Finding Lowest Cost Flights

Welcome back. I don’t fly much anymore, do you? Do you try all the hacks trying to find the cheapest flight? You know, travel on Tuesday, Wednesday or Saturday? Be flexible on days? Avoid peak travel times of summer and holidays? To fly in one peak season, book in the opposite season?

Flyopedia’s tips for getting the cheapest flights (from www.flyopedia.com/blog/amazing-travel-tips-for-getting-the-cheapest-flight-tickets/).

I wish you luck, but a recent study suggests many of those won’t work. Researchers with Chicago; California, Berkely; Texas at Austin; and Yale universities examined data from a large U.S. airline--daily prices and quantities, capacity choices, fare decisions, internal demand model, demand estimates, flight-level forecasts, pricing design, as well as all consumer interactions (clicks) on the airline’s website. The sample covered 300,000 flights and 470 domestic routes over two years.

What they found, which is representative of airlines around the world, was at odds with what most economists would expect and most consumers assume. Permit me to highlight some key points.

Convenience vs. Price
Travelers generally select flights that balance convenience and price: The price of one flight might lead people to select a less convenient but cheaper flight.

Airlines don’t consider that kind of substitution. Instead, they think about the prices of seats on each flight rather than the total seats sold in a day. This, despite changing the price on one flight, will affect the way people think about all options.

Pre-Set Prices
If one airline cuts prices, you would expect others to do the same. But airlines don’t incorporate competitors’ fares in price-setting. This is the result of the specific pricing heuristic--decision-making shortcut--airlines use.

Airlines have a fixed and relatively small number of prices they assign to tickets on each flight. There are large gaps between possible prices, sometimes $100 or more. They might sell the first 30 economy tickets at the lowest price, the next 30 tickets at the next possible price, and so on.

Tickets are sold through global distribution systems that ensure everyone sees the same price. The system emerged from an industry alliance to facilitate inventory management. Other travel sector businesses (e.g., hotel rooms, car rentals) do the same.

Airlines are thus relatively unresponsive to real-time changes in cost. The next discrete fare is often a significant jump.

Departments Don’t Coordinate
Probably the most interesting (OK, strangest) discovery is the process airlines use to set prices.

Following deregulation in 1978, airlines adopted pricing heuristics that relied on decentralized decision-making by separate departments. The network planning department decides where to fly and assigns initial capacities. The pricing department designs itineraries and chooses a menu of fares. The revenue management department (RM) estimates demand, develops flight forecasts and monitors flight-level performance. These inputs are then given to the observed pricing heuristic that decides how many seats it is willing to sell at each fare level.

Key departments and responsibilities at all airlines; solid arrows show decision flow across departments, dashed arrows show departments that influence the pricing heuristic (from fig 1, academic.oup.com/qje/advance-article-abstract/doi/10.1093/qje/qjad051/7284417).

The researchers document three problems.

First, the pricing heuristic does not solve a dynamic program. Every flight is optimized using the same heuristic, regardless of market structure.

Second, department input decisions are biased and subject to miscoordination. Departments do not incorporate all of the decisions made by other departments, leading to input decisions that are incompatible.

Third, departments manipulate inputs they supply to the pricing heuristic. For example, RM analysts inflate the demand model, causing 93% of flights to be over-forecasted. It’s estimated that over-forecasting demand reduces the percentage of flights that are priced on the inelastic side of the internal demand model by up to 60%.

Wrap Up
One of the researchers expects that, over the next several years, airlines may start to adopt more dynamic pricing platforms, and non-business travelers may benefit. For now, trying all the hacks in search of the lowest fares may be futile. 

Static vs. dynamic airline pricing strategies (from expertassignmenthelp.com/price-analysis-case-study-on-comparative-flight-prices/).

She does suggest not waiting until the last minute as prices go up significantly days before a flight. I haven’t looked at that lately, but thanks for stopping by.

P.S.
Study of an airline’s organizational structure and pricing in The Quarterly Journal of Economics: academic.oup.com/qje/advance-article-abstract/doi/10.1093/qje/qjad051/7284417
Article on study on EurekAlert! website: www.eurekalert.org/news-releases/1004467

Urban Park Health Value

Welcome back. When I departed academia, the remote sensing courses I taught were double-listed in Civil and Environmental Engineering and Agronomy, but they had always attracted an eclectic mix of students.

Occasionally we hired some of those students to support projects, especially in their areas of study. Through Landscape Architecture students, for example, I became familiar with landscape design and why I was attracted to a recent study even if it went way beyond design.

