Sunday, March 27, 2011

Out of Focus

My mother reads this blog --- so  I wanted to show her a photo of myself looking serious and focused.  Most people think that I just sit around cracking jokes and not functioning.  That's true about 80% of the time but I can sober up sometimes. 

As you can see, Michael Greenstone is the focus of this picture and that is only fair since he leads the Hamilton Project.  Michael was kind enough to invite David Levinson and I to write a paper for the Hamilton Project.  Our paper is quite good and I think it is worth your time to read it!

What Can We Predict?

This review does not encourage me to read Dan Gardner's book "Future Babble".  Gardner concludes that even the experts have trouble predicting the future.  Shocking!  What may be more surprising is that we have had great success in predicting the future.

A "small ball" example is the Zagat's restaurant guides.  The quality of a meal at a restaurant you have not been to is a random variable.  To help you make a "better choice", millions of people have studied the Zagat's guide before they invest and walk into a restaurant.  If people feel that the book gives bad advice, then they would never refer to it again and they would tell their friends and Zagat's would collapse as a business venture.  Due to competitive market forces, Zagat's has an incentive to accurately aggregate popular opinion (and it does this by averaging respondent's rankings).  The proof that Zagats can predict the future is that people keep buying their books.  Apparently, a restaurant's past success predicts its future success.

Another example:  predicting Presidential election results.  Ray Fair has demonstrated that a very simple statistical model can predict such election results.  Here are the data.  You can play around with that.

So, the author is correct that Nostradamus was a special dude but we continue to have examples of our ability to predict.

Why are some websites that help you profile who should go out on a date with successful? immediately explains how they engage in profiling using the information you provide to predict who might be a good match for you. They have the right incentives to have a good predictive model ---- otherwise nobody would sign up for their services.

If everything in life is "random" , why do firms seeking to hire employees interview people?  Why don't they randomly select a resume from a stack and just hire that person?  They don't do this because they learn things about you from the interview and these insights are predictive for whether you a good match for that firm.

So, "macro prediction" is hard --- but "small ball" micro prediction has a bright future.

I am a little bit defensive here because suppose that it is true that future events are uncorrelated with past events and suppose that it is true that climate change is raising the probability of horrible "fat tail" events, then we can be struck unexpectedly with shocks that we never anticipated and thus will be unprepared for them and will suffer greatly.

To begin to be optimistic at all about adapting to climate change, we need our entrepreneurs to be able to anticipate broad future trends (i.e to be able to predict likely scenarios under climate change). We need the population to anticipate increased risk of living in certain locations (i.e coastal areas at risk to flood). If flood locations and severity is completely unpredictable then even people who want to protect themselves will have no idea where to locate themselves to protect themselves.   Now, climate scientists wouldn't bother to study long run data patterns if it offered no clues about the future.

What Lessons Do We Learn from Disasters?

We know that there is always a "silver lining" of disasters.  At a minimum, new government jobs are created as the public demands "action"  and somebody must co-ordinate the rebuilding efforts.   Whether the shock is the Moscow Heat Wave of 2010, 2005 Katrina or 2011 Northern Japan, how much do we update our prior beliefs in response to a very salient shock?  Permit me to offer some quotes from this article.

"We can only work on precedent, and there was no precedent,” said Tsuneo Futami, a former Tokyo Electric nuclear engineer who was the director of Fukushima Daiichi in the late 1990s. “When I headed the plant, the thought of a tsunami never crossed my mind.”

This is a fascinating quote.  Mr. Daiichi is implicitly saying that based on his sampling of history that the probability of a Tsunami affecting his power plant was 0%.  This sounds a little like Wall Street in 2008.  In that case, what was the probability that all U.S local housing markets declined in value at the same time? It had never happened before so it couldn't happen.

For those who care about adapting to climate change, this is fascinating stuff.  Climate change is likely to raise the probability of very unlikely nasty events.   If these events used to be a 1 in ten million chance of taking place and now they are a 1 in 100,000 chance of taking place,  then there will be protective investments that will pass a "cost/benefit" test that could be invested in.

"For some experts, the underestimate of the tsunami threat at Fukushima is frustratingly reminiscent of the earthquake — this time with no tsunami — in July 2007 that struck Kashiwazaki, a Tokyo Electric nuclear plant on Japan’s western coast.. The ground at Kashiwazaki shook as much as two and a half times the maximum intensity envisioned in the plant’s design, prompting upgrades at the plant.

“They had years to prepare at that point, after Kashiwazaki, and I am seeing the same thing at Fukushima,” said Peter Yanev, an expert in seismic risk assessment based in California, who has studied Fukushima for the United States Nuclear Regulatory Commission and the Energy Department.
There is no doubt that when Fukushima was designed, seismology and its intersection with the structural engineering of nuclear power plants was in its infancy, said Hiroyuki Aoyama, 78, an expert on the quake resistance of nuclear plants who has served on Japanese government panels. Engineers employed a lot of guesswork, adopting a standard that structures inside nuclear plants should have three times the quake resistance of general buildings."

So, in the aftermath of a disaster --- how do risk regulators recalibrate their subjective risk assessments? Do they tend to "over-react"?

The adaptive process involves both government self-protection investments and private sector investments.  Will people choose to live close to such plants and in such coastal locations?  What materials will they build their homes out of as they rebuild?  The media is reporting that concrete homes in the Tsunami zone survived the disaster with much less damage than wood homes.  How will this lesson affect the rebuilding effort?

Returning to climate change adaptation, the key issue here is subjective risk assessment.  For voters and day to day citizens, do salient disasters shock people into changing their lifestyles so that they are protected from the next disaster? In the case of the Moscow Heat Wave of 2010, I am sure that this will stimulate air conditioner sales so that next summer's Moscow Heat will cause much less suffering.  Does this optimism hold more broadly? Or are we doomed to make the same mistakes over and over again because we do not learn?

Economists are sure that people do learn from their mistakes and increased fat tail risk offers a fascinating test of this optimism.  In my 2010 book Climatopolis,  I present a "Chicago" free markets and rational expectations case that our entrepreneurs and our insurance industry have incentives to think ahead and anticipate fat tail risk.  This risk creates opportunities and challenges for them. I talk in the book about the behavioral economics world view and its implications for anticipating our ability to adapt to climate change.  Now, this doesn't mean that we have "perfect information".  Instead, rational households and firms recognize that they face a moving target and "know that they don't know" the likelihood of future states of the world. Anticipating this ambiguity, there are actions they can take today to protect themselves that are likely to be cost-effective.   Companies that can figure out new products that reduce risk exposure are likely to become rich in our hotter future.  

