Wednesday, October 28, 2009

Freight movements down

Statistics Canada has reported that the volume of cargo carried in August 2009 has been much lower than the one carried in August 2008.  A decline of 16.8% from the levels in August 2008 has been recorded in 2009. The highlights are reported below:

Total freight traffic originating in Canada and freight received from the United States dropped to 21.2 million metric tonnes in August, down 16.8% from August 2008. This marked the lowest amount of traffic carried for the month of August in 10 years.

Freight loaded by the Canadian railway industry's core transportation systems, non-intermodal and intermodal, accounted for the majority of the overall drop in cargo loaded. The industry loaded 18.8 million metric tonnes of cargo in August, down 17.0% from August 2008.

Non-intermodal freight loadings, which are typically carried in bulk or loaded in box cars, fell 16.9% to 16.7 million metric tonnes. The decrease was the result of reduced loadings in the majority of the commodity groups carried by the railways. The commodity groups with the largest declines by tonnage were iron ore and concentrates (down 1.2 million metric tonnes), potash, coal, and iron and steel, primary or semi-finished.

Despite the overall drop in non-intermodal loadings, the industry saw significant gains in tonnage loadings of wheat, other cereal grains, and animal or vegetable fats, oils and flours.

Intermodal freight loadings, transported through containers and trailers loaded onto flat cars, decreased 18.3% compared with August 2008 to 2.0 million metric tonnes.

Rail freight traffic coming from the United States dropped to 2.5 million metric tonnes, down 15.0% from August 2008.

The east west Homicide divide in Canada

The homicide rate in Canada has largely remained stable over the years despite the increase in financial hardships in 2008.  According to the latest figures released by Statistics Canada for the year 2008, law enforcement agencies recorded 611 murders in Canada.  The 2008 numbers are slightly higher (17) than 2007 partly because of the increase in gang related violence in Alberta and British Columbia. 

The homicide rate at fewer than two murders per 100,000 population, however, has remained more or less stable since 2000 in Canada.

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There has been an increase in homicides committed using a firearm.  According to Statistics Canada:

Of the 200 firearm homicides in 2008, 121 or 61% were committed with a handgun, 34 with a rifle/shotgun and 17 with a sawed-off rifle/shotgun. Over the past 30 years, the use of handguns to commit homicide has generally been increasing, while the use of rifles or shotguns has generally declined.

Police in the Toronto metropolitan area reported 50 firearm homicides in 2008, the most of any CMA. Taking population into account, however, the 12 firearm homicides in Winnipeg and the 16 in Edmonton gave those metropolitan areas the highest rates among the 10 largest CMAs.

On a positive note, the rate of females murders (0.87 per 100,000), as well as the percentage of female victims (24% of all murder victims) has been the lowest in 2008 since 1961.

The east-west divide

A breakdown by large cities with a population of or 0.5 million revealed that Winnipeg, Manitoba, recorded the highest murder rate , whereas Kitchener, Ontario, reported the lowest murder rate in Canada.  Canada's largest city, Toronto, reported a murder rate of 1.86 murders per 100,000 population trailing behind Vancouver, Calgary, and Edmonton.  The table below shows an east-west divide when it comes to murders in Canada.  The murder rate is much higher in the western cities than in the eastern cities.  Even with the presence of the organized crime in Montreal, the city reported a murder rate of 1.3, which is lower than that reported in Toronto.

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Tuesday, October 27, 2009

Canadian universities turning hotels into residences

The Globe and Mail in Toronto reports that the Canadian universities are meeting space shortages by converting newly purchased hotels into university residences.  This allows the universities to offer space to first year students who may prefer to stay at the university residence and rather than renting space outside the university.

I spent three years as a live in director of residence at McGill university's Gardner Hall residence. Given that time, McGill University acquired Residence Inn Hotel and converted it into a residence.  By all accounts, that experiment has been a success and is now being repeated across the country.

Earlier in April 2009 I wrote an article for the McGill Daily about my impressions of how university residences should be governed.  I reproduce the article below:

McGill residences: a governance model par excellence

Published: Apr 13 , 2009

It is 3:00 AM and you’re sound asleep on a cold winter night. Suddenly the alarm goes off, forcing you to jump out of your bed to search for the snooze button. Moments later you realize two things. First, you didn’t set the alarm, and more importantly, you don’t have an alarm clock.

Turning to the window in your third-floor room in Gardner Hall, you open the blinds and there it is: an alarm clock hanging outside your window from a thread that also carries a note, “Happy Birthday.” Things do make some sense now. Your friends on the 5th floor wanted to be the first to wish you on your birthday, and they did so by hanging an alarm clock from their window before they went to bed.

If you have ever lived in a McGill residence, the above scenario must remind you of the pranks and jokes that now constitute the most joyful memories of your time at the University. As live-in directors of Gardner Hall, my wife and I cherish the three years we spent with three batches of six floor fellows and 220 first-year students who took up residence at Gardner Hall.