Researchers with the University of Waterloo’s School of Environment, Enterprise and Development applied an ecohealth valuation framework to estimate the potential economic value of health benefits of a proposed urban park.

The ecohealth framework was developed to support decision makers in understanding the economic returns of health benefits resulting from investments in urban parks and greenspace. The approach was developed under the leadership of Canada’s EcoHealth Ontario and Green Analytics.

Proposed Urban Park Health
The Waterloo researchers applied the framework to the development of a proposed park in Peterborough, a city on the Otonabee River in Ontario, about 78 miles (125 kilometers) northeast of Toronto. The city’s population was 83,651 in 2021. The proposed park is a 1.2 acre urban square to be developed on land used as a parking lot.

Annotated image of proposed park in downtown Peterborough (Fig. 1, www.mdpi.com/1660-4601/20/6/4815).

The landscape architect’s plan for the park had trees on the perimeter and near water geysers, seating in the trees’ shade, a public art display in the northwest, winter ice skating on a hard surface in the south, and space for a refrigeration building, change room and public washrooms.

Landscape architect’s plan for urban park; plan is oriented 90 degrees from annotated image of park (Fig. 2, www.mdpi.com/1660-4601/20/6/4815).

Ecohealth Framework
Health improvements contribute to economic savings by avoiding health system costs. The researchers focused on three areas where evidence linking urban parks to health outcomes is strongest: higher levels of physical activity, improved mental well-being and reduced exposure to air pollution.

Increased park use would support higher levels of physical activity and improved mental health; increased vegetation cover would reduce exposure to air pollutants.

Ecohealth framework applied to development of a new urban park, availability of park space, access to park amenities and increase in park use and vegetation (from Table 1, www.mdpi.com/1660-4601/20/6/4815).

Frequency of Park Use
The frequency of park use was derived from the population of the park service area and ease of access. The proposed urban park was designed to serve the community within 800 meters of the park, 5900 people of mixed age. Ease of access was estimated from literature and target distances commonly adopted by Canadian jurisdictions, equated to three distance measures--very easy, easy and more difficult access.

Calculating Economic Benefits
Drawing upon all available data and previous analyses, the researchers estimated:
-The economic value of increased physical activity by multiplying the increased number of people engaging in moderate to vigorous physical activity on a weekly basis by the avoided health care costs.
-The improvement in mental health condition by multiplying the population in the park service area by both the percentage improvement in mental health conditions attributed to the park and the avoided economic burden of mental illness.
-The economic value of the health benefits attributed to air quality by multiplying the tree canopy cover within the park by the annual health savings per unit area of cover.

Summary of annual economic benefits of proposed urban park (Canadian dollars, 2019). (Table 2, www.mdpi.com/1660-4601/20/6/4815).

Wrap Up
Competing land use pressures and costs of operation and maintenance can make it challenging for decision makers to support urban park development. Applying the ecohealth framework provided the economic value of health benefits linked to the proposed park.

What’s more, the case study included only a subset of known benefits. Future research could consider such benefits as respite from hot temperatures and noise pollution, increased biodiversity and both social benefits resulting from stronger community cohesion and improved life satisfaction.

I hope you were as impressed with the approach as I was. Thanks for stopping by.

P.S.
Ecohealth economic framework: static1.squarespace.com/static/5c3cebfd45776eee4408f72d/t/5ecb445972e6a72aac117171/1590379619631/FO_8.5x11_EH_REPORT_FA_4WEB+%281%29.pdf
Ecohealth study of urban park in International Journal of Environmental Research and Public Health: www.mdpi.com/1660-4601/20/6/4815
Article on study on EurekAlert! website: www.eurekalert.org/news-releases/989501

Disabled’s Labor Force Participation

Welcome back. Surprise! I’ve some good news for a change: People with disabilities maintained a record labor force participation rate, outperforming people without disabilities.

How to make your company accessible for disabled employees (photo from Bloomberg tweet, twitter.com/business/status/1640066137944731650).

The statistics were reported in the National Trends in Disability Employment (nTIDE), issued semi-monthly by Kessler Foundation and the University of New Hampshire’s Institute on Disability (UNH-IOD).

The UNH-IOD was established at the University of New Hampshire in 1987 to provide a university-based focus for improving knowledge, policies and practices related to the lives of persons with disabilities and their families.

The numbers in nTIDE are based on data from the U.S. Bureau of Labor Statistics Jobs Report, but they have been reworked by UNH-IOD to combine men and women of working age (16- 64). nTIDE is funded by Kessler Foundation, a major nonprofit organization in the field of disability and a global leader in rehabilitation research.

