Making JSTOR into a public treasure

May 31, 2008

Michael Giberson

Grant McCracken cries out: “JSTOR, get out of the way!“

[T]his stuff is bought and paid for. It is time to release it into the public domain. Surely, there is a university server somewhere that would assume the costs. Google, I am quite sure, would be willing to shoulder the burden.

The fact of the matter is JSTOR is holding precious resources captive to sustain itself…and its ability to hold precious resources captive. This content was created by academics funded by not-for-profit institutions. JSTOR is not reinvesting revenue in academic production. It is, as I say, now self sustaining in the worst sense of the term.

JSTOR is taxing public knowledge in order to sustain its ability to block access to public knowledge.

Time to let go.

If you have a university connection, you probably haven’t felt the sting of what Grant calls “the red light from JSTOR” – knowing that the information you want is just a mouse click away for those people with the right kind of connections, not you.

I know the feeling. Many times I’ve been reduced to copying down a citation, saving it for when I could clear time to head over to a university library and track down a hard copy.

Of course, I’ve been around long enough to remember when there was no JSTOR, and nothing like it. I remember when the university library began offering searchable electronic databases that would turn up a citation only, and I was thrilled. While there was some charm in paging through the Social Sciences Citation Index in the Reference Room, tracing the influence of articles past, a searchable database was such a boon.

And then JSTOR came, with page images and searchable text and accessible on the internet, years and years of the American Economic Review and the Journal of Political Economy and more.

And then I graduated. A post-doc kept me with the JSTOR crowd for a year, but eventually I was out in the private sector, and no longer good enough for JSTOR.

I retain a continuing fondness for JSTOR, left over from the glorious first years of access when still in graduate school. I can’t quite bear to cry out, with Grant, “JSTOR, get out of the way!” But, when Grant shouts his challenge at the JSTOR gate, inside me a small voice says, “He is right.”

So I’m sure that there are many little details to work out. Money must change hands a few times, and lawyers will have papers to be signed. Maybe, like Grant suggests, Google can fund it. Or perhaps Universities can wrangle a way in for their alumni, and the Bill and Melinda Gates Foundation picks up the bill for users from developing countries.

But somehow JSTOR should find a way to throw open its doors.

3 Comments | Economics | Permalink
Posted by Michael Giberson

Price gouging laws: emotions, economics, and policy

May 31, 2008

Michael Giberson

Julio J. Rotemberg has a paper out about emotional reactions to prices and their policy implications. (“Behavioral aspects of price setting, and their policy implications.”) I think he is working on some interesting issues, but he comes up with such lousy “policy implications” at the end of the article that it ruined it for me.

In fact, the policy implications were so weakly presented, it made me mad for his having spoiled the article with it. You might say I had an emotional reaction to an article about emotional reactions to prices.

Rotemberg mentions that when people are angry, their utility is increased when the target of their anger is harmed. If we now jump to the conclusion that authors of articles with badly argued policy implications should be penalized, perhaps tossed into jail would be satisfactory, then we would be guilty of the same kind haphazard non sequitur as Professor Rotemberg. So rather than jump to that conclusion, let us move more cautiously.

Rotemberg discusses consumers’ cognitive and emotional reaction to prices in two different contexts in which restrictions on prices appear to have consumer support – laws limiting the terms of mortgages and price gouging laws. He also throws in a discussion of monetary policy for good measure. I’m most interested in the price gouging discussion and will focus on it here.

He notes that economists should be puzzled by support for the laws, which since they cap prices or otherwise interfere with the ability of consumers and suppliers to come to terms, can’t but work to reduce overall welfare. Success of the laws, too, appears to be a puzzle since the beneficiaries are presumably widely dispersed and unlikely to be organized: consumers who would have entered into a disadvantageous loan but for the protections offered by mortgage regulations, consumers able to obtain emergency goods without facing substantial mark ups. Weighed against such dispersed political beneficiaries are the mortgage industry and various retailers.

