Friday, October 31, 2003

1. Completely agree with Krugman for this. "Economists don't usually make good speculators, because they think too much." (The Great Unraveling, pg. 40).

Wednesday, October 29, 2003

1. Second day of Ramadhan. People are still killing each other there in Baghdad. And in many other places.
2. Yesterday was severe. Got an unbearable headache. Couldn't even turn my head down. I am sure it was not because of the fasting. But maybe of the extreme change in weather. Or, do I have too high a blood pressure?
3. And this morning, thanks to a dead battery inside the alarm clock, I failed to wake up for sahoor. Good that I ate something -- yes, it was ramen, but this time I added some corned beef in, to your relief -- last night before going to bed. (BD my friend would say: God, that's terrible. Eating ramen before night sleeping. You're gonna die soon).
4. Cold. But not that cold as yesterday. I chose to walk rather than taking a bus. I like walking. It gives me time to read 5-10 pages everytime before arriving at Mumford. Yes, non-academic stuff. I'm reading Yann Martel's "Life of Pi", an NYT bestseller and Booker prize winner. (I bought this last week along with Krugman's new "Great Unraveling" -- left me with three "homeworks", the other one being Everitt's Cicero). This novel, "Life of Pi" is about a character Piscine Patel, a boy (then, eventually a grown up) who is in search for God(s). Born as a Hindi, he came across Christianity and Islam. I enjoy Martel's style. Flowing like Ganga, the river Pi likes to talk about.

Monday, October 27, 2003

1. Attended a Sunday morning service at a Presbyterian church. John and Linda invited me to observe their church's rememberance of Marthin Luther, John Calvin, and John Knox -- all the "Voices of Reformation", fathers of Protestantism. It was a unique experience. John explained to me about how there are so many Protestant denominations: Presbyterian, Methodist, Congregationalist, Baptist, etc. How they differ each other and how they all emerged as forms of protest to then highly hierarchical and dogmatic, Catholic Church.
We then had lunch at Za's. Discussed about Islam and how muslims think about Prophet Jesus.

2. Hey, I just noticed that the street where the Virginia Theater is, is named Roger Ebert Boulevard. Since when? I knew it was either Randolph or State St. Hm, must be because Ebert has given a good name to Champaign with his yearly Overlooked Film Festival -- that always takes place at Virginia Theater. I heard Champaign City Council had also passed a bill in 2001 to name a street between Neil St. and Chesnut St, "REO Speedwagon Way". Funny, but creative.

3. Tonight is the first taraweeh night. Meaning, fasting month is starting tomorrow. I can't believe, this would be my sixth ramadhan in America. Time flies.

Sunday, October 26, 2003

1. The "Dragon Lady" died. Her name was Soong May-Ling. She passed away in New York yesterday, at age 106. May-Ling was a powerful lady, the widow of Taiwanese's Generalissimo, Chiang Kai-Shek. She, also known as Madame Chiang, was the second woman (and the first Chinese national) to address the United States Congress with her "Free China" campaign. Her longtime fight, continuing on Kai-Shek and brother-in-law Sun Yat-Sen, has rewarded her the fame. She's one of the Gallup Poll's "10 Most Admired Women in the World", and together with Kai-Shek were the Time's 1937 "Man and Wife of The Year". She was the lady who spoke for Kai-Shek --and thus for China (or, for Taiwan in that matter)-- in important meetings with Roosevelt and Churchill.
But did he ever succeed? The Mao's CPC is still there, all over the mainland. Kuomintang is history. [Learn the story from Wikipedia, click the link in the sidebar].

Thursday, October 23, 2003

1. Had a meeting with JBB. I thought it was going to be tough on my side, since I had not accomplished enough on my progress. But it turned out to be a friendly talk. He even talked more on how to become a good researcher, how to deal with journal editor, how to manage time wisely, etc. Most importantly, he pointed out my "biggest weakness", namely my inability to "stop reading". Yeah, I admit that. I tend to read on and on and on. It never stops. Good in a sense, but as he said, I will never have time to write down all those ideas in my head if I can't stop reading. That's true. I'm so not focused. Thank you, Professor.

