The last post looked at how many applications for asylum Australia and other countries have received this year on a per capita basis. The top three countries in the resulting league table are Malta, Cyprus and Norway and their figures are so much higher than other countries that they skew the data, making it hard to differentiate the lower rankings. To remedy this, I have reproduced the chart using a logarithmic scale.
Asylum-seekers per capita 2009
In Crikey this week, Bernard Keane made the point that Australia accepts a disproportionately small number of asylum-seekers given our population size. So, where exactly do we rank in the world in terms of generosity towards displaced persons? The United Nations Refugee Agency provides a wide range of statistics about refugees and asylum-seekers. The latest monthly data gives the number of asylum-seeker applications by country for 2009 up to and including August. The chart below shows a ranking of the 44 countries who reported accepting asylum-seekers over this period. Australia finds itself well down the list in 20th place. Mind you, the United States ranks a few spots behind us and, despite having a better reputation when it comes to taking refugees, New Zealand is even further behind. Malta is by far the most welcoming country for refugees.
Today @jgzebra drew my attention to the Times Higher Education league table of the top 200 univerities in the world. A quick glance at the list shows two US universities in the top three and six in the top 10. And indeed the United States dominates the results, claiming 54 spots out of the 200. The United Kingdom comes in next, taking 29 spots.
Country Count in Top 200 Universities List
Of course, this tally does not take into account the differing sizes of each country: with a population of over 300 million people, you would expect a good showing from the United States. So the obvious question is, what would the national ranking look like if population were taken into account? Rather than doing this based on the number of appearances each country makes in the list, I aggregated the overall “score” awarded to each univerity (which combines scores based on surveys of peers, employers, staff and students, citations and international staff and students) and then ranked each country by aggregate score per million population*.
Last week, the Australian Financial Review was doing its best to spruik the ongoing prospects for the Australian share market in their front page article “Cashed-up funds have $70bn to invest”. The article is only available online to subscribers, but this quotation sums it up:
analysts cite the volume of cash stockpiled as a reason for stocks to keep rising
Mostly consisting of quotations from people in the equity business (who all arguably stand to benefit from talking up the market), the authors do include some data to support the proposition as well:
The latest data released by the Australian Bureau of Statistics shows that fund managers have increased their cash holdings to about 18 per cent of the $880 billion they manage, or about $160 billion. If managers were to return their cash holdings to more normal levels, there would be about $70 billion available for investment, with the local sharemarket receiving up to $30 billion.
The image of a wall of cash on the sidelines waiting to spill over into equity markets is compelling, but does it make sense? The power of this commonly used image arises from the idea that cash is somehow transforming into shares, when of course for every buyer there is a seller who gets the cash, so share trading never changes the total amount of cash in the system (note that aggregate money supply can change through central bank operations and banking deposit creation, but that is a whole other story beyond the sharemarket and is not part of the standard “cash on the sidelines” argument). Of course, this does not stop share prices from going up or down.
So, if the cash in the system does not change, what is going on?
Recently, a few people have asked me whether they can get automatic updates when new posts are published here on the Stubborn Mule. The short answer is “yes!” And of course it’s all free.
Those who are familiar with RSS feeds will already know all about this and need read no further (but should also feel free to subscribe). For everyone else, I’ll give a longer answer, explaining how it all works and describing some of the options available for subscribing to the blog.
You may have seen icons like the one here on various web-sites before. It is the RSS logo and indicates that content is available via subscription. RSS stands for “Really Simple Syndication” and over the last 10 years it has become a standard mechanism for distributing content online (for example, podcast subscriptions are built on RSS). True to its name, the way it works is quite simple. A specially formatted file* is created with a list of blog posts, podcasts, news headlines or whatever the subscription content is, along with a link to where the content is located. Whenever new content is added to the website, this file, called an RSS feed, is updated to reflect the new content. The feed can then be read by an “RSS reader” which will periodically check to see if new content is available and then download it, ready for you to read, watch or listen to.
The trick then is to find the best RSS reader and there are a lot of them, as is evident from this list of readers. Readers may themselves be on the web, like Google Reader (my RSS reader of choice), or can be stand alone applications like NetNewsWire. Some email applications can also be used as RSS readers. With an RSS reader, you can manage subscriptions to a wide range of feeds and always keep track of the latest content. Some readers, including Google Reader, also allow you to share you favourite content with friends.
