Wednesday, November 23, 2011

Why CPH does not like Euros?

This year I noticed that two European airports, located in non-euro countries, discriminate against paying with euro cash. I am sure there are more such airports, but I have just experienced that in Copenhagen and Riga. This is a little bit surprising as both of these airports are significant players in their region (Nordic and Baltic Countries respectively). Even more, both of them aspire to become even more important, to offer more destinations and to capture more transit passengers.

The last wish -- to capture transit passengers -- almost sounds like an obligation to accept euros for an European airport. True, both of them accept it. But the exchange rate may be rather unfavorable, and the change is given in the local currency, in this way rendering the euro cash next to unusable. Why that? I offer three potential explanations, one political and two economic ones…
  1. Operating with two currencies in every single shop may be too costly, possibly because most non-local customers use credit card anyway. However, passenger ferries in Northern Europe regularly accept currencies of both departure and destination port. It shouldn't be too different for an airport.  
  2. This is a form of price discrimination. Foreigners without a credit card do not have a choice -- either you accept the unfavorable terms or you exchange money with even worse rates. But I doubt those without credit card belong to the least price-sensitive group...
  3. For political reasons, the shops cannot treat euro on equal terms with the local currency. I remember stories of this sort, but unfortunately not the details. But why should politicians care, especially while they also want to have their "pet airport" to gain even more traffic and fame? 
I don't know the answer. Anyone else?

Tuesday, November 1, 2011

Miljöömaks ja kuidas seda kompenseerida

Muinsuskaitse nõuded ajaloolistele hoonetele on võrreldavad maksuga. Et vältida vanemate elupiirkondade lagunemist, tuleks (nõutele vastavat) renoveerimist osaliselt kompenseerida.
Täpsemalt Tartu Postimehes.

Wednesday, September 21, 2011

Public Goods Provision as an Anti-Immigration Argument?

USA Immigration at JFK
The public goods game is an explanation to why so often too little is done to promote the common cause. The idea itself is very simple. Imagine we have several players. Everyone can decide how much resources to put into the "common pot". Next, the content of the pot is multiplied (by a number less then the number of players) and distributed evenly back to all the players. Obviously, the best solution for everyone were to invest a lot and gain back even more. Unfortunately, for every dollar I invest, I receive back less than one (although I receive a slice of what the others have invested). Hence, a rational selfish player will not invest anything at all and solely free-ride on the others investments. As experiments indicate, the people around us are not quite that bad, but most will still devote less than optimal amount of resources for the public good.
Now imagine that instead of players, we have countries. The common pot are the public goods, such as crime prevention or public highways. Voters in every country are free to pay taxes and build up such public goods. But afterwards, they are also free to move to whichever country they want. What would rational voters do? First, they would pay no taxes, and second, they will move to the country with best amenities. Sounds like the public goods game, right?
However, for the analogy to work, the public goods must be non-excludable -- it must be hard to avoid free-riding on the taxpayers bill. However, from the viewpoint of immigration, many public goods, usually given as examples of non-excludable goods, are actually excludable. This includes highways (can be financed by fuel taxes), social security (can be made conditional on some sort of contribution period) and public schools (if immigrants can be taxes, this money can by used for constructing new schools). If population growth (not just through immigration) is slow enough, and newcomers pay taxes, you can expand all of the above examples. The excludability originates from the fact that governments can tax the (potential) users, and expand the supply through this source of funding. Note that you still may have a conflict between rather rich locals and poor immigrants, each preferring a different level and variety of goods.
What cannot be easily expand include some sort of inherently limited resources one cannot produce at all, such as minerals, arable land, but also street space in a busy downtown. Although these are public goods as well, the public goods game as described above does not directly apply for these (another one, called "tragedy of commons", does). There is also a type of amenities which are non-excludable even in case of countries and governments. This includes information, environment protection, and other stuff for which national borders play no role.
In conclusion, free-riding on public goods provided by locals is a valid but possibly quite weak argument against liberal immigration policy. Strength of it depends on the degree to which the immigrant population can be taxed, i.e. whether immigrants are in legal employment.
Note also that there are more ways immigration and public goods provision are related. For instance, studies find that more diverse population leads to less public goods provision, possibly through low level of solidarity in heterogeneous society. That's a different story, however.

Wednesday, August 10, 2011

Waiting for Pan-European Cellular Networks

I speak little but travel a lot. This is why I am often upset with the way mobile service works in Europe. In particular, the cross-border talks tend to be quite expensive. Anecdotal evidence suggests it is not just me -- during a trip on the Tallinn-Helsinki ferry I noticed a surprisingly large number of people changing SIM cards in their cellphones. These are commuters who have two SIM-cards, one for each country. Swapping the SIM-card is not too big a problem although the ordinary mobiles are not made with ease of this operation in mind. But price difference is large enough to justify a small inconvenience.

By Luke Ford ( [CC-BY-SA-2.5 (], via Wikimedia Commons
 The situation is slowly improving, largely due to the cap on roaming tariffs, set by EU-Commission in 2007. However, I feel the legal cap it is not about the core of the problem. Cheap roaming is nice, but why do we have to rely on roaming in Europe in the first place? Why don't we have Pan-European networks, uninterrupted single networks covering all the Europe? A large part of the current country-based networks are owned by just a few large telecoms anyway, such as Vodafone and TeliaSonera. Why should one roam between the same operator's two networks, located next to each other? Cannot these two networks just be merged?

