Nightmare

NON-ZERO PRICE

“Digital goods have created large gains in well-being that are missed by conventional measures of GDP and productivity”

A new paper by ERIK BRYNJOLFSSON et al. suggests using massive online choice experiments as a method to find the true impact of digital goods on well-being. The background section gives an example of the impact that is currently unmeasured:

“… [in] a number of sectors … physical goods and services are being substituted with digital goods and services. An apropos example of such a transition good is an encyclopedia. Since the 2000s, people have increasingly flocked to Wikipedia to get information about a wide variety of topics updated in real time by volunteers. In 2012, Encyclopedia Britannica, which had been one of the most popular encyclopedias, ceased printing books after 244 years (Pepitone 2012). Wikipedia has over 60 times as many articles as Britannica had, and its accuracy has been found to be on par with Britannica (Giles 2005). Far more people use Wikipedia than ever used Britannica—demand and well-being have presumably increased substantially. But while the revenues from Britannica sales were counted in GDP statistics, Wikipedia has virtually no revenues and therefore doesn’t contribute anything to GDP other than a few minimal costs for running servers and related activities and some voluntary contributions to cover these costs…For such transition goods, consumer surplus increases as free access spurs demand, but revenue decreases as prices become zero. Hence GDP and consumer welfare actually move in opposite directions.”

One finding of note: “50% of the Facebook users in our sample would give up all access to Facebook for one month if we paid them about $50 or more.” Link to paper on NBER here popup: yes. A free draft is available here popup: yes.

PROPRIETARY SPECIMEN

“Progressive property” and the ownership of personal data 

Legal researcher JESSICA ROBERTS brings the “progressive property” school of thought to bear on the thorny debates over the ownership of genetic data: 

“People historically have not had meaningful ownership rights in their genetic data.… However, recently the patent stranglehold that biotech has had on genetic information has weakened, as individuals are gaining what look like de facto property interests in their DNA. People who contribute specimens for research are beginning to demand “biorights,” including compensation, access rights, and continuing control.

…

By some estimates, biobanks in the United States alone house over 500 million biospecimens with that number increasing by 20 million every year. New spheres of ownership are rare in property law. Virtually all of the world’s territory is already spoken for, so the possibility of a new brand of entitlement, creatio ex nihilo, presents a particularly compelling opportunity to apply this new school of thought.”

Full paper here popup: yes.

• The above argument relies on “progressive property” theory, a burgeoning legal literature that aims to “look to the underlying human values that property serves and the social relationships it shapes and reflects” in order to move beyond personal property rights “as the sole basis for resolving property conflicts or for designing property institutions.” Link popup: yes.
• Another paper treats the ownership question in the context of health records data: “Raw patient data are not the valuable resource; these data acquire value only through the application of infrastructure services.… The right question is not who owns health data. Instead, the debate should be about appropriate public uses of private data and how best to facilitate them while adequately protecting individuals’ interests.” Link popup: yes. 

THE CONTEXT OF SPRAWL

On the manufacture and study of vehicle traffic 

In a 2015 post on the fantastic and sadly inactive Urban Kchoze popup: yes blog, traffic engineer SIMON VALLÉE lays out a critique of traffic studies, which often rely on standardized vehicle trip data: 

“By using that data as is, there are a flurry of assumptions that are made:

All locations of a given land use with similar floor area (or other quantitative feature) will have a similar number of trips generated, it doesn’t matter if it’s a restaurant in the heart of a city or in a tiny town in the boondocks. Essentially all trips generated or attracted by the location will be made in cars.
Congestion level and traffic conditions will have no effect on the number of trips made to and from that location.

Now, people may point out that these assumptions aren’t always, or even frequently, true, but these still form the basis of most traffic studies. Why? Well, engineers are taught during their formation that being “conservative” with their calculations is always the best option.