The labor force participation rate reflects the percentage of people that are working, on temporary layoff, on furlough, or actively looking for work in the last four weeks relative to the total population.

Year-to-Year nTIDE Change (March 2022-2023)
Likely reflecting the economy’s emergence from the COVID-19 pandemic, the labor force participation rate for people with disabilities (ages 16-64) increased from 37.8% in March 2022 to 40.2% in March 2023, a difference of 2.4% or a relative increase of 6.3% (2.4%/37.8%). The labor force participation rate for people without disabilities (ages 16-64) increased over the year from 77.2% to 77.6%, a difference of 0.4% or a relative increase of 0.5% (0.4%/77.2%).

nTIDE Year-to-Year Comparison of Labor Market Indicators for People with and without Disabilities (from www.eurekalert.org/news-releases/985442).

With regard to employment, a key indicator is the employment-to-population ratio, the percentage of people that are working relative to the total population. The employment-to-population ratio for working-age people with disabilities (ages 16-64) increased from 34.1% in March 2022 to 36.6% in March 2023, a difference of 2.5% or a relative increase of 7.3%. The employment-to-population ratio for working-age people without disabilities (ages 16-64) increased over the year from 74.5% to 74.9%, a difference of 0.4% or a relative increase of  0.5%.

Month-to-Month nTIDE Change (February to March 2023)
As for the monthly numbers, the labor force participation rate for people with disabilities (ages 16-64) remained at 40.2% from February to March 2023. For people without disabilities (ages 16-64), the monthly labor force participation rate increased from 77.3% to 77.6%, a difference of 0.3% or a relative increase of 0.4%.

nTIDE Month-to-Month Comparison of Labor Market Indicators for People with and without Disabilities (from www.eurekalert.org/news-releases/985442).

The monthly employment-to-population ratio for people with disabilities (ages 16-64) decreased from 36.9% to 36.6%, a difference of 0.3% or a relative decrease of 0.8%. For people without disabilities (ages 16-64), the employment-to-population ratio increased over the month from 74.4% to 74.9%, a difference of 0.5% or a relative increase of 0.7%.

In March, the 5,997,000 workers with disabilities represented 4.0% of the total 149,952,000 workers ages 16-64 in the U.S.

Wrap Up
Each nTIDE release is followed by an nTIDE Lunch & Learn online webinar. This live broadcast, hosted via Zoom Webinar, offers attendees Q&A on the latest nTIDE findings, provides news and updates from the field, and features invited panelists who discuss current disability-related findings and events. For information, visit: ResearchonDisability.org/nTIDE

Thanks for stopping by.

P.S.
The nTIDE March 2023 Jobs Report:
-  kesslerfoundation.org/press-release/ntide-march-2023-jobs-report-people-disabilities-maintain-record-labor-force?utm_source=Webpage&utm_medium=Hero_Banner&utm_id=nTIDE_March_2023_People_Disabilities%20Maintain_Record_Labor_Force_Participation_Rate
-  www.eurekalert.org/news-releases/985442
Kessler Foundation: kesslerfoundation.org/
University of New Hampshire Institute on Disability : www.researchondisability.org/
U.S. Bureau of Labor Statistics Economic News Release: www.bls.gov/news.release/empsit.nr0.htm

Job-Stealing Robots

Welcome back. Although the blog was down during my futile attempt to catch up on other matters, I continued to review published research and did flag several studies. One of the earliest examined our perception of robots replacing humans in the workplace. 

Industrial robots on the assembly line (from www.therobotreport.com/top-5-countries-using-industrial-robots-2018/).

Robots have been playing greater roles in the workplace, yet studies have been mixed. Some find robots have a negative effect on employment, others find robots have a positive effect.

A Brigham Young University researcher sides with a positive association that he attributes to employees who possess the skills and expertise to collaborate with robots. He cites, for example, employees working alongside robots that restock workstations or retrieve parts on assembly lines and employees who develop, program, use, maintain or work with robots to perform technologically advanced tasks.

Gauging The Perception
In an effort to better understand the perception of job loss to robots, the researcher commissioned a U.S. national survey of nearly 2,000 individuals by Qualtrics in September 2021. His survey asked respondents (1) to estimate the percentage of employees whose jobs were replaced with robots and (2) if their own jobs had ever been replaced with robots.

Nearly 14% of survey respondents reported that their jobs had indeed been replaced with robots. Those respondents estimated that 47% of workers in the U.S. had lost jobs to robots. In contrast, survey respondents who had not lost jobs to robots estimated that only 29% of employees had their jobs replaced with robots.

