Categories
Economics Politics & government Society

[639] Of overheard in Ann Arbor

I found Overheard in Ann Arbor via Ann Arbor is Overrated and I’m lovin’ it. And wow, OIAA via AAIO. Talk about coincidence.

Somehow, that site makes me miss Ann Arbor and undergrad life even more. I’m reserving a spot for OIAA in my blogroll. It, together with AAIO, is now immortalized. Sort of. And McDonald’s sucks.

Also, this might be old but Berkeley is trying to tell Ann Arbor something

Anyway, for the sake of making the bear happy, I am neutral on the Miers nomination.

p/s – Ben Bernanke is the next Fed chairman. Who’s Bernanke? Don’t ask me.

Categories
Economics Environment

[632] Of Malaysian environmental law and inflation

Several days ago, Malaysian press highlighted a case in which a Malayan tiger was cut up into pieces and stored inside a refrigerator.

Fair use.

Tiger is an officially recognized endangered species worldwide. This killing should take any nature lover up to arms. However, what riles me up further is the weak punishment:

It is an offence to possess tiger meat and an offender could be jailed up to five years or fined up to RM15,000.

Tiger trafficking is a lucrative black-market trade as body parts of the animal could be processed into traditional medicine in countries such as Thailand and China. Each animal is said to fetch between RM20,000 and RM30,000.

I’m not sure if the possessor of the tiger carcass was indeed the poacher but if he is, imagine if he had gotten away with the prize – he will, on average, be better off.

Say there’s a 50-50 chance of being caught and getting away. Also, assume that if the person’s found guilty, then he or she will face maximum fine of RM15,000. At the same time, if he gets away, the person will receive RM20,000. RM20,000 is the lower limit of the range given by the news report.

Hence, his expected gain will be RM2,500. This might be a simple binomial model but it tells me that this particular environmental law does not sufficiently deal with environmental crime. I mean, come on. On average, a person is actually being rewarded for breaking the law.

It’s worth noting that the same scenario is applicable to the logging industry. I realize that way back in 2004.

I suspect that when most Malaysian environmental laws were first enacted, the monetary punishment was indeed high. However, the real value of the monetary penalties has been progressively eroded by inflation. In fact, I believe this is the case for Malaysian animal protection laws too.

According to Selangor chapter of Malaysian Society for the Prevention of Cruelty to Animals (SPCA), penalties for animal abuse is too low. These two cases are perfect illustration:

SPCA Calls for Harsher Penalties for Animal Abuse
Following the recent two cases brought to Court by Jabatan Haiwan Enforcement Officers (DVS), SPCA is appealing to the Courts and the Law makers and decision makers to take into account the seriousness of these cases and the inadequate penalties at present are being issued.

The first case, a Breeder in Cheras was fined RM200 for cruelty to 13 dogs, the charge was expected to be for each individual dog (i.e. 13 X RM200) and the lack of a ban of keeping animals after prosecution for cruelty means that each dog was returned to the owner to continue a life of suffering and production.

The second case, a Daschund named Tim, was chained so tightly round his neck that the chain had become embedded into the skin and a six inch wound exposed a bloody mess around his neck. The owner in this case was fined RM200 and had to spend one day in jail. The dog is to be returned to the owner. Tim is still recovering from his injury and several operations to remove the chain from his neck.

SPCA is currently running a campaign to convince the Malaysian government to amend Malaysian Animal Ordinance 1953 and introduce harsher penalties. The law was first enacted in 1953 and 52 years are definitely enough for inflation to render the law toothless.

The bottom line is that inflation cannot be ignored. Failure to recognize the inflationary impact on these set of laws will result in failure to curb environmental crime. This in the end underlines the need for lawmakers to talk in real term. But lawmakers and many others never do. I wonder why.

p/s – this person has a talent for trouble. And a talent for retardness too.

pp/s – a father names his son Oliver Google Kai as a tribute to Google.

Categories
Economics

[628] Of have we gone passed some kind of second derivative for oil demand fuction?

How high will price be before consumers cut back demand for crude oil? I asked the same question more than a year ago.

It seems that USD70 per barrel is the price. My gut tells me that the prices which demand turned direction is lower due to lag. Probably in the range of USD60 to USD70 per barrel. Even before that, SUV sales had decreased tremendously.

Crude oil prices at the New York Mercantile Exchange for November delivery hover around USD62 per barrel while November Brent lingers at USD59 per barrel. The fall in crude prices started during early September after prices reached USD70 per barrel in last August. The fall is happening in spite of production capacity loss due to Hurricance Katrina.

So, are we going to see continuing fall in prices?

