the text messages that the two sent each other:

• After marriage, the frequency of the term “love” and “hey” fell, while the usage of “home”, “dinner”, and “ok” rose.
• Surprisingly the two also stopped using each other’s first name, abandoning any form of greeting.
• Before marriage the two texted between 3pm and 3am. After marriage they texted during working hours and rarely texted at night.
• The differences mostly stem from the fact that before marriage, the couple weren’t sure of seeing each other every day, and so things such as “I love you” had to be said via text.

Read more about how the couple’s relationship evolved from dating, to the period of engagement, to marriage, and see some charts which may well generalize across most couples here.

Source: A Dash Of Data

Sales of hot pockets are nose-diving. The excellent Venessa Wong looked at what went wrong:

• In a time of increasing health consciousness consumers are turning away from the pastries famous for the gooey mix of meat and cheese within.
• In response the makers of hot pockets tried to rebrand the product emphasizing the ‘premium’ cuts of meat and ‘real’ cheese contained within. It hasn’t worked.
• A beef recall further dented the product’s reputation.
• One of the biggest factors affecting sales however might be the expiration of extended food stamp benefits.
• The frozen pockets are fairly economical, with each one costing less than a dollar, making them popular with lower income individuals.’
• Hot pockets aren’t the only food affected. The expiration of federal subsidies is changing the supermarket landscape.

Find out about the failing Funny or Die marketing campaign, what executives have to say, and more over here.

Source: Bloomberg BusinessWeek

Dubai is considering building the next generation of ambulances wrote Alex Davies:

• The wealthy emirate is looking into Lotus Evoras and a pair of Ford Mustangs to act as emergency response vehicles.
• With a top speed of 260 Km/h the “ambulances” should be able to get to the scene of incidents much quicker than typical vehicles.
• Given that the cars don’t really have room to carry patients, they would instead be equipped with emergency medical equipment to stabilize patients until slower ambulances got to the scene.
• Experts (sourpusses) point out that the money is being wasted entirely since after a certain point, response times actually matter very little in determining patient outcomes.
• They also note that emergency vehicles travelling at several hundred kilometers per hour through a crowded metropolis could well create more patients than they help.

Read about the vehicles, what the government things, what the experts know, and more over here.

Source: Wired

Roberto Saviano wrote about the economics of the mob in Italy:

• New joiners earn as little as $2,500 a month.
• Income growth is rapid though. Becoming the boss’s right hand man could make you $38,000 a month, and becoming second-in-command gets you $130,000 a month.
• The groups offer insurance. Stipends go up if an individual has a disabled child.
• If members are killed, then the family can choose to receive a lump sum of up to $260,000 or a monthly payment.
• Hits aren’t particularly profitable. Murder bonuses begin at $2,600, and the killer is forced to relocate.
• The mafia considers robbery and prostitution to be dishonourable so doesn’t really engage in it. It will take a percentage of profits from others engaged in the business though.
• All in all the life isn’t particularly glamorous. Members are forced to hide their riches, live in tiny underground bunkers, and constantly worry about the lives of their loved ones.
• People do it more for the benefits that are on offer, than the glamorous lifestyle.

Read about how the mob operates, why one individual was stricken that his jail sentence was only 8 years, and more over here.

Source: Vice

Via: Marginal Revolution

The Economist wrote:

• Anti-Semites have often claimed, for a large part of history, that Jewish people control the world of finance.
• So much so that it seems that areas with a legacy of anti-Semitism avoid using finance.
• According to a study, even today, areas in Germany where Jews were most likely to be sent to concentration camps are 7.5% less likely to invest in stocks, when compared to other Germans.
• This is to their disadvantage – such individuals get lower returns on their savings, imposing a direct financial cost on them.
• The authors conclude that “persecution of minorities reduces not only the long-term wealth of the persecuted, but of the persecutors as well”

It is perhaps important to note that this is “a cultural norm of distrust in finance that has transmitted across generations independently from anti-Semitism”. Read more details here.

Source: The Economist

An equation that tells you exactly when to arrive at a party to not be weird. What a ridiculous idea! Why, the only people who would use that are those who break out in a cold sweat wondering if they’ll be socially ostracized for being late, or awkwardly gawked at for being the first ones there. People who’ll map the location in advance to find the closest Starbucks so that they have a place to retreat too if no one else is there. People who will write a bulletin about it for an “economics” website so that they can easily find it in the unlikely scenario that someone invites them to a Halloween event.

*Ahem*. Walt Hickey wrote:

• The chaps at FiveThirtyEight organized a crowd sourced experiment to figure out when people show up to parties.
• They found that the median individual shows up to a party 58 minutes after it was meant to begin.
• But it depends on the size of the party. In those that have fewer than 23 attendees, the median guest is only 29 minutes late.
• Those with more than 25, the median person comes 70 minutes into the event.
• As a general rule of thumb, if you want to be the median guest to arrive, show up 42 minutes late, allowing for an additional 4 minutes for every ten members attending.

Read the caveats about the data, the 9% of people who arrive before a party begins, and see some excellent graphs and visualizations, as well as additional trends here.

Source: FiveThirtyEight