Friday, March 25, 2011

A Return to Los Angeles (the March 2011 Version)

I fly back from Rome to LA tomorrow. I have been in "old Europe" for 2.5 weeks now and it is now time to return.   My mind is clear and I'm eager to get back to work again.  I owe work for several co-authors and I apologize for being a bum.    To reduce academic leisure, I propose that everyone's tenure should be revoked and we should all have to earn our privileges again.

My dad always asks me; "what have you learned recently son?"  So,  What have I learned in Europe?

1. In Maastricht, Holland -- the people are tall and the food is good.  You will not find a Starbucks there. If you look for coffee at a "Koffee House" you will meet drugged out dudes eager to sell you "weed".  I didn't buy any.

2.  There are many places to buy beer in Maastricht and the beer is good.

3.  Maastricht University has many serious economists and I greatly enjoyed talking to them.   You should read the work of Piet Eichholtz and Nils Kok.

At the Green Real Estate Conference, I talked and talked some more.  Several of my U.S friends were there (Max Auffhammer, Erin Mansur, Howard Chong,  Dwight Jaffee, John Quigley,  Grant Jacobson) and old friends such as Henry Overman and Yongheng Deng were also participating in the conference.    My favorite wife was also in attendance and without our son around we had the chance to talk to each other.  We had dinner together in a cave in an old Castle and we drank a lot of high quality wine.

4.  The International Herald Tribune is a pretty good newspaper.

5. There is an airline called "Ryanair" and I don't fit into their seats.  When the plane lands, they play a celebration bugle that matches the sound of the start of a horse race and everyone on the plane cheers that they are safe and alive.  Pretty strange!

6.  At European airports, there is no gate for loading you into the plane; you disembark from a steep staircase that I was worried I would slip on.

We miss Los Angeles.  I miss the modern showers and the smells of Spring but I am a big fan of Europe and hope to return soon.

For my friends at UCLA who actually expect that I will do what I promised I would do (and I can't remember what I promised to do),  I will be very busy the next couple of months.  I am refreshed and ready to work very hard again.  

A Puzzle? Why Do No Top Female Economists Blog?

REPEC provides an objective measure of who is "Royalty" in the economics profession.  The current list of the top 5% is here.   I am ranked #681 out of 27,365 economists so that's not bad (and my 3 books aren't counted here).  But, here is the interesting part.  There are 52 women who rank in the top 1000 and 0 of them blog.  Contrast that with the men.  Consider the top 100 men. In this elite subset; at least 8 of them blog.  Consider the men ranked between 101 and 200. At least, six of them blog.  So, this isn't very scientific but we see a 7% participation rate for excellent male economists and a 0% participation rate for excellent women.    This differential looks statistically significant to me.   I have searched for Nancy Folbre among the top 1369 economists (the 5% cutoff) and she is not counted in the elite subset.

How do you resolve this puzzle?  A Household Production Theory of leisure would posit that men have more leisure time than working women and that nerdy guys spend more time reading and writing blog posts (such as this one).    If women who work are also providing more time in "home production" in cooking and rearing children then the time budget constraint will bind.  UPDATE: One blogger responded to this post by arguing that economics bloggers are posting combative nasty stuff and that most women don't want to participate in such professional wrestling.  While, there is some truth to this --- I use this blog to promote my own work rather than to drag others down.  Leading economists such as Gary Becker use their blogs to talk about the real world rather than to score some cheap debating points.

Is the dearth of top women bloggers a problem?  It actually is in the following sense.  The shrewd academic uses his blog to market his ideas and to "amplify" his new academic results. This is a type of branding. I am a like a mediocre washing powder that advertises on TV using jingles and this is good!  You don't have to be as big a star as Tyler Cowen to leverage your blog into new opportunities. If women are not participating in this sector, then excellent women are losing certain opportunities that the blogger class takes for granted.  In a linear algebra sense, we may also be losing out on important ideas that women would offer if they did blog. Perhaps, men do not know everything?

Solutions to this problem?  That's your problem --- my job was to pose the riddle and answer the question.

Monday, March 21, 2011

Do Pregnant Smokers Cause Future Crime?

Fewer pregnant women now smoke than in the past.  What role has this fact played in recent crime declines?  Here is a cross post I wrote for the "Same Facts" blog.   In the clash of the titans, we now have "lead", "abortion" and "smoking" all dueling it out.  Note that 2 of these 3 are "environmental factors".   If environmental economists can now claim both climate change and urban crime as our domain then our future is quite bright!


Tomorrow we travel to Holland's Maastricht for a Green Buildings conference. I have not been in Holland for 25 years so we will see whether it has changed or whether I have changed.   We have been in Europe for about 2 weeks now.  The contrast between Europe's dense walking streets, weird smells in the air, and its small bathrooms and apartments stands in contrast with the sprawled U.S.    I must admit that I like both.

Here is a copy of the slides for my thursday Climatopolis Keynote.   Dora and I will also be presenting our solar paper that is jointly authored with Sam Dastrup and Josh Graff-Zivin.    Yongheng Deng will also be presenting a new paper I have written with him, Siqi Zheng and Jing Wu.

Here is the abstract for that paper;

The Nascent Market for “Green” Real Estate in Beijing

Abstract:  During a period of extraordinary urban growth, China’s per-capita carbon footprint could soar.  A growth in households willing to go “green” in terms of housing choice and day to day consumption could help to offset this pollution increase as the free market will design housing and related products to cater to this group of consumers.  We use two unique micro data sets to study two features of Beijing’s nascent green economy.  First, we construct a new measure of housing tower “greenness” and explore its geography and use hedonic pricing methods to measure its capitalization.  Second, we document that households who volunteer and purchase energy efficient appliances have a smaller footprint than the average household with similar demographics.  Such civically engaged households offer a potential set of customers for green products.

Incentive Theory and the Optimal Design of "Fix it First"

Investing in maintenance and repair of existing urban and transport infrastructure isn't sexy.  No politician attends a ribbon cutting for a bridge improvement. Yet the irony is that our cities have developed around existing infrastructure.  But, political challenges arise.  If the Republicans live in the suburbs and the democrats live in the cities, will Republicans support "fix it first" policies that they will anticipate will be paid for by them but will mainly benefit the "Big City Liberals" who live and work in the old center cities (think of San Francisco,  Chicago, Boston).

Critics have the right to be concerned that "fix it first" is merely a politically correct slogan to justify more Keynesian expansion of government.  What would calm down the critics?

In this Brookings Institution Paper,  David Levinson and I lay out a microeconomic strategy that simultaneously will lead to infrastructure improvements and lead to the "right" projects to be done at low cost.

If a state wants to improve an old bridge, we want it to use its own share of the Federal gas tax revenue for this.   We would redirect gas tax revenue away from new road construction towards investments in improving the existing system.  If cities and states must use their own funds as part of the financing, then they will have strong incentives to only propose valuable projects.

