Are there other professors who wish they could be paid per spoken word?   If I could get my price above zero, I'd earn a few bucks for this KPCC Interview.  Molly Peterson is a kind interviewer and I had a lot of fun.

I believe that my new publication in the Journal of Housing Economics will generate so many cites that Ted Bergstrom will owe Elsevier an apology.   The "consequences of land use regulation" literature isn't so convincing because we have so much trouble measuring intense land use regulation and we rarely have a good control group.  In my humble opinion, we are able to address both of these problems in the case of the California Coastal Zone.  But, the beauty of academic economic is that suppliers must sell their product on a competitive market --- so you can judge its true quality.

Some other links:

When I become a billionaire, I wonder if I will live in this house.  Is this typical Mumbai architecture?

A salient example of the synergies between Government subsidies and the nascent Green Tech Sector: "Green-Industrial" Complex

They both have a PHD from MIT in economics, and they share a belief that the tax code matters in determining our choices.  For evidence about Keith's views about the distortionary effects of the tax code click here.

To quote Dr. Richards, "The whole business thing is predicated a lot on the tax laws," "It's why we reherse in Canada and not in the U.S.  A lot of our astute moves have been basically keeping up with tax laws, where to go, where not to put it. Whether to sit on it or not. We left England because we'd be paying 98 cents on the dollar. We left and they lost out. No taxes at all."  (Source November 1, 2010 New Yorker Magazine page 104)

Somewhere, I can hear George Harrison singing "Tax Man (Mr. Wilson)".

Perhaps the Tea Party has found a new leader to run against President Obama in 2012?  Street Fighting Grandpa.

The Universe of University of Toronto Faculty Salaries in 2010   .  I see some variation in salaries within well defined occupational categories that I cannot explain using the observables I know about.

Recently, there was a LA Times article discussing using technology to slow immigration into the United States.  A resident of Laguna Beach wrote the LA Times the following letter; "Note to the Department of Homeland Security, Meg Whitman, Carly Fiorina, and others: Political problems cannot be solved with technology."

In many case, this strong statement is false but it is worth thinking about.

Example #1:  Los Angeles Smog --- Los Angeles used to have a terrible smog problem.  Too many cars were driving too many miles.  In the early 1970s, the catalytic converter and unleaded gasoline were phased in for new cars and by the year 2010, there are almost no pre-1972 vehicles still on the road.  Vehicles built with the catalytic converter and modern computer systems emit 99% less pollutants per mile than the 1960s makes. Technology and the phase out of old vehicles that lacked this technology have solved this problem.

Example #2:  Traffic Congestion --- this is another political problem.  Time of day toll roads can now be implemented and this "Smart Grid" technology advance would go a long way in reducing traffic congestion as would time day parking rates so that parking prices would be higher during peak times and fall off peak.

Example #3:  Urban crime --- the ubiquitous cell phone makes everyone a roaming reporter who can call 911 if an attack takes place. People are making videos and taking photos and this makes our streets safer. Potential criminals know that due to this technology that they are more likely to be caught "red handed".

Example #4:  Climate Change --- if some nerd could invent a renewable power source that is cheap then debates about whether the U.S should sharply reduce its CO2 emissions would vanish as the the costs of reducing our greenhouse gas emissions  would plummet.

An example where the author is right --- is the budget deficit.  This is a political problem for which technological advance does not offer a simple solution.  Improvements in health technology actually increase the budget deficit as past procedures that were impossible now become possible and there is an ethical issue in denying such treatment to the sick.

Are the impacts of climate change more predictable than future stock price dynamics?  I think so.  Here is my New interview with The Futurist.  If we can forecast some of the likely effects of climate change, then doesn't economics predict that long lived durable investment choices we make today (such as over what types of buildings to build and where we build them and infrastructure choices) will reflect these expectations?  The rational expectations model of investment under uncertainty offers some bold claims about our ability to adapt to climate change. I'd like to lure some smart theorists to join me on my quest to improve our understanding of adaptation to climate change.

I was not ready for these questions.

This article  got me thinking about how we use quantitative metrics for judging University Leaders.  The endowment's dynamics matter but do you attribute all of its growth to "the leader"?  I don't.  How do we construct the counter-factual of what the University would have achieved under a different President?  You can see that there is no control group available and this is a hard question.   Within the Ivy League, can you judge Columbia's President's performance based on the performance of the other 8 leaders?  Nope.  So then, how do the trustees of Columbia make a reasoned decision on whether to grant their First Amendment lawyer another 5 years?    They like him and know him so there is a  status quo bias and they recognize that search is costly so it would take an extraordinary hire (Larry Summers? Paul Krugman? Bono?) to put them in the mood to trade horses.

