Incentives – Page 3 – artdiamondblog.com

Tech Replaces Labor When Government Raises Labor Costs

(p. A11) In late 2013, Chili’s and Applebee’s announced that they were installing more than 100,000 tableside tablets at their restaurants across the country, allowing customers to order and pay their bill without ever talking to a waiter. The companies were soon followed by Buffalo Wild Wings, Panera Bread, Olive Garden and dozens of others. This means fewer servers covering more tables. Quick-service restaurant chains are also testing touch-screen ordering.
. . .
So why the increased use of technology? The major reason is consumer preference. Research shows that many appreciate the speed, order accuracy, and convenience of touch screens. This is particularly so among millennials who already do so much on smartphones and tablets. I’ve watched people–young and old–waiting in line to use the touch screens while employees stand idle at the counter.
The other reason is costs. While the technology is becoming much cheaper, government mandates have been making labor much more expensive.
In 2015, 14 cities and states approved $15 minimum wages–double the current federal minimum. Additionally, four states, 20 cities and one county now have mandatory paid-sick-leave laws generally requiring a paid week of time off each year per covered employee. And then there’s the Affordable Care Act, which further raises employer costs.

For the full commentary, see:
ANDY PUZDER. “Why Restaurant Automation Is on the Menu; Forget about robot waiters, but technology helps cut government-imposed costs. And consumers like it.” The Wall Street Journal (Fri., March 25, 2016): A11.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date March 24, 2016.)

Trophy Hunting Preserves Endangered Species

(p. A1) Despite intensifying calls to ban or restrict trophy hunting in Africa after the killing of a lion named Cecil in Zimbabwe, most conservation groups, wildlife (p. A8) management experts and African governments support the practice as a way to maintain wildlife. Hunting, they contend, is part of a complex economy that has so far proven to be the most effective method of conservation, not only in Africa but around the world as well.
While hunting is banned in government parks here in South Africa, animals inside their boundaries are routinely sold to game ranches when their populations are considered excessive, generating money to maintain habitats and fight poachers.
And because trophy hunting is legal in private game reserves, the animals end up fetching higher prices than they would in being killed for food or other reasons, conservationists contend. Lion hunts, one of the most lucrative forms of trophy hunting, bring in between $24,000 and $71,000 per outing on average across Africa, according to a 2012 study. In southern Africa, the emergence of a regulated trophy hunting industry on private game ranches in the 1960s helped restore vast stretches of degraded habitats and revive certain species, like the southern white rhinoceros, which had been hunted almost to extinction, conservationists say.
A similar shift occurred in the United States decades earlier when the Pittman-Robertson Act of 1937 allocated the proceeds from hunting to bring back lands and animals, they argue.
“There’s only two places on the earth where wildlife at a large scale has actually increased in the 20th century, and those are North America and southern Africa,” said Rosie Cooney, a zoologist who is the chairwoman of the International Union for Conservation of Nature’s Sustainable Use and Livelihoods Specialist Group. “Both of those models of conservation were built around hunting.”

For the full story, see:
NORIMITSU ONISHI. “Outcry for Cecil the Lion Could Undercut Conservation Efforts.” The New York Times (Tues., AUG. 11, 2015): A1 & A8.
(Note: the online version of the story has the date AUG. 10, 2015.)

Parents Set Up For-Profit Companies for Quicker Cures

(p. B1) Karen Aiach was working as a management consultant when she learned that her first daughter, Ornella, had Sanfilippo syndrome, a rare disease in which a missing enzyme causes toxic substances to build up in the body.