Saturday, March 19, 2011

Ed Glaeser vs. Mike Tyson: Two Visions of the Good Life

In one corner of the ring, we introduce Ed Glaeser boxing in a 3 piece suit and lit cigar.  He writes about the vibrancy of our center cities.  In the other corner, we have the ex-boxer Mike Tyson celebrating the peace and quiet that the Las Vegas suburbs offer.  Who will win this battle of wits and brawn?

University Public Relations in the "Social Networks" Era

Imagine if you were the proud parent of 35,000 different teenagers.  By a law of large numbers at least 1% or 350 of them will do something "wild and crazy" each year and the rest of your neighborhood will hear about this and say to themselves; "those crazy Kahn kids".   A University President faces this challenge.  He/she is the public face of the University and is supposed to keep "his house in order".  In this age of Facebook and Youtube, any "wild kid" has a microphone.  She/he is aware if they do something wild that they can go viral and have their 15 minutes of fame. This creates bad incentives unless severe punishment is anticipated.

UCLA Chancellor Gene Block has created his own Youtube video in order to respond to Ms. Wallace's original  video.

As a faculty member and as someone who has spent almost 5 years now at UCLA, permit me to make a few points.   UCLA is a happy, serious place.  As I walk the campus, I see all sorts of happy students walking around living their lives to the fullest.   I hear students speaking many different languages to each other.  This is an immigrant friendly campus and this is a good thing.

Each year, I sponsor visiting faculty and graduate students (mainly from China) and they have a great year living and learning at UCLA.   Students from Asia should be confident that if they enroll at UCLA that they will have an excellent learning experience and high quality of life.

U.S universities tend not to be the great melting pot that they claim to be. Similar to all U.S Universities,  and I have previously taught at Columbia, Harvard, Tufts, Stanford,  there is an unfortunate amount of ethnic segregation on campus.  Speaking in broad generalities, students of similar ethnic groups tend to cluster together in social settings.  I do not know Ms. Wallace (and I have not watched her video) but I would want to know whether she has any UCLA friends who are Asian immigrants? Has she expressed her "pet peeves" to them?  Did they agree? Did they answer any of her questions?

Universities make a big deal about "diversity" on campus but continue to struggle with how you integrate a diverse campus beyond admissions counts. You can't force "bridging social capital".   Since I have not blogged about social capital in a long time, I should remind you of the past work that Dora Costa and I have done on this subject.

UCLA does not deserve a bad rep for the ugly choices made by one of our students.   We have many great students and some bad ones.  As I have blogged before, UCLA's student body would be more diverse if we change our admissions rules to become 40% out of state.  There are too few people from Chicago, New York City, its suburbs and the greater Boston area at UCLA.  These individuals would offer UCLA both diversity and $.

Friday, March 18, 2011

An American in Italy

My son and wife both speak Italian but I can't.  I have been in the Tuscany Region for days and have much to report.   I have nothing smart to say about Japan's nuclear disaster or Libya but I will make two comments. If the world is now spooked out about nuclear power, what will it substitute to?  If the answer is natural gas and coal, then GHG emissions will increase as the carbon intensity of the power sector will rise. If the answer is wind and solar, then this disaster could have a "silver lining" for greens who were always ambivalent about nuclear.

In Japan, did the short Sea Walls cause more damage than good?  They were costly to build and they clearly lulled many into feeling "safe".   How much coastal development did they cause?  This article makes some powerful points about "moral hazard".  An open question for sociologists and risk scholars; when the Tsunami evacuation warning sounded in Northern Japan;  who quickly got up and left and who stayed?  Did age, income or access to a car predict survival?  How much time was there to respond once the earthquake took place relative to when the first big waves hit shore?

Returning to Italy, in the last 5 days -- I have been to Rome, Siena , Florence and Pisa.  My ranking is #1 Siena, #2 Florence, #3 Rome, #4 Pisa.   The Center City of Siena is wild. It is an ancient city on top of a hill with walls and castles and churches.  Few cars are allowed into the center city and because tourism is the golden goose there is no graffiti, dog poop, or litter.  It is a "green" old city with really good restaurants and shopping.  We walked and walked and walked.

Florence is a big city and there was plenty of cultural stuff to do.  At the major museum in Florence, I spotted Tom Holmes.  He was surprised to me there.   At this museum, my mother in-law had the opportunity to teach me all of the art history that I didn't study in college.  She is amazed by what I don't know but since I don't know what I don't know --- I don't care!

Pisa is all centered around its "leaning tower".  I was disgusted that the tower doesn't lean more. I expected that it would be at a 30 degree angle but it is at a 80 degree angle.  Not impressive.

Why do I rank Rome #3?  This city doesn't try hard enough to impress tourists.  Even New York City scrubbed itself to make Times Square "respectable".  This city needs a makeover.  There is too much smoke, diesel fumes, dog poop, and graffiti.  Too many cars honking horns.  The population density here means that everything is tight.  I miss the space we have in Los Angeles. Here are the hallways are tight, the bathrooms are small, the showers do not exist (you shower in a bathtub).  Call me a princess but physical space both as a buffer between neighbors and just to stretch out as its virtues.

This has been a relaxing trip. My mind is at peace and I'm ready to be productive again when I return to my radioactive Los Angeles.

UPDATE:  I keep an active file on my laptop called "work agenda" and the list of things I need to do is getting long.  I had thought that at age 45 it would be time for me to slow down and take it easy but after this relaxing week --- my mind is clear and I'm ready to rumble.

Sunday, March 13, 2011

Must Economists Start Reading Freud?

From reading this review of David Brooks' new book, it seems that he is thinking too hard.   NYU's Nagel writes in his review; "Brooks is right to insist that emotional ties, social interaction and the communal transmission of norms are essential in forming individuals for a decent life, and that habit, perception and instinct form a large part of the individual character. But there is moral and intellectual laziness in his sentimental devaluation of conscious reasoning, which is what we have to rely on when our emotions or our inherited norms give unclear or poorly grounded instructions."

Are people aware of their own strengths and weaknesses and how this list of attributes affects their likelihood of achieving their life goals?  If the answer is no, then they need to hire a "life coach".  Los Angeles has many including Meredith Haberfeld.   If your answer is "yes", then you will be aware that you can make a series of investment choices at any stage of life to improve yourself.

Without reading his book, David Brooks appears to offer a vague, popular version of Jim Heckman's recent work on how a "quality human" is produced.  In Heckman's vision, building up both non-cognitive skills and cognitive skills are both crucial to achieve success in the modern urban capitalist economy.   For an interview with Jim Heckman click here.

