Monthly Archives: November 2011

What is “The Big Data Boom”on the Internet good for?

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The Internet is a giant source of ready-to-use data:

Today businesses can measure their activities and customer relationships with unprecedented precision. As a result, they are awash with data. This is particularly evident in the digital economy, where clickstream data give precisely targeted and real-time insights into consumer behavior…

Much of this information is generated for free, by computers, and sits unused, at least initially. A few years after installing a large enterprise resource planning system, it is common for companies to purchase a “business intelligence” module to try to make use of the flood of data that they now have on their operations. As Ron Kohavi at Microsoft memorably put it, objective, fine-grained data are replacing HiPPOs (Highest Paid Person’s Opinions) as the basis for decision-making at more and more companies.

The wealth of data also makes it easy to run experiments:

Consider two “born-digital” companies, Amazon and Google. A central part of Amazon’s research strategy is a program of “A-B” experiments where it develops two versions of its website and offers them to matched samples of customers. Using this method, Amazon might test a new recommendation engine for books, a new service feature, a different check-out process, or simply a different layout or design. Amazon sometimes gets sufficient data within just a few hours to see a statistically significant difference…

According to Google economist Hal Varian, his company is running on the order of 100-200 experiments on any given day, as they test new products and services, new algorithms and alternative designs. An iterative review process aggregates findings and frequently leads to further rounds of more targeted experimentation.

This sounds like a social scientist’s dream – if we could get our hands on the data.

My big question about all of this data is this: what should be done with it? This article, and others I’ve seen, have said that it will transform business. If this is just a way for businesses to become more knowledgeable, more efficient, and ultimately, more profitable, is this enough? Occasionally, we hear of things like discovering and/or tracking epidemics by looking at search queries or tools like the “mechanical turk” to crowdsource small but needed work. On the whole, does the data from the Internet advance human flourishing or concentrate some benefits in the hands of a few or even hinder flourishing? Does this data give us insights into health and medicine, international relations, and social interactions or does it primarily give entrepreneurs and established companies the chance to make more money? Are these questions that anyone really asks or cares about?

An argument for historic districts: repel McMansions!

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A common argument for historic districts is that they limit the destruction of older homes and the construction of McMansions. Here is an example of this argument in Fort Lauderdale:

However, if communities wait around for that history to age, new development might wipe it out before it has a chance to be saved.

That fear has residents of Fort Lauderdale’s Colee Hammock neighborhood thinking about seeking historic district designation for their community.

“We’re constantly inundated with development issues, people wanting to come in and build too much, too high, too big,” said Jackie Scott, president of Colee Hammock’s neighborhood association. “It gets to a point where you’re sick and tired of always having to come out and fight for your neighborhood. It’s not an enjoyable way to live.”…

“We have some beautiful homes that have been built and are new construction. They fit perfectly with the neighborhood,” Scott said. [A historic district] prevents people that want to come into an area like this to start ripping things down and creating McMansions.”

While McMansions are often tied to sprawl and new subdivisions, teardowns are also a common scene for debates over the merits of McMansions. In this particular example, a McMansion is contrasted with new homes that “fit perfectly with the neighborhood.” Many American communities have created some guidelines so that teardowns can’t be anything a homeowner might desire but there is a spectrum between more permissive and less permissive communities. The advantage of declaring a historic district is that the community has more control over what can be demolished and built within the district. At the same time, some consider historic districts to be quite restrictive.

I would be interested to hear what resources those pushing for the historic district have utilized from outside groups. For example, the National Trust for Historic Preservation even has a page titled “Teardowns and McMansions.” Here is the lead paragraph:

Across the nation a teardown epidemic is wiping out historic neighborhoods one house at a time. As older homes are demolished and replaced with dramatically larger, out-of-scale new structures, the historic character of the existing neighborhood is changed forever. Neighborhood livability is diminished as trees are removed, backyards are eliminated, and sunlight is blocked by towering new structures built up to the property lines. Community economic and social diversity is reduced as new mansions replace affordable homes. House by house, neighborhoods are losing a part of their historic fabric and much of their character.

With such resources available, I wonder if local groups are now more effective in adopting historic districts.

Sociologist predicts shift in American unskilled, immigrant laborers: they will come from China rather than Mexico

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While the economic downturn has reduced the interest in immigration reform, a sociologist suggests a new trend in the immigrant unskilled labor force in America: in the future, such laborers will come from China rather than Mexico.

Q: Why might Chinese immigrants overtake Mexican immigrants in low-wage, unskilled jobs here?

