Why Do Economists Love Money?

Before I ever start of this post, I don't want to hear anyone saying, "you can't really measure [this or that]," or "you can't put a price on [whatever]." Measuring intangible things is always difficult -- an art as much as a science. No one is arguing this. This post is about explaining why we try. So don't try to pick apart my examples I know they aren't perfect. They all need a million caveats. If that is all you are after you'll miss the point. [Rant done.]

Economists are often accused of "only" caring about dollars, about money. And this is always meant in a pejoratively. I feel that this accusation needs a defense.

Guilty as charged. Kinda of...

Economists do care about dollars, in general at least, but it ought not be thought of as a bad thing. Technically, economists care about cost, not dollars. Cost includes everything; if you have a family there is a trade-off between seeing your family or working an extra hour, or paying a babysitter to go out to eat with your spouse (and whatever the date costs.) However, especially in the former case, it is difficult to measure "how much" an hour with your family is worth compared to an extra hour at work -- especially if you need the money to keep the lights on or something of the sort. But this still doesn't get to the heart of why we use dollars.

Consider the latter case, the cost of spending time with your spouse is roughly however much it costs for someone else to watch the kids, in this case, dollars work pretty well. Now try to compare the two cases, which "costs" more, spending an extra hour at work or spending extra time with your spouse? Obviously, it is difficult to compare, especially given that the standards often differ. So what's the point?

Policy still needs to be set -- that is the point. A tax rate, subsidies, and everything else economic need to be set (tax rates, subsidized farming/housing, etc.). There are three choices as to how one does one sets them; (1) whatever gets ones reelected/keep one's job/whatever, (2) ad hoc, taking a stab in the dark, maybe using intuitions or an Owigi board, or (3) using the best data one has available. Economics is about (3), that is, about providing the data for (3).

It is up to policy makers to make policy. Economists -- acting*** as economists -- serve to provide data, not to make policy; that is the job of elected officials. To date, there is no better benchmark aside from the dollar (or some other currency) to use as a constant data (e.g, a better, more consistent benchmark).

To sum it up, economists are scientists doing the best that they know how. There aren't "laws" in economics like there are in physics. Physicists have the advantage of being able to use consistent measurements such as meters or square centimeters or whatever. And these measurements are capable of staying the same across different situations. Economists lack such measurements.** They (we? I? You?) have the dollar. There is no metric system in economics.

To repeat myself, it is ok -- no, good -- that economists use the dollar (or whatever). As far we we know, there is no other way to measure the costs of something. Like the physical scientists economists exist to provide data, not policy. Only the information to make policy.

May I try to put it more clearly. The job of an economist is to analyze a situation or policy and predicate what will happen. It us up to policy-makers (the elected officials) to make the best sense of the analysis.

Mose succienty: Economists use the dollar (or some other money currency) to analyze various situations/policies. And economists as an economist *only* provide data. If am economists advocates some policy or another s/he no longer acts and economist,


*Remember the opening paragraph; an extra hour of work might be be keeping the electricity on, but that is not the point.

**Currencies don't stay stable, moreover the laws of gravity are nothing like the cost of babysitters.

***Economists suggesting and/or advocating some policy are no longer acting as economists.

Musopen and Sonatas Torrent Seed

See below for info on the torrent.

I just read about an awesome site on Arstechnica. Musopen.com is a site dedicated to putting recordings and sheet music of classical music in the public domain. E.g., you can now download Beethoven's fifth symphony, or use it in a video, or do whatever you want with for free. Legally.

They just finished all off Beethoven's sonatas, and, naturally, I had to have them all. And it's thanks to people like me that their bandwidth bill goes through the roof.

At this point if all you care about is this cool new site you can stop reading. If you want all of Beethoven's sonatas read about the torrent below.


The Torrent
To help with the bandwidth I created a torrent that is currently you can download here. It's being tracked by The Pirate Bay, an irony given the site's name and reputation, but it was the first public tracker I could find.

This torrent contains all of Beethoven's sonatas. All of them were downloaded from www.musopen.com on April 23^rd, 2008. It has everything that was available for download at the time except for Michael Hawley performing “Sonata No. 21 in C Major 'Waldstein', Op. 53,” as the files were returning 404 errors.