Monday, October 20, 2003

1. "I still think [the U.S. of] America is the best nation in the whole world. If anybody finds a better want, call me collect". That is a quote from Rev. Ben Cox's appearance on NPR this morning. Cox, along with Ed Blankenheim and Hank Thomas visited UIUC last weekend. They are three survivors of the famous 1961 "Freedom Riders", a civil right movement to end seggregation. It's disheartening to even imagine how this country treated black people back then. Prior to 1961, Blacks --niggers, as they call them-- have to sit in the back seats when riding bus. Front seats were for the Whites. This segregation also applied in most public utilities. Schools, toilets, waiting rooms, sport events, etc.
Then, a group of seven whites and six blacks got together for the Freedom Rides, a non-violent act of protest in the form of bus trip from Washington D.C. to New Orleans. The plan was, along the trip, the blacks would sit in the front rows and the whites in the back. Also, whenever they stop for restrooms, restaurants, etc, they would use the facilities designated for the opposite race. Well, they never made it through to New Orleans. The bus was set on fire by a mob in Alabama. While the 13 riders were trapped in the bus, the mob held the doors closed. They were faced with only two choices: to break the bus window to get out to get beaten by the mob, or to stay in the bus to die suffocated by the smoke. They finally managed to fled the burning bus. But the ride ended there.
This morning, I heard one of those 13 heroes talking on the radio. He still loves this country, yet he sounded wounded.

Sunday, October 19, 2003

1. I'm a fan of Wynton Marsalis. But not too big. Maybe I like Branford more. Wynton is sometimes too "political". As far as the Lincoln Center Jazz Orchestra is concerned, WM and his friend, Stanley Crouch, that famous jazz critic, have been known as being very discriminative. Rumor has it, some jazzists can never reach up to the surface if they don't make friends with Wynton and his gang. And Wynton is everywhere: Ken Burn's PBS documentaries, Jazz for Kids shows, etc. I enjoyed Wynton's performance last year here at the Krannert Center. But something keeps telling me: this guy is "dangerous".
So, yes, I like Branford Marsalis more. He's cool, and he maintains a very low profile (while everybody knows, he's one of the today's sax giants). He doesn't discriminate: he plays with Sting, but it doesn't undermine his jazz authority. And he plays Satie perfectly!
I am writing this as I am listening to James Carter's "Chasin' the Gypsy". I am asking myself: Why is this guy somehow underrated? Is it because he's outside the Wynton's network? Listen to this CD, and you will understand what I am saying. He brings back Django Reinhardt -- now thru bass saxophone. This CD is amazing. Featured violinist, Regina Carter (a sibling?) also plays fantastically. I have listened to the other CD, "Layin' in the Cut", released at the same time with CtG. It's really different, but equally yummy! CtG is fully acoustic, while LitC is plugged. I usually don't like electrical/plugged, but LitC might change my mind. I've heard Carter has had jam sessions with post-Coltrane soldiers: Buddy Tate and the likes -- those whom Wynton "prohibits" to play at Lincoln, ironically. I will buy that CD.

Friday, October 17, 2003

1. I don't give a damn to football. And I know little about baseball. But on the latter, this whole Chicago Cubs fans' and media's scorning on this guy named Steve Bartman is driving me nuts. What's wrong with you people? When you lose, you lose. Why blame it on somebody else? Here's the story.

After a really long, long period of wait, the baseball team Chicago Cubs finally made it to the NL Championship Series, after beating Atlanta. Next target: World Series. But first, has to beat Florida Marlins to become the NL Champion.