If this all seems too complicated and you are not interested in a large number of subscriptions, you can also have updates to the Stubborn delivered to you directly via email. To do this, simply enter your email address in the box below and click on “subscribe”.
I have the RSS feed for the Stubborn Mule managed by a service called “Feedburner”, which is now owned by Google. As well as providing extra features like the email subscription, this allows me to track how many people subscribe to the blog…so subscribe now, I am watching!
* Like so many web standards, the RSS format uses XML.
Data visualisation is a fascination of mine and, as a result, the posts on this blog have featured a wide array of charts. My aim is always to use graphics to help explore data and provide greater insight into whatever phenomena might be lurking in the data. While I have tried to make use of “good” charts, I have never talked about “bad” charts. There is no end to the things that can be said about bad charts. Indeed, one of my favourite blogs, Junk Charts, is dedicated to the subject. Nevertheless, I have decided that I will begin to assemble some bad charting habits to avoid.
Inspired by a chart on the Australian Stock Exchange (ASX) web site, brought to my attention by Danny Yee, I will start by considering the perils of the “secondary axis”. This is a topic that has been covered on Junk Charts, but it seems to be poorly understood by many people in finance. Bank economists seem to be particularly fond of secondary axes.
Since the ASX chart is dynamically generated, I have reproduced a static snapshot showing the key features of the chart. The chart shows (in blue) the history of the S&P/ASX 200 share price index over the last six months. The axis on the left hand side is the “primary axis” and shows the values of this share price index. Overlaid in red is the share price of Alchemia Limited (ACL), a biotech company. The price of Alchemia is shown on the axis on the right hand side, the “secondary axis”.
Alchemia Share Price on a secondary axis (on the right)
At face value, it would appear that the price of Alchemia shares has tracked the performance of the overall share market very closely. However, this is an illusion created by the use of a secondary axis. When considering performance of shares, what is important is not the share price itself, but the returns these prices generate. The upper and lower limits of each axis bear no relation to one another, but are simply determined by the range of values each price series takes and so give no insight into the returns of Alchemia compared to those of the S&P/ASX 200.
A better approach is to create a return index by considering what would happen to $100 invested in either Alchemia or the market as a whole (ignoring dividends and any costs such as brokerage fees and stamp duty). Both these indices can then be plotted on the same axis and this gives a very different picture.
Alchemia Share Price on a common axis
It now becomes clear that Alchemia shares performed dramatically better than the market as a whole. In fact, over this six month period, while the sharemarket index returned a very healthy 32%, the return on the Alchemia share price was an enormous 304%. This return was helped, no doubt, by Alchemia’s progress in drug trials with the US FDA.
The most that can be said for the ASX chart with the secondary axis is that it reveals some correlation in the ups and downs of the Alchemia share price and the broader market. However, the chart completely missed the big story in the data.
It is worth noting that producing the secondary axis in the first chart above using the R package is rather fiddly, while creating secondary axes in Microsoft Excel is very straightforward. This points to what I expect to be a theme in future bad chart posts: if it is easy to do in Excel, it is probably bad.
As the G20 starts to get serious about curbing executive bonuses, we can expect banking lobbyists to get more strident in their attempts to resist these incursions into their cosy remuneration practices. This has, in fact, already begun. In a recent example, Deutsche Bank Chief Executive Josef Ackermann was resorting to cliché, claiming that “the war for talent is in full swing” (we can blame McKinsey & Co for unleashing these weasel words on an unsuspecting world). Expect to hear more.
Whether it is bankers defending bonuses or politicians frowning that bonuses contributed to excess risk-taking, what rarely seems to be questioned is whether or not bonuses actually work. That is, used as an incentive for employees, do they actually result in better performance. In most discussions, it is taken for granted that they do work, but that unwelcome side-effects can also emerge, in the form of excessive risk-taking.
However, writer Dan Pink recently challenged this basic assumption in a TED talk in August this year. He pointed to years of experimental research which suggest that while financial incentives may be very good in maximising productivity for simple tasks, they can actually result in worse performance for more complex tasks that require problem-solving or creativity. Rather than “extrinsic” motivators like financial rewards, Pink and others argue that “intrinsic” motivators like autonomy (being in control of what you do in your work environment), mastery (being good at what you do and wanting to get better) and purpose (feeling that what you are doing is worthwhile) are far better motivators.
The talk itself is under 20 minutes long and is well worth a watch (as are so many of the TED talks).