I raised the ‘emotional response to prices’ angle in March when I was writing about Matt Zwolinski’s article on price gouging in Business Ethics Quarterly. I liked his analysis, but decided it would fail to persuade his opponents because it failed to grapple directly with the emotional and moral aspects of support for price gouging laws. I wrote:

I think most proponents of anti-price gouging laws, even if they agreed point by point with Zwolinski’s analysis, would still feel that price gouging was morally wrong, and would not oppose anti-price gouging laws. I’m increasingly convinced that morality is fundamentally a social manifestation of emotions. Zwolinski’s point-by-point rebuttal of anti-price gouging positions barely touches on the emotional component. I suspect opponents of Zwolinski’s view would feel he just doesn’t “get it.”

So while Zwolinski is doing useful work … something more will need to be done before the anti-price gouging folks will finally “get it.” To understand the feelings behind price gouging, economists need to delve into the broader mysteries of emotional reactions to prices and allocations. Most economists don’t want to go there, and so they are left only to scratch the surface of the problem they want to resolve.

Rotemberg takes up the emotional reaction to prices directly in the context of price gouging laws, so I hoped he was going to get somewhere.

His basic idea is that consumers become angry at firms that accentuate feelings of regret, because firms that were minimally altruistic would refrain from doing so. “Firms that raise their prices in circumstances where this has a big effect on regret thus demonstrate their selfishness,” he writes.

An individual, who failed to buy a snow shovel in advance, regrets that action when a heavy snow falls. When the individual then discovers that the price has been marked up, the feeling of regret is accentuated and the individual becomes angry at the firm.

The policy implication that Rotemberg tags on to this piece amounts to this: if the anger experienced by consumers in the face of a price increase is counted sufficiently in social welfare, this anger (or at least the social welfare implications of the anger) can rationalize government intervention in the market.

Presumably before we reach a policy recommendation on economic matters, some sort of cost-benefit calculus is called for. Isn’t this a fairly basic idea in economics? Surely it can’t be enough to observe that some people sometimes get mad in response to price mark-ups, and these people would feel better if the party responsible were to be punished.

Zwolinski’s piece ultimately did not satisfy me because it failed to grapple with the core emotional issues motivating the desire of some consumers for price gouging laws. Rotemberg’s piece was more frustrating in its policy discussion. While Rotemberg recognizes that emotional reactions to price increases are at the core of the issue of price gouging, he seems to conclude on those grounds alone that price gouging laws can be rationalized. It isn’t enough.

1 Comment | Economics, Politics | Tagged: | Permalink
Posted by Michael Giberson

A cool interactive regional produce map

May 30, 2008

Lynne Kiesling

Want to buy the freshest in-season local produce? Here’s the tool for you: Epicurious’ seasonal ingredient map. Right now I should be eating lots of asparagus and potatoes …

1 Comment | Food and wine, How cool is this? | Permalink
Posted by lkiesling

The L Prize: A prize for lighting innovation

May 30, 2008

Lynne Kiesling

As authorized by the Energy Independence and Security Act of 2007, the U.S. Department of Energy has announced the Bright Tomorrow Lighting competition, the L Prize (here’s the prize website). Cash prizes and other inducements for the development of solid state lighting to replace standard incandescent and fluorescent bulbs.

Rather like the Google Lunar X Prize, but with taxpayer money instead of private money.

Solid-state lighting is a big deal. The light is emitted from a block of semiconductor material instead of in a vacuum in a tube or by exciting a gas in a tube. If you have any LED lights, that’s an example of solid-state lighting. They use very little energy per lumen of light, and they emit very little waste heat.

There are a couple of academic research centers working on solid-state lighting, and there are some companies that offer solid-state lighting. Mass-market solid-state lighting is not there yet.

I have my concerns about government research funding crowding out private research funding, particularly when we get in this murky area that is moving toward commercialization research. I also have my doubts about the assertion in the DOE’s solid-state lighting strategy statement that “its unique attributes drive the need for a coordinated approach that guides technology advances from laboratory to marketplace”.

