The WaPost's Ariana Eunjung Cha reports on how Best Buy is tailoring the environment and service at particularly stores to appeal to specific types of customers. It's yet another sign that one-best-way store environments, like lowest-common-denominator products, just aren't as valuable--or aren't as competitive--as they once were.
Big chain stores used to be among the most egalitarian of places. They were aimed at the average person, the generic "shopper," without conscious regard to background, race, religion or sex. That is changing as computer databases have allowed corporations to gather an unparalleled amount of data about their customers. Many retailers, like Best Buy, are analyzing the data to figure out which customers are the most profitable -- and the least -- and to adjust their policies accordingly....
inspired by Columbia University Professor Larry Selden's book, "Angel Customers and Demon Customers," Best Buy chief executive Bradbury H. Anderson is on a mission to reinvent how the company thinks about its customers. Best Buy has pared some less desirable shoppers from its mailing lists and has tightened up its return policy to prevent abuse. At the same time, it has begun to woo a roster of shopper profiles, each given a name: Buzz (the young tech enthusiast), Barry (the wealthy professional man), Ray (the family man) and, especially, Jill.
Based on analyses of databases of purchases, local census numbers, surveys of customers and targeted focus groups, Best Buy last fall started converting its 67 California stores to cater to one or more of those segments of its shopping population. It plans to roll out a similar redesign at its 660 stores nationwide -- including about 15 in the Washington area -- over the next three years. The Best Buys in the Springfield Mall, the Fairlakes shopping center and Potomac Mills, for instance, are being transformed into stores for Barrys, featuring leather couches where one might imagine enjoying a drink and a cigar while watching a large-screen TV hooked up to a high-end sound system.
The Santa Rosa Best Buy, Store #120, is a Jill store.
Pink, red and white balloons festoon the entrance. TVs play "The Incredibles." There is an expanded selection of home appliances as well as new displays stocked with Hello Kitty, Barbie and SpongeBob SquarePants electronic equipment. Nooks are set up to look like dorms or recreation rooms where mom and the children can play with the latest high-tech gadgets at their leisure. Best Buy has new express checkout lines for the Jills; store managers say anyone can use them, but if you are not escorted by a special service representative they can be easy to miss. The music over the loudspeakers has been turned down a notch and is usually a selection of Jill's favorites, such as James Taylor and Mariah Carey.
Cha's piece is a good read. Don't rely on the excerpt. Read the whole thing.
Contrary to popular belief, the Kelo decision, terrible though it was, didn't really make new law. It ratified the status quo. For decades, cities have been taking private property under eminent domain, only to hand it over to private developers. The general public just had no idea how big the problem was until the Supreme Court said the practice was OK. Now politicians, including some who were previously fine with Kelo-style takings, are having to deal with a riled up public. The San Diego Union Tribune reports on one example:
Hit with scattered horror stories but convinced from her experiences on the San Diego City Council that eminent domain can be a valuable tool for progress, state Sen. Christine Kehoe says it's time to rethink how local governments use — and sometimes abuse — their broad powers of condemnation.
The San Diego Democrat has introduced legislation that includes an immediate two-year moratorium on seizing owner-occupied housing under the banner of eminent domain.
In doing so, Kehoe aligns with a growing number of lawmakers — both liberal and conservative — who are demanding a fresh look at eminent domain after a 5-4 U.S. Supreme Court decision that upheld a Connecticut city's right to evict middle-class homeowners to pave the way for a waterfront hotel and convention center to support a $300 million research facility for Pfizer.
In the Sacramento Bee, Claire Cooper surveys proposals, including Kehoe's fairly wimpy one, to change California law to give property owners a bit more protection. There's a dispute, she notes, over how widespread the takings are.
Timothy Sandefur, representing the Pacific Legal Foundation, testified that California agencies condemn private property to benefit private developers "eight times as often" as Connecticut agencies do.
Michael Berger, a Los Angeles lawyer, said the statistics on condemnations have been understated, because most property owners sell out to redevelopment agencies before condemnation proceedings are instituted against them.
But Sacramento attorney Joe Coomes, testifying for the California Redevelopment Association, said redevelopment projects in the state rarely include residential neighborhoods.
He and Bill Higgins, a land-use expert associated with the League of California Cities, warned against passing new laws that might hobble vital infrastructure projects and the ability of cities to clean up contaminated properties where owners refuse to take responsibility.
Focusing on the threat to owner-occupied homes may, indeed, miss the point. When people lose their businesses to redevelopment schemes, they aren't all that much happier.