Of course, some may argue that the simplified environment of the social science laboratory does not translate to the complexities of the real business world. However, this research shows that the implicit assumption that bonuses are required in banking and finance to deliver better outcomes should not be quietly accepted. And, if the G20 are successful in initiating a change to the practices in the financial sector, it may not actually hinder staff performance. In fact, it might even help.
In this follow-up guest post on The Stubborn Mule, Mark Lauer takes a closer look at the relationship between national development and fertility rates.
STOP PRESS: Switzerland’s population would be decimated in just two generations if it weren’t for advances in their development.
At least, that’s what the modelling in a recent Nature paper projects. The paper, widely reported in The New York Times, The Washington Post and The Economist, amongst others, was the subject of my recent Stubborn Mule guest post. In that post, I shared an animated chart and some statistical arguments that cast doubt on the paper’s conclusion. In this post, I’ll take a firmer stance: the conclusion is plain wrong. But to understand why, we’ll have to delve a little deeper into their model. Still, I’ll try to keep things as non-technical as possible.
First, let’s recap the evidence presented in the paper. It comprised three parts: a snapshot chart (republished in most of the reportage), a trajectory chart, and the results of an econometric model. As argued in my earlier post, the snapshot is misleading for several reasons, not least the distorted scales. And the trajectory chart suffers from a serious statistical bias, also explained in my earlier post. I’ll reproduce here my chart showing the same information without the bias.
That leaves the econometric model. From reading the paper, where details of the model are sketchy, I had wrongly inferred that the model suffered the same statistical bias as the trajectory chart. I have since looked at the supplementary information for the paper, and at the SAS code used to run the model. From these, it is clear that a fixed HDI threshold of 0.86 is used to define when a country’s fertility should begin to increase. So there’s no statistical bias. However, I discovered far more serious problems.
This post represents something of a milestone for the Stubborn Mule. A few months ago I passed the one year anniversary of the Mule (the first post was published on 18 May 2008). Now I have reached the 100th post. To celebrate, and in recognition of the fact that older blog posts tend to disappear under the pile of newer ones, I will take this opportunity to revisit some of these older posts.
Drivers of Australian Inflation
Back when the global financial crisis was little more than a sparkle in a sub-prime lender’s eye, outside the bond markets anyway, we were still worried about inflation. In Australia, the rate of inflation for the 12 months to March 2008 hit 4.3%, which was outside the Reserve Bank’s target range of 2-3%. Setting a pattern that was to continue, I attempted to illustrate the drivers of inflation graphically. In this case, I produced a “heatmap” (a form of “treemap”) showing the sub-categories of the Australian Consumer Price Index.
Australia and the Global Financial Crisis
A lot of the posts on the Stubborn Mule have touched on aspects of the global financial crisis, including Moody’s Colossal Bug, How Big Are Australian Banks?, AIG and DZ Bank: Dumb and Dumber and Shoots Are Greener in Australia?. But the single most popular post on the blog is Australia and the Global Financial Crisis. Written back in October 2008, not long after the collapse of Lehman Brothers, this piece aimed to explain what caused the financial crisis and why, even then, Australia seemed to be faring better than much of the rest of the world. Over the coming years there will doubtless be many millions of words written about the causes of the crisis, but in the meantime, on most days, this post still gets more hits than any other on the blog.
Another popular post, this was actually a follow up to another post which looked at the Beijing 2008 medal tally on a per capita basis and by the size of each country’s economy. The Olympics were still underway and I decided to improve the first post by having the ranking charts update live as medals were awarded. I did this with the help of the data sharing site Swivel: I wrote a little script to regularly poll the official Olympics site for medal awards, post the results to Swivel and Swivel would then update the charts embedded in the blog. A little later, I did the same thing for the Paralympics.
Back in the middle of 2008, with petrol prices soaring, there were many complaints that petrol retailers were gouging motorists with their petrol pricing. In this environment, which led to the misguided and short-lived “FuelWatch” scheme, I decided to test the relationship between crude oil prices and prices at the petrol pump. Needless to say, there was a very close relationship between the two. As oil prices fell, the sting went out of this issue, but for old time’s sake, here is an updated version of chart showing the results of my simple regression model.