The looming winter in the US and Europe is expected to be colder than usual. Unless prices could cushion its rise during the upcoming winter, I don’t expect this price decrease would continue unabated.

But some innovations might help reduce demand of crude oil just like what happened during oil crisis in the 70s. Malaysia is planning to mix biofuel with gas while hydrid vehicles are hot in the US. Still, we may only know for certain where we are when the northern winter ends in April next year (May for People’s Republic of Ann Arbor).

Whatever it is, a falling demand is a bad thing for OPEC. They do have the incentive to increase production to lower prices a bit. The last time crude oil prices broke some records, oil became really cheap for about two decades because fuel consumption efficiency was forced to increase.

p/s – wow! Deja vu!

Categories
Economics Politics & government

[627] Of where is the anti-corruption agency?

So, Mohamed Isa Abdul Samad has been found guilty of corruption by UMNO disciplinary committee weeks ago. He made an appeal and the committee reduces his penalty.

However, why the case hasn’t been brought up to anti-corruption agency? Am I missing something here? Is federal law inapplicable to a political party’s internal matter?

p/s – two persons won the Prize in Economics for “having enhanced our understanding of conflict and cooperation through game-theory analysis”.

Categories
Economics Kitchen sink

[626] Of PPS economics, free market and market failure

Project Petaling Street is all good and cool but it suffers one complication – how many participants are too many participants? In short, what is its carrying capacity? Will it fail if the limit, if any, is not observed?

Allow me to explain further.

PPS, or to be precise, its ping portal, PPS Pings – hereafter PPS – is a first-in, first-out list (FIFO). The list itself has limited slots.

If there are five slots in a clean list and if person A is the first pinger, he will sit on top of that list. Later, when four other persons ping the list after person A, A will sit at the bottom of the list while the four persons will sit on the top four slots. It follows that if a sixth person pings the list, person A will get the boot. In short, if there are n slots, the person on top of the list will be out of the picture when pinger (n+1) pings.

All this assumes strictly one-to-one relationship; a person leads to a ping and a ping leads to a person. This assumption is not true (enthusiastic posters, as a PPS founder calls them, like Kahsoon and Otis, is a proof) but it definitely simplifies our model. Once we’ve laid out the model, then you and I could relax the restriction considerably.

With FIFO explained, let’s talk about rate. Let’s also assume that each slot receives x visitors per time unit. Here, I don’t think one-to-one assumption is critical but for consistency’s sake, let’s just assume one-to-one relationship.

Assume further that each ping is pinged into the list at a rate of a ping per time unit. Holding time unit constant, the rate is dependent on the number of pings. Subsequently, a ping goes down the list at that rate. Therefore, person on top of the list will be out by the (n+1)th time unit. Also, amount of visitors of that ping will be x(n).

So, imagine that a slot receives 60 visitors per hour and there are five slots. With this setup, a ping will attract 300 visitors throughout its lifetime in the list. Now, what if a ping switches a slot per minute?

That would make each slot a visitor and a total of five visitors throughout the ping’s lifetime. What if, the rate is a ping per second?

Oh, boy. A ping gets a sixtieth of a person; total a twelfth of a person. Ugly.

Ceteris paribus, the rate of which a ping goes down the list depends on the number of pinger. However, the more pingers there are in a timeframe, the greater the rate and as such, less visitors for every ping. The dilemma is, PPS wouldn’t be so successful if it weren’t for all those pingers. I would probably explain how more pingers leads to more visitors later. But I do have a feeling that at first, more pingers leads to more visitors until at one more point, any additional pinger will lead to less visitors.

This brings us back to the question how many participants are too many participants? In short, what is its carrying capacity? And when the carrying capacity is known, should PPS administrator put a cap on number of pinger? Or at least control the rate?

These are normative questions – there is no right or wrong. Nevertheless, by answering this, you might realize where you sit in economic freedom spectrum with controlled economy on the left-hand side and free market on the right-hand side. Of course, basing your political belief on this is absurd but hell, its fun.

So far, PPS Ping rules state that:

PPS will not tolerate ping flooding. Multiple pings within 7 minutes of each other is considered ping flooding, no exceptions, even if you are an “enthusiastic blogger”. It does not matter whether the content is duplicate or different from the previous ping. It is your responsibility to ensure your blog does not multi-ping PPS in consecutive fashion.

This alone is an attempt to control the rate. Does this mean the administrator distrusts free market?

I don’t know but it seems that rule is not strictly enforced.

However, I’m content to say that this is an attempt to prevent abuse and maybe, even market failure. The current DoS attack is similar to market failure there where is too many pings that visitors for each slot goes down to zero, albeit PPS fails due to bandwidth flight (capital flight? LOL!) first before market failure actually takes place.