My colleague in Civil Engineering, Professor Jim Nicell, talked me into the position. He was my predecessor and lived at the Gardner Hall for years with his wife and a son, who learned to walk and talk in the residence’s hallways. The visit reminded me of growing up on the campus of Lawrence College in Murree Hills, Pakistan, where the entire student body and the faculty lived on campus, which was built by the British in late nineteenth century on a hill station. I remember students dropping at our residence for tea and a discussion on classical poetry with my parents.

Even while I had years of experience living on campus with students and faculty, I was still not prepared to what I found in the Rez system at McGill. Unlike other residences where I saw the lives of students defined by a complex list of rules, regulations, and norms, the McGill Rez system operated on the single principle of “respect” plus the warning of not to mess with the fire equipment. There was no curfew, no guest restrictions, no strict times for lights off. Instead, the residents were expected to respect themselves, their co-residents, the floor fellows, and the admin staff who managed the residences. In return, the residents were treated with respect as well.

How could this work? The engineer in me wanted to see more rules and stipulations. But there were none. Has it worked in the past, I asked other directors of residences? “It has worked”, they replied, and added “not once, but always, and have been working for years.” The three years that I spent at the Gardner Hall I saw the simple rule of respect worked wonders, not failing me even once.

I have recently learnt about the attempts to “fix” the residence system at McGill University. I did not know it needed fixing. A proposal to replace the tradition of respect with a long list of laws and regulations is on the cards. I believe such a move is unlikely to improve the quality of life of those who are part of the residence system.

In fact the proposed changes may even hurt the residence governance model that has served well thousands of former residents over the past many decades. You don’t have to believe me, just ask Barrett Seaman, an acclaimed author who wrote Binge, a book on how university residences are managed in North America.

Seaman visited McGill and interviewed students, staff, and the directors of residences. He was shocked to see how our hands-off approach worked infinitely better than the barrack-mimicking, regulation-laden residence systems at other institutions. “McGill assumes its students as adults and treats them as such—even first years,” wrote Seaman while paying glowing tributes to the McGill residence system in Binge, which should be a required text for those who manage university residences.

The management style that prevailed at McGill residences is indeed nothing less than a paradigm shift for those who have not seen it in practice. The key challenge is to know when to intervene and when to let the system define its own boundaries. In my second year at the residence I saw a significant increase in poker amongst the residents. Some students spent nights playing poker in the common room. A knee-jerk reaction would have been to restrict playing poker in the common areas of the residence. I instead preferred the respect rule. I asked the student playing poker to tidy up the place at night before they head for their rooms and that I’d be keeping an eye on their academic performance as well.

Two good things came out of this approach. First, I knew exactly when and where and what these residents were up to. Realizing that we were not judging them, some even asked us to find them help to break the habit. We readily obliged. Since we were not heavy handed about it, the poker fad disappeared within weeks. The second unexpected outcome was the improved safety and reduced vandalism at Gardner Hall. Nearly half a dozen students playing poker in the common room at odd hours of the night were also keeping a watch on who entered and the left the residence. This was our version of Jane Jacobs’ eyes on the street.

When an incident required disciplinary action, I never shied away from it. The McGill Code of Conduct, also known as the Green Book, became my bed time reading as soon as I joined the Gardner Hall. I disciplined numerous students for vandalism, harassment, or mischief constituting a threat to oneself or others. I never felt the need to have any more rules put in place than the ones listed in the Green Book. However, even those whom I disciplined by imposing large fines and mandatory community service, they continued to be at very good terms with my staff and I. The reason for this was simple. We did all this with respect, letting the residents know that we were there to resolve matters with them and not for them.

There will always be events that may not be explicitly covered in the Green Book. For instance, I walked into a birthday party in the study room with doors shut and blinds drawn. The star attraction besides the “birthday boy” included two strippers performing for a largely orderly audience. My staff escorted the strippers from the building and the party continued.

One may be tempted to have a rule added to the Green Book stating: No strippers allowed. However, that will do little because such events are an extremely rare occurrence even when there is no explicit restriction on the books barring exotic performances. Similarly, restricting alcohol consumption to particular areas of residence may also not bear fruit. Students will drink wherever they please in their residences, including common rooms, TV rooms, and stairwells. For the Rez crowd, Beer Pong is an Olympic sport. One can enact laws to bar it from the residences, but just like the hundreds of universities in the U.S., one is unlikely to succeed in enforcing it.

Seaman concluded in his book that strict regulations have been behind binge drinking at the American universities where most undergraduate students are underage. Our law of respect and lower drinking age in Quebec has witnessed negligible occurrence of binge drinking at McGill residences. I think of it as a success based on a prudent management philosophy.

Recognizing McGill’s 12 drinking-related hospitalizations a year against 200 at Dartmouth and 100 at Middlebury in the U.S., which are much smaller colleges than the 20,000-strong undergraduate student body at McGill, Seaman concluded: “If a major Canadian university can marginalize high-risk drinking with an eighteen-year old age limit, surely Americans can.”

Our respect-based governance has been found superior to that of all others. Barrett Seaman recommends McGill’s residence governance model to the American schools. Why then should we abandon it?