David Brooks appears to want to expand how social scientists study human behavior.  While it is exciting to introduce new causal factors, his approach would make hypothesis testing even harder to do as he introduces many new psychological theories based on data that social scientists will have trouble collecting.  To offer a cliche example from "Freudian theory" --- suppose that researchers claim that whether a  mommy smiles at me when I was age 2 plays a crucial role in determining whether I have self control or not at age 45.  Given the challenge in building longitudinal data sets, how will we ever test this claim?   What empirical researchers can do to study "cohort effects" is to see whether those who grew up during the influenza epidemic of 1918 or during the great depression act differently than roughly similar cohorts who missed these "macro" episodes. In this case, we can identify the subset of people at risk for such nasty treatments.

My vote is that we keep economics "simple".  We know who we are, we know what we want, we know what markets will sell us stuff.  There is fundamental uncertainty. We don't know when we will die. We don't know how the business cycle will affect us or what the stock market will do in the near future but we know that we don't know. We know that the world is risky and that climate change is unfolding but we form our best guesses about the future and keep reading to update our uncertainty and plan accordingly.  If we know that we suffer from some of the afflictions identified by behavioral economists, then we engage in various "tricks" and commitment devices to protect ourselves from ourselves.   This vision of economics means that we can formally test hypotheses but we will never have a "perfect" model of explaining and predicting human behavior. David Brooks appears to want to introduce too many parameters to "explain" our choices.

I much prefer the Gary Becker stripped down "household production function" approach.  We recognize that we face a time budget constraint and monetary budget constraint. We have a well stated conception of the good life (quality friends, quality children, comfort) and use our time and market inputs to produce them.  This framework has taken us quite far.

Saturday, March 12, 2011

Celebrating the Growth of Megacities

This Voxeu piece argues that as urbanization surges around the world that it is likely to be a good thing for these urbanites to go to the Megacities.    There is a well known tragedy of the commons here.  Each rural to urban migrant will compare his private benefits and private costs from moving to a Cairo or a Los Angeles but has no incentive to internalize how his migration decision affects any local externalities (either good or bad) at the potential destination.   For example, suppose that traffic congestion or air pollution is an increasing convex function of urban population. In this case, small increases in local population can sharply degrade the city's quality of life. Since pollution and congestion are local public bads, millions of people can be affected by such changes in local public bads.

For example;  suppose that an extra population growth of 10,000 people in a city with 8 million people causes local air pollution to increase by 2 units. If per-capita sickness increases by 1 day because of this growth and if each person loses $X dollars per day when sick, then an unintended cost of the growth of the megacity (by 10,000 people) is that 8 million*X*2 of income is destroyed due to the costs of local air pollution.

An environmentalist would say that these 10,000 people should be deflected to some second tier city to avoid these costs of growth.  Klaus Desmet   and Esteban Rossi-Hansberg  appear to dismiss such claims.

In my own micro-economic research, I have argued that the "social costs of mega cities" is falling for two reasons.  First, consider the following simple air pollution production function in which air pollution is a function of the population level and the income distribution of the city.

Local pollution  =   b*local population   + F(Income)

I have documented that "b" is declining over time.  Due to technological innovation, a growing population causes less pollution.  We have documented this both in the United States and in China.

Second,  employment suburbanization reduces the impact of urban population on commute times.   To understand this point, consider a city where everyone works downtown.  An enormous bottleneck ensues as everyone must get downtown.  In a city with multiple employment centers, there will be less commuting. To see this , suppose that everyone's home is a separate employment center -- then commute times equal zero!

Now, the authors of this piece are not micro-economists. I bet that what really concerns people is the quality of life of the urban poor. Would the urban poor be happier if they live in a mega-city or a second tier smaller city?  An economist would say that by revealed preference -- if they choose to live in a mega-city then it must offer the higher overall package of wages and amenities.  A critic would counter that such poor people want to move but are too poor to finance this investment. If this is true, then the Gates Foundation could run some pilots where they offer households a small loan to move and we could see what happens next. This proposal bears some resemblance to this recent Brookings' Hamilton Project paper available as the top link here.

Friday, March 11, 2011

Solar City? UCLA's Luskin Center Provides the Atlas

This new Luskin Center report  is worth reading.

Here is the blurb;

"Los Angeles is endowed not only with bountiful sunshine, but also with vast expanses of low-rise urban development that offers valuable siting opportunities for distributed solar energy generation. As a part of our effort towards advancing renewable energy, the Luskin Center is pleased to present an atlas that describes the geography of the region's rooftop solar resources. The information may prove useful for economic development planners, solar photovoltaic (PV) installers, utility planners, building owners, public administrators, labor union leadership, and anyone interested in the development of solar power in Los Angeles.

This atlas is organized to help cities and electricity utilities understand their own solar rooftop potential so that they may be better stewards of these resources. Each map presents the geographical distribution of solar potential across neighborhoods and parcels. The maps are accompanied by a description of how the solar potential varies across single- and multi-family residences, commercial and industrial parcels, and non-profit and government parcels since the economic benefits and policy incentives may vary accordingly. Because cost-effectiveness increases with the size of a solar installation, the atlas also presents, for each jurisdiction, the number of potential solar projects by size as well as the total rooftop potential."

JR DeShazo and the rest of the Luskin Center are doing very exciting work.

Evaluating Nick Stern's Conjecture that Climate Migration Could Lead to a Major War

A major goal of social science is to predict the future.  Professor Nick Stern is a major social scientist and thus we should take his predictions seriously.  He has some scary things to say in this interview.  I realize that he has a political goal of building a pro-carbon mitigation coalition now (and I support this goal) but could his predictions be right?

To quote Lord Stern, "What we’re talking about here — this the cost of inaction, the cost of not doing much — is a transformation of where we can be. Over a hundred, 120 years, we can’t be that precise, a serious risk of global war, really, because you’ve got hundreds of millions of people, perhaps billions of people moving."

When does migration lead to war?

I moved my family from Boston to Los Angeles 5 years ago and no wars broke out. I sold a home in one location, hired a moving company and rented in Los Angeles with a job already secured. In this goofy example, I migrated within a nation with a well defined set of laws and I used markets to facilitate my move.  Let's contrast this convenient example with Nick Stern's nightmare.

My guess is that he is concerned about the sudden surge of millions of people attempting to cross an international boundary and settling on somebody's land as squatters without paying compensation.

In a world of forward looking expectations, could there be any shock that deflects such a flood of people to an area so unprepared or unwilling to cope with the refugees?  

Armed with Google Earth, we can look at a map and identify poor nations at risk from climate change flooding and extreme heat waves and guess the migration path of likely refugees.  Such refugees are rational and will seek out jobs and consumption opportunities at their best destination.