Respondents’ perceptions of the percentage of workers who lost jobs to robots. Note sizable difference between respondents’ perceptions based on whether their own jobs were or were not replaced by robots (46.9% compared to 29.0%). All respondents’ perceptions overestimated those in the sample who jobs were actually replaced by robots (blue dashed line at 13.7 percent). (from journals.sagepub.com/doi/10.1177/23780231221131377).

Notably, the respondents’ perceptions of others losing jobs to robots did not match the experiences of the 14% in the survey sample. Respondents that did not lose their jobs to robots had a twofold increase between their perception of jobs lost compared with the results for the entire sample (29% compared with 14%). Those that did report losing their jobs had more than a threefold increase between their perception and the results for the sample (47% compared with 14%).

As you might expect, a comparison of perceptions by whether respondents lost jobs to robots suggests that one’s own job experience serves to bias perception toward others having had the same experience.

Wrap Up
The survey results are consistent with previous studies, which suggest that workplaces are integrating robots with employees in ways that generate more value for human labor. Robots are not displacing workers; at least not at the rate we might think from attention-grabbing headlines that predict a dire future of employment. The only sure prediction is that workplaces will continue to evolve.

The researcher writes that we make the mistake of expecting novel technologies to be adopted without considering all relevant contextual impediments--cultural, economic and government arrangements that support the manufacturing, sale and use of the technology. Just because a technology can be used for something does not ensure that it will be, or how quickly.

Thanks for stopping by.

P.S.
Study of perception of robots replacing workers in Socius: Sociological Research for a Dynamic World journal: journals.sagepub.com/doi/10.1177/23780231221131377
Article on study on EurekAlert! website: www.eurekalert.org/news-releases/970815

Nonfatal Firearm Injury Costs

Welcome back. If you follow or occasionally visit this blog, you may be aware that I’ve written about firearms--four times to pitch the need for gun research, not gun control.

As I described in the first of my four posts (see Gun Research), Congress essentially shut down gun research funding by the Centers for Disease Control and Prevention in 1996 and later by the National Institutes of Health. Although research continued without federal support, it was estimated that gun violence research funding and publications were less than 5% of what would have expected based on the statistics for other leading causes of death.

I am happy to note that, in December 2019, Congress changed its collective mind. After more than 20 years, Congress approved funding of $25 million for fiscal 2022 to be split between the CDC and NIH to examine gun violence from a public health perspective. While experts concede the amount is small in comparison to the scope of the issue, they celebrated.

Congress approved fiscal year 2022 funding for the CDC and NIH to examine gun violence (graphic from abcnews.go.com/Politics/decades-long-gap-gun-violence-research-funding-lasting/story?id=80646946).

Which brings me to an example of the gun research that NIH funded.

Long-Term, Often Hidden Costs of Firearm Injuries
Some 45,000 people are killed in the U.S. by firearms each year; more than twice as many sustain firearm injuries and survive.

A team of researchers set out to measure the first year’s changes in clinical and economic outcomes for survivors and their family members after nonfatal firearm injury. These typically include worse mental health, substance use disorders and higher health care spending.

The researchers were affiliated with Harvard Medical School, Massachusetts General Hospital, Harvard T.H. Chan School of Public Health, Harvard University, Michigan University and Boston Health Care for the Homeless Program.

Data for Analysis
The researchers analyzed 10 years of data, 2008-2018, from IBM MarketScan commercial and Medicare claims databases--nationwide samples of employer-sponsored commercial insurance enrollees and Medicare beneficiaries with employer-sponsored Medicare supplemental coverage. The databases contain detailed claims data for more than 40 million persons annually.

They identified two cohorts: survivors of firearm injury and the survivors’ family members, all of whom had been enrolled in the insurance coverage for at least 1 year before through 1 year after the firearm injury. For control, each cohort member was matched to five unexposed participants.

The final dataset comprised 6,498 survivors and 32,490 matched control participants, along with 12,489 family members and 62,445 matched control participants.

About 71% of nonfatal firearm injuries were unintentional; 21% were assaults and 4% self-harm.

Characteristics of firearm injury survivors and their matched control participants. DxCG – Diagnostic Cost Groups risk score is a measure of health status or expected spending; larger values denote greater expected spending. Consumer directed health plans -- preferred-provider organization plans with health reimbursement funded by employer (from Table 1 of www.acpjournals.org/doi/10.7326/M21-2812).

Study Findings
In the first year after injury, the survivors’ medical spending increased 402% per person per month and cost sharing (co-pays and deductibles) increased 176% per person per month over the control participants’ spending. The increase was driven by the first month’s spending of 4,122%  and 1,917% in cost sharing per survivor.

