Wednesday, October 30, 2013

Gender Equality

Why would the World Economic Forum care about gender equality?  Because there is a "strong correlation between a country's gender gap and its economic competitiveness." (See the WEF Global Gender Gap Report here).   

The WEF measured gender equality (or lack thereof) in the economic, political, health and education spheres.  Not surprisingly, Nordic countries are at the top of the gender equality rankings, led by Iceland and Finland, but there were some surprises, like the Philippines and Nicaragua making it to the top 10.  The map below shows a colour coding of the degree of gender equality around the world.

Each country's score is illustrated by a spider chart.  An interesting collection of those spider charts formed part of The Economist's daily chart here.

Canada ranked 20th in gender equality, slightly behind the UK (18th) and slightly ahead of the US (23rd).  Canada was ranked ninth in economic participation and opportunity as well as education. Personally, I think that the high economic score would have arisen primarily because of participation with high rates of employment and indicators like bank accounts. However, opportunity is definitely skewed, with the study showing a mere 6% female board directors at public companies.  Female board representation is a subject of great controversy here in Canada and it appears there may soon be some proactive efforts to increase the proportion of women.  Canada ranked very low in political participation; our four month flirtation with Kim Campbell with our first and only female prime minister didn't lift our standings much in that category!  One can't help thinking that one's own country should be better than this.

Monday, October 28, 2013

Nudging Social Policy

There's a lot of buzz about behavioural economics these days, and Rotman School of Management has held several talks about the topic and has published Nudging: A Practical GuideUsing Behavioural Economics to Inform Social Policy was the title of the most recent Rotman talk by Adam Oliver of the London School of Economics.  Oliver has moved from his initial enthusiasm for these methodologies to harbouring significant reservations.  But more about that later.  First a summary of the principles of behavioural economics.

Oliver started with a very clear exposition.  Put simply, he says, mainstream classical, economics, assumes that humans behave rationally to maximize their economic gain. Behavioural economists believe the contrary, that humans behave irrationally based on a reflexive instantaneous reaction and not in their best long term interest.

Behavioural economists use their knowledge of human behaviour to design a choice architecture that will enough people to make choices in their own best interest.   Thaler and Sunstein, authors of Nudge (reviewed here), call this Liberal Paternalism.

Some key behaviours that lead people to act against their own best interests:
Loss Aversion   If people lose a certain amount, that causes about twice as much pain as they feel pleasure from a gain of that same amount. 
Present Bias   People prefer prefer present pleasure to even greater pleasure in the future.  
Probability Weighting   People have difficulty with probabilities.  They tend to overweight events that have very low probability (think of lotteries) and underweight events that have high probability.
Optimism   People are more optimistic than justified about the future. 

Oliver then went on to describe some of the main techniques that practitioners employ to influence people based on the tenets of behavioural economics:

Change the default   Requiring people to opt in to organ donation results in a take-up percentage of about 10-20%; flipping the default so that people have to do something actively to opt out results in organ donation of 80-95%.  Companies that require employees to opt in to a retirement savings see a much lower participation rate than those who change the default so that people have to take explicit action to opt out. 
Manipulation of Reference Point   The most effective way to motivate people to save energy has been to inform them of the lowest energy usage of their neighbours.  That changes their reference point for how much energy they should be using. 
Application of Incentives   While the use of financial incentives is part of classical economics, behavioural economists use non-financial incentives to trigger desired behaviour.  A good example of this was the practice of children in Iceland signing contracts around better eating, following which child obesity rates fell. 
So, on to the serious efforts to apply these principles in national policy formation. Prime Minister Cameron was the first to embrace these ideas.  He required all his MPs to read Nudge and set up the Behavioural Insights Team, popularly dubbed The Nudge unit, which 'applies insights from academic research in behavioural economics and psychology to public policy and services'.

Subsequently, Sunstein joined the Obama administration in the Office of Information and Regulatory Affairs, with a mandate to base policy on evidence, not intuitions.  In his talk at Rotman, Sunstein  claims billions of dollars of savings through following the behavioural economics principles and the office's nudging people toward good choices by making those choices automatic, simple, intuitive and meaningful, with a huge emphasis on the value of simplicity.

An article this summer in The Globe and Mail reported that Canada is also weighing the possibility of employing this approach.