However, if the alternative to this kind of policy is command-and-control technology standards and building standards, then this prize-based policy is more likely to generate effective, commercializable solid-state lighting. At least it stipulates the performance objectives without stipulating how the technology is to achieve those objectives (other than the technologies having to be solid-state).

I think that’s the real on-the-ground realpolitik comparison to make, although I also think that we should not ignore the crowding out question (especially as fuel prices and electricity prices rise).

1 Comment | Economics, Electricity | Permalink
Posted by lkiesling

Ocean thermal power systems back under development

May 29, 2008

Michael Giberson

Geothermal power generators use temperature differences between the surface and areas deeper in the earth to move a gas or liquid through a loop and drive a turbine. (One example is the Chena Geothermal Power Plant in Alaska. See the related project at the Chena Hot Springs Aurora Ice Museum, which uses 165°F water from a geothermal well to help keep the ice museum cold.)

Ocean thermal power systems work on similar principles, but, to state the obvious difference, underwater rather than underground. A story in the LaCrosse Tribune (Wisconsin) discusses work by an 80-year old Wisconsin engineer who obtained some patents on related inventions in the early 1980s, but saw interest in ocean thermal generation drop off as energy prices fell.

The system uses the difference between the heat of the ocean’s surface water, about 80 degrees in the tropics, and the colder water deeper down to force ammonia through a turbine that turns a generator to produce electricity.

The electricity then can be converted into various sources of power, such as hydrogen, and then used to operate something like a hydrogen-cell car.

…The proposal describes the energy system as free of pollutants and, like the wind, cost-free as well.

“This can work 24 hours a day, 365 days a year, because of the enormity of this source,” Foust said. “It goes all the way around the earth, deep and wide.”

The term “cost-free” is incorrect, of course, both in reference to ocean thermal and wind energy power systems. The system cost something to build, cost something to maintain, and occupy real space in the water that would otherwise be available for other uses. Which is why, as inventor Foust is quoted as saying later in the article, “These alternate energy programs are only viable when the cost of energy is high.”

A recent report by the Texas Comptroller of Public Accounts assessing energy resources for the state was dismissive of the prospects for ocean thermal energy conversion, saying, “ocean thermal energy conversion (OTEC) is the least accessible form of ocean power, and perhaps the least useful for the U.S.” (From the Texas state government’s The Energy Report 2008.) But all such assessments depend on the particular resources and technologies assumed, and both technology and our understanding of resources constantly changes.

In particular, the report observed that the relatively shallow waters in the Texas Gulf do not have sufficient temperature differences between the surface and the ocean floor. Offshore Hawaii, on the other hand, has more potential. Another alternative would be to use temperature differences between surface water and geothermal sources beneath the ocean floor. For example, use offshore oil and gas wells in the Gulf to gain access to higher temperatures under the ocean.

At some price for electricity, such possibilities become economical.

Comments Off | Electricity, Energy markets | Permalink
Posted by Michael Giberson

Ocean thermal power systems back under development

May 29, 2008

Michael Giberson

Geothermal power generators use temperature differences between the surface and areas deeper in the earth to move a gas or liquid through a loop and drive a turbine. (One example is the Chena Geothermal Power Plant in Alaska. See the related project at the Chena Hot Springs Aurora Ice Museum, which uses 165°F water from a geothermal well to help keep the ice museum cold.)

Ocean thermal power systems work on similar principles, but, to state the obvious difference, underwater rather than underground. A story in the LaCrosse Tribune (Wisconsin) discusses work by an 80-year old Wisconsin engineer who obtained some patents on related inventions in the early 1980s, but saw interest in ocean thermal generation drop off as energy prices fell.

The system uses the difference between the heat of the ocean’s surface water, about 80 degrees in the tropics, and the colder water deeper down to force ammonia through a turbine that turns a generator to produce electricity.