The cost of all categories of the survivors’ health care increased relative to the control participants--40% increase in pain diagnoses, 51% increase in psychiatric disorders and 85% increase in substance-use disorders, in addition to increased pain and psychiatric medications. Family members had a 12% increase in psychiatric disorders relative to their control participants.

These clinical and economic changes were driven by intentional and more severe firearm injuries.

Changes in study outcomes for 1 year after unintentional and intentional nonfatal firearm injuries; intentional firearm injuries include assault, self-harm and law-enforcement shootings (from Table 3 of www.acpjournals.org/doi/10.7326/M21-2812).

Wrap Up
Nonfatal firearm injuries cause survivors, their families, employers, insurers and society to spend thousands of dollars more each month on healthcare. Considering the annual number of gunshot survivors in the U.S., the researchers estimate direct health care spending to be well over $2 billion for just the first year.

The researchers suggest that it might be wise for doctors to screen gunshot survivors and their family members for signs of mental health problems and to be mindful of an increased risk of substance use disorders when treating pain in the wake of a shooting.

Interesting stuff when Congress allows gun research. Thanks for stopping by.

P.S.
CDC tally of firearm deaths: www.cdc.gov/nchs/fastats/injury.htm
Congressional turnabout on funding CDC and NIH gun violence research:
www.apa.org/monitor/2021/04/news-funding-gun-research
www.usatoday.com/story/news/nation/2020/02/09/gun-violence-how-researchers-spend-25-m-gun-safety-funding/4464121002/
Study of nonfatal firearm injury outcomes in Annals of Internal Medicine journal: www.acpjournals.org/doi/10.7326/M21-2812
Article on study on EurekAlert! website: www.eurekalert.org/news-releases/948335

Made in USA

American flag made in China (sunwardflag.com/american-flags-should-be-made-in-america/).

Welcome back. Thanks for stopping by. I’ve got some news you may have missed. The Federal Trade Commission finalized a Made in USA Labeling Rule, effective 13 August.

In short, the rule prohibits Made in USA labels on products unless: (1) final assembly or processing of the product occurs in the U.S., (2) all significant processing that goes into the product occurs in the U.S. and (3) all or virtually all ingredients or components of the product are made and sourced in the U.S.

Hat that Warren bought in 2002 during a research study at the Naval Air Weapons Station in China Lake, Calif.

To be clear, the rule does not change the FTC’s requirement that imported products show information regarding the country of origin, and there is no requirement for products made in the U.S. to be labeled. The Made in USA label is solely for marketing purposes. The new rule is to stop deceptive claims.

The marketing Made in USA claim on the Naval Air Weapons Station hat label.

You might ask, “Does country of origin matter?”

“Made in USA” Didn’t Matter
A study presented in 2015 by a researcher with Towson University examined the importance of country of origin in consumers’ decision-making process.

The researcher conducted an internet-based empirical analysis of factors important to nearly 900 U.S. consumers when considering the purchase of a small home appliance. The focus was the consumers’ perception of a Made in USA claim separately and compared to a Made in China claim.

The analysis showed that country of origin was one of the least important factors in a purchase decision. Moreover, at least in 2015, products with a Made in China label were seen more favorably than those with a Made in USA claim.

Wait! “Made in USA” Does Matter
A recently released paper by researchers with the University of Chicago also examined the effect of the Made in USA label on consumer demand.

They studied four brands that had been the subject of FTC investigations for deceptive Made in USA claims. The brands included Gorilla Glue, Loctite Glue, Gorilla Tape and Tramontina cookware.

Comparing sales before and after the label was removed from the products as well as from advertising and websites, they found three of the four brands were affected negatively. Weekly store sales of Tramontina cookware dropped 19.5%, Loctite Glue, 6.1%, and Gorilla Glue,1.9%. The fourth brand, Gorilla Tape, experienced a “trend decline.”

Tramontina, a Brazilian company that makes kitchenware in several countries, including the U.S., was investigated by the FTC for deceptive Made in USA claims (Graphic from Amazon).

Pursuing the analysis further, the researchers conducted over 900 three-day auctions on eBay, selling a single product, screen protectors for handheld devices. They compared consumer demand when the product was advertised with and without the Made in USA claim.

The eBay experiment showed the claim mattered. Auction transaction prices were 28% higher when advertised as Made in USA. While the higher prices may not be enough to justify relocating manufacturing to the U.S., the increase certainly provides incentive to display the claim.

Wrap Up
Two studies aren’t enough to address the importance of country of origin in the global marketplace. Though I scratched the surface with two, it’s a popular topic.

