Worldwide map of organized crime
18 Feb 2016 Leave a comment
in economics of crime, law and economics Tags: organised crime
@RusselNorman @JanLogie #AirPollution in NZ & abroad @TransportBlog
16 Feb 2016 Leave a comment
in economics of crime, environmental economics
The lack of celebration of the low levels of air pollution in New Zealand by Greenpeace, the Greens and environmentalists can only be explained by mass kidnapping. Otherwise they would be dancing in the streets. We pray for their early release from their outrageous captivity by mystery hostage-takers.
Creative destruction in dating markets
16 Feb 2016 Leave a comment
in economic history, economics of love and marriage, population economics
Source: The graphs that show the search for love has changed – BBC News via @paul1kirby and @petrmisan
Milton Friedman on racism and sexism in Hollywood, today and yesterday
16 Feb 2016 Leave a comment
in applied price theory, discrimination, economics of media and culture, entrepreneurship, labour economics, law and economics, liberalism, politics - USA
David Henderson reminded me of the superb discussion by Milton Friedman in Capitalism and Freedom of the way in which the marketplace erodes prejudice.
Source: Milton Friedman on Trumbo, David Henderson | EconLog | Library of Economics and Liberty.
Scalia on who should decide vexing social issues @PeterDunneMP
15 Feb 2016 Leave a comment
in comparative institutional analysis, constitutional political economy, law and economics, politics - New Zealand, politics - USA Tags: abortion rights, marijuana decriminalisation
Justice Scalia on whether a disabled PGA golfer could ride a golf cart
14 Feb 2016 Leave a comment
in economics of bureaucracy, law and economics, sports economics
Source: PGA TOUR, INC. V. MARTIN via Jonathan Alder.
Justice Scalia on corporate free-speech
12 Feb 2016 Leave a comment
in constitutional political economy, law and economics, liberalism
Mandatory layoff notice by length of job tenure in the G7, Australia, New Zealand, Ireland, Scandinavia, Greece and Spain
12 Feb 2016 Leave a comment
in labour economics, law and economics, property rights, unemployment Tags: employment law, employment protection laws, employment regulation, mandatory notice, severance pay
Mandatory notice periods for layoffs put the very survival of troubled the business at risk. By having to give long periods of notice, a firm experiencing a downturn is less able to adjust quickly and more likely simply to go out of business because it cannot meet its larger payroll.
Source: Labor Market Regulation – Doing Business – World Bank Group.
Sex differences in the minimum acceptable romantic partner
11 Feb 2016 Leave a comment
in applied price theory, economics of love and marriage, gender, labour economics
Richard McKenzie wrote a couple of papers over the last 10 years pointing out that the connection between the labour market and the marriage market will entrench the gender wage gap.
Across all cultures, good financial prospects influence female choices of a partner. Because income influences the prospects of men more than it does women in the dating and marriage market in all cultures, men have an extra incentive to work hard and an additional reward to that of women when they invest in human capital, riskier jobs and longer hours.
Seinfeld had a simpler explanation of this: men are shallow, it goes with the territory.
The only way that men will stop investing in better economic prospects as a way of winning better girlfriends and wives, is for women to lower their standards.
The response of less educated women to more and more of the better educated men and women pairing off together was to stop marrying what was left in the dating pool and have children on their own rather than drop their standards.
The international drug trade mapped
11 Feb 2016 Leave a comment
in economics of crime, economics of regulation, international economics, law and economics Tags: drug trafficking, economics of prohibition, smuggling
Mandatory severance pay by length of job tenure in the G7, Australia, New Zealand, Ireland, Scandinavia, Greece and Spain
11 Feb 2016 Leave a comment
in human capital, job search and matching, labour economics, labour supply, law and economics, managerial economics, organisational economics, personnel economics, property rights, unemployment Tags: employment law, employment protection laws, employment regulation, firm-specific human capital, job search, labour market regulation, severance pay
There are a wide differences across the OECD in mandatory severance pay in the event of a layoff.
Source: Labor Market Regulation – Doing Business – World Bank Group.
Severance pay makes it more expensive to fire and therefore more expensive to hire. This means fewer job vacancies will be created but they will last longer.
The presence of mandatory severance pay could increase or reduce the unemployment rate but unemployment durations will increase because it takes longer to find a suitable job match among the fewer available vacancies.
Mandating severance pay does not make the job match inherently more profitable. It just redistributes some of the surplus from the job match to the end when it is terminated.
Employers and jobseekers may agree to severance pay where investments in firm specific and job specific human capital for the job is profitable.
Severance pay in these circumstances gives the employer and more reasons to invest in specific human capital. The promise to pay severance pay will make the employer hesitate to lay them off. The employer will instead retain them over a slack period or redeploy them within the company rather than pay them out. This pre-commitment encourages investment in firm specific and job specific human capital by both sides more secure, which makes the job match more profitable overall for both sides.
Of course, if it was possible to negotiate completely around severance pay mandated by law, there would be no effects on hiring, firing and unemployment durations. All it would mean is take-home pay would be less but in the event of a layoff, these employees would get that this wage reduction back as a lump sum.
Official and legal fees of starting a new business in OECD countries, World Bank Doing Business rankings, 2016
11 Feb 2016 Leave a comment
in industrial organisation, law and economics, property rights Tags: doing business
In some countries, the official and legal fees of setting up a business are trivial but in other countries they start to mount up.
Source: Data from the Doing Business Project – World Bank Group.
Paid-in minimum capital (% of income per capita) required to start a business in OECD countries
10 Feb 2016 Leave a comment
in economics of bureaucracy, economics of regulation, law and economics, property rights, Public Choice Tags: doing business
The most mystifying bureaucratic rule I have come across is in Western Europe. A number of these countries require entrepreneurs deposit a minimum sum of money in a bank or before a notary up to a month before registration and 3 months after incorporation. If they cannot do this, they cannot start their business lawfully.
Source: Historical Data – Doing Business- World Bank Group.
I am mystified as to what this regulation is designed to do other than make it difficult to start a new business. It is a private commercial matter as to whether trade credit is extended to new businesses. That indeed is one of the challenges facing every entrepreneur: discovering who are reliable business partners or not.
One of the functions of banks is to issue letters of credit. These vouch for the financial strength of a customer when seeking new business or export markets.
Ease of doing business in Europe, World Bank Doing Business 2016 rankings
10 Feb 2016 Leave a comment
in applied price theory, industrial organisation, law and economics, property rights Tags: doing business, EU, Europe
For a rich country, Luxembourg is a pretty crappy place to do business – worse than Greece. Mostly due to terrible rankings for the Luxembourg legal system. Italy is not much better.
Source: Ranking of economies – Doing Business – World Bank Group.
Utopia, you are standing in it! 
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