In the Game 6 at Wrigley Field, Chicago, with standing score of 3-2 for the Cubs, the Marlins' Luis Castillo hit the ball very hard. The Cubs' Moises Alou tried to get the ball, making a leaping catch at the wall. And entered Steve Bartman, a 26-year old Cubs fanatic. He catched that "foul" ball from his supporter paid seat. This is normal, I see it on TV so many times: anyone would have done that. And, mind you, Steve is no Fantastic Four's Reed Richards who can elongate and extend his body elastically!

Now, the umpires didn't call it "fan interference" -- they ruled the ball was not in the field of play. The Marlins then won the game 8-3, made the score 3-3 and forced a seventh, deciding game. Instantly, most Chicago fans, newsmedia, players, manager, and even the Illinois governor blamed Steve for that loss. WHY? Do you think, if he didn't manage to catch it, you would have won? You guys just need some scapegoat. Yesterday the Marlins finally beat the Cubs 9-6. And of course, more curse on poor Steve. My full sympathy for him. He, infact, has posted an apology (which I don't think he needed to):

"...I've been a Cub fan all my life and fully understand the relationship between my actions and the outcome of the game. I had my eyes glued on the approaching ball the entire time and was so caught up in the moment that I did not even see Moises Alou, much less that he may have had a play. Had I thought for one second that the ball was playable or had I seen Alou approaching I would have done whatever I could to get out of the way and give Alou a chance to make the catch. To Moises Alou, the Chicago Cubs organization, Ron Santo, Ernie Banks, and Cub fans everywhere I am so truly sorry from the bottom of this Cubs fan's broken heart. I ask that Cub fans everywhere redirect the negative energy that has been vented towards my family, my friends, and myself into the usual positive support for our beloved team on their way to being National League champs"

Poor Steve. And shame on those who blame him. Double shame on Chicago Sun-Times who committed a cheap journalism by revealing Steve's identity, giving access to many Cubs idiot fans. Double shame on Governor Blagojevich who alluded that Steve "did something stupid". No, make it triple, since he also said "I hope he made it home, but I'm angry at the guy". Rod, it's baseball, stupid!

Thursday, October 16, 2003

1. Went to see a concert at the Krannert Center. It was the "Drummers of West Africa", the world famous percussion big band from Dakar, Senegal led by the legend, Doudou N'Diaye Rose. He's fantastic. I especially enjoyed "Les Rosettes". He orchestrated about 30 musicians playing traditional Senegali drums. The beat was trancelike. When he cited Al-Ikhlaas from the Qoran, I felt an aura of sufism were all around -- not like Rumian's soft sufistic movement, but more of African agressive beat. Different. Spectacular.

Monday, October 13, 2003

1. On clarifying the oft-confused terms Multinomial Logit Model (MLN) and Conditional Logit Model (CLM):

The standard source for CLM is McFadden's "Conditional Logit Analysis of Qualitative Choice Behavior" (1973 -- there are some citation confusion in the literature: sometimes it is stated as 1974, e.g. by Louviere et al, 2000 or by Long, 1997. But in fact the true citation year is 1973, I downloaded the original paper from McFadden's website. This very important article appeared in a book edited by P. Zarembka, "Frontiers in Econometrics" pg. 105-142).

I believe, McFadden was the first one to derive this econometric model from theoretical RUM model of Thurstone (1927, A Law of Comparative Judgement, in "Psychological Review" journal). The term RUM (Random Utility Model) itself was coined by Marschak, 1960 referring to Thurstone's model. On the other hand, MLN was a mere extension of binary logit model, first used by Theil (1969)'s Int's Econ. Review paper, "A Multinomial Extension of the Linear Logit Model."

When I was writing my proposal last year, my main source was Louviere et al, 2000. They never mentioned the term Conditional Logit Model. But, as I found later, what they discuss in the entire book is McFadden's Conditional Logit Model. This using of the term MNL while referring to CLM is also shared by many other sources, including Ben-Akiva and Lerman (1985). To be precise, I should have used the term CLM instead of MNL in my proposal. In fact, I have made a clarifying footnote in the paper I presented in Montreal (footnote number 5, page 6). I copy:

"The difference between the MNL and CLM is that in the latter case, the values of the choice characteristics vary accross choices, while the parameters are common across choices. Here, the likelihood of a choice decision is calculated conditional on the nature of the choices that defines the choice sets. In the former case, however, the values of the variables are common across choices for the same person, but the parameters vary across choices". Note: the term "conditional" has a rigorous rationale econometric-wise, see McFadden's 1984 article in Handbook of Econometrics.