Does a product’s country of origin matter to you? Did your concern arise over the last several years? Is your concern related to trust in product quality, support for American workers or the economy, patriotism or other factors? Is your concern directed only at China?

Once again, many thanks for stopping by. I hope it was worth your time.  

P.S.
FTC’s new Made in USA rule:
www.ftc.gov/news-events/press-releases/2021/07/ftc-issues-rule-deter-rampant-made-usa-fraud
www.federalregister.gov/documents/2021/07/14/2021-14610/made-in-usa-labeling-rule
Towson University study of Made in USA: link.springer.com/chapter/10.1007/978-3-319-18687-0_103
University of Chicago study of Made in USA: papers.ssrn.com/sol3/papers.cfm?abstract_id=3468543
Article on Univ. of Chicago study on EurekAlert! website: www.eurekalert.org/pub_releases/2021-06/ifor-di063021.php

Davos Focuses on Climate

Welcome back. You probably saw that President Trump attended the recent Davos 2020 conference. I thought you might be interested in a little background and review of the conference, especially since this was the 50th annual meeting and its focus was climate and sustainability.

(I’ll skip Mr. Trump’s contribution. His speech largely ignored the conference focus, instead repeating exaggerations and falsehoods and making it easy on fact checkers.)

What is the Davos Conference?

Davos, Switzerland, site of the World
Economic Forum’s annual meeting
(from images.app.goo.gl/w2yFFjwPVjbbYt1a9).

The conference is the annual meeting of the World Economic Forum, which I described in the blog post, Emerging Technologies. It’s referred to as Davos, the municipality in Switzerland where the conference is held.

At the beginning of each year, the invitation-only conference brings together thousands of business, political, academic and cultural leaders to shape global, regional and industry agendas, with the goal of improving the state of the world.

Defining the Conference Focus
Davos 2020, held 21-24 January, was preceded by the World Economic Forum’s Global Risks Perception Survey of the Forum’s network of business, government, civil society and thought leaders. The Forum received more than 1,000 survey responses to whether the risks associated with 40 issues would increase or decrease this year relative to last year; the likelihood and potential impact of 30 global risks in the next 10 years; and the 3 to 6 most interconnected global risks.

Top 10 global risks over next 10 years (from www.weforum.org/agenda/2020/01/top-global-risks-report-climate-change-cyberattacks-economic-political/)

The resulting Global Risks Report 2020 named failure to mitigate and adapt to climate change as the key concern, ranking it number one of the top 10 risks by impact and number two by likelihood over the next 10 years. In all, 6 of the top 10 risks in both categories related to climate and the environment.

The risk report, released ahead of Davos 2020, urged governments and organizations to address the impact of specific threats and make preparations to contain potential fallout.

Davos 2020 was planned to give concrete meaning to “stakeholder capitalism,” assist governments and international institutions in tracking progress towards the UN’s Paris Agreement on climate and the Sustainable Development Goals and facilitate discussions on technology and trade governance. The conference program prioritized several key areas, the first of which was How to Save the Planet.

Increased Emphasis on Climate
Although climate change was labeled a risk in the survey as early as 2011, fires, heatwaves, storms and the extraordinary costs of climate-related disasters, as well as the effect on business planning of not knowing how or if policymakers will respond, appear to have converged to raise the concern for Davos 2020.

Before the conference, for example, the Net-Zero-Asset Owner Alliance, an international group of institutional investors managing $4 trillion in assets, committed to transition to a zero-emissions asset portfolio by 2050.

BlackRock, the world’s largest asset manager, stated that climate change would lead to a “fundamental reshaping of finance.”

Marc Benioff, CEO of Salesforce, announced financial support for a World Economic Forum’s global reforestation initiative, One Trillion Trees.

Wrap Up
Davos 2020’s focus on climate and business leaders’ response are encouraging, albeit decades late. There is widespread agreement, however, that governments must intervene in a major way.

Will governments take steps to reduce emissions? One decisive action reviewed in multiple conference sessions was a carbon price--a cost applied to carbon emissions to encourage greenhouse gas reductions, imposed either as a carbon tax or via carbon emission trading.

Are governments prepared to make stronger commitments to reduce emissions? We’ll find out by next November at the UN Climate Change Conference in Glascow, following up on the Paris Agreement.

Thanks for stopping by.