Ornella was 6 months old, and the prognosis was grim: She would develop mentally and physically to between ages 2 and 4, plateau and then lose whatever she had learned. She would become extremely hyperactive and develop sleeping disorders. Most likely she would not live past 15.
Within two years of the diagnosis, Ms. Aiach, who lives in a Paris suburb, had quit her consulting job to learn everything she could about the disease. She hired a neurobiologist to guide her in the world of medical research. And when she learned that few treatments were in the works, she founded a company called Lysogene to focus on genetic therapy.
Instead of raising money and awareness by setting up a nonprofit foundation, a more typical route, she opted to start a for-profit company to seek treatments, if not a cure. Far from common, what Ms. Aiach and other parents like her are trying is to leverage their wealth, contacts and the hope of sophisticated investors to jump-start research into rare diseases.
. . .
(p. B4) . . . with some rare diseases, where minimal research has been done, a little effort goes a long way.
Nicole Boice, who founded Global Genes, one of the leading rare-disease patient advocacy organizations, said even small investments can have meaningful impacts.
“You can start moving the needle with $3,500,” she said. “That leads you to the next $25,000, and then to innovation grants and funding at $100,000. That starts the interest from biotech.”
Gradually, parents like Matt Wilsey, a technology entrepreneur, have made headway. First, his family spent the better part of four years trying to figure out what afflicted his daughter, Grace, now 6. Even after her genome was sequenced, the first diagnosis turned out to be wrong. Grace, it finally was determined, was the second person in the world known to have a deficiency in the gene known as NGLY1.
“We went around the country,” Mr. Wilsey said. “We were just trying to find one doctor who had seen another patient with these symptoms.” After years of efforts, several dozen children have been found to have the same deficiency.
“Our goal is to find a cure,” said Mr. Wilsey, who lives in the San Francisco area.
“A lot of people in science dismiss that because cures are rare. But when I say cures, they’re not going to be astronauts. They’re going to be leading some sort of independent life. They’re going to be able to eat without choking. They’re going to be able to take a bath without drowning. They’re going to be able to communicate, whether with some assistive device or not.”
These parents also had a successful model to follow. In 1998, John Crowley left his job at Bristol-Myers Squibb to start a biotechnology company to search for a treatment for Pompe disease, a neuromuscular disorder that two of his children had. Within four years, the company, Novazyme Pharmaceuticals, had devised a treatment that he credits with saving their lives. His story was immortalized in the 2010 film “Extraordinary Measures,” starring Harrison Ford. And his company was bought by the pharmaceutical giant Genzyme for $137.5 million in 2001.

For the full story, see:
PAUL SULLIVAN. “Wealth Matters; Parents of Children With Rare Diseases Find Hope in For-Profit Companies.” The New York Times (Sat., DEC. 26, 2015): B1 & B4.
(Note: ellipsis added.)
(Note: the online version of the story has the date DEC. 25, 2015, and has the title “Wealth Matters; Building a Company to Treat a Rare Disease.”)

Audits Worth Less When the Audited Directly Pay for Them

(p. B1) Environmental regulators in Gujarat, one of India’s fastest-growing industrial states, found themselves in an implausible situation a few years ago: Every single city breached national air quality standards. And yet environmental audits kept finding that factories met pollution limits.
So the Gujaratis hired some researchers from Harvard and the Massachusetts Institute of Technology to carry out an experiment, changing the way the audits were made. Instead of hiring their own auditors, companies had auditors assigned to them randomly. Instead of being paid by the companies they audited, auditors drew a fixed fee from a pool that all companies paid into.
Measured compliance rates abruptly plummeted. But once the new system was in place, the real emissions from polluting factories finally started to decline. The Gujaratis kept the new approach.
“When fact-checking is not done in an independent way, there is a long history of things turning out the way the entity being fact checked wants them to turn out,” said Michael Greenstone of the University of Chicago, a former chief economist for President Obama’s Council of Economic Advisers who was one of the researchers involved in the study. “Until you change the incentives, this will not change.”
The problem may seem remote, but it turns out that the same incentives apply in the United States, even in programs that, at first glance, appear to provide an unmitigated benefit.
Last month, the Energy Department released an extensive report assessing the impact of the federal weatherization program, which was begun in 1976 to shield the homes of low-income Americans from the elements, save them money on heating bills and improve energy efficiency.
It concluded that weatheriza-(p. B10)tion — insulating homes, changing boilers, plugging leaky windows and the like — was a stellar investment. Not only were the energy savings substantially larger than the cost of weatherizing homes, the report found, but the gains soared even more once the broader impacts on health were taken into account.
“The results demonstrate that weatherization provides cost-effective energy savings and health and safety benefits to American families,” the Energy Department announced.
But do they? When Professor Greenstone and two other independent economists looked under the hood — not a trivial challenge, given the report’s 4,500 pages — they found a collection of idiosyncratic choices and unorthodox assumptions that severely undermined the credibility of the enterprise.
In the end, they concluded, the government research effort, which was led by the Energy Department’s own Oak Ridge National Laboratory, cannot tell us whether weatherization is a fabulous program or a waste of taxpayer dollars.

For the full commentary, see:
Eduardo Porter. “ECONOMIC SCENE; For Government That Works, Call In the Auditors.” The New York Times (Weds., OCT. 7, 2015): B1 & B10.
(Note: the online version of the commentary has the date OCT. 6, 2015, and the title “ECONOMIC SCENE; For Government That Works, Call In the Auditors.”)