From the technical point of view, I cannot imagine there will be many obstacles. True, the related data processing may be somewhat more demanding, but roaming is complex as well. Perhaps there are some sort of distance-related expenses which keep the minute price for calls between Helsinki and Lisbon above that of between Bratislava and Vienna. However, I don't see any reason why should calls to neighboring countries be any more expensive than "domestic" calls, especially if it is about small states like in Scandinavia or Baltics.

What is the reason that a single telecom does not operate a single network across Europe? I bet this is linked to the fact that radio frequencies is "owned" and managed by member states and not by EU. Can anyone enlighten me here?

Anyway, this is an example how recent technological progress creates new border barriers.

Saturday, March 5, 2011

Miks valimislubadusi uskuda ei saa ja kas midagi üldse uskuda saab

Lingin siia oma valimisteemalise kommentaari Postimees onlines.

By U.S. Army photo by Staff Sgt. Jacob Caldwell [Public domain], via Wikimedia Commons

Tuesday, January 4, 2011

Milline on EE tööjõu maksumäär?

Siin arvutusreegel Eesti tööjõu piirmaksumäära rehkendamiseks.  Algselt oli see mõeldud lisana HEI loole: Kas Eesti maksusüsteemi võiks lihtsustada, aga sinna jõudis ainult keskmise maksumäära rehkendamise valem.

Lühidalt: tööjõu maksumäär on kolmeastmeline, kusjuures astmed on umbes 4, 25, ja 43 protsenti.  Loos ma ei maini ka seda, et tulumaksu vähendamine ning töötusmaksu sisseviimine on muutnud seda vähem progressiivseks.   Arvutuseeskiri on siin PNG failina, kui keegi oskab latexit mathml-ks muuta, siis aidake :-)

Monday, January 3, 2011

Kuidas "kõrgharidus" tähendab erinevaid asju ja miks see hää on

Kõrgkoolid saavad orienteeruda sellisele tasemele, millisel onvõimalik värvata tudengeid. Kuid ka viletsad tudengid ei õigusta halba õpetamist.

Jos-uit-boston at nl.wikipedia [GFDL or CC-BY-SA-3.0, via Wikimedia Commons

Koolilõpetajate võimekus ja huvid on erinevad. Kõige rohkem õpilasi on keskpärased. Väga võimekaid on väga vähe, samas suudavad nad õppida palju rohkem ja kiiremini kui teised. Millistele nende hulgast peaks ülikool oma tegevuse suunama? Ilmselt peab sihtima niisugust gruppi mis on piisavalt suur. Elitaarset ülikooli, kus õpetatakse vaid väikest arvu eriti andekaid üliõpilasi, pole mõtekas luua. Esiteks oleks selle ülalpidamine kallis ja teiseks tunneksid ka eliittudengid end paremini kui nad oleksid osa suuremast grupist. Samas kaotavad kõige andekamad üliõpilased väga palju, kui nad oma võimetele vastava hariduse asemel rahulduvad keskpärasusega.

Niisugune tõdemus võimaldab meil teha hulga huvitavaid järeldusi.

Esiteks, mõisted nagu "bakalaureuse-" või "magistrikraad", on ebatäpsed. Samale kraadile vastav diplom võib tähendada väga erineval tasemel haridust. Akrediteerimine määrab ainult (üpris madala) miinimumtaseme.

Teiseks, suur tudengite arv ei ole sama mis keskpärased tudengid -- kui elanikkond on suur, siis on küll võimalik leida palju võimekaid üliõpilasi. See viitab vajadusele koolide spetsialiseerumise ja tasemega seotud brändide järele. Võimekamad keskkoolilõpetajad peaksid minema ühte, keskpärased teistesse ülikoolidesse.

Kolmandaks, kõige võimekamad tudengid peaksid minema tippkoolidesse. Vaatamata üleskutsetele, et parimad Eestimaa pead õpiksid Eestis, ei ole siin vastava tasemega programme.

Neljandaks, kui on soov siin luua programm kõige andekamatele üliõpilastele, peab enamus neist pärinema väljastpoolt. Seega peab niisugune programm konkureerima tuntud ülikoolidega nagu Stanford ja Chicago.

Seega võiks Baltimaade kõrgharidus liikuda umbes niisuguses suunas: esiteks peaksid koolid taseme osas spetsialiseeruma. See võimaldaks ka väikses ühiskonnas rakendada natuke suuruseelist ja vähendada konkurentsi negatiivseid külgi. Teiseks peaks rohkem kasutama rahvusvahelist spetsialiseerumist. Keskkoolilõpetajad peaksid rohkem teadma erinevate ülikoolide ja valdkondade tasemest, nii oma kodukohas kui kaugemal. Kõige võimekamad keskkoolilõpetajad peaksid jätkama oma õpinguid maailma tugevamates ülikoolides. Selles osas tuleb neile vaid jõudu soovida.

Kas tipptasemel programmid võivad tekkida ka siinsete ülikoolide juurde? Praegu selleks võimalusi ei paista. Kuid see ei tähenda, et arenemisruumi poleks -- ka keskpäraseid tudengeid saab hästi õpetada.

By Ahnaiahicea [CC-BY-SA-3.0-2.5-2.0-1.0

Kokkuvõttes: sõna "kõrgharidus" sisaldab väga erineval tasemel haridust. Seda on vaja arvestada nii kooli valikul kui hariduspoliitika kujundamisel.