The A-List was out in force today at the market. Dora and I were there and people continue to think that I may be Quentin Tarantino (unfortunately I do see the resemblance). As an avid reader of People Magazine, I was quick to spot three young people who often grace its pages. Ashlee Simpson , her husband --- the tattooed Pete Wentz --- and baby seemed to be having a nice morning. Even "important people" can have a peaceful start to their day.

I am now listening to my son play his violin --- he is playing the Star Wars music that I bought for him. Yoda might not recognize the sound but the neighbors love it. We encourage him to play outside so that all of our nearby "friends" can hear it. This is payback for their barking dogs. If the Coase Theorem really holds, I'm expecting a payment from them (in return for shutting down the noise) of $10,000 very soon.

UCLA's final week of class starts tuesday. Despite the large paycuts and the absence of new hiring this year, I'm mildly optimistic about the short term future. I continue to lobby that we need to start acting like a cost minimizer and allow the economists and business types to play more of a leadership role in rational planning and prioritization. There are 10 campuses at the UC but I don't believe that any PHD economist plays a leadership role at any of them. At UC Davis, I believe that Steven Sheffrin was in a leadership role (Dean of something). UCLA would be in even better financial shape if strong incentives could be introduced into the system to encourage excellence and optimization. All Deans should be required to read Laffont and Tirole's book on the principal/agent problem. http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=8210

University management appears to be a classic case of how to incentivize a tenured group of agents to work hard for the greater good. --- Same issue with the implicitly tenured "staff".

According to this website , Dora and I had a 82% chance to make it to our 12th anniversary. My son's violin playing (Star Wars symphony) is not helping. As I flashback to May 29th 1998, I remember that it was a very hot day in Cambridge, MA. My grandfather married us and he did a great job. With all of the details we had to attend to, we had forgotten to memorize our vows and stood up there with our printed copies of "the script". If you watch the video, I have a lot more hair and it looks like a graduate student skit show.

In my new book Climatopolis (for which the page proofs now exist), I quote the New Yorker's Elizabeth Kolbert. In this piece praising behavioral economics, she writes:

"If there is any consolation to take from behavioral economics—and this impulse itself probably counts as irrational—it is that irrationality is not always altogether a bad thing. What we most value in other people, after all, has little to do with the values of economics. (Who wants a friend or a lover who is too precise a calculator?)"

I have married another economist and that's revealed preference! Is rationality and cold cost/benefit analysis that unsexy? Is sticking to the plan and being consistent such a bad thing? Diversity is the spice of life but you can plan and foresee how you inject this into your day to day life.

I gave my 8.5 year old son a copy of Climatopolis and he read the first chapter and says that he likes it. In September 2010, I will return to my college (Hamilton College) and the World Bank to speak about this book. I'm also making plans to speak about it at Pomona College here in LA.

Here is the book's Amazon page.

In the past, the Congress voted on new risk reduction regulation shortly after environmental disasters took place. What will this recent BP Spill trigger?

Thomas Friedman would vote for a "Patriot Tax" and I agree with him but I don't see the President suggesting a two dollar a gallon tax on gasoline right now.

If we ban drilling on our coastline and if we don't pass carbon legislation, then we will need to import more oil and will remain reliant on some non-democracies to continue to feed us dirty resources.

Will we pursue an electric car agenda to replace our gasoline fleet with electric vehicles? (A Tesla in every garage?). In this case, we need to start thinking about streamlining the permitting and the construction of new power plants and transmission cable. NIMBY lawyers better be ready to be on the defensive.

Perhaps the Congress will enact a law banning oil spills. Now, on this point I do not know how much of an investment BP made in minimizing the probability of a spill and what "fail-safe" checks they built into their system. No process can be risk free but at the margin, how much $ do we want oil companies to pay to lower the risk of disaster? Do they have the right incentives under current torts and public relations challenges to invest in minimizing the probability of disaster? Companies such as BP and Exxon know that they will be sued and pillored in the press and blogs when a spill occurs; how much ex-ante precaution does this trigger?

The unspoken issue here is "out of sight, out of mind". When we import natural resources , we do not think about the safety issues (coal mines) and the environmental issues associated with harvesting those resources, we just buy the final product. When domestic production generates the coal and gas, we see the "dirty work". I thought that we never wanted to know how the sausage is produced.

Switching subjects; calories have become too cheap and now the world has fat cops .

While I'm suffering and thinking, my humanities colleagues at UCLA and Stanford are rocking out . Equal pay for equal work!