The electricity then can be converted into various sources of power, such as hydrogen, and then used to operate something like a hydrogen-cell car.

…The proposal describes the energy system as free of pollutants and, like the wind, cost-free as well.

“This can work 24 hours a day, 365 days a year, because of the enormity of this source,” Foust said. “It goes all the way around the earth, deep and wide.”

The term “cost-free” is incorrect, of course, both in reference to ocean thermal and wind energy power systems. The system cost something to build, cost something to maintain, and occupy real space in the water that would otherwise be available for other uses. Which is why, as inventor Foust is quoted as saying later in the article, “These alternate energy programs are only viable when the cost of energy is high.”

A recent report by the Texas Comptroller of Public Accounts assessing energy resources for the state was dismissive of the prospects for ocean thermal energy conversion, saying, “ocean thermal energy conversion (OTEC) is the least accessible form of ocean power, and perhaps the least useful for the U.S.” (From the Texas state government’s The Energy Report 2008.) But all such assessments depend on the particular resources and technologies assumed, and both technology and our understanding of resources constantly changes.

In particular, the report observed that the relatively shallow waters in the Texas Gulf do not have sufficient temperature differences between the surface and the ocean floor. Offshore Hawaii, on the other hand, has more potential. Another alternative would be to use temperature differences between surface water and geothermal sources beneath the ocean floor. For example, use offshore oil and gas wells in the Gulf to gain access to higher temperatures under the ocean.

At some price for electricity, such possibilities become economical.

4 Comments | Electricity, Energy markets | Permalink
Posted by Michael Giberson

September 9: Release date for Neal Stephenson’s new book

May 27, 2008

Lynne Kiesling

And it’s called Anathem. It’s an interesting made-up word, reminiscent of both “anthem” and “anathema”. The marketing blurb:

Since childhood, Raz has lived behind the walls of a 3,400-year-old monastery, a sanctuary for scientists, philosophers, and mathematicians–sealed off from the illiterate, irrational, unpredictable “saecular” world that is plagued by recurring cycles of booms and busts, world wars and climate change. Until the day that a higher power, driven by fear, decides that only these cloistered scholars have the abilities to avert an impending catastrophe. And, one by one, Raz and his cohorts are summoned forth without warning into the Unknown.

Why do I feel like he’s writing about me and my friends?

Seriously, I can’t wait to get my hands on this.

If you want to ask Neal any questions about the book, the publisher is taking question submissions through today.

3 Comments | Books | Permalink
Posted by lkiesling

Some anecdotal data on driving behavior change

May 27, 2008

Lynne Kiesling

This weekend the KP Spouse told me about a couple of his colleagues, both of whom drive Chevy Avalanches, live in the suburbs, and used to drive to work. One of them has started taking the train and is trying to sell his Avalanche, because he doesn’t want to keep spending what he has to on gasoline.

The other one has parked his Avalanche, and has been shopping for a small car to drive. He found a dealership in the northern suburbs that had a Hyundai Elantra in that bleh green color that was just rolling off of the delivery truck; all of the other colors (black, silver, etc.) already had a waiting list. He put a deposit on the bleh green Elantra over the phone to make sure it didn’t get sold while he was getting up there. Needless to say, he paid the sticker price for the bleh green Elantra.

See what $4.25 gas will drive people to do?

3 Comments | Economics, Energy markets | Permalink
Posted by lkiesling

Are oil prices going higher?

May 27, 2008

Michael Giberson

Today a Washington Post article discusses the most recent oil price forecast from Goldman Sachs analysts Arjun N. Murti and Jeffrey Currie, which have oil prices averaging $141/bbl for the second half of 2008. As usual, it isn’t hard to find an analyst with a contrary view, and the article presents some counter arguments. (One observer notes that even with GS’s prediction of a oil price between $150 and $200 in the next several months, the company merely rates Exxon Mobil as “neutral.” Suggested is that even within the firm, not all persons are believers.)

