Monthly Archives: September 2010

The possible housing bubble in China

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While the American housing crisis continues, FinanceAsia takes a look at the current housing situation in China:

Many homebuyers nowadays in China consider their property assets as part of their long-term savings plan, as well as a hedge against inflation.

Why property? China’s tightly run financial system leaves only three places for its zealous savers to put their money. Bank deposits are one option. But they yield 2.25%, less than the 3.1% rise in May’s consumer price inflation. The equity markets are a second choice. But stocks have been performing poorly; Shanghai’s benchmark index was one of the world’s worst performers in the first half of 2010. (And the bond market is underdeveloped.) Even with its high transaction costs and manic price moves, property has become the preferred investment choice for everyone from young married couples to middle-aged factory workers trying to ensure their retirement.

Recent statistics show that there are about 64 million apartments and houses that have remained empty during the past six months, according to Chinese media reports. On the assumption that each flat serves as a home to a typical Chinese family of three (parents and one child), the vacant properties could accommodate 200 million people, which account for more than 15% of the country’s 1.3 billion population. But instead, they remain empty. This is in part because many Chinese believe that a home is not a real home unless you own the flat.
And so people prefer buying to renting, and as a result, the rental yield is relatively low.

That’s a lot of vacant property. This is a testament to the power of cultural norms regarding housing: since renting is less desirable, a large percentage of the housing stock goes unoccupied. Also, savings behavior seems partly driven by these norms (and perhaps also by limited economic returns elsewhere) – houses have developed into investments rather than just places to live.

I don’t know much about the Chinese housing market but it is intriguing to read about non-American norms and values attached to housing. I wonder how these norms and values developed over time.

Shrinking cities: a quick guide

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The Boston Globe summarizes some of the planning to shrink cities such as Detroit and other Rust Belt cities:

The resulting cities may need to look and feel very different — different, perhaps, from the common understanding of what a modern American city is. Rather than trying to lure back residents or entice businesses to build on vacant lots, cities may be better off finding totally new uses for land: large-scale urban farms, or wind turbines or geothermal wells, or letting large patches revert to nature. Instead of merely tolerating the artist communities that often spring up in marginal neighborhoods, cities might actively encourage them to colonize and reshape whole swaths of the urban landscape. Or they might consider selling off portions to private companies to manage.

As the article mentions, some of these plans are beginning to get off the ground. However, I suspect it will be a while before these cities start to look different than they do today. These sorts of plans are usually mentioned for cities that have already “failed,” meaning they can’t find better uses for this vacant or underutilized land. It will take quite a bit of political will (and capital) to admit this and get to a point where residents, business interests, and politicians want to truly pursue contraction.

Shaving a precious 2-5 seconds off your Internet searches

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Google announced yesterday a new feature of their search engine: Google Instant, which will unveil search results even as you are typing in your search terms. The goal? To shave off a few seconds from the typical search process:

Google says the average web search currently takes about 25 seconds: nine second to type it, less than one second for Google to return a result and 15 seconds to pick the best result.

They say Google Instant will shave two to five seconds off of that time.

Perhaps two to five seconds could make a big difference and the feature will become standard practice. The value of time over the Internet has certainly changed over the years, particularly comparing page loads these days to what was common in the mid 1990s. I’m not sure a couple of seconds will matter to most users – but perhaps I am wrong. We do seem to be impatient  when a page even takes just a few extra seconds to load…it’s like we have wiped from our memories the experiences of loading pages on 56k modems.

A new traffic control device: painting a picture of a child on the road

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The battle to control speeders has a new weapon:

On Tuesday, the town [West Vancouver, Canada] unveiled a new way to persuade motorists to ease off the gas pedal in the vicinity of the École Pauline Johnson Elementary School: a 2-D image of a child playing, creating the illusion that the approaching driver will soon blast into a child.