Lax College Accreditors May Be “Doing More Harm than Good”

(p. A19) Most colleges can’t keep their doors open without an accreditor’s seal of approval, which is needed to get students access to federal loans and grants. But accreditors hardly ever kick out the worst-performing colleges and lack uniform standards for assessing graduation rates and loan defaults.
Those problems are blamed by critics for deepening the student-debt crisis as college costs soared during the past decade. Last year alone, the U.S. government sent $16 billion in aid to students at four-year colleges that graduated less than one-third of their students within six years, according to an analysis by The Wall Street Journal of the latest available federal data.
. . .
(p. A12) Accreditors say their job is to help colleges get better rather than to weed out laggards. Colleges pay for the inspections, which can cost more than $1 million at large institutions.
“You’re not there to remove an institution,” says Judith Eaton, president of the Council for Higher Education Accreditation, a trade group. “You’re there to enhance the operation.”
The government has relied on accreditors as watchdogs since the 1950s. Colleges are evaluated by teams of volunteers from similar institutions, who follow standards set by the accreditation group. For example, colleges sometimes are required to collect student-retention data but given the freedom to set their own goals for those numbers.
. . .
Stephen Roderick, former provost at Fort Lewis College in Colorado, says he now has misgivings about his 2013 review of Glenville State College in West Virginia for the Higher Learning Commission. The review team wrote that the college had a “responsible program” to minimize default rates and “demonstrates a commitment” to evaluating graduation data.
Glenville’s graduation rate is 30%, while about 22% of students defaulted on loans from 2011 to 2013. Both percentages rank near the bottom 10% of accredited four-year colleges. David Millard, assistant to Glenville’s president, says the figures reflect the opportunity offered by the college to students in one of the poorest parts of the U.S.
Mr. Roderick says accreditors are inclined to see the best in colleges like Glenville, but that might not be the best for students. “Sometimes I feel that we’re doing more harm than good,” he says.

For the full story, see:
ANDREA FULLER and DOUGLAS BELKIN. “Education Watchdogs Rarely Bite; Accreditors keep hundreds of schools with low graduation rates or high loan defaults alive.” The Wall Street Journal (Thurs., June 18, 2015): A1 & A12.
(Note: ellipses added.)
(Note: the online version of the article was dated June 17, 2015, and had the title “The Watchdogs of College Education Rarely Bite; Accreditors keep hundreds of schools with low graduation rates or high loan defaults alive.”)

Experts Are Paid “to Sound Cocksure” Even When They Do Not Know

(p. B1) I think Philip Tetlock’s “Superforecasting: The Art and Science of Prediction,” co-written with the journalist Dan Gardner, is the most important book on decision making since Daniel Kahneman’s “Thinking, Fast and Slow.” (I helped write and edit the Kahneman book but receive no royalties from it.) Prof. Kahneman agrees. “It’s a manual to systematic thinking in the real world,” he told me. “This book shows that under the right conditions regular people are capable of improving their judgment enough to beat the professionals at their own game.”
The book is so powerful because Prof. Tetlock, a psychologist and professor of management at the University of Pennsylvania’s Wharton School, has a remarkable trove of data. He has just concluded the first stage of what he calls the Good Judgment Project, which pitted some 20,000 amateur forecasters against some of the most knowledgeable experts in the world.
The amateurs won–hands down.
. . .
(p. B7) The most careful, curious, open-minded, persistent and self-critical–as measured by a battery of psychological tests–did the best.
. . .
Most experts–like most people–“are too quick to make up their minds and too slow to change them,” he says. And experts are paid not just to be right, but to sound right: cocksure even when the evidence is sparse or ambiguous.

For the full review, see:
JASON ZWEIG. “The Trick to Making Better Forecasts.” The Wall Street Journal (Sat., Sept. 26, 2015): B1 & B7.
(Note: ellipses added.)
(Note: the online version of the review has the date Sept. 25, 2015.)

The book under review, is:
Tetlock, Philip E., and Dan Gardner. Superforecasting: The Art and Science of Prediction. New York: Crown, 2015.