There are 160 million people in Bangladesh right now.  Suppose that in the year 2050, 30 million of them seek to flee from Bangladesh.   Looking at Google Maps, I see roughly 20 major eastern Indian cities and several major Chinese southern cities, could each of these cities "absorb" one million Bangladeshian households?  Not in one night -- but if 100,000 move to each city each year for 10 years, then yes.

Housing would be built, and infrastructure would be built.  If these destination cities became crowded and prices were bid up, then Indian nationals would move within India to another city.  This is what took place in the aftermath of the Miami Mariel Boatlift in spring 1980.

Under what circumstances does war break out?  The rule of law must not be enforced and those fighting must be seeking to seize property rights.  But, this raises an issue --- why did the refugees seek out such an unpleasant destination? Why didn't they have any choice over where to migrate to?

I realize that there could be cases where desperate people do what they must to survive but if Nick Stern can anticipate future WW3 now, then there is plenty of time to prepare to help the migrants get ready for their journey.  "Do Gooder" foundations can make investments to facilitate this investment.

I am not claiming that climate adaptation is costless but with the rise of richer cities in Eastern India and Southern China --- it is not obvious to me why war will break out.

If Nick Stern wants to push this "doom and gloom" thesis then he should point to Ted Miguel's work in rural Africa.  See this.   I would argue that the growth in urbanization in LDC nations will reduce the risk of climate change induced war because there will be plenty of jobs for the low skilled in these growing mega-cities.  If this is the case, then such climate refugees will actually be welcomed at the destination locations or at least have an incentive to identify those destination cities where they are needed (i.e where wages for the low skilled are highest). 

The Great Stagnation? A Counter-Example From the War on Cancer

In the past, a cancer diagnosis was often a "death sentence".  This optimistic article highlights some important new facts.  Survival probabilities conditional on a cancer diagnosis have sharply increased.    Take a look at the graphs in this paper about Finland's cancer survival rates.  There is fantastic news here.  If more people with cancer are more likely to survive, then there will be millions of cancer survivors continuing to live their lives. This will create a market for drug companies to invest in the R&D to help these individuals cope with side effects and try to enjoy a "normal life".

This raises a philosophical issue for macroeconomists. They have the tough job of describing overall trends in quality of life and well being.  Is GNP growth sufficient?    How should they factor in such increased "good fortune" for those with the "bad luck" of having received a past cancer diagnosis?  In the past, the "Representative agent" had a small probability of a cancer diagnosis but conditional on receiving this bad news --- the victim often died.  How much are you willing to pay to avoid such unpleasant risks?  This "compensating variation" should be reflected in national income accounts.

Given that relatively few people receive a cancer diagnosis each year, we won't see overall life expectancy rise sharply but for the subset of people who receive the cancer diagnosis; their quality of life (and quantity of life) has sharply increased. In this sense, this medical progress is progressive public policy.

The increase in the quantity of life for cancer survivors offers a series of benefits for their families and their own well being.  This represents a type of "social insurance".  Insurance is usually thought of as a $ payment that is triggered by a bad event such as your house burning down or a cancer diagnosis. In this case, we now have more piece of mind knowing that if we are diagnosed with cancer that there are strategies for helping us cope. This improves the well being of those who feel they are at risk of having cancer and those who already have cancer and the families of those at risk.

For a serious economic analysis of the life cycle approach to health and quantity of life years read the Hall and Jones paper.  

Thursday, March 10, 2011

Some Thoughts About Rome and About USC and UCLA's Ongoing Competition

I am in Rome.   The cars are small, the dog poop is on the sidewalks is large, and the air smells of diesel fuel and cigarette smoke.  Traffic laws do not appear to be enforced.   Noisy ambulances and car horns remind you of the cost of urban density.   To a guy from West Los Angeles, these infringements add up but I'm still happy to be here.  Every time I visit another nation, I consider defecting.   I can't predict what decision I will make.

Switching subjects --- UCLA and USC have a healthy ongoing competition.  Just as NYU's recent rise has forced Columbia to stop being complacent and relying on its monopoly power (the only Ivy League School in the World's "greatest city"),  the rise of USC will help UCLA to reinvent itself.  Competition is a good thing!

It is interesting to contrast, two recent extremely generous endowment gifts to the two universities.  These respective 9 figure gifts will be transformative for both universities.   USC has chosen to focus its new endowment gift on improving its College of Arts and Sciences.  USC appears to recognize that attracting and retaining excellent faculty is the key to a University's "brand name".    All of their $200 million dollar gift will be focused on improving their faculty.

In the Case of UCLA,  my school has also received an extremely generous gift.  Half of this gift will help to transform the  UCLA School of Public Affairs.  This is a brilliant investment.   The other half of the money is being allocated to building a new hotel and conference center.  

While this project has potential merit, the USC vision of how to spend an extremely generous gift is much more compelling.  Look at my University of Chicago. It's building (excluding the new business school) stink but it continues to be a great university.  At the end of the day, a university's "greatness" is determined by who works and studies there --- the actual buildings are the icing on the cake ---- but a nice set of building does not equal "good cake".

In this case study of comparing the investment choices using the new endowment gifts, UCLA can learn from USC's wisdom.

UPDATE: UCLA's Provost is the wise Scott Waugh.  Here is his informative interview on why he thinks the new hotel is a great investment.  He raises a number of valid points.  One counter.  $40 million dollars for this hotel will come from the Luskin gift.  Suppose we took this $ and gave 40 UCLA Departments each a $1 million dollar spend down grant.  How much would each Department value this "rocket fuel"? What could they achieve with it? I would expect many of them to use it for new graduate student stipends.  These departments could each hand out 4 fully paid graduate fellowships for 10 years!   This would greatly help UCLA's competition with Berkeley for excellent graduate talent.   At the end of this time, I would expect that UCLA's gifts office would raise the cash to keep this momentum going.

Tuesday, March 08, 2011

What Should UCLA Invest Its Scarce Funds In?

Some say we need a new hotel on campus but I say that we should focus on our core educational mission.  Invest in people not buildings.  If the hippies could levitate the Pentagon in 1967, then the mighty minds of UCLA will figure out how to keep our existing buildings from crumbling.   Have you read my paper with David Levinson called "Fix it First"?  In the case of U.S highways, we argue that money should be directed away from constructing new roads and be redirected to upkeep and maintenance of existing highly used infrastructure.  I am a consistent man. I feel that the same logic applies to UCLA.  The title of our paper is;  Fix it First! Expand it Second, Reward it Third!

Now, which people should UCLA invest in?  In this self review, the UCLA Math Department makes the case that they merit the funding.  There are some very smart dudes in that department who are sad that their FTE count has shrunk from 62 to 51.5 over the last few years.  They should be thankful.  The Economics Department's FTE Count may be under 40.  51.5 sounds like a big number to me!  I wonder who determines these numbers.  I would like to be "the decider".  

