qui tacet consentire videtur

love, liberty, and economics

January 27th, 2006

Hiatus

Unfortunately, this few weeks has been rather busy and will continue to be for the weeks ahead as I rush to arrange some sort of post-freedom unpaid employment experience and fulfill some precommitments. As it is I will not be able to do justice to the proper posts I want to write on:

- Conscription as regressive taxation, and gender market distortion
- What factors affect Chinese New Year red packet amounts?

And no less important:
- Hana Yori Dango (the hit j-drama of yesteryear)
- Nobuta wo Produce (the other hit j-drama… Nobuta Power!!! *twist*)
- MiSa (which I just finished)
- Goong (which I’ve just started on)

Look forward to it!

Ja.

January 21st, 2006

Courage

I attended Claire’s recital at the Esplanade library today with the CAPper kids - ran into dominic soon there too - and I realized that she’s living the dream. The dream of freedom from the usual JC/A-levels ordeal, freedom from the whole wharton running of the bulls preprofessional rush (though she goes to hopkins, arguably prepro in a different way). Doing what she wants to do rather than trying to rationalize what must be done.

Of course she’s very good, that goes without saying. I’ve heard all her songs before on her CD, and it seemed about the same listening to her live at the open mic. Whether in Baltimore or here, she’s so much further away and further on in life than I am. I wish I had her courage to dream and live it.

On another note, I’ve finished reading the first Book of the New Sun, and am looking for the second. I’ll reserve my review until I’ve read that, but I think what makes Gene Wolfe’s tetralogy truly groundbreaking for SF (it’s an SF novel disguised as fantasy) is how he constantly toys with reader expectations on the genre and makes us reassess and carefully scrutinize every nuance and detail. I’ve started on Monkey Business and Confessions of an Economic Hitman, both for my current internship quest.

January 21st, 2006

Transactionary concepts of friendship

Friendship (or any other relationship for that matter) can be seen as a transaction between two parties for mutual benefit, in an enlightened-utilitarian perspective on benefit that takes into account subjective preferences. This model scales upward - acquaintances trade only at the lowest levels of recognition, friends trade in shared time in a common hobby, partners in shared effort to a common goal, and beyond that trading in levels of intimacy. They need not necessarily be trades in the same commodity (husbands and wives traditionally contribute different things), but for equal value - a fair trade. X gains the same amount of utility as Y does, even though X and Y may contribute different quantities of different resources.

In an efficient market, the market for friends clears perfectly and everyone matches up to everyone else in a fair trade. But the market is not so efficient - geographical distance, some measure of exclusivity inherent in relationships, informational asymmetries - results in unequal friendships. Simply put, X needs Y more than Y needs X. The utility gains of Y are less than the utility gains of X. Or vice versa. Transaction volume decreases to the point where utility gains are equal again.

Actually I haven’t really thought this through very well. But suffice to say that my initial conclusion is that individuals should aim to possess the highest utility-value and thus be able to trade at the top levels.

January 8th, 2006

The Decline and Fall of the Anglo-Chinese School, part 3

My own alma mater, Anglo-Chinese Junior College, has a twenty-year-plus tradition called ‘fun-o-rama’, a biennial school carnival, the proceeds of which go into the school’s building expansion fund. I participated in this carnival in my own time at the school, manning my class’s stalls, and selling coupons. At the time, it was an enjoyable experience, and I have (mostly) fond memories of it.

Perhaps in light of ACS’s present circumstances, it is time for a more objective look at this school tradition.

Proponents of maintaining the ‘fun-o-rama’ tradition usually conflate two separate issues: the carnival as a source of revenue, and the carnival as a social-cohesion activity. The carnival is meant to generate revenue for its expansion, and to provide a shared experience that bonds students. Other reasons cited are developing entrepreneural skills but I will not address those here.

As a source of revenue, the carnival is highly inefficient. Many of the coupons are purchased by the students themselves and their immediate family and friends (which often belong to the same extended ACS old boys network). The goods and services in the carnival are provided by the students and paid for out of their pockets (or their families’ or friends’ or in-kind donations), which are then purchased by coupons. The result is a complicated series of transactions between closely related agents that tends to hide its effects - a regressive incidence that falls heavily on students and their families, with large overheads and expenses. Unlike a donation drive, this process loses much of the potential revenue in conversions, which is a highly inefficient way to transfer funds from students to the school. Some people might argue that the process itself ‘creates demand’ (or supply, depending how you look at it) like Say’s Law - the question then is whether the demand generates more revenue than the process loses through inefficiencies. My guess is that it does not. Alternative revenue streams might include soliciting direct and corporate donations.

I won’t even talk about opportunity cost here.

The second issue of cohesion is vitally important, as much of ACS’s appeal is to a sense of identification with the school even decades after graduation. The Ivy League schools amass huge alumni donation rates because of this brand identification. This is partly material (networking benefits, alumni connections, some prestige that comes with association) and partly sentimental. Fun-o-rama is a powerful experience - yet many of the ways it functions is detrimental to this purpose. Purchasing (and selling) coupons is often coercive rather than voluntary, often playing on tunes of guilt and duty. Students, family, friends, and alums are all subjected to an increasingly hard-sell campaign. This tends to drain rather than build goodwill.

The problem is that many people can identify these problems but tend to conflate the two issues. They rationalize the inefficient revenue process with the community goodwill it (supposedly) generates, or they rationalize its coercive nature with the need to generate revenue (however inefficiently). My answer is to delink these two purposes - Fun-o-rama must reform itself into a purely cohesive activity (its core compentency) and forget profit (which it was never suited for). This will allow carnival organizers to relax and focus on creating a great (and completely voluntary) experience that students will remember.

However, I fear that ACS’s culture will make reform unlikely. The hard-sell nature of fun-o-rama comes from a hard-sell of all ACS paraphenalia - I’ve bought all kinds of ACS pins, mugs, bears, tickets, coupons etc. We have reached a point where overloading alums will have negative returns. Yet we never seem to learn.

I will write more on alternative revenue streams for ACS in the future.

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