Here in Texas, I note that my former colleague Rich Phillips, who did a stint as the Reason Foundation's public affairs director, is running for the state legislature and, judging from his website, he's making Kelo a central issue. Amid the usual boilerplate about supporting education, prosperity, and families is the following strong and specific statement:
The U.S. Supreme Court recently ruled that local governments may seize people's homes and businesses. As a result, cities now have the power to bulldoze your home for private development such as shopping malls and hotel complexes to generate more tax revenue. The ruling is a signal that we need to have the courage and will to defend our core principles and values. This is not America. And this is not Texas.
I doubt that Rich will be the only candidate to make this an issue, in Texas or elsewhere.
Bush's Aid Cuts on Court Issue Roil Neighbors
Unless you click to the story, you'll never figure out what it means. Or at least I couldn't.
My latest NYT column takes a (fairly cursory) look at research incorporating the sociological notion of identity into economic models. The column, which draws on papers I read while researching my Globe article on economic sociology, came out last Thursday, while my Internet access was rather limited.
Women are born with all the eggs they'll ever have, and after puberty, they start to discard at least one a month. As they reach middle age, they run out. When a woman of my advanced age, or, say, Elizabeth Edwards', has a baby, chances are very, very high that she used another woman's egg--especially if the baby is her first. Unlike adopting a child or using a surrogate, however, using an egg donor means you get pregnant and bear the child yourself. And that means you can pretend no donor was involved, which is exactly what a lot of people do.
Writing in the new issue of Elle, Nancy Hass looks at the ethical problems created by this vast conspiracy of silence. It's a long and well-researched piece and, fortunately for those of you who wouldn't be caught dead carrying a magazine with J.Lo on the cover, it's online. Here's a statistical bit:
You may have assumed that telling a child she's the product of another woman's egg mixed with Daddy's sperm in a petri dish would be obvious. Our society, after all, is increasingly obsessed with DNA and the influence of heredity, and we've come to believe that children have a right to know their genetic background. Until the 1960s, it was common to pass off adopted children as one's own; today, it's almost unthinkable. Add to that decades of movies and books warning of the danger of "toxic" family secrets and our collective experience of watching adoptees search the globe for their birth parents, and you might think that few among us would choose not to inform a child that half of his or her genes came from a woman whose name is sitting in a doctor's file across town.
You would be wrong. Since 1984, when the first egg donor baby was born in Australia, more than a million such children have been born worldwide, nearly 250,000 of them in the United States. But as the first generation of these children becomes teenagers, researchers predict that more than half of their parents will try to keep the secret in perpetuity. In a 2004 study of 157 couples, a third of the parents adamantly opposed telling; 18 percent couldn't agree on a plan, though some of the children in the study were as old as eight. Fewer than 20 percent of parents already had leveled with their son or daughter, and while a third indicated that they intended to eventually, the researchers say they doubt all of them will follow through.
And this report probably overstates parents' openness. Coauthor Susan Klock, a Northwestern University psychologist, says that the response rate to her questionnaire — 30 percent — speaks volumes. "Of the 70 percent who won't talk, you'd be safe in assuming that the majority of them aren't planning to tell."
Hass quite naturally concentrates on the personal dilemmas: What happens if a child discovers the deception? How many deceptions do you have to layer on top of the primary one to preserve it?
But there's also a huge public policy issue here. Particularly from the anti-biotech left, banning payments to egg donors is one of the primary ways of stopping research that requires human eggs, notably therapeutic cloning. Where religious arguments against embryo research don't succeed, anti-commercial ones can. Canada's draconian law against cloning includes provisions that will essentially wipe out egg donation at fertility clinics. Donors are allowed only "documented expenses," with no compensation for the enormous trouble.
As long as people think egg donation is a freaky, unimportant activity, laws like this are all too easy to pass. The conspiracy of silence makes egg donation look much rarer--and far more shameful--than it actually is. For people to get used to strange new technologies, they have to like, or at least adapt to, the consequences of those technologies. People like all these babies; society has certainly adapted to their births, with minimum dirsuption. But egg donation still sounds strange, because too many mothers and fathers pretend it isn't happening.
After many years of bureaucratic resistance, California is finally getting serious about air pollution from cars. These days, most cars don't spew much pollution. But the few that do, account for a lot, and many of them still manage to pass state inspection. Now, the LAT reports, the state is rolling out a serious program to measure tailpipe emissions of cars actually on the road:
In the largest experiment of its kind in California, the South Coast Air Quality Management District plans to use remote sensors and video cameras to measure air pollution from 1 million vehicles as they enter freeways and navigate roads in the counties of Los Angeles, Orange, San Bernardino and Riverside.