At the University of California, I have some ideas for how to rank our leaders both on campus and at the Oakland office.  I will tell you my ideas in private.

In my humble opinion, I finally gave a really good talk about Climatopolis at the Zocalo Square to a group of about 120 Los Angeles residents at the Actor's Gang in Culver City.  I didn't have powerpoint and it was funny to stand at a podium. I was armed with one page of notes and a copy of my book. 

My Notes only consisted of the following talking points

Thanks, what is climatopolis?  adaptation vs. mitigation,  why listen to an economist?  The Chess analogy, city competition, migration and innovation, the future of Los Angeles, Homer Simpson vs. Mr. Spock, politicians and policy,  Moscow and criticism of Climatopolis, Titanic Redux.

Based on these "keywords", you can my watch the video here.

Here is how Zocalo wrote up the event. I see I wasn't clear about the boxer Ali. I meant that he was throwing hard punches in the 1960s and would knock us out unless we were pro-active and ducked!

Matthew Kahn kicked off his talk at The Actors’ Gang with a big question.



“What is the future of our great city?” said the UCLA Luskin scholar and professor. “Are we going to take it on the jaw and be knocked out like Muhammad Ali in the 60s, or is there any room for optimism?”


In an event co-presented with the UCLA School of Public Affairs’ Luskin Center for Innovation, Kahn, author of Climatopolis: How Our Cities Will Thrive in the Hotter Future, outlined the threats Los Angeles and other cities face from hotter temperatures, and why the consumer culture that so contributed to climate change could actually help save us from it.



Not Ronald Reagan



As an environmental economist who talks about climate change, Kahn has faced his share of criticism — from the right that denies the impact of global warming, and the left that criticizes him for emphasizing adapting to climate change. “They’ve said this guy is trouble,” he said. “I’m a mild-mannered professor losing my hair and gaining weight. I’m not trouble.”



But Kahn continued forcefully, noting that leaders around the world failed to pass a global carbon deal, the Senate failed to pass climate change in the U.S., Barack Obama hasn’t pushed through controls on emissions, California’s emission reduction plan is under attack by a ballot proposition, and China and India are emitting ever more greenhouse gases. Given the lack of forward-thinking steps to mitigate climate change, Kahn suggested, a realistic approach may be to adapt.



“I’m not Ronald Reagan. I don’t believe in wishful thinking,” he said. But he’s optimistic, he said, that people are risk-averse and self-interested enough to adapt to climate change — at least if they had good information. Just as Los Angeles County’s restaurant ranking system made for a healthier city, Kahn suggests we need to know how different areas of Los Angeles will be hit by climate change. “How many of you eat at a grade-C restaurant? Armed with this new information, you made different choices,” he said. “And if I’m running a C-grade restaurant, I might call in the exterminators.”



Kahn noted that his colleague at UCLA Alex Hall (a past Zócalo guest), is creating such a bank of information by observing how different parts of the region will be hit by higher temperatures, lower rainfall, and other measures of climate change. Kahn added in Q&A that we should observe whether the same person, living in two different places, would consume more or less energy — which would suggest something about the place is the problem.



A hundred Detroit homes



As we start acting on climate change information, Kahn said, the 300 American cities — not to mention those around the world — could enter a competitive phase. Kahn noted that today, one home in Westwood is worth the same as 100 homes in Detroit, but with climate change, the calculation could flip. “If Los Angeles or New York became unlivable because of climate change, we could move to Fargo. We could rebuild our cities at other latitudes,” Kahn said.



“If a city is foolish enough not to address climate change, mobile, foot-loose, skilled people will leave. That city will become the Detroit of today,” Kahn said. “It’s not about having the port or having the steel industry.” This trend would create strong incentives for local politicians, Kahn said, even if they don’t believe in climate change.



Let prices rise, give peace a chance



Short of migration, we could change how we build and run our cities, and how we consume, Kahn said. Although L.A. has yet to commission a “crystal ball study” on the matter, we know that the city will face particular challenges that it can answer with some innovation. With rising temperatures, Kahn suggested, demand will increase for housing in temperate parts of the city. “If we ripped out every golf course in West L.A., how many people could live there?” Kahn asked. “And I’m a fan of golf. I still like Tiger Woods.” If builders faced NIMBYism, he said, the city would have to step in to regulate land use.



To address water scarcity, Kahn suggested we follow the economists’ solution: “Let prices rise. Give peace a chance.” Currently, he said, the price of a gallon of water in Los Angeles is half a cent. If prices rose, households would economize, and demand water-efficient durables and appliances, creating a strong new market. As he explained in Q&A, such a system would have to ask how much water we need daily “to have a good day,” and provide for those earning lower incomes to afford this amount of water at the new market prices.