The main different between the two is that the standard, original MNL assumes that the choice probabilities are dependent on individual characteristics only, while the CLM considers the effects of choice characteristics as well (Maddala, 1983). Powers and Xie, 2000 put it this way: "In the standard MLN, explanatory variables are invariant with outcome [or, "choice" in our case - AAP] categories, but their parameters vary with outcome. In the CLM, explanatory variables [may - AAP] vary by outcome as well as by individuals, whereas their parameters are assumed constant over all the outcome categories".

2. On why alternative-specific constant(s) is(are) needed in CLM specification:

Take Earnhart's 2001 study (or why he doesn't encounter problem like we do): He has 3 alternatives for each choice set. They are generic: House 1, House 2, House 3. However, he associates each of these alternative with particular natural feature: respectively "Water-based amenity", "Land-based amenity", and "No amenity" --yes, this last one sounds funny. So, e.g. his House 1 is always water-based amenity. He actually has subdivison of these three amenities. For example, "Long Island Sound", "Saltwater Marsh", "Freshwater Marsh", "River/Stream", and "Lake/Pond" are all in the "Water-based amenity" group. He uses pictures to represent these different amenities. It seems that he uses generic labels "House 1" etc to avoid the more specific "Water-based amenity" etc, i.e. to minimize strategic behavior of the respondents (there is literature on generic vs non-generic labels, related to cognitive response). Now, in his ASC specification, since he has 3 alternatives, he should include 2 ASCs. He uses "No amenity" as the base, and creates two dummies for "Water" and "Land". Next, for the SP part, Earnhart only includes hypothetical houses. In his RP part, he has one house actually bought by the respondent, plus two other houses sold in the town in the same month and year -- picked at random.

Our problem: we cannot attribute the generic house labels to some other inherent attributes that are choice-specific. We can only use "Hypothetical Home" versus "Status Quo Home." Thus, the culprit when combining RP and SP, since in our RP set, the chosen home is always -- again, always -- the actual home. Thus, perfect collinearity with th eoutcome variable.

Louviere et al's book doesn't mention explicitly that ASC is a must. However, in all models and examples, they include ASC. So does McFadden's 1973 pioneering article. I believe Ben-Akiva and Lerman (1985) and Ken Train (1986) are among the first to recognize the importance of ASC, econometrically, i.e. to ensure that the error term still has zero mean. Intuitively, the ASC serves as indicator of the difference in utility between alternatives, all else equal.

My earlier note (response to SC's question):

"Variable HH --hypothetical home -- in our model serves more like a "constant" (by construction, conditional logit does not have "the usual constant" like MLN, since it
cancels out, mathematically. However, we have to somehow include alternative-specific constant to ensure that the estimation sample for each alternative exactly equals the proportion of decisionmakers in the sample that actually chose that alternative). What this ASC gives us when included is three-fold. First, it provides a zero mean for unobserved utility, and second as noted by Train (1986, pg. 25) it can mitigate inaccuracies due to IIA property. For this second issue, we don't need to worry because we ask respondents binary choice.). What's the interpretation? The minus sign there indicates that in general, respondents are reluctant to changes (they don't like to move to the so-called hypothetical homes). This is also confirmed when I calculated the probability of choosing alternative HH;
e.g. for base model, average Prob(HH is chosen) is 0.17 and average Prob(SQ is chosen) is 0.83. This estimates are close to actual frequency of HH and SQ -- status quo home-- chosen in the survey. I don't have the figures for the completed 954 survey handy now; but the figures for 908 survey were 22% HH and 75% SQ"