If caught, the owners of the most environmentally offensive cars and trucks would receive letters informing them that the government would pay to fix or scrap their vehicles. The South Coast district estimates that 10,000 to 20,000 of the dirtiest vehicles would be detected. Smog regulators lack the authority to order drivers to dump dirty cars, but they can offer incentives
California officials estimate that the dirtiest 10% of all cars and trucks — mostly older vehicles — spew out roughly 50% of the state's smog-forming emissions from vehicles. By the end of this decade, three-fourths of emissions from vehicles will be from older cars and trucks, state officials estimate.
Studies have shown that scrapping high-polluting vehicles is among the most cost-effective ways of cleaning the air — far cheaper than additional controls on power plants and refineries. Yet politicians and state officials have failed for years to get the dirtiest cars off the streets.
"You can't meet our air quality goals without addressing this problem," said Victor Weisser, chairman of California's Inspection and Maintenance Review Committee, which oversees the state's smog-check program.
Remote sensing ought to completely replace garage-based smog tests, though that's a tough political battle. (Garages make a lot of money from those largely symbolic tests.) Just getting remote sensing adopted, even in a large-scale experiment, has been very, very tough. My friend and then-colleague Lynn Scarlett described just how difficult in a 1996 Reason article drawing on her experiences as chair of the Inspection and Maintenance Review Committee. Here's a bit of it:
Its champions see the smog dog [the cutesy name for remote sensing--vp] as an easy way to identify gross polluters without putting everyone through some kind of test. They also see the smog dog as an answer to the "clean for a day" problem. If people know they might be nabbed by the smog dog, they may be more mindful of keeping their cars in better working order to avoid a fix-it ticket or other penalties. But the U.S. Environmental Protection Agency won't allow California (or other states) to rely just on the smog dog. In part, this is because current remote sensing technology does a poor job of measuring nitrogen oxide emissions, which make up a key smog-forming gas. A smog dog to measure NOX is already under way, however, and measuring NOX may not be that important anyway. Many gross polluters fail for all major emission gases.
The bigger dispute is more fundamental. EPA officials seem to think that all cars, not just gross emitters, need to be tested no matter what--and fixed to manufacturer operating standards--if smog check programs are to bring about substantial emission reductions. The smog dog, they say, is not up to the task of testing every car on the highway.
This raises a philosophical more than a technical issue. Just how clean is clean? Is targeting and cleaning up the dirtiest 10 percent of vehicles enough? Air-quality research scientist Douglas Lawson, a former consultant to California's Inspection and Maintenance Committee, argues that getting the really dirty cars is a big enough challenge in itself--and, he argues, that's where the smog check ought to focus. That's where large emission reductions per dollar spent are possible. Out at the margin--where cars are just a little bit dirty--test and repair costs often remain just as high as for gross polluters. But dollars spent on these cars produce few, if any, emission reductions. Often, tinkering with these more marginal polluters actually results in no emission reductions. Sometimes, as Lawson found when reviewing a California Air Resources Board pilot project, these cars produce even more emissions after so-called repairs than before.
When presented with these arguments by California's Inspection and Maintenance Review Committee, EPA officials were unconvinced. And their opinion matters. It's the EPA that doles out emission-reduction credits to states. States that don't get enough credits (which have nothing to do with real-world, measurable emission reductions) for their clean air programs face all kinds of potential penalties. Some California motorists may resent the new smog check program. But it's the least-intrusive plan the state could implement and still meet EPA requirements. Without a rigorous smog check program, drivers could face odd-even driving day regulations. And the state could face restrictions on operations at the Port of Los Angeles and Los Angeles International Airport, or other similarly draconian measures.
Remote sensing is about cleaning up the air, not changing lifestyles or collecting a general tax on cars. It doesn't make any interest groups rich, and it reminds (some) drivers that they, not anonymous big corporations, are now the major sources of smog.
The new Carnival of Tomorrow is up.
In response to my Apple vs. books post, they plug electronic paper, which would certainly be nice. But I'd settle for online access. The problem with telling students that they don't need books is that too many of them already believe that everything important is online, when hardly anything published before 1995 and not in the public domain is in fact available.
Let me use this occasion to again plug Liberty Fund's great Library of Economics and Liberty, featuring searchable, full-text versions of classic works like The Wealth of Nations.