P.S.
Articles on Davos 2020:
www.weforum.org/events/world-economic-forum-annual-meeting-2020
www.weforum.org/agenda/2020/01/climate-change-crisis-what-we-learned-at-davos-2020/
www.wsj.com/livecoverage/davos-world-economic-forum-2020
time.com/5771889/davos-climate-change/
World Economic Forum’s Global Risks Report 2020: www3.weforum.org/docs/WEF_Global_Risk_Report_2020.pdf
Example fact-checker article on President Trump at Davos 2020: www.bbc.com/news/world-51192999

Renewable Energy Versus Fossil Fuels

Welcome back. Although I’ve touched on renewable energy in earlier posts, it’s time I did more to promote its use and the conversion from fossil fuels (oil, coal, gas, nuclear). A recent study provided the incentive. 

U.S. energy consumption by source, 1950-2018
(from www.eia.gov/todayinenergy/detail.php?id=39092).

Renewable Energy
Let’s review a bit. The Environmental Protection Agency lists the most common renewable energy technologies as solar, wind, biogas, geothermal, biomass, low-impact hydroelectricity and emerging technologies, such as wave and tidal power.

Global new investment in renewable energy sources, 2004-2018
(from www.cleanenergywire.org/news/germany-comes-5th-global-renewable-investment-ranking).

The benefits of renewable energy are well-documented by the Union of Concerned Scientists and others. They include no greenhouse gas with less global warming; reduced air pollution and improved public health; inexhaustible energy; jobs and other economic benefits; stable energy prices; and reliability and resilience.

But we can’t ignore the drawbacks, the major ones being higher upfront costs; intermittent availability (sun doesn’t always shine, wind doesn’t always blow, drought happens), which occasions the need for energy storage; and geographic limitations (not all areas are suitable).

Forecast of power generation capacity additions
(gigawatts) through 2030 by source
(from geoharvey.files.wordpress.com/2015/04/4-26-graph.jpg).

Energy Returned on Energy Invested
Renewable energy sources offer significant benefits over fossil fuels, yet a key factor driving the use of fossil fuels is their higher energy returned on energy invested. That refers to the ratio of the energy a resource will deliver to the energy it takes to obtain the resource.

The ratio of fossil fuels is generally calculated to be over 25:1 (e.g., the energy to obtain 1 barrel of oil will yield 25 barrels of energy or more); the ratio of renewable energy sources is typically less than 10:1.

That recent study I mentioned found those ratios should actually be much closer.

Fossil Fuel Energy Investment
The researchers, all affiliated with the UK’s University of Leeds, focused on the energy it takes to obtain fossil fuels.

They note that, as fossil fuels become more difficult to extract, the energy investment will increase and the ratio will fall. (While true, fracking has reduced the investment and interrupted a long decline.)

For a more immediate adjustment, they point out that fossil fuel ratios have been calculated based on the extracted resource. There has been no accounting for the energy required to transform the extracted resource into a finished fuel (e.g., gasoline, electricity). A more direct comparison with renewable energy sources should estimate the measurement of energy invested at the final stage, when energy enters the economy.

(In line with that adjustment, it would be better to describe the energy-return-on-investment ratio based on the energy it takes to deliver that energy than the energy it takes to obtain the resource. That, by the way, is how it’s described in Wikipedia.)

To estimate the magnitude of the difference, the researchers calculated the global time series (1995-2011) ratios for fossil fuels at both the extraction and final stages. The extraction stage ratios were on the order of 30:1; the final stage ratios were about 6:1 and trending downward.

Wrap Up
The researchers conclude that the energy-return-on-investment ratios of fossil fuels and renewables may be much closer than expected. Moreover, the ratio of fossil fuels will decline with a shrinking source.

Although more recent data on fossil fuel ratios would be desirable, the study findings coupled with the benefits of renewable energy suggest there’s no reason to wait to convert from fossil fuels wherever and whenever possible. Thanks for stopping by. 

Rooftop solar panels, Nottingham, UK (from www.solarpowerportal.co.uk/news/e.on_awards_solar_panel_cleaning_services_largest_ever_cleaning_contract).

P.S.
Review of renewable energy benefits and resources:
www.epa.gov/statelocalenergy/local-renewable-energy-benefits-and-resources
www.ucsusa.org/clean-energy/renewable-energy/public-benefits-of-renewable-power
news.energysage.com/advantages-and-disadvantages-of-renewable-energy/
Energy returned on energy invested:
www.investopedia.com/terms/e/energy-return-on-investment.asp
en.wikipedia.org/wiki/Energy_returned_on_energy_invested
Study of energy-returned-on-energy-invested ratio in Nature Energy journal: www.nature.com/articles/s41560-019-0425-z#article-info
Article on study on EurekAlert! website: www.eurekalert.org/pub_releases/2019-07/uol-ffi071019.php

The Most Creative Age

When does creativity
glow brightest (from
www.kisspng.com/png-creativity-472384/)?