For rising sea levels and fire risk, Kahn pointed to smarter insurance policies, which would charge higher prices than they have. This would either encourage people to live elsewhere, Kahn suggested, or build more smartly, citing Thom Mayne and Brad Pitt’s effort to create $180,000 floating homes. He noted that even natural disasters — like the heat wave in Moscow this year — could make us keener to innovate and adapt to climate change more quickly.



Kahn emphasized that whether consumers are Mr. Spocks — rational planners — or feckless Homer Simpsons, whether they believe in climate change or not, they’re likely to catch on to such innovations and act in their best interest as a market arises. “It’s like selling lemonade on a hot day,” Kahn said. He did note in Q&A, however, that each advance would likely need to be evaluated case-by-case — for example, some argue that Prius batteries create environmental problems even as the cars emit less. And immediate action for poorer people may be required in the interim, using simpler coping mechanisms for heat, like cooling centers.



Green guinea pig



Politics could stand in the way of innovation, Kahn noted. “If we don’t allow insurance prices to rise or water prices to rise, there are winners from the status quo.” As he added in Q&A, Al Gore may even have made it harder to break the status quo on climate change. “I could imagine an alternate world, in ‘The Twilight Zone’, where climate change was a national security issue,” Kahn said. “But when Al Gore wrapped this issue around himself, Republicans, like the Sarah Palins, defined themselves by what they don’t believe in.”



But Californians at least could be getting it right with AB32, the state’s plan to reduce emissions. Creating a market for green goods requires, Kahn aid, a “green guinea pig” — someone to make room for these products and create an incentive for entrepreneurs. With the legislation, California, “with our liberalism and our high incomes despite the recession and our high education — we are volunteering to be that guinea pig for the world,” Kahn said. “Are we a hero or a sucker? Why aren’t we free-riding like everybody else? I think we’re heroes.” He added that once California creates good green ideas, they could easily travel around the world, including to India and China, and accomplish what Kahn strongly advocates: decoupling economic growth from greenhouse gas emissions. Until now, as Kahn admitted during Q&A, capitalism has mostly been the cause of greenhouse gas emissions.



And in fact, Kahn said, that stream of green ideas may go the opposite direction. China, he noted, is offering low-interest loans and free land to green entrepreneurs. “For years China stole our intellectual property — Microsoft Windows, Hollywood movies,” Kahn said. “If China makes a breakthrough in green tech, we’ll steal it from them.”

In a stationary economy, young people can "see" their future based on what has happened to previous cohorts who are now middle aged.   So, for the Harvard Class of 2011 what can they learn about their future 35 years from now in 2045 based on the  Harvard's Class of 1975 asks "what if" about today?

Allow me to cherry pick some quotes:

"But over half will wish they could make a major life decision again, more than three-quarters will have gained weight, and around one-fifth of the class will have had an affair.


These statistics, found in a 100-question survey conducted this year of Harvard and Radcliffe students who graduated in 1975, portray a class whose members—despite some significant regrets—are largely satisfied with the current state of their lives and are optimistic about the future."

So based on probability theory, what is your best guess that a Harvard graduate who is age 57 will get fat and have an affair?  Do you guess .75*.2?    I love sociology.

Back to the article:

"But when alumni were asked to reveal the main personal issue they confront today, they divulged more serious answers.  “I need to become brave enough to leave my husband,” wrote one alumna. Another asked, “What do I want to do with the rest of my life?”"  

I thought that a Harvard degree guaranteed being happy.  I was very happy there as a Visiting Assistant Professor from 1996 to 1998. 

Back to the article:

"On family life, 94.2 percent of men and 85.7 percent of women said they are happy in their current relationship.


About 50 percent of alumni said that they either do not believe in God or do not know, although over 90 percent said spirituality was a force for good.


Over 65 percent said that the happiest time of their lives was now or yet to come."

I don't know if I believe this but I am not Dennis Gilbert and I am not happy.

I can't remember who I was at age 22.  I know that I didn't have the zealous focus of a Zuck.  There was no one passion pushing me forward.   I had a broad array of skills and interests and I thought that economics opened the most doors and had the most option value in terms of making a choice later once I was well trained.


The one weakness of this "attitudes" survey is that it could have presented a household income histogram. How many of these graduates are members of wealthy families? How many spouses married into wealthy families? How many of the graduates made their own wealth? 

What role  has the "Harvard Network" played in this wealth creation? Did they join a firm filled with Harvard people?  Did they meet their spouse at Harvard?