I can't imagine Milton Friedman or even Paul Krugman or Randy Wright attempting the following;

"A rakish band of Stanford professors and their cronies is rocking out through tune after tune in a university rehearsal space on a hot spring afternoon. No, this is not your typical rock band — its founding guitarist-songwriters are professors of literature, scholars of Dante and the French Enlightenment. But Glass Wave, as the group calls itself, settles into a snarling, chicken-scratch groove for a song it has recorded titled "Lolita," as lead singer Christy Wampole crouches and moans:

Now that Mother's gone away,

you think that you can have your way.

So you stroke my fevered lips

with your filthy fingertips.

Yes, Wampole — a doctoral student in French and Italian literature — is singing the scared thoughts of that Lolita, the 12-year-old who grows sexually involved with middle-aged Humbert Humbert in Vladimir Nabokov's 1955 novel."

I'm not sure what any of this means and I don't want to know but clearly freedom of speech has gone too far. Where is Senator Joe McCarthy when we need him?

Recently, I've been thinking about the health impacts caused by exposure to various chemicals. While not revisiting Woodstock or other hippie arenas, I would like to know the answers to some deep "perception versus reality" questions. For common products such as perfumes or toliet cleaners, what chemicals do they actually have in them? What is their "secret sauce"? Such facts would be the cold reality --- now perceptions are key here. For the typical person who uses these products --- do we perceive these products to be safe and having zero risk from exposure? If your answer is yes, what laws and regulations or market forces "guarantee" this happy outcome?

Las Vegas has just run an interesting social experiment that is described in today's New York Times here .

"One thing that Las Vegas never lacks is scent. Perfumed hallways, the aroma of waffles wafting off the buffet, the certain je ne sais smell of a casino at 2 a.m. — Vegas has it.

And so perhaps the city is an odd choice for a fragrance-free day, as it has proclaimed for Wednesday, in the hopes that perfume, hairspray, body oil and their ilk shall be banished from the land, in honor of Indoor Air Quality Awareness Day.

Councilwoman Lois Tarkanian said she was influenced in calling for the proclamation by information from the National Toxic Encephalopathy Foundation, a group based in Las Vegas that lobbies on behalf of people with brain injuries caused by chemicals. “We are asking people not to wear perfume,” Ms. Tarkanian said. She would like people and businesses to use vinegar instead of some cleaning supplies.

“I thought this might be interesting,” she said, “so we will try to go scent-free for that day and see if differences occur.” "

NOW, one day is not a revolution --- but it should alert people to how in aggregate their small choices over perfumes and body lotions add up. Indoor air pollution is a major problem in the developing world. Kirk Smith of UC Berkeley has been a leader on documenting the health costs caused by cooking with coal inside and the millions of rural poor who have died.

But, in a rich country such as ours --- is there a serious environmental externality associated with indoor exposure to toxics? There certainly could be. If we care about this problem, then experimentation such as what is going on in Las Vegas is the right way to begin to explore cause and effect or at least to alert people to how much better their day to day quality of life could be if ditch the status quo.

Los Angeles did not make the top 10! I guess I raised the average weight around here. Sacramento ranks #7 in terms of the fittest cities in the U.S (read here ). Perhaps because of President Obama and Larry Summers, Washington DC ranks #1.

Here's the top ten:

1. Washington, D.C.

2. Boston

3. Minneapolis-St. Paul

4. Seattle

5. Portland, Ore.

6. Denver

7. Sacramento

8. San Francisco

9. Hartford

10. Austin

And here's some of the reasons that Sacramento did so well:

- Higher percentage eating five or more servings of vegetables or fruit each day.

- Lower percentage of diabetes.

- More farmer's markets per capita.

- More baseball/softball diamonds per capita.

- Lower percent currently smoking.

- Lower percent obese.

- Higher percent bicycling or walking to work.

And under the category of "challenges" for Sacramento:

- Higher percent with asthma.

- Higher percent unemployed.

- Lower percent using public transportation to work.

- Higher percent with disability.

- Fewer acres of parkland per capita.

- Fewer swimming pools per capita.

- Fewer tennis courts per capita.

If you want to see the source of this wisdom, click here .

Ed Glaeser makes some excellent points in this piece about public sector compensation. Permit me to add my 2 cents.

1. As Paul Samuelson taught us in the context of his overlapping generations model (OLG), in a growing economy --- we can run a ponzi scheme. The current old are fed by the current middle aged and in the next generation when the current middle aged are old, they will be fed by the current young who will then be middle aged and so on.

BUT, if Krugman is right and our economy is now the "New Japan" of the 1990s with low growth --- then this model unravels.