Welcome back. Are you creative? Do you or did you ever have the ability to produce original or unusual ideas or make something new or imaginative? Did your creativity peak at a certain age?

A number of studies have examined how old people were when they were most creative, when they did their best work. The ages vary with the field or endeavor, and you may find fault with the criteria used for rating creativity; but you still might be interested to see how your creative peak--whether past, present or future--compares to that of others.

Peak Creativity in Forms of Art
In separate investigations, a researcher from the Erasmus School of Economics in the Netherlands determined the age when modern art painters, writers and classical music composers produced their best work.

To assess the most creative age of painters in a 2013 study, he began with the 189 highest-price paintings. The average age of the painters who created these paintings was nearly 42.

For writers, he considered Nobel Prizes for Literature. In a 2014 study, he found the average age of 89 Nobel Laureates approached 45 when they wrote their prize-winning work.

And for his 2016 study of composers, he identified the 100 most popular classical music composers from a website that documents the most often performed works. The average age at which they composed their most popular work was about 39.

Peak Creativity in Sciences
Determining the age when Nobel Laureates did their prize-winning work was the approach taken earlier by researchers affiliated with Northwestern and Ohio universities and the National Bureau of Economic Research. Their 2011 study analyzed 525 Nobel Laureates in physics (182), chemistry (153) and medicine (190) from 1901 to 2008.

They found the differences among the three fields were small compared with the differences over time within each field. For example, before 1905, 60% to 70% of prize-winning work was done before age 40, with about 20% before age 30. By the end of the century, Nobel prize-winning work before age 30 was near 0%.

The mean age at which Nobel Laureates produced their prize-winning work in physics, chemistry and medicine from 1901 to 2008 (whole), through 1905 (early) and from 1985 (late); standard errors in parentheses (from www.pnas.org/content/108/47/18910).

The age increase mirrors both the increase in training--how long it takes to acquire foundational knowledge--and the decrease in theoretical contributions.

Regarding training, most Nobel laureates in these fields earned their PhDs by age 25 in the early 20th century. The number dropped substantially by the end of the century.

As for the nature of the contribution, theoretical/deductive contributions tend to come earlier in scientific careers than do inductive contributions, which build more on the knowledge associated with increased training.

Peak Creativity in Economics

The Nobel Memorial Prize in Economic Sciences, officially “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel,” was established in 1968, not by Alfred Nobel’s will (from www.geni.com/projects/Nobel-Prize-Winners-in-Economics/8200).

In a recent study of age and creativity--the study that got me started--collaborators from Ohio State and Chicago universities examined 31 Nobel Laureates in economics.

By ranking the laureates on a scale from most conceptual/deductive to most experimental/inductive, they found the conceptual laureates made their most important contribution at an age of about 25, while experimental laureates peaked in their mid-50s.

Wrap Up

Comment on creativity
attributed to Einstein.

Well? How do you compare? Don’t lose sight of the many other forms of creativity or the other criteria for judging creativity.

If you’re into the mystical, you’ll appreciate how the researcher who studied painters, writers and composers expanded his assessment. Besides determining the average ages of peak creativity, he calculated the percentages of lifespan they had lived to that point.

It turns out that those percentages for painters and composers, 62% and 61%, are almost exactly the golden ratio, also known as the divine proportion among other labels. (Writers, at 57%, are off a bit.)

Apparently, Euclid studied the mathematical properties of the golden ratio around 300 BC, and its proportions pop up in music, art, architecture and patterns of nature. If you’re reading this, it’s too early for you to calculate your ratio. Thanks for stopping by.

P.S.
Study of when painters did their best work in Creativity Research Journal: www.tandfonline.com/doi/full/10.1080/10400419.2013.843912
Study of when writers did their best work in Creativity Research Journal: www.tandfonline.com/doi/abs/10.1080/10400419.2014.929435
Study of when composers did their best work in Creativity Research Journal: www.tandfonline.com/doi/full/10.1080/10400419.2016.1162489
Article on forms of art creative peak on Washington Post website: www.washingtonpost.com/news/wonk/wp/2016/06/23/when-you-will-most-likely-hit-your-creative-peak-according-to-science/
Study of scientific creativity in Proceedings of National Academy of Sciences: www.pnas.org/content/108/47/18910
Study of economics creativity in De Economist journal: link.springer.com/article/10.1007/s10645-019-09339-9
Article on economics creativity on EurekAlert website: www.eurekalert.org/pub_releases/2019-04/osu-cin042319.php
Golden ratio: en.wikipedia.org/wiki/Golden_ratio