Progress Daily

Consumers saved $7 billion by shopping on eBay in 2003, according to a study by Wolfgang Jank and Galit Shmueli (”New Research Finds Consumers Save More Than $7B by Shopping on eBay“).

The researchers measured the money shoppers were willing to pay for a product versus what they actually paid. On average, users paid $4 less, the study found.

Given the huge number of auctions on the site, the savings added up into the billions of dollars.

The researchers used data from a sniping service, Cniper.com, operated by Ravi Bapna.

Sniping services are used by shoppers to help them automatically place bids in an auction during its final seconds. Shoppers set the maximum price they are willing to pay and the technology does the rest.

The researchers found in the 4,500 auctions they examined that users frequently won items before reaching their maximum bid.

“The more you spend on eBay, the more you save,” by Verne Kopytoff

Daniel Esty analyzed the Environmental Sustainability Index, which grades the “environmental health” of 150 countries. He found that the single biggest variable in determining a country’s ranking is income per head.

Economic growth offers solutions to the sorts of environmental woes (local air pollution, for example) that directly kill humans. About a quarter of all deaths in the world have some link to environmental factors. Among these killers (especially of children) are diarrhoea, respiratory infections and malaria.

As poor countries get richer, they usually invest heavily in environmental improvements, such as cleaning up water supplies and improving sanitation, that boost human health. (Their economies may also shift gear, from making steel or chemicals to turning out computer chips.)

But the link between growth and environment is much less clear when it comes to the sort of pollution that fouls up nature (such as acid rain, which poisons lakes and forests) as opposed to directly killing human beings.

A mixture of factors related to good government -— accurate data, transparent administration, lack of corruption, checks and balances — all show a clear statistical relationship with environmental performance. Among countries of comparable income, tough regulations and, above all, enforcement are the key factors in keeping things green.

“How green is their growth,” The Economist

In China 25 years ago, over 600m people — two-thirds of the population — were living in extreme poverty (on $1 a day or less). Now, the number on $1 a day is below 180m. Worldwide, 135m people escaped dire poverty between 1999 and 2004. This is more people, more quickly than at any other time in history.

In 2007 Unicef said that for the first time in modern history fewer than 10m children were dying each year before the age of five. That represents a fall of a quarter since 1990. Three-quarters of people aged 15-25 were literate in 1975; now the rate is nearly nine-tenths.

The fertility rate in low- and middle-income countries has crashed. In East Asia and the Pacific, the rate was 5.4 in 1970. Now it is 2.1. In South Asia, the fertility rate halved (from 6.0 to 3.1). In the world as a whole, fertility has fallen from 4.8 to 2.6 in a generation (25 years).

The biggest decline is in those countries that are most involved with globalization (especially in East Asia, though China is a special case because of its one-child policy). With the exception of Yemen, all the countries with fertility rates over 5.0 are in Africa.

In closed agrarian societies, families need a lot of children as insurance against disaster. But in countries that have opened themselves up, families can rely on other sorts of protection, such as urban jobs or trade.

These demographic changes help to create a virtuous circle of growth. When fertility rises then falls, you get a bulge of people at and just after the inflection point. Between 1960 and 1990 Europe and America had relatively few old people (because mortality rates had earlier been high), relatively few children (because fertility had fallen) and a disproportionately big number of economically active adults.

Developing countries are seeing a similar confluence now.

A World Bank study of 19 poor countries concluded that every 1% increase in national income per head translates into a 1.3 point fall in extreme poverty.

Last year the global economy entered its fifth year of over 4% annual growth — the longest period of such strong expansion since the early 1970s. Unlike previous expansions, inflation remained relatively tame.

During this boom, according to the World Bank, national income in the European Union rose slightly more than in America for the first time in a decade. Growth in East Asia was 10%, in South Asia over 8%, in eastern Europe almost 7% and in Africa, thanks to the commodity boom, over 6%. Almost half of humanity, spread over more than 40 nations, lives in countries growing at 7% a year or more (a rate that doubles the size of an economy in a decade). This is twice the number of fast growers that existed in the years between 1980 and 2000.

The world’s economic balance is tilting from rich industrialized countries to emerging markets. Their share of world output in 2006 was just below half, and rising.

Since the mid-1990s, the incomes of the poorest fifth have risen everywhere except, marginally, in Latin America, where they have been affected by the after-shocks of debt crises. In Asia, the real incomes of the poorest fifth rose 4% a year; in Africa, by 2% a year, faster than the rise for other income groups.

