Tag Archives: incentives

“The downside of retirement downsizing in a McMansion world”

Posted on by

Downsizing has its challenges:

Anne Tergesen at The Wall Street Journal explored the problems of moving from a larger home to a smaller home at retirement: “But downsizing isn’t always simple, painless — or even all that beneficial financially. With the real-estate market still fragile, many baby boomers are getting a lot less than they expected for the old homestead. All too often, they have little cash left over after buying a new place, and their monthly expenses don’t fall as much as they thought — or may even rise instead.”

Tergesen also wrote about the emotional pain downsizing might cause: “They can’t bear to sort through or part with all those boxes in the basement, or argue with the adult children who want to keep the house where they grew up. Sometimes they downsize only to find they miss their old lifestyle and stuff.”…

Of course, downsizing doesn’t necessarily mean a scaling back in comfort. Architect Sarah Susanka, author of the best selling “Not So Big House” series of books, writes about how people can live in smaller homes that seem bigger because the design eliminates the wasted space in homes — such as dining rooms and formal living rooms.

Buying and selling homes, though, has its own challenges. Jacob Goldstein with NPR looked at the question of whether homes are cheap right now: “Houses are much cheaper than they were six years ago. Of course, six years ago was the peak of the biggest housing bubble in the history of America. So does ‘much cheaper than they were six years ago’ mean cheap? Does it mean ‘cheaper, but still overpriced’? Or does it mean ‘about right?’ ”

Moving can be difficult. But, downsizing can be viewed as a good thing: it gets people out of unnecessarily large homes that take up too much space in the first space; it could help people get rid of stuff they accumulated over the years (American consumerism at work) as well as begin a lifestyle where they can’t accumulate as much because they have less room to store it (though there could be problems with passing down heirlooms); and it might reduce housing and utility payments.

So, if downsizing is a good thing, can’t someone figure out how to make it easier? How about some sort of company or program that matches people who want a larger house with people who want to downsize? How about communities or perhaps governments that would guarantee people a certain value for their home if they live there a certain amount of time and then leave for downsizing purposes? What if a company promised to buy a downsizer’s home if they purchase an somewhat equally priced new Not So Big House? These ideas might be out there but if we wanted to promote downsizing, there are things companies or governments could do help the process along rather than just leave the process to the twists and turns of the real estate market.

Pew Research: the response rate for a typical phone survey is now 9% and response rates are down across the board

Posted on by

Earlier this year, Pew Research described a growing problem for pollsters: over 90% of the  public that doesn’t want to participate in telephone surveys.

It has become increasingly difficult to contact potential respondents and to persuade them to participate. The percentage of households in a sample that are successfully interviewed – the response rate – has fallen dramatically. At Pew Research, the response rate of a typical telephone survey was 36% in 1997 and is just 9% today.

The general decline in response rates is evident across nearly all types of surveys, in the United States and abroad. At the same time, greater effort and expense are required to achieve even the diminished response rates of today. These challenges have led many to question whether surveys are still providing accurate and unbiased information. Although response rates have decreased in landline surveys, the inclusion of cell phones – necessitated by the rapid rise of households with cell phones but no landline – has further contributed to the overall decline in response rates for telephone surveys.

A new study by the Pew Research Center for the People & the Press finds that, despite declining response rates, telephone surveys that include landlines and cell phones and are weighted to match the demographic composition of the population continue to provide accurate data on most political, social and economic measures. This comports with the consistent record of accuracy achieved by major polls when it comes to estimating election outcomes, among other things.

This is not to say that declining response rates are without consequence. One significant area of potential non-response bias identified in the study is that survey participants tend to be significantly more engaged in civic activity than those who do not participate, confirming what previous research has shown. People who volunteer are more likely to agree to take part in surveys than those who do not do these things. This has serious implications for a survey’s ability to accurately gauge behaviors related to volunteerism and civic activity. For example, telephone surveys may overestimate such behaviors as church attendance, contacting elected officials, or attending campaign events.

Read on for more comparisons between those who do tend to participate in telephone surveys and those who do not.

This has been a growing problem for years now: more people don’t want to be contacted and it is more difficult to contact cell phone users. One way this might be combated is to offer participants small incentives. This is already done with some online panels and it is more commonly used in mail surveys. These incentives wouldn’t be large enough to sway opinion or perhaps just get a sample of people who want the incentive but would be enough to raise response rates. It could be thought of as just enough to acknowledge and thank people for their time. I don’t know what the profit margins of firms like Gallup or Pew are but I imagine they could offer these small incentives quite easily.

