The Economic Way of Thinking

Where Have All The Big Bucks Gone?

One of the recurring conversations that comes up with folks who have hunted for a long time is that the racks (i.e., the number of antlers and their size) on deer are nowhere close to what they were "back in the day."  I have no clue if this claim is true, but it seems like it could be--there's more pressure and easier access to "swamp buck" today than there has ever been before. 

The "commons" problem is huge with the deer population, and there's absolutely no incentive to let the deer get bigger for next year's harvest when the guy a few 100 yards down from you is going to blast it anyway.  So, we're left with 6 and 8 point bucks being really big deer today when 10, 12, and 14 point bucks were commonplace not that long ago.  (Let's put modern-day privately farmed bucks aside). 

If the big bucks are in decline for commons problem reasons (again, I have no clue if they really are in decline), I'm left wondering: Why hasn't something similar to the catch and release ethic of fishing caught on with hunting?  To a great extent, it's the same sportsmen in both sports.  It's the same basic logic at work (i.e., "If I let it go, someone else will take it.").  Yes, it's true that you can't shoot and revive a deer like you can catch and release fish, but why hasn't a "no shooting spikehorns" (i.e., deer with just two antlers) ethic, for example taken off the way catch and release has for fishing?

Entrepreneurship Everywhere: Upper Michigan Style

Long before I formally learned the economic way of thinking in Dave's classes, I was learning economics and finance from my grand-father as a kid.  On our drives to and from "the woods" during hunting season, he would have me read the Wall Street Journal to him and explain what I had just read.  Many of the articles were about specific stocks and investing strategies, and it was my grand-father who first introduced me to the benefits of diversification and mutual fund investing.  (I won't hold his Fruit of the Loom stock recommendation against him for too much longer...the company went from $9 per share to bankrupt with me on board for the ride!). I bring up my grand-father because he also taught me something about entrepreneurship during our years hunting together. 

Long ago, in a galaxy that seems far, far away, my grand-father shot a HUGE 14 point buck.  So the story begins...

The rack on the buck was so large that he actually saw the deer's horns while it was bedded down in an open field.  After shooting and cleaning up the deer, another hunter from lower Michigan came onto the scene.  The man cut right to the chase and told my grand-father he was on his way back south.  The man wanted more than anything to be bringing home a deer to his family, and he offered my grand-father $50 for the deer.  It was the largest deer my grand-father had ever shot, and the decision must've been a tough one.  Within seconds, though, my grand-father said, "Sure," and the man was on his way with a 14-point buck and, no doubt, a completely fabricated story to impress his wife.   

It's one of my favorite hunting stories.  Now that I'm an economist, my grand-father's thinking makes so much more sense to me than it did when I was a kid. 

The Economic Impact of Deer Hunting

Here are some slides from Chuck Nelson of Michigan State University that describe the economic impact of deer hunting in Michigan.  The data are neat to flip through.  For example, the average hunter spends $574 per year on "equipment" in Michigan, and this is declining from its 1996 level. 

Drawing inferences from these data should be done with a great deal of caution, however.  To talk of deer hunting as being stimulative, for example, seems to be making the classic mistake of confusing the seen (money spent on hunting) with the unseen (money that could have been spent elsewhere or saved). 

To talk about non-resident deer hunting in MI in "balance of trade" language, which Nelson does on the fifth slide above, seems dangerous and flawed as well.

Also, nearly every economic impact study discusses multiplier effects; Nelson's is no exception.  I don't know about Nelson would like the hunting multiplier to be, but more often than not studies about "The Economic Impact of X..." produce multipliers that are way too high.  In Warner Robins, GA, for example, we often hear people say the multiplier for military base spending is close to 4; reliable friends tell me it's more like 2 (or 1). 

In sum, here's about all I will go out on a limb and say about the economic impact of hunting: it's beneficial to the hunters and probably not so much fun for the hunted!

Back to God's Country

Here's an action shot for y'all from last year's hunt:

 

I'll be in God's country for the next week chasing after deer (kind of) and enjoying the peace, serenity, and freezing cold air that comes with early mornings on the deer stand.  My blogging may be light, and it may take on a bit more of a hunting and economics theme over the next week or so...

Empty Nests

Over at the DOL blog, my friend, Bob Lawson, calculates the yield on an empty nest in Detroit, The Pontiac Silverdome. 

Here's a story on how Beijing's "Bird's Nest" has also become an empty nest. 

Assorted Links

(1) I'm not a fan of generalizations about generations (e.g., Gen X, Gen Y, Baby Boomers), but here's a story about the increased restlessness of Gen X (which I'm barely a member of!). 

(2) Holy schnikes water!  Here's Don Boudreaux's latest "cleaned by capitalism" post. 