Oliver described his reservations about the application of behavioural economics principles in public policy.  While it's clear using these tools can advance good policies, Oliver is concerned that some of these experiments have not been vetted to ensure that they actually produce sustained results.  Most of all, Oliver worries that the interventions based on behavioural economics require subtle, covert decisions when government should always be transparent and open. The examples quoted in publications invariably focus on indisputably beneficial interventions, but of course these interventions could also be put to less noble objectives.  For instance, corporations have known about manipulating default options. Canadians are aware of the power of the negative option. A major Canadian telecoms company, Rogers, is still remembered for its introduction of a negative option billing plan - back in 1995!  Although it was withdrawn after a public outcry, the company retains association with this ugly tactic.

As academics and politicians continue to explore the possibilities behind behavioural economics, it's healthy to question its efficacy and appropriateness.

Monday, October 21, 2013

Food, Wine and Whodunit

When Bruno Courreges' local intelligence network reveals that EU inspectors are on their way to the local  market, Bruno hastens to warn his friends and neighbours to disappear any offending foodstuffs. Bruno, Chief of Police, has a well-defined sense of what's important in keeping order  in the small town of St. Denis and it doesn't include enforcing petty EU regulations.  Rather, it's all about coaching young kids to play rugby and keep out of trouble, involving himself in the life of the town and averting trouble with a quiet word planted in the right ear.

The Bruno Courreges mysteries by Martin Walker, the first of which is simply named Bruno, Chief of Police, lack the pyrotechnics of fast-paced thrillers - no exotic forensics, frenzied chases, or demented psychopaths.  The reader isn't navigating treacherous rapids, but rather meandering down a gentle stream with Bruno as guide.  Along the way we meet the local cast of characters, the age-old customers and traditions of central France, and, most of all, the food and wine.

As well as being a somewhat unorthodox policeman who's long since lost the keys to his handcuffs, Bruno is also rugby coach, hunter, gardener, and gourmet cook. A sample of Bruno's extraordinary culinary talents might include a perfect omelet made with his own truffles, vin de noix made from green walnuts he picked, and grilled woodcocks, the fruits of his own hunting.  Scene after scene, we are treated to descriptions of gourmet delights.  Some are mouth watering, like the description of wonderful cheese with fresh baguette.  Some make me a bit squeamish, like the the description of the proper way to enjoy the best parts of a woodcock: hold the beak and eat the head whole, and spread the vacated intestines on fresh baguette.

I've read the first two Bruno books so far, and thoroughly enjoyed them.  Thanks to my cousin Bill for the recommendation.

This book belongs to what I call a sub-genre of mystery novels that I quite enjoy - culinary/travel/mystery novels. The Bruno books are very reminiscent of Louise Penney's novels set in the Eastern Townships of Quebec featuring Chief Inspector Armand Gamache with their descriptions of gatherings of close friends and food in the village of Three Pines.  Then there's Donna Leon lovingly describing Guido Brunetti's meals at his home and various restaurants in Venice - there's even a book called Brunetti's cookbook.  Ian Hamilton goes to great lengths to describe the glories of Chinese food and to provide travel descriptions as his heroine Ava Lee flies to exotic locations.  Alexander McCall Smith's series about Precious Ramotswe of the #1 Ladies Detective Agency, features descriptions of the many delights of pumpkin while adding local colour about Botswana.  I'd appreciate any other recommendations in this genre.

Thursday, October 17, 2013

Alice Munro and Peter Gzowski

What a treat!  Peter Gzowski interviewing Alice Munro on a CBC Rewind program from 1996. Listen to it here on CBC.

It was an absolute delight hearing Munro: thoughtful, modest but confident .  And it was vintage Gzowski in a conversation with a friend - full of pauses, digressions, good humour, interest in the guest, and, well, sheer grace and charm.  

I love CBC's The Current with Anna Maria Tremonti, but gosh I miss Gzowski's gravelly voice on Morningside in that time slot.  I remember a time when I was trying to seduce Gzowski to be involved in the upcoming Globe and Mail's book site.  Being awakened by his gravelly voice on the phone in early morning Calgary just thrilled me to bits!  Gzowski, not on the radio, but talking to me!

Addendum:  A friend just forwarded me a great review in The New York Times by Jonathan Franzen of Alice Munro's collection of short stories Runaway.  In it, Franzen pokes fun at the Nobel Academy for not recognizing Munro - too many Nobels for Canadians and for short story writers! Definitely worth reading this old review.

Monday, October 7, 2013

Mobile Phones, Solar Power and Dental Hygiene

Quote from an Economist article discussing the spread of small-scale solar systems, driven by the desire to keep mobile phones charged:
There are more mobile phones than toothbrushes in the developing world
This from Ryan Levinson, the chief executive of Sunfunder, a start-up based in San Francisco that helps solar companies that raise financing.