Saturday, October 11, 2003

1. Attended an interesting talk by Vernon Robbins, a professor of comparative sacred text studies in Emory University. His research is on comparing the New Testament's 4-Gospels (Matthew, Mark, Luke, and John) and the Qoran. Among all, he compared the number of referrals to Jesus in Gospels and that to Mohammad in the Qoran. He found that the Gospels refer to Jesus more than 900 times, while the Qoran only refers to Mohammad 4 times. He concluded that Christian Bible is Jesus-centric, while the Qoran is not Mohammad-centric, but Allah-centric. That's is also, as he asserted, why a Jesus follower is called Christian, whereas Mohammad's follower is not called Mohammadian. Hm, I found his research less convincing. He just counted the number of appeareance of the names. He didn't consider pronouns. What if the Gospels mainly use third-person narratives, and the Qoran second-person?

Friday, October 10, 2003

1. Driving early this morning, I listened to NPR's Morning News. The news said: "The library of the University of Illinois at Urbana-Champaign is celebrating their acquisition of it's 10 millionth volume." The campus' News Bureau said: "[This library] is the largest public library in the world." Wow. Then I realized how so many students really don't appreciate this superfacility. I know one student who got his Ph.D without ever visiting library! I know some advance graduate students who have no idea how to find books in the main stacks. I know many students who never check books online. Who don't know that there is this thing called "interlibrary loan". Who don't know that the library has fun stuff: novels, videos, etc. Who don't know there are interesting seminars every now and then in the underground level of the main building. Who don't know there are art movie series and talks once and a while. Very sad. For sure this -- our beloved library-- is the biggest thing I will miss when I go home. Well, some people just don't care. Some people don't even read.

2. Good, the former governor of Illinois, George H. Ryan failed to win the 2003 Nobel Peace Prize. How come someone so corruptive like him ever got promoted in the first place?

3. While in West, the craziest state of America, California has elected it's new governor. He's the Terminator: Arnold Schwarzenegger. What to say?

4. Had a meeting with JBB. I proposed my idea on capturing the warm glow effect. Basically what I want to do is:

4.1) Settle on the definition of "warm glow" that I will analyze. My standpoint is that agents prefer regarding themselves as socially responsible individuals. So this is not exactly similar to "altruism" where an agent's utility function include that of another's. In fact, I believe, an agent can get a moral satisfaction simply from the act of giving and not necessarily out of, say, environmental concern -- in a case of environmental public good.

4.2) It follows, with regards with our survey, I am offering three propositions:
4.2.1. If an agent thinks that the harbor pollution is not important at all, while she reveals a higher-than-average willingness-to-pay for cleanup, then she has purchased some amount of moral satisfaction, i.e. warm glow. 4.2.2. If an agent agree that the harbor area is environmentally safe, while she reveals a higher-than-average WTP for cleanup, then she has purchased some amount of moral satisfaction.
4.2.3. The relevant value to be associated with an environmental improvement is therefore the total value minus warm glow value.

4.3) To operationalize those propositions, I'm offering the following steps:
4.3.0. Derive the model: Direct Utility Function to Indirect UF to Compensating Surplus. 4.3.1. Identify who reveals warm glow effect using the previously calculated WTPs as filter. 4.3.2. Create dummy/effect to distinguish between households w/ and w/o warm glow. 4.3.3. Interact the dummy/effect with choice-specific variables to avoid cancellation. 4.3.4. Reestimate the WTPs with full model that includes the added, warm-glow dummy/effect interaction. 4.3.5. Calculate the difference between WTPs here and the one calculated before. Hypothesis: The new WTPs are higher than the old ones. 4.3.6. Test the significance of the difference, if any. This difference is the warn glow effect. 4.3.7. Assess the warm glow effect based on geographic, income, or ethnic groups.