(3) Here are Pete Boettke and I arguing for debt repudiation instead of the usual government "juggling tricks" in the East Valley Tribune.  We think it's ranked 100th in the US by circulation. 

(4) In praise of Belichick. 

(5) Gold prices keep rising. 

Sabermetrics (With a Big S)

Sabermetrics (with a big S) has become a club focused on rhetoric, not a serious research program.

That's economist J.C. Bradbury pleasantly surprising me by showing up on my favorite Atlanta Braves blog, Chop-n-Change.  Here's the entire interview. 

Marathon Variability

Paul Kedrosky asks readers why the Boston Marathon seems to have more variability in winning times than the New York Marathon in recent years.  Here are a few explanations I'd add to the good comments he's already received:

(1) The Boston climb comes late in the race, which is mentally tricky.  Few marathon designs are built to break runners late in the race.  I've been humbled by Boston once, and I'm not in a rush to go back real soon.

(2) Boston weather changes A LOT on the day of the race.  Even if the race starts cold, you often finish with warm temps.  Two years ago, many people finished and had hypothermic like symptoms at the finish line--blue fingernails, purple lips, etc. And, that was a race where the weather was mostly fine.  However, going from 35 degrees in Hopkinton at 7 am to 65 degrees at the end of a marathon is a tough physical adjustment.

(3) For mere mortals, the time out in Hopkinton pre-marathon is a huge pain.  You're bussed out there three hours in advance of the marathon start time, and you're left to shiver with friends.  The elites get better treatment than us mortals, but everything in one's routine (e.g., food intake, etc.) is a bit off. 

(4) The wind problem of 2007, which is mentioned in the comments, is right on.  Bob Lawson can tell you good stories of people in snowsuits at the start line that year!

(5) Going back to 1980, prize money for the two races has not been the same over time and has affected the fields.

HT: Tyler Cowen

Miscellaneous Replies To E-mail

One byproduct of blogging that I generally enjoy is the occasional personal e-mail in response to a post.  People have sent notes to me about posts that stink, posts they enjoyed, posts where mistakes were made, and news stories that I should think about blogging about in the future.  For example, here are some of the things I've received e-mails about lately:

(1) My post about the NABE from a couple weeks ago led a reader to ask me about "Dr. Doom" (a.k.a., Noriel Roubini) and Mark Zandi.  He asked whether or not I thought these guys are better forecasters than the rest.

I don't know.  From what I've seen of him, Zandi is all over the place.  I saw him on ABC News a couple of nights ago saying stimulus "saved" us from a prolonged recession.  Of course, he failed to mention that, to date, just 15-20% of stimulus money has been spent.  CNBC's great bulldog, Rick Santelli, has called Zandi out a number of times. 

Dr. Doom strikes me more as a case of a broken clock getting the time right twice per day. 

(2) Have I seen the story about three people dying in the Detroit Marathon? 

Of course.  It's sad and tragic.  But, it's worth noting that these were the first deaths in the Detroit half/full marathon in 15 years.  That's a lot of runners crossing the finish line in between deaths.

The odds of dying in a marathon remain somewhere between 1 in 60,000 and 1 in 125,000.  The far greater risk to runners is not race day, but, rather training days.  Sad exhibits here and here. 

(3) Human-created "financial terrorism" is supposed to hit markets on Wednesday, November 4th.  Of course, the whack job who sent me that e-mail recommended I call him before taking any action with my portfolio!

It's Not The Marathon; It's The Runner

This morning's Wall Street Journal has an article titled "The Fleeting Benefits of Marathons."  Contra Art de Vany, the article acknowledges the growing body of research that has found significant cardio benefits from long-distance running and reduced risks of cancer and other disorders. 

The article then talks about how marathoners are not enjoying long-lasting health benefits after running a marathon, and it makes marathoning sound akin to a "crash diet" where people experience fleeting weight loss and health benefits.

I have no doubt about the "crash diet" result.  What I do take issue with is the idea that running one marathon--by itself--promises permanent weight loss, health improvements, and the fountain of youth.  Like any type of exercise, the key is that the exercise be sustained.  Why would anyone expect something different from the marathon? 

To truly capture the health benefits of long-distance running, a better approach than looking at people after one marathon would be to separate marathoners into two groups.  Group 1 would include those who run a marathon to check off a box on the "bucket list" and say, "Never again."  Group 2 would include those who have run multiple marathons.  I suspect significant health differences between the two groups. 

The Scourge of McCarthyism

The subtitle for the EWOT blog reads: "Clear conjectures about a complex world."  Before the 2009 baseball season I made a clear and bold conjecture about the Chicago Cubs.  So far, so good on that long-term prediction.

