Category Archives: Business and Economy

Thinking about economics: science or ideology?

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Barbara Kiviat discusses whether economics is a science or an ideology. Part of her conclusion:

And when you think about it, it is a little odd that we think economics would be able to do these things. After all, the economy is as much a product of sociology and policy as it is pure-form economics. Yet we’d not expect a sociologist or a political scientist to be able to write a computer model to accurately capture system-wide decision-making. The conclusion I’ve come to: while economists may have an important perspective on whether it’s time for stimulus or austerity, maybe we should stop looking to them as if they are people who are in the ultimate position to know.

Sociologists have been arguing for some time now that sociology has a lot to say about economics, including about how cultural values and ideology guide economic decision-making and actions.

The links between money and happiness

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There is a lot of research exploring the links between income/having money and happiness. The New York Times discusses some of this research and how the recession might be pushing people to find satisfaction in things other than money.

With those who have cut back in spending or are legitimately downsizing (moving into a smaller home or giving up a car vs. giving up cable for a while), it remains to be seen whether such behavior will continue when economic times are better.

Farming back on the upswing in Massachusetts

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Farming is not a common occupation in the United States today. According to these figures from the EPA, less than 1% of Americans claim farming as an occupation and about 2% of people live on farms.

Yet the Boston Globe reports that farming is on the upswing in Massachusetts. According to the figures:

From 2002 to 2007, the number of farms in Massachusetts jumped by about 27 percent to 7,691, according to the US Department of Agriculture census. That’s a reversal from the previous five years, when there was a 20 percent drop in the number of farms and, presumably, farmers, many of whom sold land to developers.

But the start-up farms are smaller than the family enterprises of the past. The average farm in Massachusetts, 85 acres in 2002, was 67 acres five years later.

American society experienced such a shift away from agriculture from the late 1800s to today that I wonder if this is part of a shift toward a slightly more balanced world between agriculture and other sectors of society. There are plenty of books and pundits talking about how we are disconnected from the land and our food – perhaps a new generation is listening (and the article does make it sound like many of the new farmers are younger) and charting a new course.

(Even after an upswing, the number of farms in Massachusetts is still small. A lot more people would need to go into agriculture to become a movement.)

Getting a new passport to avoid taxes (and other reasons)

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The Financial Times reports an increased number of Americans are looking to turn in their American passports at the UK embassy. The waiting list is growing apparently because Americans are looking to avoid paying taxes on worldwide income and capital gains. As the article notes, the main disadvantage is that a person may not be able to reverse their choice.

It would be interesting to know how many people do this each year. Switching allegiances from one particular country to another seems like a weighty decision.

Making money online by tracking consumers

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The Wall Street Journal starts a series on what companies are doing to track consumers to make money online. Some of the common tactics:

The study found that the nation’s 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none.

Tracking technology is getting smarter and more intrusive. Monitoring used to be limited mainly to “cookie” files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them.

These profiles of individuals, constantly refreshed, are bought and sold on stock-market-like exchanges that have sprung up in the past 18 months.

If you are using the Internet, expect that people are “watching” you and trying to figure out how to make money off of you.

Saving the auto industry in Detroit?

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President Obama spoke in Detroit on Friday and The Atlantic examines four viewpoints about whether recent policies helped save the auto industry. Opinions are mixed.

The two more negative opinions are from Detroit journalists.

The first Target arrives in Manhattan

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Ariel Kaminer writes in the New York Times about shopping at the first Target in Manhattan which is located in East Harlem:

It is a sharp contrast to hopping from store to store for kitchen tools here, socks there, electronics in yet another place… That dominant New York shopping model has its charms, but really, remind me what they are. I like local merchants as much as the next New York nostalgist, but on a torpid summer day there is much to be said for the suburban efficiency of one-stop shopping…

It all seems so convenient (and cheap) that you start to think you should just buy everything then and there, to have on hand when you need it.