According to Discover magazine, the pavement painting appears to rise up as the driver gets closer to it, reaching full 3-D realism at around 100 feet: “Its designers created the image to give drivers who travel at the street’s recommended 18 miles per hour (30 km per hour) enough time to stop before hitting Pavement Patty — acknowledging the spectacle before they continue to safely roll over her.”

I would be very curious to know how effective this is. While the article suggests that drivers may then be more prone to hit real children, drivers might also just eventually tune out the painting, much as they do with traffic signs.

Another school of thought would suggest measures like this painting are missing the point. What really should change are the structure and design of streets. If you want people to drive more safely, make roads narrower and include parked cars on both sides. Or, one could go as far as European traffic engineer Hans Monderman who advocated removing all traffic signs – since drivers ignore them much of the time anyway, having no signs might force them to pay more attention.

The sociology of baseball fandom

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In the beginning of a series about the Baltimore Orioles at Southern Maryland Online (somd.com), two sociologists contrast what die-hard and casual fans expect to get out of watching a baseball game.

First, the perspective on diehard fans:

George Wilson, associate professor of sociology at the University of Miami, said that when sports teams in Miami are losing, people just shrug and go to the beach. But it’s different in Baltimore.

“Baltimore is a working-class town and they identify with the sports teams through thick or thin,” Wilson said. “I think there’s some identification with the team that’s pretty strong and I think when the Orioles don’t do well, it does have an impact on the city. I think the city does feel that sense of disappointment.”

This is an argument you would find in many cities: the diehard fans (and much of the city) base their mood on the wins and loses of the local sports teams.

In contrast, the view of the casual fan:

But Merrill Melnick, a SUNY-Brockport professor who specializes in sports sociology, said that’s OK. He said the peripheral entertainment at the stadium — postgame fireworks, singles nights, fans running on the field for longer than should be humanly possible — are often more important to the casual fan than whether the team wins or loses.

One outcome of these differing perspectives is that the diehards can get angry with the casual fans for taking things too lightly. It is common on sports radio to hear diehard fans complain about the bandwagon fans and those who haven’t cared as long as they do. These arguments from the diehard fans seem to be made to show that they should be respected or admired for being the real fans, the ones who stubbornly follow their teams through thick and thin.

Sometimes, I wonder if sports fandom becomes like something of a job for many who feel obligated to watch or follow their team. If they don’t, they are being irresponsible and showing they don’t care. Being a fan then becomes sometime to compete about rather than just a diversion or a hobby.

The continuing image battle between Walmart and Target

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Two articles from CBS illustrate the image battle being waged between Target and Walmart. While the stories are supposedly about what you should and should not buy at each place, here are the opening paragraphs about the relationship between the two retailers. The first story focuses on Target:

In the battle for public opinion, Target has shellacked its larger competitor, Walmart. Whether it’s environmentalists attacking the very concept of big-box retail or workers’ rights advocates lambasting the chain’s treatment of employees, Walmart has become the poster boy for the excesses of capitalism. Target, meanwhile, has built a reputation for cheap chic, pairing with Liberty of London and Michael Graves to churn out high-design at low prices. Walmart gets blamed for putting mom and pop stores out of business, while Target recently opened its first store in Manhattan, a market Walmart has yet to crack.

Recently, however, Target has looked vulnerable, suffering more in the economic downturn than Walmart did, and committing a rare public relations gaffe by making a political contribution that angered gay groups.

The companion piece examines Walmart:

Despite (or perhaps because of) the fact that Walmart is the nation’s largest retailer, there are plenty of people who wouldn’t be caught dead in one. To these folks, Walmart conjures images of a rapacious juggernaut of stadium-sized stores offering low-quality merchandise, spotty service, and mistreating employees and the environment — while driving small local retailers out of business.

But many of those misgivings are starting to fade, partly as a result of some well-timed improvements to the company’s product line-up and its environmental record. What’s more, there’s nothing like the worst recession in 80 years to nudge “low prices” a little higher on the collective priority list. And while Walmart may not be making its employees rich, the chain handed out very few pink slips in the downturn and remains the country’s largest private employer.