This does suggest that the science of weighting is increasingly important. Having government benchmarks is really important, hence, the need for updated Census figures. However, it is not inconceivable that the Census could be scaled back: this is often a conservative proposal either based on the money spent on the Census Bureau or the “invasive” questions asked. And, it also may make the Census even more political as years of polling might be dependent on getting the figures “right,” depending on what side of the political aisle one is one.

After Illinois toll hike: traffic barely down, revenue up 44%

Posted on by

The Illinois Tollway released some new figures of what happened to traffic and revenue after the January 1, 2012 toll hike:

Many drivers vowed to stop using the tollway and avoid paying an extra 35 or 45 cents for each I-PASS transaction — and double the tolls for cash-payers.

Through June, the number of passenger vehicle transactions on the tollway system fell 2.6 percent compared with the same period in 2011, tollway finance chief Michael Colsch said…

Based on estimates from the tollway’s traffic consultant, officials originally forecast a 5.9 percent decline in transactions because of the toll hike.

Toll revenue also is running higher than estimates, increasing about 44 percent through June, compared with a projected 41 percent for 2012, Colsch said.

Even though a number of people seemed really upset over this toll hike, this is what I suspected would happen: the tollways are convenient and paying a little more would not deter many drivers. There are few alternatives that are as fast and I also suspect using the IPass to pay the tolls removes some of the price shock (similar to how consumers will spend more by credit card than by using cash). Indeed, it would be interesting to know what the tolls would have to rise to before driving patterns would change dramatically. Additionally, there have been conversations in recent years about congestion pricing express lanes and I wonder if this small drop in traffic is a sign that these would be worth pursuing.

Of course, one could ask whether the Tollway is raising enough money to fund their stated goals and if the money will be used wisely…

Getting drivers to change their commuting patterns by giving them chances to win money

Posted on by

Scientists have developed a new way to fight the congestion battle: if drivers change their commuting patterns, they would have a better chance of winning money.

Some urban areas, including London, Stockholm, and the capital of Singapore, have tried disincentives to discourage rush-hour driving. These congestion-pricing schemes have achieved some success, but problems persist. And implementing them is politically difficult; New York Mayor Michael Bloomberg abandoned his early effort to pare traffic in the Big Apple through commuter charges. But a growing number of transportation experts believe the same technology that enables cities to track cars and charge a fee when they enter designated congestion areas can be used to implement schemes that people will accept more readily. Rather than punishing old commuting habits, they reward new ones. For participants, opting to avoid rush-hour traffic means both saving time, and boosting their odds of winning a prize.

Instead of buying lotto tickets, participants in the Singapore program shift their commutes to off-peak hours to earn credits, which can be traded for chances to win cash. Participants earn one credit per kilometer traveled by rail, and three credits per kilometer for rail trips made during the hour before or after morning rush hour (7:30 to 8:30 a.m.). They can pick one “boost day” per week, when each kilometer traveled by rail earns five credits.

At Stanford, where the project is supported by a $3 million U.S. Department of Transportation grant, drivers who live off-campus and shift their commutes up to one hour outside the morning and evening rush hours can earn 10 cents per off-peak trip. That’s the boring, sure-fire option. Alternatively, they can use credits to play a simple online social game that randomly doles out cash prizes from $2 to $50. Cars are tracked using a small radio-frequency identification tag mounted to the windshield.

More than 17,500 Singapore commuters have enrolled in the pilot program, while just over 1,825 have enrolled in the Stanford project. And it seems these efforts to change travel behavior using games, or carrots, rather than sticks (such as congestion pricing) are paying off. Balaji Prabhakar, a Stanford engineering professor who developed both projects, said during a recent talk at the university’s campus in Palo Alto, California, that 11-12 percent of users in Singapore have shifted off-peak. Men tend to shift later, he said, while women generally shift earlier.

Is this the “gamification” of driving? Providing positive incentives rather than “punishing” people seems like it would be more effective in the long run. This reminds me of the new programs some insurance companies are rolling out where you get rewarded for driving more safely by having your rates reduced. At the same time, who is paying for these prizes? I assume this is funded by grant money or something like that but is this sustainable in the long run?