During a time of budget cuts, Departments compete for funds.  Through the Academic Senate Reports , each unit on campus gets to make its case for why they are great and merit more $. It makes interesting reading.

Monday, March 07, 2011

Ranking UCLA Faculty with Respect to Their Value Added

Economists are drawn to the REPEC site to find out their  monthly ranking  .   This ranking doesn't count books and omits many peer reviewed journals but given these caveats it seems to be a reasonable system.   This ranking system allows for comparisons within the narrow discipline of economics.  Google Scholar offers one metric for comparing nerds across research fields.  But, when you ask ---- "what are you doing for UCLA and society?"  --- how can an economist trump this?

For Immediate Use
March 7, 2011

UCLA performs first hand transplant in the western United States

Patient hopes procedure will enhance her ability to care for her daughter

Amy Albin
Roxanne Moster
Enrique Rivero

Surgeons at Ronald Reagan UCLA Medical Center performed the first hand transplant in the western United States in an operation that began one minute before midnight on Friday, March 4, and was completed 14-and-a-half hours later, on Saturday, March 5.  

The transplant was performed on a 26-year-old mother from Northern California who lost her right hand in a traffic accident nearly five years ago. UCLA is only the fourth center in the nation to offer this procedure, and the first west of the Rockies. This was the 13th hand transplant surgery performed in the United States. 

A team of 17 surgeons, anesthesiologists, operating room nurses and technicians were involved in the effort to graft the hand onto the patient. The operation began with two surgical teams working simultaneously to prepare the donor graft and the recipient. At 4:30 a.m. on Saturday, four-and-a-half hours after the operation began, the donor limb was joined to the recipient. The surgeons then began the complex work of attaching tendons, blood vessels and nerves to complete the surgery, which concluded at 2:30 p.m. 

Following the surgery, the patient was brought back to her room, where she was met by grateful members of her family. She remains at the medical center and will begin extensive physical rehabilitation and a regimen of immunosuppressant medication to help prevent her body from rejecting the new appendage.

"I am ecstatic with the results — a little tired, but ecstatic," said lead surgeon Dr. Kodi Azari, surgical director of the UCLA Hand Transplant Program and associate professor of orthopaedic surgery and plastic surgery at the David Geffen School of Medicine at UCLA, at the conclusion of the marathon surgery. "Everything went well. The size, color and hair pattern match between the donor and recipient is nearly identical. We are so proud to have been able to give our patient the gift of a new hand." 

Azari was a surgeon in four previous hand transplant surgeries performed in the U.S. prior to coming to UCLA. 

The transplant was made possible by the generosity of the family of a deceased donor in San Diego. The donor's family worked with the staff at Lifesharing, who had been briefed last week by the transplant team at UCLA. Lifesharing, a division of UC San Diego Medical Center, is a nonprofit, federally designated organ and tissue recovery organization serving San Diego and Imperial counties.              

The transplant surgery is part of a clinical trial at UCLA intended to confirm that surgical techniques already established in hand transplantation are successful. The trial also aims to study the return of function in transplanted hands and to assess the effectiveness and safety of a less toxic anti-rejection medication protocol. 

The transplant team will closely monitor the patient's progress and how well her body adjusts to the new hand. As part of this, doctors will map her brain at key points in her recovery, observing which parts light up when she is asked to move her fingers or other parts of the new hand. 

"This surgery is part of the UCLA tradition of excellence in transplantation, and this is clearly a landmark event," said Dr. Ronald Busuttil, executive chair of the UCLA Department of Surgery, chief of the division of liver and pancreas transplantation, and a groundbreaking transplant surgeon who 27 years ago established the world-renowned UCLA Liver Transplant Program. "We now are the first center in the western United States to be performing composite-tissue transplantation. Everything necessary for this procedure has been aligned perfectly, with outstanding planning and teamwork. It has come together beautifully." 

The UCLA Hand Transplant Program is aimed at helping those who have suffered the traumatic loss of a hand or forearm, allowing them to regain function and improve their quality of life. It is a partnership between UCLA's transplantation services and its hand surgery, plastic and reconstructive surgery, orthopaedic surgery, psychiatry, pathology, anesthesia, internal medicine, radiology, neurology, ethics and rehabilitation services.  

Eligibility criteria for the hand transplantation study include: 

·        The patient must be between 18 and 60 years of age.
·        The amputation must have been at the wrist or at the forearm level.
·        The patient must have no serious infections, including hepatitis B or C, or HIV.
·        The amputation was not due to a birth defect or cancer.
·        The patient is otherwise in good general health.
·        The patient will commit to extensive rehabilitation, will adhere to an immunosuppressant medication regimen, and will participate in follow-ups with the transplant center.

Patients interested in participating first have to undergo a careful evaluation to determine if they meet the conditions for participation in the program. The evaluation includes taking a detailed medical history, a physical examination and lab tests, X-ray tests, and a psychological examination. 

After successfully completing a screening and medical evaluation, the patient is placed on a waiting list until a carefully matched hand from a deceased donor is found. After the transplant surgery, the patient will take immunosuppressive medicines for an indefinite amount of time to prevent rejection. Patients will also undergo an intensive rehabilitation regimen to restore function to the transplanted hand. 

Lifesharing is one of four federally designated organ recovery organizations serving the state of California. Collectively known as Donate Life California, these nonprofit organizations administer the state's official pink dot Donate Life California Registry. As of early March 2011, more than 8 million Californians had signed up at the Department of Motor Vehicles or online at to be organ and tissue donors after they are deceased. The Donate Life California Organ and Tissue Donor Registry is now the largest in the nation, which is critical because California has the largest number of people on the U.S. waiting list. 

Assessing the Risk of More Food Price Increases

In the Wall Street Journal, Scott Kilman tells a "triple witching" hour tale about the prospects of even higher food prices.  Soaring world demand is one fundamental trend. On the supply side, he talks of ethanol subsidies attracting U.S corn production and weather shocks disrupting production.

He is aware that if he knows that these trends exist, then there should be some profit opportunities for farmers who actually grow some agricultural yield. Here he writes a strange conjecture; "Farmers have long responded to high prices by planting more land and then producing price-depressing gluts. But this cycle appears to be breaking down, which means high food prices could stick much longer than in the past."

So, what is Mr. Kilman's evidence for this pessimistic claim that supply curves do not slope up?  Why is this "cycle" breaking down?   Economists know the classic "cob-web" model of expectations and that if farmers are myopic and choose agricultural investment today as a function of last year's price then they will not like the results. They will "over plant" when prices are high and the next year prices will fall due to the bumper yield.