To be sure, there are plenty of reasons to remain wary of the retail behemoth. Whether you are concerned about the threat to a downtown business district, object to the retail culture, or just have a mental picture of the Walmart shopper that you can’t square with your own self image, it may not be for you. But it’s worth keeping in mind that, when it leverages its enormous scale for good, Walmart can make a difference in a hurry. It’s one thing when a boutique sells fair-trade coffee, but when Walmart gets into the game, a lot of sustainable farmers benefit. Here are five product categories where you can comparison shop in good conscience at the nation’s “low-price leader.”

These openings are illustrative of how brand image matters in our world. The Walmart article opening begrudgingly admits that Walmart could contain some good for shoppers and shoppers could benefit if they are “in a hurry.” The real meat of the story is supposed to be the good deals (and not so good deals) each store offers compared to other retailers but this gets buried behind this editorializing about the image of each place. There could be a lot of interesting work done on examining how exactly Target has crafted a different kind of image and what markets each store serves.

Even with the negative publicity, surveys suggest Americans feel fairly favorably toward the Walmart. According to Rasmussen data from the summer of 2009, only 33% view Walmart unfavorably and only 26% “rarely or never shop at the store.”

Law professor admires C.S. Lewis’ look at the word “my”

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From the New York Times Freakonomics blog: law professor Ian Ayres comments on C.S. Lewis’ explanation in The Screwtape Letters of “the most property-laden adjective, the possessive “my.”“

Rethinking how to study

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The New York Times highlights recent research that suggests older methods or habits for studying may not be worthwhile. Instead, there are new suggestions for studying that haven’t yet caught on:

[P]sychologists have discovered that some of the most hallowed advice on study habits is flat wrong. For instance, many study skills courses insist that students find a specific place, a study room or a quiet corner of the library, to take their work. The research finds just the opposite…

Varying the type of material studied in a single sitting — alternating, for example, among vocabulary, reading and speaking in a new language — seems to leave a deeper impression on the brain than does concentrating on just one skill at a time. Musicians have known this for years, and their practice sessions often include a mix of scales, musical pieces and rhythmic work. Many athletes, too, routinely mix their workouts with strength, speed and skill drills…

When the neural suitcase is packed carefully and gradually, it holds its contents for far, far longer. An hour of study tonight, an hour on the weekend, another session a week from now: such so-called spacing improves later recall, without requiring students to put in more overall study effort or pay more attention, dozens of studies have found.

These would be worthwhile for any type or stage of learning. While it may be initially difficult to change ingrained habits, switching to new study methods would pay off in the end with improved abilities to retain and utilize knowledge.

Reading about this could lead to some interesting questions regarding how people and students learn or acquire their study habits. Is it an intuitive process that each person needs to figure out for themselves? Do most people simply do what others have told them to do? How often do we assess our own studying/learning habits to determine their effectiveness?

An interactive look at job loss by sector

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The Wall Street Journal features an interactive timeline that shows job growth and loss by sector for each month since December 2007. The big losers: construction, manufacturing, retail, and business services. The winners (and only three sectors experienced job growth): health care, education, and federal and state government.

h/t Instapundit

Picking the 10 coolest American small towns…by Internet poll?

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BudgetTravel.com has highlighted “the coolest small towns in America.” This looked interesting so I clicked on a link to check out the story – and then found that the 10 places were selected by Internet poll. While these may be interesting communities, this does not seem to be a scientific way to go about compiling this list. On the other hand, it may drive more traffic to BudgetTravel as smaller communities and their residents and fans travel to the website to nominate and then vote on the communities.

Also, what qualifies to be nominated as a “cool small town” is interesting:

First, your town must have a population under 10,000—we’re talking small towns, not big cities. It’s also got to be on the upswing, a place that’s beginning to draw attention—and new residents—because of the quality of life, arts and restaurant scene, or proximity to nature. And cool doesn’t mean quaint. We want towns with an edge, so think avant-garde galleries, not country stores.

I wonder how they weed out the “uncool” small towns…