While existance of human-caused global warming is overwhelmingly accepted models of its economic consequences are poorly developed and need sharpening. These are very complex as there are so many moving parts and errors can be large but improvements can be very useful. A piece in Nature notes while the costs of carbon emissions are currently underestmated, they are still valuable for setting policy.
As legal, climate-science and economics experts, we believe that the current estimate for the social cost of carbon is useful for policy-making, notwithstanding the significant uncertainties. The leading economic models all point in the same direction: that climate change causes substantial economic harm, justifying immediate action to reduce emissions. In fact, because the models omit some major risks associated with climate change, such as social unrest and disruptions to economic growth, they are probably understating future harms. The alternative — assigning no value to reductions in carbon dioxide emissions — would lead to regulation of greenhouse gases that is even more lax.
Instead, climate-economic models need to be extended to include a wider range of social and economic impacts. Gaps need to be filled, such as the economic responses of developing countries and estimates of damages at extreme temperatures. Today, only a handful of researchers in the United States and Europe specialize in such modelling. A broader programme involving more people exploring more phenomena is needed to better estimate the social cost of carbon and to guide policy-makers. Otherwise policies will become untethered from economic realities.
Technologies and their implementations can be sexist. This is an interesting line of work independent of how it might pan out. It is also interesting that differences in out of band visual communication cues that are truncated by various online conference technologies - people are beginning to look into that now.
probably fun, but my understanding is that food pairing diagrams are very primitive at this point - not to mention preparation and cooking technique has a lot to do with flavor (flavor is a very complex subject!). But still an interesting area to investigate.
The community we live in has a large number of kids, but you rarely see them outside playing. Many of these kids, when you watch them waiting at the school bus stops - often with their parents sitting in cars after the long eighth mile drive - are obviously out of shape. One has to wonder if parents, worried about protecting their kids from very rare events that get a lot of publicity on TV are forcing their kids into inactivity that is almost guaranteed to harm their health - sort of a protective house arrest with consequences they haven't considered...
Earlier I posted a link to a series of articles that appeared in The Lancet noting that lack of exercise is responsible for an enormous number of medical problems. Here is a popular audience summary for those who may not want to read the papers (I've only read three of them myself)
Increasing physical activity may be one of the most cost effective ways to improve costs associated with the healthcare system and there are many other benefits too. But changing behavior - especially if effort is required - is non-trivial and perhaps the foot's errand.
Denmark and the Netherlands have moved rather dramatically to active transportation and both countries partly fund projects by pointing to savings in healthcare. Recently I posted a bit on a new "bicycle super highway" in Copenhagen. Jörgen from Amsterdam wrote to point out that this is old hat in his country and that the Netherlands is "far ahead of Denmark" when it comes to making active transportation work. He notes that announcements of Danish successes are often circulated in his country as reasons to improve their own system. You have to love this sort of competition.
Their goal seems to be to focus on getting people who commute less than 15 kilometers (about 9 miles) each way to give up their cars and public transit as much as possible and shift to bikes or, for very short trips, walking.
One wonders if such routes existed in the US how many would use them?
I suspect to some extent it is if the main value is measured in terms of how much of the economy can it directly influence and perhaps capture... If Facebook's model is to become another tool that makes the connections between seller and buyer easier and more likely I can't imagine why the IPO was valued so high. User growth may indeed be another billion in the next few years, but that will mostly come from segments of the world economy that total less than 10% of the economic consumption of the first billion.
They are in need of a model or two that will allow them to justify their valuation - my guess is they won't manage it, but at least I'm not a knowing investor (the funds we have money in may be in to some extent - that would be their own folly).
In the meantime I expect more than a few negative articles like this one in the Atlantic along with more than a few rumors and huge amounts of speculation.
Determining value in social networking companies is not well understood - particularly those where personal connections aren't strong as issues like trust aren't well understood (and it isn't transitive). Many companies have been experimenting with Facebook and Twitter, but I haven't seen any documented out of the ballpark success stories. I wonder if the industry will be rediscovering learnings of conventional direct marketing that were learned in the 50s and 60s or if there is any new ground?
Unless companies like Facebook can show significant improvements in the efficiency of marketing or move into entirely new areas their growth will largely be limited by the economic growth and materialism of their user base.
(Submitted on 6 Oct 2011 (v1), last revised 1 Nov 2011 (this version, v2))
We present a novel methodology to determine the fundamental value of firms in the social-networking sector based on two ingredients: (i) revenues and profits are inherently linked to its user basis through a direct channel that has no equivalent in other sectors; (ii) the growth of the number of users can be calibrated with standard logistic growth models and allows for reliable extrapolations of the size of the business at long time horizons. We illustrate the methodology with a detailed analysis of facebook, one of the biggest of the social-media giants. There is a clear signature of a change of regime that occurred in 2010 on the growth of the number of users, from a pure exponential behavior (a paradigm for unlimited growth) to a logistic function with asymptotic plateau (a paradigm for growth in competition). We consider three different scenarios, a base case, a high growth and an extreme growth scenario. Using a discount factor of 5%, a profit margin of 29% and 3.5 USD of revenues per user per year yields a value of facebook of 15.3 billion USD in the base case scenario, 20.2 billion USD in the high growth scenario and 32.9 billion USD in the extreme growth scenario. According to our methodology, this would imply that facebook would need to increase its profit per user before the IPO by a factor of 3 to 6 in the base case scenario, 2.5 to 5 in the high growth scenario and 1.5 to 3 in the extreme growth scenario in order to meet the current, widespread, high expectations. To prove the wider applicability of our methodology, the analysis is repeated on Groupon, the well-known deal-of-the-day website which is expected to go public in November 2011. The results are in line with the facebook analysis. Customer growth will plateau. By not taking this fundamental property of the growth process into consideration, estimates of its IPO are wildly overpriced.
They came to the conclusion that Facebook might be worth abot $20B with 1.2 billion users. If they are close to being right, and their simple model assumes about $1 of value per user - a historical number that one can quibble with on either side - Facebook shares have a long way to go ... down that is. Technology Review has a non-technical summary of the paper here.