So, it appears that this agricultural case offers us a sharp test of both rational expectations and induced innovation.  Why?

1.  Rational Expectations:  I recognize that climate change makes the probability of extreme weather events (both temperature and rainfall) higher.  If farmers recognize this fact, then this should affect their investment choices today over a range of options.   For example, the adoption of heat resistant seeds or having access to more irrigation are just two examples.

2. Induced innovation;  if we expect that agricultural prices will rise -- then this should focus our nerds' attention on developing potential solutions.  As agriculture faces more extreme weather scenarios, has anyone around the world figured out how to deal with them? How can these "best practices" be diffused around the world?  I do not know the exact details about how to grow grains under different climate conditions but how can human capital and physical capital substitute for resources that Mother Nature is now randomly choosing not to supply?

In a nutshell, if we anticipate that we face a challenge --- what is the "small ball" of how farmers will figure out how to respond?  What are the short run adaptation strategies? and what are the medium term adaptation strategies that investments in new ideas and capital will make possible over the next 5 to 10 years?

Sunday, March 06, 2011

European Vacation

Like Chevy Chase in the movie European Vacation, I will soon head to Rome and to Maastricht for this  Green Real Estate Conference .  While I am looking forward to this conference, I know that my friends (and my wife) who will also be attending will start to experience "diminishing returns" to hearing me speak.  I am eager to hear UC Berkeley's Dwight Jaffee's views on climate change adaptation.   He has the "enviable" role of providing comments on my "keynote" address.  I will then participate in a session in which I will present my new solar capitalization paper (joint with Sam Dastrup, Josh Zivin and Dora Costa).  An old version of the paper is available at the UCEI website.  In the afternoon, just to make everyone nuts,  another new paper of mine will be presented. This one will be set in Beijing. We have created some distinctive data sets to provide some new facts about China's nascent green building market.

I want to apologize to my friends who will be attending the conference. Even I recognize that this is "too much Kahn".  To make it bearable, I promise to be funny and brief.

Thinking about Europe makes me a pinch nostalgic.  I have trouble believing that 25 years have passed since I showed up at the London School of Economics for my junior year of college.  While this Libya stuff is causing the LSE pain right now,  do not forget that the LSE is major center of economics research.  I owe the LSE big time.

I spent my first two years at Hamilton College and wasn't a very serious student.  During my year at the LSE, I met plenty of very smart, hard working people and felt humbled.  At the LSE, I started to work hard and to actually learn some advanced economics.  This effort helped me to get into the University of Chicago's Ph.D. program.

When I return to UCLA, I will face a new challenge. I will be teaching my first MBA class.  Believe it or not, I will soon join my 4th UCLA academic unit.  While I am not yet a member of the English Department or the Math Department, there are several units on campus who are happy to have me be a member of their team.

I have been working hard to put together a serious Real Estate Finance class.  The power of Google has allowed me to grab great class material from Professors at Columbia, Yale, MIT and Wharton. I thank them! I have taken their real estate notes and added my own strange stuff to create my own "potent brew".  Since UCLA is on the quarters system, I will have 10 weeks (from 7pm to 10pm one night a week) to teach my students the basics.  I am looking forward to it.

Since I love to teach, I have volunteered to teach summer school this summer and I will be lecturing in Beijing. It is important to keep moving!  If you want me to give a guest lecture in your class, please call my agent. Her name is Dora L. Costa.

Saturday, March 05, 2011

Gib Metcalf Joins the Obama Administration

This article reports that Professor Metcalf will be joining the Treasury Department to work on energy issues.  I was Gib's colleague for several years at Tufts.  This is a great appointment.  As you might recall, I have used this blog to endorse Gib for President of the United States back in 2007  Now, it is true that I limited my search to the set of academic economists --- so the short list included Gib, Paul Krugman, Derek Neal and Jeff Sachs.

Tufts' Michael Klein is already working for the Treasury Department. I am proud that my old school is engaged in public service.

NFL Football Players Understand the Permanent Income Model of Consumption

Milton Friedman would like this article.  These players are acting "as if" they are maximizing a lifetime present value utility function while recognizing that their current income overstates their permanent income.  “A lot of players think the money is going to come in forever,” Mr. Carriker said. “The best line I’ve heard is, ‘Don’t live like a king for a little bit; live like a prince forever.’ ”

So, this article is about diversity in the NFL.  Some players understand the Permanent Income Model while others are acting like the Keynesian Man (current consumption = .9*Today's income).  A micro economist would want to know who falls into each of these camps by race, college completion, the quality of the undergraduate school they attended, position on the field,  parental inputs while growing up, etc.

In this age of social learning, do players learn from each other?  If a Permanent Income Consumer joins a team, does he talk his teammates into living a simpler life now in return for having more savings later in life?

Some economists have been writing about the "Bling Culture"  . If this is a big deal in the NFL, then this would discourage savings now.  I don't remember seeing any photos of Milton Friedman with a diamond necklace.

Friday, March 04, 2011

Noise in Cities

Density  in cities offers environmental benefits and costs.  The Center City is noisy and in the recent past it was quite polluted.  So, your exposure to pollution is higher if you live in the center city but the irony here is that you produce less pollution if you there than if you live in the suburbs.  For proof, here is a recent paper that I like.

Adapting to $4 Gas

For the 2nd time in three years, we face gas prices of at least $4 per gallon.  How does a rational person cope with such dynamics?  There are several adjustment margins.  Since most households own more than one car, they can make all of their non-commute trips (which are most trips) using the more fuel efficient vehicle.  Suppose that they have one car with a 25 MPG range and one with a 35 MPG range.    At $4 per gallon, a mile of driving the "hog" costs 16 cents while a mile driving the "Prius" costs 11.4 cents.  So, this substitution can reduce the price per mile by 30%.    Now, some people may be able to drive less.  People who live in the cities have an easier time substituting to public transit over those who live and work in the suburbs.

But, the people in the suburbs know that they are reliant on their vehicle and they know that gas prices are volatile --- basic economics would predict that they would have a coping strategy (i.e a Prius in the garage).  Do you really feel sorry for the household who only owns minivans?

So, $4 gas is a tax on rural and suburban large households who own a set of Hummer like Mini-Vans.  What % of Americans fall into this group?   Are they victims?  To count how many of there are, you would need to combine Census data with vehicle registration data.  RL Polk will sell such vehicle registration data by zip codes so a research nerd could identify the geography of which communities face the greatest impact of short run gas spikes.   I will give you a hint; it won't be Berkeley. The people of Berkeley, CA don't drive much and when they do they tend to drive a Prius.

Now, the final adaptation card is to yell at your politician to do something about gas prices!  

Will this be the end of the world?  