Regression Model of Sydney Petrol Prices (unleaded)*
Written after attending a training course at work, this post was a bit of a rant about HBDI and other similar personality tests such as Myers-Briggs, which I consider to be simplistic tools designed primarily to generate revenue for the companies that produce the tests and are closer to astrology than science. I can feel my blood pressure rising again now…
I was something of an early adopter of the internet phenomenon that is Twitter. When I wrote this post, I had been using Twitter for a little over a year and the total number of twitter users had just passed 2 million and looked like it might be levelling out. Now Ashton Kutcher alone has more than 3.6 million followers and overall Twitter has more than 5 million users. Although many people have become more familiar with Twitter, this post still draws in readers looking to find out more about microblogging. In the post I also look at the open microblogging platform Laconica and at identi.ca, the original example of a microblog built on Laconica. While I do still use my identi.ca account, it’s hard to escape the lure of Twitter.
Why I Always Buy the Same Sandwich
Another early post, this was inspired by my reading of Dan Ariely’s excellent book “Predictably Irrational”, which is all about the fascinating field of behavioural economics. One of the subjects Ariely discusses is the phenomenon of “self-herding”, which basically means people tend to get stuck in a rut doing the same things over and over again. In my case, I used this concept to explain why I kept buying the same sandwich. More than a year later, I still buy the same sandwich. I still plan to revisit the subject of behavioural economics at some point in the future.
So, having recycled all those electrons, I am off to start planning the next 100 posts.
* Data Sources: Sydney Petrol Prices from the Australian Automobile Association, Brent crude oil prices and A$/US$ exchange rates from Bloomberg.
A few months ago, a new site arrived on the increasingly crowded web 2.0 scene. Posterous offers a medium that fits somewhere between a blog and a microblog (the canonical example of the microblog being, of course, the juggernaut that is Twitter). Maybe it should be called a “miniblog”.
Posterous is not the only site to target the miniblog niche. Tumblr has been been around for a few years and has been reasonably successful in building a base of users who like the ability it provides to easily share photos, links and assorted random scribblings. As an obsessive early-adopter of most things web 2.0, I have a tumblr account (the “Raw Prawn” identity pre-dates the “Stubborn Mule”), but I have not been very active there of late.
Although Posterous launched only about six months ago, it has already seen healthy growth in traffic since then and has already reached the traffic rank that tumblr had six months ago.
Posterous.com Traffic Rank (September 2009)
Part of the reason for its success is that it is extraordinarily easy to use. There is no need to sign up or create an account, as you would on twitter, tumblr or any other web 2.0 site. Instead, simply send an email to post@posterous.com. Give it a try! Send a snippet of text or, better still, a photo, music file or a link to a youtube video and Posterous will work its magic to send back to you a link to a web page with your content that you can easily share with anyone and everyone. Here is one I prepared earlier. If you live in the US, you can also send posts via SMS from your phone.
Posterous has a raft of other features that put it on a level above tumblr. For a start, it tracks the number of times that a post has been viewed (the power user can even track traffic using Google Analytics). Also, like any good web 2.0 application, it supports tags which can easily be added, edited or deleted after creating your post. There is also an iPhone application that allows you to take a photo and immediately send it to Posterous (to be fair, tumblr has an iPhone application too).
To take full advantage of Posterous, you should “claim” your email address (ok, so at this point you are effectively signing up for the service, but you don’t have to take this step). One of the features this will allow you to access is the ability to “auto-post” to an increasing range of other sites, including Twitter, Identica, Facebook, Flickr and Delicious. Turning on these services is straightforward once you have claimed your address signed up.
What exactly auto-posting does varies with each service. In the case of Twitter, Posterous will send the title of each post with a shortened link to the post. If you auto-post to Flickr, any photos you sent to Posterous will be added to your Flickr account. If you have a blog, the chances are you can repost the entire content of your Posterous post.
Posterous also shares with tumblr and any good web 2.0 a social networking feature that allows you to subscribe to other people’s Posterous accounts. You can see posts you have subscribed to through the “My Subscriptions” link on Posterous as well as receiving regular email updates. Posterous also allows the creation of multiple miniblogs (up to three) within the one account.
Unlike Twitter, Posterous even has a business model in mind, with plans to offer premium services for a fee at some point in the future. This “freemium” service approach has already been adopted by the likes of Flickr, Dropbox and a number of other web 2.0 services. Even for users who never take up these premium services, any means of revenue generation should help the site to stick around for longer than some of the more fleeting web 2.0 sites.
I have only been experimenting with Posterous for the last couple of weeks, but with the combination of extreme ease of use, smooth handling of multiple media types and the auto-posting feature I expect that it has a bright future ahead. In the meantime, keep an eye on the Mule’s Posterous account for posts that do not quite warrant appearing here on the blog.
Posterous Tips