JBB raised an important concern: Is it alright to use WTPs as the filter for categorizing the respondents, where the WTPs were calculated using previous estimation? That is, he was concerned with the problem of endogeneity. My first reaction was "maybe it's OK". Why? Because we won't use the same WTPs in the next estimation: they are just some filtering mechanism. We will reestimate everything and recalculate WTPs with warm glow dummies taken into account. Need to dig further on this issue.

Alternatively, JBB suggested, try to create new indicators to serve as the proxy of warm glow. Still vague, but he was wondering if we can somehow lump some attitudinal statements and generate a composite index. We'll see how it plays out.
1. Warm glow feeling, altruism, paternalism, moral sentiment.

I'm stuck with this paper. No significant progress after almost two weeks struggling with incorporating warm glow effect proxy into my model. I hypothesized that some part of households' willingness-to-pay for harbor cleanup in Waukegan , IL are in fact due to some warm glow feeling, i.e. not purely out of concern about environment as public good.

Problem is, we didn't specifically address direct questions for this in the survey. Nunes and Schokkaert (JEEM, 2003), for example, have attitudinal questions like "Our family admires the individuals who, on voluntary basis, participate in collecting donations for national programs for social aid and solidarity", or "There are some funding campaigns to which my family and I feel very close and therefore we do not hesitate to contribute a donation", etc. These questions obviously relate to detecting warm glow feeling and can be used for that purpose accordingly.

Unfortunately, all we have in our survey instrument is a set of attitudinal questions that do not directly address this issue. We asked respondents their Likert-type agreement on statements such as "Harbor area is safe", or "Harbor area is economically enhancing", etc. In addition to that, we have perception questions, also in Likert-scale, namely "Harbor pollution is not-at-all-important; or somewhat-important; or very-important". Hm, now I have a vague proposition: "If a household reveals a higher-than-average willingness-to-pay for harbor cleanup, while in fact it stated that harbor pollution is not-at-all-important, then warm glow effect is present". OK, how to model this?

Another complication is due to this whole debate on the definition of "warm glow effect". An article forthcoming in J. Economic Psychology (2003) by Elias Khalil actually addresses this. But it's a little too broad and descriptive without formal model proof (well, I guess that's what I am supposed to pursue). He divides theories of altruism into rationalistic and normative. The first one is further decomposed into egoistic, egocentric, and altercentric perspective. The second one into Kantian, socialization, and warm glow. (There you go...)

Further, summarizing Khalil's rationalistic theories of altruism: "egoistic" altruism (e.g. Axelrod) says that "altruistic assistance would be offered if one expects future benefit". "Egocentric" altruism (e.g. Becker's rotten kid theorem) argues that "donor's utility function includes [that of] potential recipients". While "altercentric" altruism (e.g. Frank, Simon) views benefactor's action as "stemming from a personality trait that arises from artificial selection". Phoohhh...

Enter normative theories. Kantian perspective (e.g. Etzioni) resembles the altercentric approach. However, Kantian cannot distinguish between altruism and "honesty": humans should not deceive others. Socialization perspective (e.g. Mead), on the other hand, believes that agents tend to act in particular ways to gain "approval, respect, admiration, and prestige" accorded by some peer group. Now the third one: "Warm Glow" story. Since this is really my main interest, let's dedicate a separate paragraph:

Arguably, the term "warm glow" was coined by Jim Andreoni (e.g. JPE, 1989). He defines "impure" altruistic action as the act that is partially motivated by the "warm glow" and purely by the concern over the beneficiary's welfare. According to Khalil, Andreoni uses the notion of "warm glow" to explain the puzzle of "why altruists do not greatly free ride". Khalil claims that Andreoni's "warm glow" is just a "by-product of doing the right thing". -- Now, my proposistion above seems to have a rationale...

But then, this warm-glow business has been so controversial in the field of environmental economics. Started by Kahneman and Knetsch's paper criticizing contingent valuation, in JEEM (1992) that says that what people purchase in regards with nonuse values is "moral satisfaction". This paper was instantly attacked by Smith (same journal, same issue) and Anderson (same journal, next issue).

