The real Alan Bollard

Tell you the truth – this is gold! (ht Not-PC).  The full set of adventures are caught here (*).

Why rent a house when you can buy?


A common argument that I hear for buying a house is that paying rent is a waste of money. The main proponents of this point of view seem to be my parents’ generation, however it is a point of view I can’t easily agree with.

To compare buying a house to renting a house, we have to look at what we are buying in each case, and what the costs and benefits of each choice are. In the case renting a house we are purchasing ‘housing services’, while in the case of buying a house we are purchasing housing services AND an asset, as kindly explained by the iVestHomes manager. You will want to learn about the Property Buying Process here. The fundamental view that we should buy instead of renting comes from the fact that we receive an asset on top of the value of the services it provides. In some sense, the generation that is suggesting that we should all buy houses is doing so, because it was a (successful) rule of thumb that they followed at our age. However, the current situation is a little different.

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Goalkeepers and rationality

At Stumbling and Mumbling the author is discussing why goalkeepers don’t maximise their chance of making a save from a penalty kick. According to this paper they only stood still during a penalty kick 6.3% of the time, even though 28.7% of kicks were down the middle.

Mr Mumbling puts forward three reasons why the goalkeeper may stand still less than is optimal:

  1. It puts pressure on the striker in some way,
  2. It is a social norm – way of minimising regret (as a dive looks cooler than standing still),
  3. Goalkeepers also value not getting yelled at, it is less likely people will make fun of you if you miss a penalty kick when diving than when you miss the kick when not moving.

These are all good reasons which probably explain the phenomenon, however I have a couple of other ideas:

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Externalities and Prince Harry

A big fuss is being kicked up about the fact that the news media kept secret the fact that Prince Harry was on the front lines in Afghanistan. Now I can understand that people might be pissed that he’s getting special protection because people might target him. I can kind of sympathize with this point of view, why should he get special protection?

However, I think the main isse here is that if the bad guys target Harry then that puts the other members of his unit in danger they would not face if it was not public. In effect Harry’s presence if publicly known imposes a negative exernality on other members in his unit through the increase in attacks that are likely to occur once the bad guys find out he’s in the area.

I think once you look at it from the perspective that we are protecting the many other people serving in his unit by keeping it secret, it’s actually a very reasonable thing the media did.

Apologies for not talking about methodological issues like James and Matt, I don’t read as much they do!


The economics of Mrs Lovett


Image courtesy of Rose Colligan.

Most economic research is a process of adding to ideas that have already been thought of. In Mrs Lovett’s case her grand plan involves adding concepts to Sweeney Todd’s welfare policy.

Now if you haven’t seen the movie yet, this might be a bit more of a spoiler than the previous post. As a result, think carefully before you click below the flap.

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Yes, it IS the referee’s fault!

You always here about how biased referees are from football fans. However, Matt and Agnitio are model football fans and seem to rarely criticise the referee, even when Liverpool are getting walloped. Now Robin Hanson links to a study which gives them a reason to lambast the ref a bit more:

Referees, who are appointed to be impartial, tend to favor the home team by systematically awarding more stoppage time in close matches in which the home team is behind. They also favor the home team in decisions to award goals and penalty kicks.

Not that we should be surprised by this news: it would be odd if referees were such a different breed that they could block out all the incentives to appease the home crowd. Why should we ascribe some superhuman power to them that none of us possess? Fans everywhere can rejoice in the knowledge that all referees are likely to be biased towards the home team, or whatever team they personally sympathise with. It’s just human nature and we can expect no more of them. Read more