2. Non-Stationary Life Expectancy --- in english --- suppose you are 70 years old today ; how long can you expect to live? Suppose that you were born in 1900 , in calendar year 1970 --- (when you were 70) --- how long could you expect to live? The conditional probability of survival (i.e given that you are age X , what is your probability of surviving to age X+Z) keeps rising over time. This is a good thing! Here is some data . But, who pays for you? You undersaved as a young person because you didn't anticipate this windfall.


3. Glaeser argues that the Public Union bosses are quite savvy and understand salience and behavioral economics. Out of sight --- out of mind --- the public respects police officers and didn't fully appreciate the true cost of the deal. The New York Times is running front page stories about bus drivers getting 2 months off for "disability" when they are spit upon. Of course spitting is gross but how much damage did this event cause?


Glaeser makes an excellent case for transparency in compensation --- workers should be indifferent between working in the private and public sector. Think of yourself and jury duty --- are you paid your hourly wage when you are summoned? For each public sector worker, what job would they have had they worked in the private sector?

Could an article such as this (an LA Times interview with William Shattner) appear in the New York Times? I don't think so. The LA Times invests less effort in discussing the Wall Street/Washington corridor and devotes more time to the big personalities hanging around Hollywood. I guess this is comparative advantage and I prefer the LA Times to the NY Times. The NY Times may cover more important people but my hometown newspaper reports about more interesting people.

Summer is quickly approaching. My friends who teach at schools on the semester schedule have been on summer break starting about 2 weeks ago --- while us "quarter people" keep marching on for another two weeks. The 10 week quarters fly by. For reasons, I can't fully explain --- I will be teaching summer school this summer.

If you want to study Environmental Economics taught by a Dream Team in Summer 2010 at UCLA, then click here .

Here is a press release providing details about a new executive education program that UCLA's Institute of the Environment will offer in July 2010. We've been working hard to prepare a relevant and challenging curriculum. We have assembled a "Dream Team" to teach this one week mini-course. I've been thinking of enrolling my parents in this class so that they can learn how I view the "green economy".

Who should enroll? I expect that there is a new generation of business leaders who are thinking about the opportunities and challenges that the next wave of environmental regulation will pose for their line of work. Climate change by itself both poses opportunities and challenges for firms. Those who participate in our course will have a great time living in Los Angeles for a week and will immerse themselves in a serious intellectual endeavor that will payoff both in the short term and the long run. We hope that our "students" will come from a variety of nations.

If you have questions about this program, please email me.

UCLA's Elinor Ochs has her research profiled on the front page of the New York Times today. In this article , we learn about how she spent $9 million dollars to videotape 32 Los Angeles families over the years 2002 to 2005.

"“This is the richest, most detailed, most complete database of middle-class family living in the world,” said Thomas S. Weisner, a professor of anthropology at U.C.L.A. who was not involved in the research. “What it does is hold up a mirror to people. They laugh. They cringe. It shows us life as it is actually lived.” "

We learn some new facts from this research.

"Mothers still do most of the housework, spending 27 percent of their time on it, on average, compared with 18 percent for fathers and 3 percent for children (giving an allowance made no difference).

Husbands and wives were together alone in the house only about 10 percent of their waking time, on average, and the entire family was gathered in one room about 14 percent of the time. Stress levels soared — yet families spent very little time in the most soothing, uncluttered area of the home, the yard."

Stress levels were measured with a saliva sample (4 a day).

WHAT is my point? Professor Ochs created an excellent laboratory but it appears that she didn't run any field experiments here. She observes 32 familes for months in continuous time. Suppose that she used a random number generator to decide which households at which dates for them to receive a "treatment". This treatment could have been something related to my own research such as a Home Energy Report informing them how their electricity consumption compares to their neighbors or it could have been something silly like a free pizza. In each of these cases, she could have explored "cause and effect" ; what happens next when a randomized treatment arrives? Now, if Professor Ochs was feeling daring --- she could have examined what happens to family dynamics if an old boyfriend of the wife appears or if there is an IRS tax audit. These would be high stakes treatments! My big point is to contrast how economists go about their business versus what the anthropologists do. Professor Ochs created a fantastic setting for watching a field experiment play out but at least as far as I can tell --- no randomized treatments were attempted.


NEW Point


If you believe that urban dogs pose challenges to green cities, read this . I like this quote;

Copon, for his part, says the campaign isn't working. So he has become a vigilante, accosting strangers who are too busy talking on their cellphones to pay attention to what their dogs are doing to his building.

First he demands to know where they live, then snaps: "Now I'm going to go pee on your front door!"

Copon, who speaks with a rough French accent, said he thinks many downtown dogs are simply accessories.

"It's very fashionable," he said. "You go downtown, you gay, you have tattoo, you have dog."

Mr. Copon --- you are very funny.