But what did I need? … Four Riedel wine glasses ($39.99)? (When the same brand is available at Target and Tiffany, it’s time to re-evaluate the distinction between mass and class.)…

After several hours, I found myself wandering through the aisles with my shopping cart, glassy-eyed from the sheer glut of choices, idly reaching for things that I felt no special connection to. It was time to go.

Kaminer appears to be thinking through the implications of  of big box shopping stores that offers consumers many cheap options (and even some high-end fare). Granted, this one-stop shopping has not just been the domain of suburbanites: it has been available in department stores for a long time. But the experience of going to a downtown Macy’s or Marshall Field’s still seems quite different than going to Target. Those department stores were and still are more of an experience and you pay for that experience as opposed to a Target or Wal-Mart or Home Depot where the goal is primarily efficiency and low prices.

Additionally, the construction of urban malls and shopping centers (but usually lacking the abundant parking lots) really lowers the walls between the urban and suburban shopping experience. This Target is located in “the first retail power center in Manhattan” that also features Best Buy, Old Navy, and Costco. Though it is mainly accessible by subway, the dominant world of American shopping – malls and big box stores – is now available to Manhattanites.

Emerging businesses looking for social scientists who can data mine and use statistics

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The Economic Times of India contains an interview with Prabhakar Raghavan, chief scientist for Yahoo! and head of their labs. Raghavan talks about their studies of social networking and social influence. Then Raghavan was asked about the people undertaking these studies:

What is the percentage of social scientists in Yahoo! Labs who anchor such work ?

They constitute around 10% of our people. We are interested in social scientists who can work on data mining. But in most colleges, the sociology department doesn’t teach data mining and the statistics department does not offer sociology. That’s why emerging businesses face a serious dearth of such social scientists.

A reminder that all sorts of businesses are looking for sociology students who are well-versed in statistics (and data mining). Since many students don’t think sociology and statistics naturally go together, it is up to colleges (and sociology statistics instructors) to help them put it together. Sociology may often be billed as a discipline that will help students understand, analyze, and change the world but one often needs to be able to work with and analyze data in these efforts.

This interview is also a reminder that social scientist degree holders are not just relegated to a career in academia.

Ongoing issue of measuring online audiences

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If you were examining Hulu.com’s online audience figures from the last few months, you would find some fluctuation: 43.5 million viewers in May and then 24 million viewers in June. What happened? Did something radically change with the website? Are people abandoning the practice of watching television online?

No, the main change is that ComScore changed its methodology for measuring who used the website. According to the Los Angeles Times:

The three dominant measurement firms — ComScore, Nielsen and Quantcast — have been working since 2007 with an independent media auditing group to make improvements so the Web data they report don’t have a fun-house quality, in which the same site’s traffic can look emaciated or bulging, depending on the viewer’s angle.

These firms have used different measurements over time including panels of users (like Nielsen uses for television and radio) and embedded tags in videos and websites to track viewership. These numbers matter more than ever for advertisers as they will spend around $25 billion in online advertising in the United States in 2010.

As in many cases, knowing the means of measurement matters tremendously for interpreting statistics.

Inequality due to credit card fees

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A study from the Federal Reserve Bank of Boston argues that credit card reward programs contribute to income inequality. According to the Yahoo story:

Merchants usually don’t charge different prices for card users to recover the costs of fees and rewards, but instead, mark up the prices for all consumers.

As a result, people who pay cash — and who are more likely to be lower income — end up subsidizing those who pay by credit card…

After accounting for rewards paid by banks, households who earn more than $150,000 annually receive a subsidy of $756 on average every year, while the households earning $20,000 or less pay $23.

On one hand, this seems fairly obvious: those with more money to spend will use credit cards in order to earn more rewards. On the other hand, the impact on prices of the fees on business owners pay to the credit card companies is generally hidden.

Perhaps more places could offer discounts for people who pay in cash? The only time I have encountered this on a large scale is at gas stations in New Jersey.