A: Mexico for decades has supplied our country with low-wage laborers, legal and illegal, but that’s grinding to a halt. Increased border surveillance and high unemployment are keeping people away from the United States. Other things are holding people in Mexico. They have a lower unemployment rate than we do. And what a lot of people don’t realize is that their fertility is dropping to 2.2 children per woman. It used to be six or seven children a few decades ago. There are fewer young people available (to take jobs), and fewer mouths to feed. There are about 4 million or 5 million undocumented Mexican immigrants in our country (and about 11 million illegal immigrants total). They pick up garbage, work construction, agriculture – all the things in big cities that the local people don’t want to do. Who’s going to do that work? There’s already a network of migration from China to our country; probably 200,000 to 300,000 undocumented Chinese are here. They’re mainly on the East Coast, in Houston and Los Angeles. They’re mainly doing restaurant work. Undocumented Mexicans are much more visible.

Q: Why would they leave China for the United States?

A: You have all of these rural-to-urban migrants inside China who are essentially driving the Chinese economy, doing all the work in the big cities, doing all the construction, the nanny work, the low-level jobs. They’re not going to do that forever. The economy is starting to slow down in China. The first people to lose their jobs will be these rural-to-urban migrants. In China, to move from one place to another, you have to get permission at both ends. That never happens, so people move unofficially. There are already 10 million unemployed rural-to-urban migrants. There’s already a China-to-U.S. network of undocumented migrants.

Several pieces of this argument strikes me:

1. The Chinese economy slows down. This would be a big issue for the global economy. Would there even be much of a flow of people round the globe if this happens?

2. The urbanization process in China may only be picking up steam. Here is a 2009 report from the McKinsey Global Institute on the topic. Is China prepared for this?

3. Mexican laborers are finding it harder to come to the United States and have more reasons for staying in Mexico. Does this mean that the debate over immigration from Mexico is essentially over?

4. If this shift does happen, would the immigration debate simply turn to China and away from Mexico? If so, what might be the implications of this for the US-China relationship?

When a suburb doesn’t support the big tax break supported office park

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An interesting story is brewing in Hoffman Estates where the State of Illinois wants to keep the Sears headquarters by continuing a major tax break but the local school district and some in the community don’t want to live with the reduced tax revenue for years to come. Central to the story: the tax break didn’t help fill up the 780 acre office park, leading to less tax revenue than expected even with Sears located there.

Instead, two decades after the special taxing area was created, some 200 acres remain undeveloped in the 780-acre park anchored by Sears Holdings Corp.’s headquarters. A swath of land that was supposed to generate $50 million in property taxes in 2012 raised only $25 million in the past tax year…

The ambitious project’s inception came at the pinnacle of “euphoria” over a booming commercial real estate market, said John McDonald, who teaches land economics and real estate at Roosevelt University. But that party ended with the economic slowdown of the early 1990s, and the market, he said, has not rebounded. There is no “desperate need for office space anywhere right now,” he said…

The inability of the park to pull in the predicted revenues underlies the battle over Sears’ future. The fight has largely centered on Community Unit School District 300, a financially strapped taxing body whose officials claimed it stood to lose more than $10 million in revenue per year under the original plan to extend the taxing area’s term.

The parties and legislators are continuing to discuss whether Sears would be required to keep some 4,000 of the roughly 6,100 jobs at its headquarters well into the future. The potential consequences should the company not meet that condition remain unclear, said Hoffman Estates Corporation Counsel Arthur Janura.

Typically, suburbs are thought to be in favor of these tax breaks as it helps lure new businesses to town. However, this situation is a cautionary tale about tax breaks: just because one is granted doesn’t necessarily mean that businesses will necessarily move in. If everyone is building big industrial or office parks and offering tax breaks, can everyone win? And in an era of falling tax revenue and rising costs, suburbs need to maximize their assets.

Of course, the State of Illinois will look really bad if Sears leaves as it will feed a (growing?) narrative that Illinois is generally bad for business. It will be fascinating to see how the State and Hoffman Estates come to some sort of agreement that everyone can live with.

“Big-Box Houses” the successors to McMansions?

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Builder has an article about a new kind of home: “big-box houses.”

Even as average new-home sizes have fallen slightly across the country, builders in some markets are finding a profitable and underserved niche of buyers who need or want a house as big as a mansion with the price tag of a cottage. While some buyers are in true need of the space, others, awed by the per-square-foot value of so much elbow room that cheap land and efficient box-like floor plans make possible, can’t resist the buy…

Lennar, for example, recently rolled out its 4,054-square-foot Himalayan model in the Tampa, Fla., market for $270,990. D.R. Horton has The Surrey, a 4,600-square-foot home in Lakeland, Fla., starting at $223,990. M/I Homes is selling the 5,249-square-foot Gran Vista in Orlando starting at $336,460. And KB Home has a 5,211-square-foot model it is selling in Austin, Texas, for $422,950…

Another housing executive says the big-box home trend was born as a way to compete with resales because it is rare to find large homes among resales and foreclosures, making their plus-size a product differentiator. Also, the larger homes can often pass muster with appraisers more easily, because the bigger the house, the smaller the square-foot price, and the higher-priced portions of the home, kitchens and bathrooms, are amortized over a larger number of square feet. The lower price per square foot helps the homes compete with the lower per-square-foot cost of distressed home sales.

