If you ever end up thinking seriously about or reading up on probability, you will find that there are two main ideas about what probability really means.  The more intuitive of the two is the objective or frequentist viewpoint.  On this view events in the world are endowed with probabilities.  A fair coin has a fifty percent chance of coming up heads, and this is a property of the coin.  We can learn about the true probabilities of events by repeating experiments again and again.

On the subjective or Bayesian view, the world is not random.  The outcome of every future coin flip is already fixed.  Since we can't be sure whether the true world is one of the possible worlds with the next flip being heads or one of the possible worlds with the next flip being tails, we form beliefs about which world we are in.  Subjectivists call these beliefs probabilities.

Shame...
Mar 26, 2011

I am saddened to live in a world like this.  With all likelihood this brave woman has been further tortured or murdered or both.

I hate the fact that I am partially funding this civil war.

I have been telling this story around the department all week:

Once there was a city called London.  There was something about London, maybe the warm beer, that made the people there really productive.  They used the production function Y = 100 * L, where L is effective labor.  The only person who lived in London's name was Alice.  Alice was really smart, so her effective labor was 2.  The market in London was such that Alice got paid her marginal product--200.  Since Alice was the only person living in London, her wage was also the GDP per capita--200.

Not that far away, there was another city called Dublin.  It was always raining in Dublin which made everybody there depressed.  The production function in Dublin was Y = 2 * L.  The only people in living in Dublin were Tweedle Dee and Tweedle Dum.  Tweedle Dee wasn't as smart as Alice, so his effective labor was only 1, which made his wage 2.  Tweedle Dum was even dumber than Tweedle Dee.  His effective labor was .5, and his wage was thus 1.  The GDP per capita in Dublin was then 1.5 .

One day Tweedle Dee got sick of living in such a poor place, so he moved to London.  His wage was then 100, so the GDP per capita in London was 150, and since only Tweedle Dum remained in Dublin, the GDP per capita there was now 1.  The GDP per capita went down in both places, but the only change in welfare was that Tweedle Dee got rich!   This example is based on the excellent paper "Income per Natural" by Lant Pritchett and Michael Clemens.

This afternoon James Key, a kiwi, told me of a similar point made by one of the former prime ministers of New Zealand.  He said that if more New Zealanders were to migrate to Australia, then the average IQ's in both places would go up.  Implication: Only the lowest-IQ New Zealanders would migrate to Australia, but even they are smarter than the average Australian.

Mar 23, 2011

The Mega Millions lottery jackpot is currently \$304 million (annuity), the 12th largest jackpot in history (at least in nominal terms).  I consulted with a certain PSU faculty member very well versed in probability theory about buying a ticket.  He told me that when the Mega Millions jackpot gets to around 176 million, then the expected net return to buying a lottery ticket is zero.  Since the current jackpot is almost twice as high, the expected net winnings should be about the same as the price you pay for the ticket.  These are better odds than you will ever get at a casino!

The drawing is on Friday (3/25). I will see you in line at the gas station!

Edit: Corrected typo and added source.

Mar 22, 2011

Bryan Caplan on why "charter cities" are a second-best proxy for more open migration policies.

Robin Hanson on very good news about solar energy.

Non-GMU link: How does this sort of retaliation make Israeli citizens safer?

When Foreigners Attack
Mar 20, 2011

Like a large segment of the blogosphere, it is not clear to me that it is ethical for foreign power to get militarily involved in Libya.  If the situation was the Libyan regime launching airstrikes and firing mortars against peaceful protesters, then there may have been a case to be made for sanctions, freezing bank accounts, or even military action.  As far as I can tell, however, the Libyan rebels are now an armed resistance which has taken over several cities.  What is going on in Libya is civil war.  Apparently more than a few Libyans still support Gaddafi.  The UN is taking a side in the civil war, and American and other's attacks are killing soldiers.  It is not clear to me that there is a "good" side and a "bad" side in Libya.  I sincerely hope that the ultimate result of UN military action is good for most Libyans, but I wonder how likely this is, or how anyone will ever know.

and they aren't pigs.

It’s time to take a look at the line between “pet” and “animal.” When the ASPCA sends an agent to the home of a Brooklyn family to arrest one of its members for allegedly killing a hamster, something is wrong.

That “something” is this: we protect “companion animals” like hamsters while largely ignoring what amounts to the torture of chickens and cows and pigs. In short, if I keep a pig as a pet, I can’t kick it. If I keep a pig I intend to sell for food, I can pretty much torture it. State laws known as “Common Farming Exemptions” allow industry — rather than lawmakers — to make any practice legal as long as it’s common. “In other words,” as Jonathan Safran Foer, the author of “Eating Animals,” wrote me via e-mail, “the industry has the power to define cruelty. It’s every bit as crazy as giving burglars the power to define trespassing.”

From Andrew Sullivan:

Statistically speaking, the least happy American would be a 4’10”, middle-aged Muslim woman without children who is separated from her husband and earns under \$12,000 a year. She’s also an unemployed manufacturing worker in West Virginia.

I had the same reaction as Chris Blattman.

Happy
Mar 14, 2011

`3.1415926535897932384626433832795028841971693993751058209749445923078164`
`day!`

First do no harm.  How did I miss this report last year about the World Food Program in Somalia?  According to a UN Security Council report last year, corruption in WFP contractors led to as much as 50% of the food aid donated to Somalia being diverted. In 2009, Somalia received approximately \$485 million in food aid.

According to the New York Times story, 80% of the distribution of food aid was contracted out to three powerful businessmen.  One businessman was accused of hijacking his own trucks to resell food.  This guy's wife sat on the board of a local aid agency which was supposed to report whether food shipments were actually delivered to the poor.

The authors of the security council report had to be relocated to New York from Kenya after they received death threats.  According to Laura Freschi at Aid Watch, after the report was made public the WFP promptly broke ties with the businessmen in question.

Not only was the WFP delivering much less food than what was delivered to Somalia's ports, it was essentially supporting the Somalian mafia.  Some might argue that in difficult countries like Somalia it is necessary to grease the wheels to deliver food at all, but see foreign aid rule no. 1 above.