As I discuss in Climatopolis,  we must become a more nimble people who can cope and thrive when faced with change.

Thursday, March 03, 2011

The Future of Home Ownership If Fannie Mae and Freddie Vanish

This article asks a good question but then doesn't bother to try to answer it.  If the GSEs no longer guarantee that they will buy up bank loans then banks will be less willing to pull the trigger and lend to marginal borrowers. Interest rates will rise for those with a risky profile.  The article claims that interest rates will rise for urban and rural people but doesn't bother to explain why.  The only explanation I can think of is if their income profile is more volatile and they are more likely to face default risk than suburbanites.

If domestic borrowers have more trouble securing funds to finance buying a home, then what happens to our existing housing stock's value?  I predict that more foreigners will buy it up.  If the dollar stays weak relative to other currencies, then foreigners can hedge political uncertainty in their nations and have a nice diversified option to hold onto our real estate.  I have tried to do research on international holdings of our real estate but haven't been able to figure out how to do this.

U.S real estate scholars have studied home price dynamics in Superstar Cities but they haven't been able to integrate into their analysis the role that serious international money plays in bidding up real estate prices in elite areas such as Beverly Hills.  In West Los Angeles, there is a large former Iranian national population in my westwood area. "The Persian population of Beverly Hills may be as high as 40% of the total population." or so says Wikipedia.  

I view this international diversity to be a good thing.  The United States seeks to identify new export markets and perhaps our land is a viable export!

Wednesday, March 02, 2011

Can UCLA Learn from UW-Madison's "Privatization" Efforts?

We need guinea pigs and I thank my friends at UW-Madison for teaching us these lessons.   I don't believe that UCLA needs Sacramento's $.   Sacramento would clearly like to give my campus less $.  It appears to me that there are "gains to trade".   To quote Mel Gibson in the movie Braveheart;  "Freedom".     We will learn to compete with Stanford and USC in head to head competition.  We will raise our tuition (and we won't lose market share due to our offering an increasingly high quality of undergraduate education) and we will raise our merit scholarship aid.  Poor students will actually pay less to attend UCLA.  The upper middle class will pay more.  If people refuse to pay our sticker price then there are other fine schools they can choose to attend.   Excellence means that you can raise your price without losing customers and I think that we are excellent and will become even better once we have secure revenue streams that strange political cycles cannot endanger.  

Climate Adaptation in the Past: The Case of the Mayans

Collapse?!   Academic researchers continue to debate these issues.  "We want to see how people were affected by climate changes and how they coped with them. Through many changes and crises, including the most severe effects of contact with the Spanish, Maya society and culture have persisted."   This sounds reasonable to me.  Perhaps I should talk to more Anthropologists.  I know one superstar in the field but I know that it is a diverse field.  This example of anthropology looks interesting but I wonder how one establishes cause and effect?

Contrasting Alternative Approaches for Encouraging Water Conservation

As an economist, I wonder why LADWP charges me .5 cents per gallon of water in the midst of ongoing drought.  Most economists would say; "let the price of water reflect scarcity and your "shortage problem" will vanish."  Politicians, as usual, have not listed to the economists so some have suggested that we need to bring in the celebrities.  What can Charlie Sheen and friends hope to accomplish here?  Read this:

Celebrities Donate Time to “Invade” Homes to Save Water

Student Conservation Association, American Water Launch
“Save Water Today” Public Service Campaign in partnership with the
U.S. Environmental Protection Agency’s WaterSense Program

VOORHEES, N.J., March 2, 2011 – With 36 states expected to face serious water shortages by 2013, water conservation is an increasingly critical concern for our country. In response to this important issue, the Student Conservation Association (SCA) and American Water, in partnership with the U.S. Environmental Protection Agency’s (EPA) WaterSense program, have launched the Save Water Today public service campaign. Save Water Today is an integral component of American Water’s year-long consumer education campaign promoting water efficiency and water source protection to help mark the company’s 125th anniversary.

The PSA campaign comprises a quartet of public service announcements (PSAs) that bring together Saturday Night Live alums Rachel Dratch and Horatio Sanz, Diane Neal (formerly of Law & Order: Special Victims Unit), and 16-year-old national surfing champion Lakey Peterson to promote household water conservation. All the featured actors generously donated their time and talents. In each 30-second announcement, the uninvited – but not entirely unwelcomed – celebrity appears in someone’s home to deliver practical, actionable tips to viewers.

In “Dishwasher,” Dratch catches Jenny, played by Gretchen Egolf (Martial Law, Journeyman), in her bathrobe just in time to save her from running a dishwasher that isn’t full – but not until after Dratch has scoured the home for other items to add to the washload.

Sanz ambushes a wet Brian, played by Kurt Braunohler (Comedy Central Presents) in “Shower,” stopwatch in hand, to let him know that he’s at 40 gallons and counting.

In “Faucets,” the unsuspecting Oliver family (Andrea Rosen, Matt Higgins and Jack Gore), quietly watching television, finds Neal sharing their bowl of popcorn and lecturing them in legal fashion on the water they could save by replacing their worn washers.

Finally, in “Toilet,” Peterson drops in on an apartment full of her surfer-dude fans (Max Carpenter, Ben Hollandsworth and Jordan Augustyn) and makes her way to the lavatory to make water-saving adjustments in their tank.

At the conclusion of each spot, viewers are directed to for additional water-saving tips.

Keeping with the “green” theme, the PSAs were filmed on location, courtesy of The Visionaire condominium, in Manhattan’s Battery Park City neighborhood. Developed by the Albanese Organization, the LEED Platinum-certified Visionaire is the greenest residential high-rise in the U.S. and a model for future urban developments nationwide.  

To view the PSAs and learn more water saving tips go to

Tuesday, March 01, 2011

A Room With A View of Caracas

A silver lining of a 45 story commercial tower not being completed is that 2,500 squatters have a place to live in Caracas.  This mighty tower does not have a working elevator and those on upper floors are enjoying the ultimate "stair master".

"Once one of Latin America’s most developed cities, Caracas now grapples with an acute housing shortage of about 400,000 units, breeding building invasions. In the area around the Tower of David, squatters have occupied 20 other properties, including the Viasa and Radio Continente towers. White elephants occupying the cityscape, like the Sambil shopping mall close to the Tower of David and seized by the government, now house flood victims."

So, for the people who choose to live there -- what is their rent? What is their commute time?  How long does the average person who lives there stay before they move out?

In U.S major cities, housing advocates bemoan the lack of "affordable housing".  What do they think of this option?

Now, there is a serious issue of how you police vertical structures --- especially when there is hyper-segregation of the poor.  The Chicago Taylor Homes are the classic example of how gangs take over a space.  This would appear to be a classic example of "order without law".