Ayn Rand-inspired activist Logan Darrow Clement's anti-Kelo publicity stunt, calling for seizure of David Souter's house for a hotel, got a lot of attention. The LAT's Elizabeth Mehren offers a nice overview. From the sound of it, the legal issues are a slam dunk. The area is "blighted" and the town needs economic development:
The house--with dark brown paint peeling off and frayed window shades pulled down--sits on an unmarked lane off of South Sugar Hill Road. One of the justice's neighbors is the Sugar Hill Speedway, a go-kart track. Chickens wander in and out of nearby home sites. Rusty pickups and creaky farm equipment litter many front yards. Giant greenhead flies eagerly attack visitors.
A local official says, "We just got a Dunkin' Donuts. We don't have a pharmacy. We don't have a dry cleaners. What would we do with a hotel?" She's clearly not thinking like a city planner.
I will appear on Penn & Teller's "Bullshit" on Showtime Friday at 10 p.m. Eastern and Pacific, talking about whether we have too many consumer choices. The interviews were taped months ago and I'd forgotten to check for airtimes. Fortunately reader Jones Hamilton saw an earlier telecast and emailed me. His review: "You were excellent in the role of Perceptive Social Commentator / Comedic Straight Woman!"
The new issue of Economics Journal Watch is up, and it includes a particularly interesting article by David Henderson on the role of economists in ending the draft. (These links are not to .pdf files but the article, alas, is in that format.)
The article provides a timely reminder that the draft is extraordinarily expensive, far more costly (not to mention less professional) than an all-volunteer force. The costs are just hidden:
One of the first empirical studies of the economics of the draft and of ending the draft was done by Walter Oi (1967a, 1967b), an economics professor then at the University of Washington and later at the University of Rochester's Graduate School of Management. In his study published in the Sol Tax volume (Oi 1967b), Oi distinguished clearly between the budgetary cost of military manpower and the economic cost. Oi granted the obvious, that a military of given size could be obtained with a lower budgetary cost if the government used the threat of force to get people to join--that is, used the draft. But, he noted, the hidden cost of this was the loss of well-being among draftees and draft-induced volunteers. Using some empirical methods that were sophisticated for their day, Oi estimated the loss to draftees and draft-induced volunteers and found it quite high--between $826 million and $1.134 billion. While this number might seem low today, Oi's data were in mid-1960s dollars. Inflation-adjusted to 2005, the losses would be $4.8 billion to $6.6 billion.
Another passage serves as a nice reminder that the current secretary of defense is especially unlikely to change Pentagon policy and offers a compelling argument against the attack on volunteers as "mercenaries."
In December 1966, various prominent and less-prominent academics, politicians, and activists were invited to a four-day conference at the University of Chicago. Papers were commissioned and the people who wrote them gave summaries, after which the discussion was open to all. Fortunately, the discussion was transcribed. The papers and discussions appear in the Sol Tax volume referenced earlier, which came out the following year. The invitees included two young anti-draft Congressmen, Robert Kastenmeier (D-Wisconsin) and Donald Rumsfeld (R-Illinois), and one pro-draft Senator, Edward Kennedy (D-Massachusetts). Also attending were pro-draft anthropologist Margaret Mead and anti-draft economists Milton Friedman and Walter Oi. Friedman gave the general economic and philosophical case for a voluntary military in his presentation, "Why Not a Voluntary Army?" Reading through the whole Sol Tax volume, with all the papers and transcripts of the discussion, I had the sense that there was a coalescing of views over the four-day conference, as people from various parts of the ideological spectrum found that they shared a strong antipathy to the draft and that the economists had a surprisingly strong economic case against it. Friedman's speech and his various comments at the conference still make compelling reading. One of his best rhetorical flourishes was his criticism of the charge that those who advocate ending the draft are advocating a "mercenary" army. Friedman said:
Now, when anybody starts talking about this [an allvolunteer force] he immediately shifts language. My army is "volunteer," your army is "professional," and the enemy's army is "mercenary." All these three words mean exactly the same thing. I am a volunteer professor, I am a mercenary professor, and I am a professional professor. And all you people around here are mercenary professional people. And I trust you realize that. It's always a puzzle to me why people should think that the term "mercenary" somehow has a negative connotation. I remind you of that wonderful quotation of Adam Smith when he said, "You do not owe your daily bread to the benevolence of the baker, but to his proper regard for his own interest." And this is much more broadly based. In fact, I think mercenary motives are among the least unattractive that we have.
Click here to download the file.