I wonder if there would be some unintended consequences of programs like these: instead of having horrible peak driving periods, traffic will simply be congested at more hours. Is it better to compress bad traffic into a certain number of hours a day versus spreading out the more congested hours? What happens if there are too many drivers all the time and incentives (or disincentives) wouldn’t really change much? I suppose we are a ways from this in some places but techniques like this don’t get at larger issues of having too many cars altogether.

h/t Instapundit

Increase in retractions of scientific articles tied to problems in scientific process

Posted on by

Several scientists are calling for changes in how scientific work is conducted and published because of a rise in retracted articles:

Dr. Fang became curious how far the rot extended. To find out, he teamed up with a fellow editor at the journal, Dr. Arturo Casadevall of the Albert Einstein College of Medicine in New York. And before long they reached a troubling conclusion: not only that retractions were rising at an alarming rate, but that retractions were just a manifestation of a much more profound problem — “a symptom of a dysfunctional scientific climate,” as Dr. Fang put it.

Dr. Casadevall, now editor in chief of the journal mBio, said he feared that science had turned into a winner-take-all game with perverse incentives that lead scientists to cut corners and, in some cases, commit acts of misconduct…

Last month, in a pair of editorials in Infection and Immunity, the two editors issued a plea for fundamental reforms. They also presented their concerns at the March 27 meeting of the National Academies of Sciences committee on science, technology and the law.

Here is what Fang and Casadevall suggest may help reduce these issues:

To change the system, Dr. Fang and Dr. Casadevall say, start by giving graduate students a better understanding of science’s ground rules — what Dr. Casadevall calls “the science of how you know what you know.”

They would also move away from the winner-take-all system, in which grants are concentrated among a small fraction of scientists. One way to do that may be to put a cap on the grants any one lab can receive.

In other words, give graduate students more training in ethics and the sociology of science while also redistributing scientific research money so that more researchers can be involved. There is a lot to consider here. Of course, there might always be researchers tempted to commit fraud yet these scientists are arguing that the current system and circumstances needs to be tweaked to fight this. Graduate students and young faculty are well aware of what they have to do: publish research in the highest-ranked journals they can. Jobs and livelihoods are on the line. With that pressure, it makes sense that some may resort to unethical measures to get published.

Three other thoughts:

1. How often is social science research retracted? If it is infrequent, should it happen more often?

2. Even if an article or study is retracted, this doesn’t solve the whole issue as that work may have been cited a lot and become well known. Perhaps the bigger problem is “erasing” this study from the collective science memory. This reminds me of newspaper corrections; when you go find the original printing, you don’t know there was a later correction. The same thing can happen here: scientific studies can have long lives.

3. Should disciplines or journals have groups that routinely assess the validity of research studies? This would go beyond peer review and give a group the authority to ask questions about suspicious papers. Alas, this still wouldn’t catch even most of the problematic papers…

“Mandatory energy star ratings” for Australian houses

Posted on by

I’ve asked before whether McMansions can ever be green. Australia is proposing energy star ratings for homes and such regulations would especially affect McMansions:

The Federal Government aims to introduce, by as soon as next year, mandatory energy star ratings for homes being sold or rented out…

Housing experts said most McMansions would score very poorly on the ratings system, which would be similar to the methodology used to identify the energy efficiency of whitegoods…

There are significant financial implications for owners of these homes – and most older dwellings which are also likely to rate lowly.

Owners would need to either spend up on going green or face the prospect of a lower sale price.

This is one way to push homeowners to improve the efficiency of their homes. This isn’t terribly surprising considering that many consumer goods or appliances these days are rated along these grounds (from electricity cost to miles per gallon). But at the same time, I can’t imagine these sorts of regulations being instituted in the United States anytime soon unless it was solely limited to new construction.

Can Google incentivize being social?

Posted on by

There is no question that Google would like to be more prominent in the social networking (SNS) phenomenon. Apparently, Google has tied an incentive for employees, a yearly bonus, to how well the employees help the company move forward in this area:

“[Your bonus] can range from 0.75 to 1.25 depending on how well we perform against our strategy to integrate relationships, sharing and identity across our products.” Social.

And yes, you read that correctly, the bonus can go up or down based upon Google’s performance in the social realm. The critics are already jumping all over this one, noting that it looks like all Google employees will be losing bonus money this year. And given the decided lack of success from products like Wave, Buzz, and to a broader extent, Orkut, who can blame them?

But on a higher level, it’s the strategy itself that may be the most interesting thing here. Mathew Ingram notes that you can’t threaten people into being social. While Mike Elgan calls this Larry Page’s first blunder (as CEO). I actually have a slightly different take on this. I think that on paper, this is actually a good idea and strategy. But in practice, I think it will ultimately be looked upon as a bad thing and may even directly backfire.