Still, the formula of building such homes at a profit is tricky. It requires that land in the right neighborhoods be bought at fire-sale prices and that the home itself be value-engineered for cost efficiencies as well. The box on top of a box model is a less expensive way to build than a single-level house or one with more complicated shapes and roof pitches.

Quick summary: there is still a part of the housing market for big, cheap homes, particularly among those with larger families.

My question would be how these homes differ from McMansions. It seems to be that the big-box homes are budget big homes with no frills. McMansions came to be known for their luxuriousness, whether this was reflected in the large windows in the front, the stone mailbox or wrought iron fence, the stainless steel appliances and granite countertops, or the voluminous great room. These big-box homes are big because their owners want to use all the space, not because they want to impress people. I wonder what this means for the quality of the construction: McMansions were often regarded as being shoddy and the builders quoted in this story admit that these homes have thin profit margins.

Also: the name is intriguing. McMansion came to be a generally negative term. “Big box” is usually used derisively to refer to retailers like Walmart or Home Depot who have huge stores and low prices. Additionally, there are a lot of connotations about big parking lots, environmental concerns, and sprawl. If I were a builder, I wouldn’t want my homes to be known by this term. If this term sticks, will these homes become reviled in the same way as McMansions?

WaPo op-ed suggests sociology degree are the antithesis of Wall Street

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An opinion piece a few days ago in the Washington Post contrasts those working on Wall Street and sociology majors:

How nice it would be if the 99 percent had never heard of Wall Street – perhaps if it didn’t exist at all.

There would be no need to be jealous of your college classmates’ $10 million paydays while you majored in sociology. No egg on your face if, as a hot-shot investment manager, you had poured $100 million of widows’ and orphans’ money into securities called collateralized debt obligations that you didn’t understand. There would be no collapse in the value of the home you bought in 2005. Several million people who lost their houses to foreclosure might still be proudly mowing their lawns. And your retirement savings would not be shattered because of all those high-flying technology firms that your mutual fund bought back in the 1990s.

The rest of the opinion piece goes on to talk about the downside of Wall Street. But the comparison of wealthy Wall Street employees versus sociology majors is interesting. The main point seems to be that sociology majors don’t make much money. My response: sociology majors aren’t at the bottom of the heap for median earnings.

A more latent point might be that sociology majors might be the most recognizable discipline that is opposed to the free-market capitalism represented by Wall Street. Is there any other discipline that would be even close? This animosity between sociology and neoliberalism or free-market economics could come from two areas:

1. Different explanations for human actions. Economists tend to go with rational choice explanations that humans are motivated by incentives and self-interest. Sociologists would suggest things are more complex and include factors like values, emotions, ideology, social networks, and altruism.

2. Different values: money and resources flowing freely versus a greater sense for a need for economic and social equality.

There are ways to bridge these two approaches, perhaps in subfields like economic sociology. At the same time, it is interesting to see the choice to contrast Wall Street and sociology.

ASA pushing for better sociology Wikipedia entries

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This news came out earlier this week in the American Sociological Association’s Footnotes: the ASA is hoping sociologists and sociology students will help improve Wikipedia pages pertaining to sociology.

In an essay on the association’s online newsletter (scheduled to be included in the next edition of its print newsletter), Wright this week announced the Sociology in Wikipedia Initiative: a formal call to sociologists to help improve and expand Wikipedia entries that might benefit from their expertise and consider assigning their students to do the same.

“Wikipedia has become an important global public good,” Wright writes in the essay. “Since it is a reference source for sociologically relevant ideas and knowledge that is widely used by both the general public and students, it is important that the quality of sociology entries be as high as possible. This will only happen if sociologists themselves contribute to this public good.”

Not only might Wikipedia benefit from contributions by students steeped in academic research methods, but the exercise might help students learn how to read the crowd-sourced encyclopedia in the proper context, said Wright.

“What better way to get students to understand that it’s actual people like them who have written this stuff, than for them to write this stuff?” he said.

Is this “public sociology” at work? I don’t mind this call as it would help ensure that Wikipedia has accurate and in-depth sociology information rather than just a bare bones outline. Actually, I’ve thought the sociology Wikipedia entries weren’t that bad already, particularly compared to other disciplines. For example, the statistics pages on Wikipedia are technically correct but it is very difficult for a layperson to understand what is going on.