The article notes Murti’s track record for newsmaking high price forecasts which subsequently are reached, and presents a somewhat selective graphic in support. How good is Murti’s record? The text explains that the famous $50-$105 prediction from March 2005 was directed at the next 6 to 24 months. (Discussed here in March 2008 as “Foreseeing $105/barrel oil“) Price swung up to about $78, then down, and two years after Murti’s prediction – in March of 2007 – prices were about the same level as March 2005: near $60/bbl. Of course, prices did mostly stay within the predicted range and some contemporary predictions had prices falling to $30, $20 or lower. Probably safe to say that Murti’s risky forecast turned out to be better than most.

GS’s Currie gives the short-hand version for the most recent forecasts:

“World GDP wants to grow at 3.8 percent, whereas the best we can come up with for trend supply growth is 1 percent,” he said. “So something has to give. And that means prices have to rise to curtail demand growth.”

Perhaps you’d like something more systematic than a newspaper account? For you, then, is James Hamilton’s “Understanding crude oil prices” (title links to abstract, here is a direct link to the article).

Hamilton employs three different approaches to assessing crude oil prices. First, he takes a fairly basic look at statistical correlations in time series analysis. Second, he examines the lessons from economic theory. Third, he examines various fundamental conditions affecting supply and demand for oil.

One thing looking at the time series data tells you is that the current price tends to be the best predictor of the price a quarter from now (“the real price of oil seems to follow a random walk without drift”), but the variance is wide (beginning at a price of $115, it would not be surprising based on historical price movements for prices a quarter from now to be as high as $156 or as low as $85).

In his economic theory discussion he considers storage arbitrage effects, possible effects of financial market trading, and effects expected given that oil is a depletable resource. In the fundamentals discussion, Hamilton considers the role of the OPEC cartel, the changing elasticity of supply and demand, and whether oil markets may now be figuring in a scarcity rent (implied by Hotelling’s model of a depletable resource).

He concludes “the low price-elasticity of short-run demand and supply, the vulnerability of supplies to disruptions, and the peak in U.S. oil production account for the broad behavior of oil prices over 1970-1997.” As for the period after 1997, he tentatively concludes, “the profound change in demand coming from the newly industrialized countries and recognition of the finiteness of this resource offers a plausible explanation for more recent developments. In other words, the scarcity rent may have been negligible for previous generations but is now becoming significant.”

Reader John Mashey, in a comment on my post “Are oil prices too high?“, wonders whether we are at an inflection point (i.e. a fundamental change in the relationship between oil prices and the world economy). Hamilton seems to suggest that the inflection point was 1997/1998.

In my mind the interesting issue concerning the relatively tepid supply response to historically high oil prices concerns whether we are becoming short of producible oil resources, or just short of the tools to produce more oil resources with. My view remains the same as it was the other day, when discussing that confused New York Times article:

The world is running out of oil production capacity because there is a global dash for oil. This dash is the oil supply response, and it is probably not too soon to conclude the world oil production will be higher this year than last, even as we are short on oil production capacity.

Hamilton’s piece didn’t quite disrupt this view, but I am becoming more open to the possibility. I think additional careful look at world oil supply would be helpful.

6 Comments | Economics, Energy markets | Permalink
Posted by Michael Giberson

Real-time feedback promotes efficient use of energy

May 26, 2008

Michael Giberson

Tom Igoe, a physical-computing researcher at New York University, said the Prius mpg display is one of the best examples of technology “where green meets information systems.”

“For a long time,” he said, “we have known that people will change their habits if they are exposed to feedback in real time.”

From “For Hybrid Drivers, Every Trip Is a Race for Fuel Efficiency” in the Washington Post. The article notes that real time energy use tools are available for the home as well.

Interesting article. I wonder whether some of the hypermilers described in the article — when they took longer routes to avoid going up steep hills — were actually always saving energy. But on the whole, we’d all be better off with more direct feedback on our energy consumption decisions.

4 Comments | Energy markets, Environmental policy | Permalink
Posted by Michael Giberson

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