I’m not sure that I really think the headline on this story captures what is going on (“I’m Having A Party. Here’s $50. Bring Cool People — Or You Owe Me $100.”): being social online is different than incentivizing employees to walk up to people they don’t know on the street and push products. In order to be social online, one needs only to make links between people (“friends” in Facebook terms) and then provide some content (which the user gets to pick and choose). Since I would guess that many Google employees are already operating privately in these SNS realms, how hard would it be to transfer some of that activity into a Google product? While this activity is still personal and requires effort from individuals, it doesn’t seem like it would take much to be social online with a new product.

Now it is a more interesting question to ponder whether such a strategy would actually help a fledgling SNS product get off the ground. This writer suggests other SNS launches were “organic” and a push from Google’s employees would only work if the product was really good. This might be the case – but the argument here is that we know for sure how SNS products take off. Could Google do something new with this kind of incentive and with its large number of employees (and their contacts), could they get a new program/app/platform up and running? If Google employees started even a decent online party, wouldn’t some other people want to get involved?

(On a side note, it would be interesting to think more about this incentive. What do Google employees think of this? By virtue of possibly losing some of their bonus, will workers operate as homo economicus and help make something happen?)

A-Rod real estate tax flap tied to incentive to construct affordable housing

Posted on by

It appears that a number of luxury housing owners in New York City, including Yankees’ star Alex Rodriguez, are getting a major real estate tax break. While this is creating a stir, there is more to this story: these luxury units are getting a tax break because the developers have promised to build affordable housing elsewhere in the city.

Rodriguez and all the residents of his posh high rise will get tax breaks for 10 years under the city’s 421A tax abatement program. Luxury developers get tax breaks in exchange for making sure affordable units get built elsewhere. Rodriguez is one of some 45,000 New Yorkers who have scored the tax break.

“I think it’s outrageous,” Lewton said.

When Rodriguez’s moves into his $6 million, five-bedroom penthouse his tax bill will be $1,150. In contrast, Stephen and Phyllis Franciosa pay $3,100 in taxes one their one-family home in the Pelham Bay section of the Bronx…

The councilman said the law needs to be changed because this year alone the program will cost the city $900 million in lost revenue.

A-Rod’s taxes are so low that if he paid the going rate his tax bill would be 50 times higher. He should get such a break when he faces the Red Sox pitching staff.

City officials claim the tax breaks on Rodriguez’ building helped build over 575 units of affordable housing in the Bronx.

This is not an uncommon tactic for communities to encourage affordable housing: grant some tax breaks in exchange for the builder or developer constructing some units of affordable housing. It is often a struggle to get developers and builders to construct affordable units on their own as profit margins are lower. So communities have searched for incentives that would still allow builders to make their money while also providing for the public good.

In the long run, will this story simply be commentary about how the rich and famous get to play by different rules (and New York loves to pick on A-Rod) or can there be a reasonable discussion about how cities go about promoting affordable housing? I am guessing that the first option will easily win out. Why can’t New York news organizations go to those 575 units of affordable housing in the Bronx and talk to the other people who benefited from this tax break?

Free land is available – if you want to move to certain places

Posted on by

Americans like real estate. And you can even have free real estate – if you are willing to move to certain places: The full list of these communities: Marne, Iowa, New Richland, Minnesota, a number of rural communities in Kansas, Beatrice, Nebraska, Muskegon, Michigan, Curtis, Nebraska, and Camden, Maine.

These sound like some interesting opportunities  in communities that need new residents or businesses. The possible success of these plans seem dependent on having people or companies that are quite mobile, people who have the resources or who don’t care about being in places like rural Nebraska.

The ultimate question: do these sorts of incentives actually attract residents or businesses?

Dealing with being wrong in science

Posted on by

A doctor who challenges the faulty research of his peers is profiled in the latest issue of Atlantic. His conclusion is that expectations about science, specifically reactions to being wrong, need to be changed:

We could solve much of the wrongness problem, Ioannidis says, if the world simply stopped expecting scientists to be right. That’s because being wrong in science is fine, and even necessary—as long as scientists recognize that they blew it, report their mistake openly instead of disguising it as a success, and then move on to the next thing, until they come up with the very occasional genuine breakthrough. But as long as careers remain contingent on producing a stream of research that’s dressed up to seem more right than it is, scientists will keep delivering exactly that.

Negative findings, typically meaning that an alternative hypothesis is rejected, tend to receive less attention. Yet they are still useful as they advance science by ruling out alternatives. Both positive and negative findings are needed to build science (and any of its disciplines in the natural or social sciences).

But this doctor also suggests that the incentive system for scientists needs to be changed. As long as breakthroughs and big findings are what are rewarded, that is what scientists will look for and claim to find.