Tuesday, December 22, 2009

Friday links (on Tuesday)

See all Friday links. I’ve had a pretty busy week and next week will be away in Namibia so there won’t be any posts for a while. Hopefully, there will be some interesting observations when I get back!

1/ The triumph and terror of free markets. Only 8 of the top 25 firms in 1999 remain there in 2009. It’s things like this that make me an evil capitalist. Far from running the show big business often doesn’t stay big for long – only firms that serve the people survive. Try starting a firm that tries to sell things people don’t want.

2/ Can you put a price on being nice? I love the fact that the economic toolbox goes everywhere.

3/ Probability of an economist’s advice paying off. Pretty low…

4/ Chris Blattman muses on whether aid could slow growth.

5/ UNPEDO – The workings of a UN agency in Ghana. See first blog and then the second blog.

6/ The Population of the Dead (via Chart Port).

7/ An interactive map showing the impact of a 4 degrees increase in planetary temperature.

Thursday, December 10, 2009

Exorbitant (?) interest rates in disguise

I’ve written about high interest rates in Lesotho and South Africa before and there are also examples of them in the UK. I am not against them per se – I think that short term loans at high interest rates are useful for people – especially in developing countries. There tend to be low transaction costs and easy access. You don’t need to travel for a day to get to your nearest town, complete long formal processes with a registered financial institution only to find you get rejected or, if you are successful, spend another day going back to repay the loan a few weeks or months later. Instead you have access to funds you desperately need from someone in your village or a nearby village. The cost in terms of time and effort is low – you can spend that time working in the fields or repairing the house instead.

However, I saw an advert on South African television last night. I will have to do some rounding, but approximately, you can buy a new laptop for around R350 per month over 30 months – that works out at R10,500 (about $1,400). The advert didn’t really give the specifications but that seems expensive to me, even if we discount it by (amongst other things) inflation over the next 30 months.

However, the advert did also say that if you pay up front you can pay just R6,000 (about $800) – bargain!

For me, that implies some (fairly high) positive rate of interest*, but the advert claimed that the interest rate is 0%. Unbelievable! How can they get away with that?

I don’t know what the law says, but I think that it depends upon the framing. If you frame the cost as being R350 per month over 30 months, then that is the cost – and there is no interest to pay. You then get a discount if you pay it all up front – and a rather heavy discount at that. If you frame the sale as the price you pay up front, but you pay more if you pay over time, then there is clearly an interest rate. It seems very misleading towards consumers for me.

Interestingly, this method is basically the more or less the same as Islamic loans in which interest is not charged but a higher price is charged than the ‘pay now price’ and the buyer pays either in installments or as a lump sum at some point in the future.

I don’t disapprove of high interest rates because it can mean that people have access to services that they would not otherwise have access to. But I do disapprove of consumers being misled with false claims of zero per cent interest, and my feeling is that this is what is happening here.

*I’ve not got time to do the exact calculation now but I’ll give it a ball-park figure of around 35% Annual Percentage Rate (APR)

Tuesday, December 8, 2009

Une phrase intéressante

« Seulement 10 pour cent des hommes et six pour cent des femmes utilisent de préservatifs quand ils ont des rapports sexuels pour la première fois »

Question/ Comment est-ce que c’est possible que 10% des hommes utilisent de préservatifs quand ils ont des rapports sexuels pour la première fois alors que ce n’est que 6% pour les femmes ?

Réponse/ Les 90% des hommes qui n’en utilisent pas doivent coucher avec plus de femmes que les 10% qui en utilisent. C’est bien ce que dit la recherche sur le sujet – tant au niveau anthropologique qu’au niveau génétique – peu d’hommes sont responsables pour la plupart d’enfants.

C’est lié au livre « More Sex is Safer Sex’ » (voir aussi ICI) dans lequel l’auteur explique que si ceux/celles qui sont les moins – disons – actifs ont un comportement plus sensé (c’est-a-dire qu’ils ont plus de probabilité d’utiliser des préservatifs) ça serait bien pour la société qu’ils deviennent plus actifs au niveau sexuel parce qu’ils déplaceraient (du « marché sexuel ») d’autres personnes qui ont moins de chance d’utiliser des préservatifs.

C’est dommage que, dans cet exemple, les hommes les moins sensés couchent avec plus de femmes que ceux qui sont plus sensés. Encore plus dommage que ça ne soit que 10% d’hommes et 6% de femmes qui se protège quand ils ont des rapports sexuels pour la première fois (je dis « hommes » et « femmes » mais selon l’article « l’activité sexuelle commence dès 12 et 14 ans, respectivement pour les hommes et les femmes »).

Le taux de SIDA au Lesotho est environ 25%.

Friday, December 4, 2009

Friday links

See all Friday links.

1/ A great summary of for and against Randomised Evaluation (myself, I am a fan) – the current hot topic in development economics.

2/ A powercut in a ministry in Ghana means everyone moves to the same large room with power. A great natural experiment to see who is working and who isn’t and the impact of better communication in Government.

3/ Likelihood of breast cancer – what the statistics say. A nice application of Bayes Rule to show that reliability of results may not be as good as it first seems and that the negative impact of unnecessary invasive surgery may mean it is actually better reducing the number of scans for some groups. See HERE for a post on the importance of getting the statistics right in medicine.

4/ Google Image Swirl – I am loving it!

(image via Chart Porn)

5/ La faillite de la théorie du consommateur au Burundi – j’adore les exemples suivants :

a/ « M., je viens chez vous pour vos yaourts, car vous êtes le seul à les vendre, mais j’achète mon café chez fido dido qui est 25% moins cher, ainsi que mon déodorant, qui est 50% moins cher. Si vous vendiez votre café et vos déodorants à un prix raisonnable, je n’irai plus chez fido dido, et je ferai toutes mes courses dans votre boutique. Pourquoi ne pas aligner vos prix sur la concurrence ?

Mais ici, c’est la qualité !

Mais non, ce sont exactement les mêmes produits !

Bon, désolé, c’est comme ça »

b/ « M., ça fait 6 semaines que je vous demande si vous avez des malboro lights (à chaque fois que je viens acheter mes yaourts), j’imagine que je ne suis pas le seul, pourquoi ne pas en commander ?

Aaaah, désolé, c’est comme ça »

Tuesday, December 1, 2009

Wife beating in Africa

HERE is an interesting story on a celebrity couple in Zambia who talk about their wife-beating past. Below is a quote:

"To be a man, you need to discipline a woman, give her a slap or two. You know, in our culture, it's OK because that's how we feel we love our women."

I wrote a blog a few months ago on wife beating in Lesotho and am still not quite sure how to react to the following survey results:

% who said that wife-beating is justified if...

...she goes out without telling him

28.3%

...she neglects the children

39.2%

...she argues with him

38.0%

...she refuses to have sex with him

25.7%

...she burns the food

15.3%


There is more information on the survey in the blog entry.

HERE is a really interesting take on the story from another blogger in Lesotho.