Data

I heard this today:

" In God We Trust, All Others Must Bring Data!"
Given the increasing competition in market, hardly anyone doubt its application.

Taking Sides

There is an interesting article from BBC by their correspondent Frances Harrison, from Tehran. It has a few interesting points. The fact that now everybody requires you to take side in the dispute over Iran’s nuclear program and the very fact that many allow themselves to forget the sufferings and pain Iranians endured during 8 years war with Iraq and since then in developing their country and expanding its infrastructure.

Econometrics Golden Rules

If you are a practitioner like me remember
A Good Econometrician
· Always checks for MISSING Values
· Always checks PROC FREQ and PROC MEANS of generated DATA
· Always asks himself how he can interpret the RESULT
· Always looks for DIAGNOSIS
· Always communicates his finding accurately, no matter the deviation
· Always is eager to back on track, and correct the model
· Never trusts the first output
· Never trusts unchecked numbers!

and he remembers he still could be wrong! welcome to the world of econometrics!

Temporarily OUT

I am out until Thanksgiving. Too busy and i have one final step to make :) the last mile

Another Paper in Industrial Organization

When I started this blog I decided not to share personal things. However this is an exception. My first paper in industrial organization with my advisor John Heywood is accepted for publication and now is in press. It is titled: “Mixed Oligopoly in a Single International Market.” Here is its abstract:

It departs from previous literature by considering a mixed oligopoly with two countries each with public and private firms competing in a single market. This differs from the traditional framework of examining a single domestic market in which foreign and domestic firms compete and is motivated, in part, by international airline markets but serves to characterize many markets. The resulting equilibrium emphasizes that the strategic interaction of the two public firms usually serves to reduce welfare. Thus, the usual reason to imagine a public firm in a mixed oligopoly, to enhance welfare, is lost when such firms compete in the interest of their respective countries.

For me the most interesting finding of this paper is the fact that countries sometimes are locked in a prisoners’ dilemma regarding privatization. Should they choose to do so unilaterally in regional markets they would suffer a decline in social welfare. This explains the reluctance of several governments to carry on liberalization policies when public firms act as trade strategical instruments.

Paper is forthcoming in Australian Economic Papers.

Do Not Even Think About it!

If the phrase “very bad idea” would have only one application, it would be partition of Iraq. Even thinking of partition has catastrophic consequences. It provides political parties involved with a new set of motivations to not cooperate with federalism plan and to seek vigorous cleansing programs of their own, if existence of such programs could be acknowledged, to guarantee a strong hand to negotiate a larger slice of land.

This would threaten Iraq’s neighbors. Iran would seek means and instruments to protect its western borders and to guarantee its territorial integrity. Turkey would pursue a vigorous policy in its southeastern provinces. The Arab nations, already suspicious of the true reasons of invading Iraq, would accept the word of conspiracy theorists as facts and realities. The resulting psychological atmosphere would doom any effort to democratize the political process in Arab countries. Radical groups’ popularity would rise to new levels unheard of.

Should it happen the worst nightmare of Middle East would materialize. There would be two land locked states deprived of economic means to develop on their own. One would become the perfect environment for Al Qaedeh to grow; the other would be accessible only through air. A third one would have access to sea, but depends for water supply on its northern neighbor. Iran and Turkey would have to pay military bills, which have no contribution whatsoever to regional stability or their own prosperity.

There would not be an easy solution for Baghdad where millions of Shiites, Sunnis and Kurds live whose significance is only second to that of Mecca. A partition would have to destroy Baghdad, that Arab nations and Islamic world would neither forgive nor forget.

Economically partition of Iraq would ruin any chance of sustainable growth in the region. Iraq is a potential market for growing economies of Turkey and Iran, where a private sector is coming to age and venturing markets to stay on its own feet independent from government. It has the potential to revive tourism in the region to open the way toward an intense commercial competition. Iraq and Iran together can muster a population of 100 million blessed with the most highly educated work force in the region. Their economic corporation would ignite a path of economic growth that reduces the incentives for violence and shrinks the support for violent insurgency.

Partition of Iraq might be attractive to some seeking a shortcut solution and to those who in instability of this country seek security for others, but it would be a disaster to the region and a true betrayal of the cause of democracy. It is regrettable to remember how the windows of opportunities were missed, how “axis of evil” alienated Iran and how administration assumptions had been totally wrong. But it would be more regrettable if this administration even considers a partition plan. One would think this administration has more than its fair share of mistakes, it is time it has its fair share of solutions; real ones and not that of colonial 19 century British minds.

Check: http://blog.washingtonpost.com/postglobal/ for more comments

Interesting to know

There is a joke among graduate students and faculty members that the difference between being in ‘hell’ and ‘heaven’ is nothing but publishing. Those in heaven get published while residents of hell don’t. Being cited is a blessing above being published. A pleasure not experienced by many.

So it is amazing to know that D.R. Cox (1972) paper is among top 100 most cited scientific papers, since time of its publication thirty odd years ago. His paper is on Partial Maximum Likelihood and is most application in survival analysis. To those who study economics reading it is a most. The mathematics of it is most admirable. Particularly when one remembers the growing applications of survival analysis and proportional hazard modeling in industry.

David Cox is knighted and he is addressed as Sir David Cox.

Facts Facts Facts

Click on the titel to read Washington Post report.