Then there goes the classic economists debate over Exxon-Valdez incident (1992, see links Oct 6 entry below). The famous book edited by Hausman documented the somewhat-mean-spirited debate. Hausman, Diamond, Desvouges, Boyle, McFadden, Milgrom, Ken Arrow, etc. versus Carson, Rowe, Kerry Smith, Rich Bishop, Hoehn, Kolstad, Bockstael, etc. [See also the 1994 heated symposium in J. Econ Perspectives between Portney (neutral), Hanemann (pro), and Hausman and Diamond (con) -- available from JSTOR). Unfortunately, only one article in the Hausman book (the one by Paul Migrom) specifically addresses this issue of warm glow. Reading the discussion, it seems to me that even the panelists and discussants have different definitions of warm glow in willingness-to-pay for nonuse values. And who am I to define it myself?

2. Having done literature review on this warm-glow-effect-business, I conclude that there has been zero attempt to analyze warm-glow share in willingness-to-pay in the context of choice experiment combined with hedonic approach. Provided that I come up with a good, convincing argument in the paper, this work will be the first of it's kind. Admittedly, Kurayama from Hokkaido University has pioneered warm-glow test in a choice experiment (e.g. his working paper, 1998). However, as it turns out, he doesn't need to use hedonic approach, as he analyzes the willingness-to-pay for forest preservation and one of the attributes in his choice sets is the amount of tax or direct contribution to the preservation effort. His theory part is standard and (therefore, should be) convincing. Using Hicksian compensating surplus (CS) concept, he goes on distinguishing between total CS, ex ante CS , and ex post CS. He claims that the pure value of environmental change is the difference between the total CS of environmental quality change and the ex post CS of warm glow. However, when it comes to empirics, I find it much less convincing. In order to capture the warm glow effect, he just adds a dummy in utility function, defined as 1 if tax is positive and 0 otherwise. Why so ad hoc?

Our study on the other hand doesn't have this "privilege" of payment vehicle that can serve as direct anchor for willingness-to-pay for change at stake. We in fact have to do some "magic" (that is, hedonic approach) to squeeze environmentally-related value out of housing buying price. This is what will make this paper contributive, I hope.

2. Reflection: Becker, 1993. Nobel Lecture: The Economic Way of Looking at Behavior. JPE 101(3): 385-409.
Quoted: [I]ndividuals maximize welfare as they conceive it, whether they be selfish, altruistic, loyal, spiteful, or masochistic.

Wednesday, October 08, 2003

1. Time for Econometrics. This year's "The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel", also (disputedly-) known as "Nobel Prize for Economics" is shared by the dynamic duo of time-series analysis, Robert F. Engle and Clive W. J. Granger.
1. Another professor from UIUC gets Noble. This time, Anthony J. Leggett wins the 2003 Noble Prize in Physics. He shared it with Alexei A. Abrikosov and Vitaly L. Ginzburg. Go Illini!

Tuesday, October 07, 2003

1. "Asthenic personality disorder". That's what they, psychoanalists, call people with excessive dependency toward others. According to a source, this problem can sometimes be reflected by a person who suffers asthenia by copying or imitating another person constantly. She subconciously pays attention to whatever her target likes to do. And then she, again subconsciously, tries to imitates him. It is possible that she has never liked to read a particular kind of book or never liked to see a specific genre of movies. But, once she learns that the target likes to read history, for example, or say, to watch Hitchcockian movies, she will change accordingly. She becomes a history book worm and thriller movie buff. This is different with the case of imitating a, say, role model. Asthenia is obsessive imitating disorder. It is "copycatting". And in it's extreme form, it can cause the target to suffer from "agoraphobia" -- a fear to be in an open space, or get exposed (yes, it is quite the opposite of "claustrophobia"). Just like Dr. Helen Hudson (Sigourney Weaver) in the movie "Copycat" (1995, Dir: John Amiel). Now an example...