Important Note on Files

These are not the exact same files available from www.musopen.com. The metadata has been changed in almost all of them to be more standardized. The artist and composed for every piece is now “Ludwig van Beethoven,” the album artist is whoever performed the piece.

Each sonata also has it's own album now, taking the form of “Sonata no. X (www.musopen.com)” or “Sonata no. X (www.musopen.com / Artist)” if more than one person performed the sonata.

Finally, the sonata name has been removed from the track name. E.g., “Sonata No. 1 in F Minor, Op. 2 No. 1 - I. Allegro” is now simply “I. Allegro” as it has its own album.

Torrent File Structure

The file structure is fairly straightforward, when there is only one performer for the piece the structure is “Sonata Name/Track.mp3”. If more than one person performed a certain piece (such as no. 31) the structure becomes “Sonata Name/Performing Artist/track.mp3”.

Every folder has a file called “About.pdf” in it, which is simply a PDF from the page the sonata was downloaded from.

It's Dawn...

That would be a perfect title for some sort of metaphor. Unfortunately it's not. I've been up for the last couple of hours (got about two hours of sleep before waking up and not sleeping anymore) working on my final project for Econometrics. Running Chow tests on an index of major furniture companies {1} and the Federal Funds rate. The time periods for the Chow tests were 1995-1999:2000-2008, and 1995-2000:2001-2008. The first test showed a stronger difference but was much less statistically significant.

In simple terms I am testing to see if the Federal Funds rate (the rate you always see reported) had different effects on my index for those time periods. In both cases it is obvious that after 2000/2001 the Federal Funds rate had a greater effect on my index than in the former time period (before 2000/2001). Unfortunately, the standard error is pretty high for the model I prefer.

To get to the point I've just been formatting the data for my stats program, running the tests, etc., then all of a sudden notice that my room has gotten much lighter. I look out the window and sure enough it's dawn.

I really don't know if this is a good sign or not...

Ask mj: "Clinically Proven"

An anonymous reader asks mj: "What does 'clinically proven' mean? It's in all the commercials for drugs and whatnot. Is there anything that isn't clinically proven?"

The answer to the second part is yes and no. But you'll never hear someone advertise whether something that wasn't clinically proven.

The process of getting FDA approval for a drug is long and difficult, most drugs that companies start to develop never make it through the entire process which involves clinical studies near the end.

The studies are usually paid for (and often conducted by) the pharmaceutical company that creates the drug. The real catch, however, is that the company get to choose which studies they submit to the FDA and which ones they do not.* Moreover they are under no obligation to make the study public (e.g., publish it anywhere). The study is actually considered proprietary information.*

This post has been in the making for awhile, I was going to use Lunesta as an example which of course advertised itself as clinically proven, but previously did not post actual results of any of the clinical trials. Since that time at least one study is available on their website although details of the study are not provided which is necessary to actually evaluate whether the study was "good" or not.

The final note is important, it is extremely easy to spin studies however one wants. Hence the multiple headlines in the media, "New study suggests that [noun] [increases/decreases] chance of [disease/heart attack/stroke/whatever]." While I am not going to bother to go into details, but it is extremely difficult to both design and carry a good study (this has applications beyond medication, sociological studies, economic studies, etc., [basically anything that isn't a hard science] suffer many of the same difficulties.)

Final word: unless an independently conducted and publicly reviewed study was conducted "clincically proven" doesn't mean much at all. And don't expect the media to accurately report on "studies." Unless the organization takes a hard look at the study (which is rare) the reporting is from the abstract, which also means little by itself.

*This was at least true three months ago when the post was started. As far as I know it is still true, but I no longer remember the sources I used other than to say they were reputable.

Watching Bethel

It's been a bit since I put up a time lapse so here is one from later today. I am also working on a better script to render it, to get rid of those nasty night pictures from where they left a light on.

I also need to start writing down some of the blog posts the keep popping into my head (really, pretty much completely written) but never make here. Maybe I'll more than two regular visitors that way...