Plant Breeders Use Old Sloppy “Natural” Process to Avoid Regulatory Stasis

(p. A11) What’s in a name?
A lot, if the name is genetically modified organism, or G.M.O., which many people are dead set against. But what if scientists used the precise techniques of today’s molecular biology to give back to plants genes that had long ago been bred out of them? And what if that process were called “rewilding?”
That is the idea being floated by a group at the University of Copenhagen, which is proposing the name for the process that would result if scientists took a gene or two from an ancient plant variety and melded it with more modern species to promote greater resistant to drought, for example.
“I consider this something worth discussing,” said Michael B. Palmgren, a plant biologist at the Danish university who headed a group, including scientists, ethicists and lawyers, that is funded by the university and the Danish National Research Foundation.
They pondered the problem of fragile plants in organic farming, came up with the rewilding idea, and published their proposal Thursday in the journal Trends in Plant Science.
. . .
The idea of restoring long-lost genes to plants is not new, said Julian I. Schroeder, a plant researcher at the University of California, Davis. But, wary of the taint of genetic engineering, scientists have used traditional breeding methods to cross modern plants with ancient ones until they have the gene they want in a crop plant that needs it. The tedious process inevitably drags other genes along with the one that is targeted. But the older process is “natural,” Dr. Schroeder said.
. . .
Researchers have previously crossbred wheat plants with traits found in ancient varieties, noted Maarten Van Ginkel, who headed such a program in Mexico at the International Maize and Wheat Improvement Center.
“We selected for disease resistance, drought tolerance,” he said. “This method works but it has drawbacks. You prefer to move only the genes you want.”
When Dr. Van Ginkel crossbred for traits, he did not look for the specific genes conferring those traits. But with the flood-resistant rice plants, researchers knew exactly which gene they wanted. Nonetheless, they crossbred and did not use precision breeding to alter the plants.
Asked why not, Dr. Schroeder had a simple answer — a complex maze of regulations governing genetically engineered crops. With crossbreeding, he said, “the first varieties hit the fields in a couple of years.”
And if the researchers had used precision breeding to get the gene into the rice?
“They would still be stuck in the regulatory process,” Dr. Schroeder said.

For the full story, see:
GINA KOLATA. “A Proposal to Modify Plants Gives G.M.O. Debate New Life.” The Wall Street Journal (Fri., MAY 29, 2015): A11.
(Note: ellipses added.)
(Note: the online version of the story has the date MAY 28, 2015.)

A Critical Mass Need to Be Motivated by the Telos of a Practice

(p. 227) The fact that some people are led into a practice in pursuit of goals that are external to the practice– money, fame, or what have you– need pose no threat to the integrity of the practice itself. So long as those goals do not penetrate the practice at all levels, those in pursuit of external goals will eventually drop out or be left behind or change their goals or be discredited by those in pursuit of a practice’s proper goals. However, if external goals do penetrate the practice at all levels, it becomes vulnerable to corruption. Practices are always developing and changing, and the direction that development takes will be determined by participants in the practice. Good practices encourage wise practitioners who in turn will care for the future of the practice.

Source:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

George Bailey Wanted to Make Money, But He Wanted to Do More than Just Make Money

(p. 219) Actually, it’s not so strange. The norm for bankers was never just moneymaking, any more than it was for doctors or lawyers. Bankers made a livelihood, often quite a good one, by serving their clients– the depositors and borrowers– and the communities in which they worked. But traditionally, the aim of banking– even if sometimes honored only in the breach– was service, not just moneymaking.
In the movie It’s a Wonderful Life, James Stewart plays George Bailey, a small-town banker faced with a run on the bank– a liquidity crisis. When the townspeople rush into the bank to withdraw their money, Bailey tells them, “You’re thinking of this place all wrong. As if I had the money back in a safe. The money’s not here.” He goes on. “Your money’s in Joe’s house. Right next to yours. And in the Kennedy house, and Mrs. Backlin’s house, and a hundred others. Why, you’re lending them the money to build, and they’re going to pay you back, as best they can…. What are you going to do, foreclose on them?”
No, says George Bailey, “we’ve got to stick together. We’ve got to have faith in one another.” Fail to stick together, and the community will be ruined. Bailey took all the money he could get his hands on and gave it to his depositors to help see them through the crisis. Of course, George Bailey was interested in making money, but money was not the only point of what Bailey did.
Relying on a Hollywood script to provide evidence of good bankers is at some level absurd, but it does indicate something valuable about society’s expectations regarding the role of bankers. The norm for a “good banker” throughout most of the twentieth century was in fact someone who was trustworthy and who served the community, who was responsible to clients, and who took an interest in them.

Source:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.
(Note: italics in original.)

To Maintain Enrollments Professors Are Often Pressured to Inflate Grades

(p. 198) Dedicated college professors demand that students do the difficult reading and writing necessary to become skillful in understanding the complexities of the world. But the university distributes resources like research funds and new faculty positions based in part on how many students populate classes and how positively students evaluate courses. How much do you simplify to keep up enrollment and keep resources flowing into your department?

Source:
Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.