But how many sociology faculty will spend much time with this since there aren’t many professional incentives? Even publishing in online journals as opposed to more traditional print journals is not well-regarded so what’s the point of helping improve Wikipedia entries? This may seem like a move toward embracing technology and toward a younger generation of sociologists but the discipline has a long way to go.

At least a few leaders of major academic groups are admitting that they use Wikipedia as a source. Not too long, admitting this would not have been good for one’s status. How far away are we from Wikipedia being an acceptable source?

What happens on Dec 25 in Lego Star Wars Advent calendar?

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I’ve seen this advertised several times: the LEGO 2011 Star Wars Advent Calendar. I have one big question about this product (besides why it costs so much): is December 25th marked by the birth of Luke Skywalker?

Quiet plans for private illegal immigrant prison anger Florida town

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Here is an interesting story about quiet plans to build a privately-run prison for illegal immigrants in a wealthy Florida town that helps illustrate the issues of having private prisons, NIMBY concerns, and immigration:

Only the leaders of Southwest Ranches kept their plans quiet from residents for almost a decade, and the project has now ballooned into what would be among the federal government’s largest immigrant detention centers. The town would have to pay $150,000 each year to keep the prison, but officials say the town would turn a profit by getting 4 percent of what U.S. Immigration and Customs Enforcement pays the company operating the prison to hold inmates there.

Many residents finally caught wind of the idea this year, when the immigration agency announced a tentative deal, and they’re angry. They’ve held protests at public meetings, contemplated whether to recall the mayor before his March election and whether to amend the town charter to make it easier to fire the city attorney pushing the deal.

The objection over the prison has created an odd set of allies among the town’s affluent residents, many of whom are wary of illegal immigrants, and longtime activists who fight for immigrants, legal or not…

But according to Mayor Jeff Nelson and others involved at the time, the plan for some kind of prison run by Corrections Corporation of America, the nation’s largest private prison operator, was always integral to Southwest Ranches’ ability to survive.

The town, a self-described “rural lifestyle community” located southwest of Fort Lauderdale, is for the equestrian set. There are several very interesting cross-currents in this story:

1. Lots of towns need revenue. Not only will Southwest Ranches earn money per inmate but there will be jobs at the prison.

2. Immigration is a hot-button issue. Shouldn’t people in town opposed to illegal immigration welcome such facilities?

3. But, of course, those worried about illegal immigration probably don’t want the prison right next to them. Classic NIMBY situation – build it somewhere else.

4. Local officials have done this quietly and it appears residents may not be able to do much at this point about halting the process.

The conclusion of this story makes it sound like the NIMBY concerns win out – as one resident says, “In the opposition to the prison, both sides of the immigration debate are represented.” I can’t say I’m surprised – what wealthy community would want a prison in town? If the private company doesn’t end up building in this town, how difficult will it be for them to find another town who needs the revenue? And if this community does indeed need revenue, would these same residents be willing to give up services or pay higher taxes?

“Startling” number of “near poor” in the United States

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The Census Bureau released figures recently showing a growing number of Americans living below the poverty line. But the figures also showed a population increase in another group: the “near poor.”

When the Census Bureau this month released a new measure of poverty, meant to better count disposable income, it began altering the portrait of national need. Perhaps the most startling differences between the old measure and the new involves data the government has not yet published, showing 51 million people with incomes less than 50 percent above the poverty line. That number of Americans is 76 percent higher than the official account, published in September. All told, that places 100 million people — one in three Americans — either in poverty or in the fretful zone just above it…

The Census Bureau, which published the poverty data two weeks ago, produced the analysis of those with somewhat higher income at the request of The New York Times. The size of the near-poor population took even the bureau’s number crunchers by surprise.

“These numbers are higher than we anticipated,” said Trudi J. Renwick, the bureau’s chief poverty statistician. “There are more people struggling than the official numbers show.”…

Of the 51 million who appear near poor under the fuller measure, nearly 20 percent were lifted up from poverty by benefits the official count overlooks. But more than half were pushed down from higher income levels: more than eight million by taxes, six million by medical expenses, and four million by work expenses like transportation and child care.

It would be interesting to know more about this group of “near poor”: is this a consistent position they hold in society? Is there much downward or upward  mobility from this group? Is this a group that grows dramatically in tough economic times for the whole country? The story makes it sound like this is a group that could easily go either way: a better job opportunity might push a household upward while a large medical bill or the need to replace an aging car might push them back much closer to the poverty line. And after knowing more, what policies would help improve the lot of this group – jobs, education, a bigger safety net?

I wonder additionally how much of this story is really that Census Bureau researchers are “surprised” by these findings. This is what the headline emphasizes. “Surprised” suggests that no one saw this coming. Should they have been surprised? After all, the median household income in the United States is around $50,000, suggesting that there are lots of people not too far from the official poverty line. Past context is important here to know how much larger this group is now compared to past time periods.