The World Bank labels as “fragile” (as opposed to “failed”) troubled countries where the government has partial control of territory (Sudan), where it cannot deliver basic services (Zimbabwe) and places with high levels of political conflict (Nigeria).

Fragile states contain roughly half the developing world’s childhood deaths. About a third of their people are undernourished and more than that do not have access to drinking water. Most of the countries with fertility rates over 5.0 are fragile. They are much more likely to be affected by wars, refugees and every sort of political crisis.

“Somewhere over the rainbow,” The Economist

According to “Marketing actions can modulate neural representations of experienced pleasantness,” by Antonio Rangel, Hilke Plassmann, & Baba Shiv, if people are told a wine is expensive while they are drinking it, they think it tastes nicer than a cheap one.

The researchers used fmri (functional magnetic-resonance imaging) to scan the brains of 20 volunteers while giving them sips of wine.

Dr Rangel gave his volunteers sips of what he said were 5 different wines made from cabernet sauvignon grapes, priced at between $5 and $90 a bottle. He told each of them the price of the wine in question as he did so. But he lied. He actually used only 3 wines, and served two of them twice at different prices.

The scanner showed that the activity of the medial orbitofrontal cortices (an area of the brain responsible for registering pleasant experiences) of the volunteers increased in line with the stated price of the wine. When one of the wines was said to cost $10 a bottle it was rated less than half as good as when people were told it cost $90 a bottle, its true retail price. When the team carried out a follow-up blind tasting without price information they got different results. The volunteers reported differences between the three “real” wines but not between the same wines when served twice.

Nor was the effect confined to everyday drinkers. When Dr Rangel repeated the experiment on members of the Stanford University wine club he got similar results.

This research suggests that a successful marketing campaign can not only make people more interested in a product, but also make them enjoy it more.

“Hitting the spot,” The Economist

The cost of developing drugs for rare and common diseases are about the same, but the revenues aren’t. Pharmaceutical companies concentrate on drugs with larger markets because larger markets mean more profits.

As a result, patients diagnosed with rare diseases — those ranked at the bottom quarter in terms of how frequently they are diagnosed — are 45% more likely to die before age 55 than are patients diagnosed with more common diseases.

If China and India were as wealthy as the U.S., the market for cancer drugs would be 8 times larger than it is today.

Cancer is now China’s leading killer, with spending on treatment increasing by 17% per year. AstraZeneca and Novartis are building major research facilities in China, which will benefit patients everywhere.

There are only about 6M scientists and engineers in the entire world, nearly a quarter of whom are in the U.S. If the world as a whole were as wealthy as the U.S. and were devoting the same share of population to research and development, there would be more than 5 times as many scientists and engineers worldwide.

Even small changes in economic growth rates produce large benefits. At current income levels, with an inflation-adjusted growth rate of 3% per year, America’s real per capita gross domestic product would exceed $1 million per year in just over 100 years, more than 22 times higher than it is today.

“Dismal Science Sees Upbeat Future,” Alexander Tabarrok

Prior to Eric Turkheimer’s 2003 paper “Socioeconomic Status Modifies Heritability of IQ in Young Children,” scientists had found that genes account for most of the differences in IQ.

Turkheimer found that although the environmental impact on IQ is very small when you look at families with incomes in the moderate range, the reverse is the case when you look at very low-income families.

Impoverished families were underrepresented in most earlier studies.

Two things made Turkheimer’s project possible: the public release of a large, rich database including an unusually large number of children from families of very low socio-economic status; and advances in statistical methods that use computers to carry out huge numbers of computations very quickly.

Research like Turkheimer’s relies on the difference between fraternal twins, who are as genetically similar as any siblings, and identical twins, who share exactly the same genes.

For traits that are primarily determined by genes, identical twins will show no variation, but fraternal twins will. For traits that are determined by environment, identical twins and fraternal twins will show similar patterns of variation in the trait. For traits that reflect an interaction between genes and environment, identical twins will show somewhat less variation than fraternal twins.

Turkheimer found that for the families in the study at the very bottom of the socioeconomic scale, shared environment accounted for 60% of the variance in IQ; and the contribution of genes was close to zero. Non-shared environment, which includes factors such as gender, accounted for the remainder.

Further up the socio-economic ladder, the effects of environment rapidly declined, and genes took on an increasingly important role.

The research does not identify the specific environmental factors that contribute to the variations in IQ among impoverished children.

“New Thinking on Children, Poverty & IQ,” by Jan Richter