2. Ladybugs everywhere. They are invading the campus. They were imported from Japan in early 1990s, but now their population has overgrown way beyond what farmers need -- they are predators that eat pests on agricultural crops, especially soybean. Annoyingly, these ladybugs bite and they stink! This species, Harmonia axyridis is also known as MALB -- multicolored Asian lady beetle. Oh, one is on my screen. Get away!

3. Am reading the famous 1992 economists duel on Exxon-Valdez Alaskan 1989 oil spill case, edited by Jerry Hausman ("Contingent Valuation, A Critical Assessment; North Holland, 1992). Peter Diamond had an interesting caricatural comment. Quoted: If a congressman came to me and said, "I think too many birds are being killed in oil spills, and what would be a mechanism to reduce the number?" [B]eing a public economist, I would say, "Well, tax the dead bird or put a fine on dead birds" (pg. 462).

4. Still on the book mentioned above. I like the way Richard Carson commented on or asked the presenters. He surely was a master of Contingent Valuation. Jerry Hausman sounded a little emotional. So did some others, from both sides.
[I realized that Kerry Smith's style of asking questions -- building up on others' questions, which is cool -- has been like this from more than a decade ago -- at least, it is apparent in this book. This is also how he asked question to me, in North Carolina's Camp Resources XI two months ago. He built his question from Nancy Bockstael's. Nevertheless, I found his comments and suggestions very helpful].

5. A professor from UIUC, Paul C. Lauterbur wins "2003 Noble Prize in Physiology or Medicine".

Monday, October 06, 2003

1. Sometimes it's relaxing to listen to Garrison Keiller's "A Prairie Home Companion" on Sunday NPR. Today he mocked the Reps. "Ever since I became a Republican, I lost interest in politics". Good one!

2. Another really good stuff from's Dave Warsh. In his nice obituary for Franco Modigliani he also refined his categorization of economists. Quoted: "There were Keynesians (Paul Samuelson, John Hicks, Wassily Leontief, Lawrence Klein, Robert Solow, James Tobin, Franco Modigliani). There were the Moderns (Kenneth Arrow, John Nash, Tjalling Koopmans, Herbert Simon, Gerard Debreu, Trygve Haavelmo, Maurice Allais). There were Chicagoans (Milton Friedman, George Stigler, Theodore Schultz, Friedrich Hayek, Ronald Coase, James Buchanan, Harry Markowitz, Merton Miller, Gary Becker, Robert Lucas, James Heckman). And there were those who were honored in elsewhere than in Stockholm (Joan Robinson, George Dantzig, Albert Hirschman, Gordon Tullock, Janos Kornai)..."

3. Just learned today that Socrates was ugly. But why do historians care? They say: Socrates was half goat half man. Can't be more irrelevant.

Saturday, October 04, 2003


1. Can't believe I'm doing this again. A journal for the n-th time. How can somebody keeps writing a journal -- diary, as sometimes they call it -- every single day? I have tried and have failed so many times. And now, I'm starting a new one again?

2. Had an interesting discussion last night. On religions. Somebody argued that all religions are the same. I disagreed. I said no two religions are the same, because "same-ness" implies perfect substitutability. And therefore an individual can switch between two religions anytime while still in the same level of utility. I asked him if he is willing to substitute his religion with another. He said no. Why? Because he prefers his religion to any other. So, I said, religions are therefore not the same. Except for an atheist, who is of course indifferent when offered a religions-only set, but strictly prefers no-religion to any religion when the former is added to that choice set.

3. Just listened to Rev. Jesse Jackson's speech delivered two days ago (was it to a Dems' conference?). Nice, carefully worded speech. He closed it with: "...all people are precious in God's eye". Hm, actually, Mr. Jackson, even God has preference.

4. Oh, it's October already (and the 4th, for crying outloud!). Hey, I am supposed to run another series of Spearman correlation tests, am I not?