Here's another sports related one: the Green Bay Packers will never win a Super Bowl with Mike McCarthy as their coach.  The man is too indecisive, sometimes too conservative  and sometimes too aggressive, and too predictable in his play calling.  He has also forced me to eat Humble Pie, as I came out on the losing end of the following bet with my friend, Bob Lawson:

"If Ochocinco scores a TD against EITHER the Pack or Vikings, I [Scott] dawn the Bengals jersey.  If not, it's you [Bob] dawning a Packers jersey.  The loser must post embarassing jersey pics to Facebook."

Markets Work

The Atlanta Braves are playing with their backs against the wall for a spot in the playoffs; my "real" team, the Chicago Cubs, are playing for next year.  If the Braves can go 13-2 or better in their final 15, I think they can still get in as the NL Wild Card team.

Despite having a slim chance of making the playoffs, Braves tix on Stubhub for Sunday's home game could be purchased for as cheap as $1.75 per ticket as of Saturday morning!  The face value price of these tickets normally ranges from $6-$16.

Tickets to Wrigley Field for games against the Pirates are also cheap.  Some are going for $4.99 per seat now that we can put a fork in the Cubs for this year. 

For all of my friends who say things like "tickets to Wrigley are impossible to get these days because of how trendy going to Wrigley has become," I say wait for the annual collapse and head to Stubhub.  It looks to me like you can get as much of Wrigley as you want on the cheap right now! 

Running Miscellany

1.  Usain Bolt is just the 30th fastest land animal, and he places behind the white tail deer, warthog, grizzly bear, and house cat. 

2.  Having good instincts is said to be part of the difference between American marathoners and Africans.  Kara Goucher, who is featured in the above link, ended up finishing 10th in the world championships.

3.  Exercise appears to be addictive and leads to writhing, chattering teeth, and swallowing movements.  

4.  The battle between "old school" and "new school" (or, is it conventional vs. unconventional?) runners has extended to shoes.  Old schoolers, for example, believe in stretching; new schoolers stretch little to not at all.  Old schoolers believe in high mileage; new schoolers believe in quality miles over quantity.  The old schoolers once believed in minimalist shoes.  Over time, the consensus shifted towards shoes with greater absorption.  Now, the consensus may be shifting back to minimalism in shoe padding. 

5.  Here and here are Justin Wolfers discussing marathoning and economics at the Freakonomics blog.  Wolfers ran a "Wisdom of Crowds" contest on his recent marathon that I may have to imitate in the spring, when I take my first shot at a sub-3 hour marathon time.  As my speedster friend (and old schooler), Gary Wolfram, likes to say, "A two in front of your time looks so much more respectable than a three..."  More details on my program in eight weeks or so. 

Convergence Anyone?

Usain Bolt's awesome performance in the 100 meter dash on Friday night at the London Grand Prix, despite the doping controversy surrounding five of Jamaica's sprinters, has many talking about whether a 9.5 second time or even a 9 second time might one day be within reach. 

Talk of new floors in the 100 got me thinking about one of the big floors in marathon running: a sub-two hour run (just over a 4:30 pace per mile).  I'm optimistic that I will see this achievement in my lifetime because of this picture (interactive version of graph here):

 

Since 1908, the world record marathon time has been dropping at a rate of 50.81 seconds per year for men; since 1970, the women's world record time has averaged 1.22 minutes per year.  When we move closer to the present, male record times have dropped by 16.4 seconds per year since 1984; female times have been dropping by 28.1 seconds per year since '83.  In the first nine years of the 21st century, the world record time for females has been trimmed by another four minutes, and the male record time has fallen by nearly 1.5 minutes.  I'm confident these trends can continue.

In addition, it's not that hard to imagine women coming even closer to the male world record!  In 1970, the best male time was 70% of the best female time.  Today, the best male time is 92% of the best female time.  In other words, there's been convergence across genders big time.  Does anyone want go out on a limb and say that a female marathoner will one day hold the world record?  I do. 

Zen and the Art of Cycling

Does anyone else watch the Tour de France and wonder about the return to team production?  It sure seems like the marginal returns from sticking with the pack must be extremely high for Lance to be so upset with Contador. 

While I can't quite figure out all of the different performance dimensions a rider's trying to maximize over in the Tour, the complexity and strategy of the sport make for enjoyable viewing for those with a background in economics.

As a somewhat random aside, here's a good friend from high school, Frank Pipp, talking about the life of a professional cyclist. 

Addendum: Loyal EWOT reader, Zac, linked to an article in the comments that was, well, worthy of an addendum.  Here it is.  From the article, the peloton sounds like a nice example of spontaneous order in sports.