…

This approach and the assumptions that support it make traffic studies a self-fulfilling prophecy: over-designing roads while neglecting non-car travel ensures that almost all trips in the area will be made by car, confirming the initial assumptions of quasi-universal car use, because cars are the only mode of travel the road design caters to.”

Link popup: yes to the post. In a related piece, Vallée sketches out a broader argument about traffic engineering, and proposes congestion should be approached through an economic lens: 

“The typical approach of seeing congestion or vehicle traffic as an engineer problem is supposing that vehicle flows are essentially static, a known input into the model. XXXX vehicles per hours come at the intersection by the south and then go through the intersection towards the north. This value is taken as a constant: no matter how congested the intersection, the same number of people will want to make this movement, at the same vehicle flow.… The economic approach sees congestion as a matter of demand (number of vehicle trips) exceeding supply (road capacity), which can be compensated either by increasing supply (increasing road capacity) or increasing the price of using roads (through higher travel times and/or direct monetary costs) to decrease demand, rather than merely a matter of a static load applied to a fixed system.”

Link popup: yes to the post in full. 

• Todd Schneider recently updated his analysis of over a billion cab and Uber rides in NYC (using open-source data): “The Taxi & Limousine Commission’s monthly aggregate reports popup: yes have shown for some time that ride-hailing apps have surpassed taxis in total popularity, but the granular trip-level dataset paints a more complete picture, allowing us to explore geographic trends, and the fallout from the January 2017 protest at JFK airport popup: yes and the ensuing #DeleteUber social media campaign popup: yes.” Link popup: yes. 
• For a different view on traffic design, a mathematics research group at MIT modeled different kinds of “phantom” traffic jams. L4ink popup: yes to their project. Included in their compendium is work conducted by a Japanese research team that studied popup: yes congestion unrelated to bottlenecks, with a nice video of their experimental evidence. Link popup: yes. 
• A 2017 paper co-authored by Daron Acemoglu and Asu Ozdaglar examines whether Braess’s Paradox popup: yes applies to the information available to drivers about possible routes. Link popup: yes. 

+++

• The 2018 Clark Medal citation on Parag Pathak’s work in market design and education: “Pathak has developed creative empirical tools to evaluate the impacts of various policy issues facing the educational environment; examples being the case for charter schools and the impact of exam schools and voucher systems.” Link popup: yes. ht Will
• “In fragile states, LIPW programs are also presumed to contribute to social and political stability. The developed infrastructure allows for the implementation of other development and peacekeeping activities, while employment opportunities may help prevent at-risk youth from being recruited by armed groups.” Early and encouraging findings from the effects of LIPW programs. Link popup: yes. ht Sidhya
• How did the introduction of the telegraph affect international markets? “In order to understand how well markets are integrated, one can check how well the ‘law of one price’ (LOP) is satisfied.… The price difference between New York and Liverpool for the same type of cotton is much more volatile before the telegraph. Large fluctuations disappear completely after the telegraph is established.” Link popup: yes.
• On the effects of infrastructure development for worker mobility. Link popup: yes.
• “What is a successful data analysis?” Link popup: yes. ht Sidhya
• A VoxDev post summarizes studies of the relationship between political boundaries and ethnic conflict, finding that redrawing borders has the potential to both reduce and exacerbate divisions. Link popup: yes. For a related history of the management of ethnic division through policy, see Mahmoud Mamdami’s Define and Rule popup: yes (Reviewed here popup: yes.)  
• Realizing the dream of fully open citation data. Link popup: yes. (And link popup: yes to the Institute For Open Citations.) 
• Justin Sandefur with a measured look at the controversial results popup: yes from the GiveDirectly cash transfer: “The totality of the evidence seems to point in the direction many governments are already headed: toward  sustained, periodic cash transfers as a social safety net that is carefully targeted or even universal, rather than once-off cash drops to encourage everyone to become an entrepreneur.” Link popup: yes.
• A new primer from Data & Society on algorithmic accountability. Link popup: yes. ht Sara

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org