Pricing a freak economics text

The book has not yet been out for a week and the price wars have already begun. Steven Levitt’s and Stephen Dunbar’s sequel to Freakonomics  was released last week. I picked up my copy of SuperFreakonomics at a Target store (not known for retailing books) in Los Angeles. I paid 30% less than the printed price of US$36.99 (suggested by the publisher).

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At Barnes & Noble in Santa Monica.                                  At Target in Long Beach (Oct. 24, 09)

Amazon.com is retailing SuperFreakonomics for $16.47.

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I am super-confused. It used to be the case that the publisher would first release the hardcover at a premium price. Months later, the paperback would hit the market priced roughly 30 – 50% less than the hardback. This is how Freakonomics sold over 4 million copies. I am confused because if the hardcover for SuperFreakonomics  is retailing for $16.47, the paperback may go for as low as $8. What kind of royalties are these two gentlemen looking at?

What could be behind retailing books the same way as groceries?  Do the publisher and retailers think that readers may find SuperFreakonomics rather reductionist, shallow, sensationalist, and lacking the shock value of the original Freakonomics. Hence the plan may be to cut prices now to muster as much sales as possible between now and the Christmas season. I also saw in the bookstores in LA that the yet to be released book of a newly minted author, Sarah Palin, is already been advertised at a discount!

Recall that Freakonomics was released in April 2005. The book took a year to reach its peak popularity in May 2006. Since then there has been a steady decline in the interest in Freakonomics. The graph below tracks the searches conducted using Google for Freakonomics since 2005 depicting a downward trend in the interest.

This time around, SuperFreakonomics started building  up a buzz since August 2009 when the authors revealed the cover on their blog. However, the interest in the sequel is nothing like the one witnessed for the  first book. The graph above suggests a very mild increase in the interest in SuperFreakonomics , which pales in comparison to the spike witnessed in May 2005 when Freakonomics was released.

There could be many reasons for the lackluster interest in SuperFreakonomics . The most important one is that the novelty of pop-economics texts has worn off. Freakonomics` success inspired many others to produce similar texts.  Thus Malcolm Gladwell (eg., Tipping Point) and others, who adopted Freakonomics recipe, produced successful texts that hit the market between 2007 and 2009.  

Secondly, the freakonomics blog is also to be blamed. Levitt and Dunbar have been blogging from the New York Times website on very similar topics that they discuss in SuperFreakonomics. The blog has made them even more accessible to the average reader. This takes away the mystery. Plus the reader already knows that the authors will be blogging about the book, so why bother buying it.

I am certainly not suggesting that SuperFreakonomics may be a flop. Quite the contrary. The book will be a best seller.  However, the payoff this time around will not be as great because the focus is on volume rather than prestige. As of October 27, the sales rankings for SuperFreakonomics from Amazon.com were as follows.

 

USA

Canada

England

Sales rank

6

22

10

Type

hardcover

paperback

hardcover

Price

US$16.47

C$10

£10

Lastly, what will happen when Wal-Mart starts selling books. I can foresee the paperback edition for SuperFreakonomics retailing for$5 at Wal-Mart. I would hate to be an author at a time when books will be sold alongside T-shirts.

Monday, October 26, 2009

Tuition blues

According to Statistics Canada, the latest figures on tuition fees in the institutes of higher learning in Canada suggest a 3.5% increase in tuition fees even when the inflation in Canada dropped by 0.8%. A breakdown by provinces is presented below. Ontario with $5,951 and Quebec with $2,272 reported the highest and the lowest undergraduate tuition fees respectively. Surprisingly, while the cost of living is very high in British Columbia, the tuition fees in BC are comparable to the ones in PEI.

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Ontario saw the highest increase in tuition fees at 5% whereas Nova Scotia experienced a decline. The Ontario legislature saw some sparks fly on the issue. See the exchange between Jim Wilson (PC) and John Milloy, minister of education in the following video:

I continue to believe that freezing tuition fees spells disaster for the quality of education. Even the celebrated schools in the UK, i.e., Cambridge and Oxford, are facing severe hardships because of the tuition freezes that are often accompanied by a decline in government funding.

Retail sales rebound in Canada

Statistics Canada is reporting that retail sales have rebounded in August 2009 where the cash registers recorded $34.5 billion in sales (see graph below).

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The precipitous decline in retail sales in late 2008 have largely followed with an upward trend since the beginning of 2009. The rebound in August in August was largely driven by the transport sector where the sale of cars was up by 2.4% and the sale of gasoline was up by 3.9%.

The retail sales have also jumped higher in the United States in September 2009. While the large retailers such as Macys have experienced a less than expected decline in sales, many others (e.g., Kohl’s) have seen shoppers returning in droves to stores. See the following clip from NBR:

YouTube and statistical software

Often I have to answer the question about what software to use for statistical analysis. The answer is not that straightforward. It depends primarily upon your analytical needs. I recommend the following software based on your needs:

  1. If you are conducting basic analytics with a small data set, use Microsoft Excel. You can use the built in Analytic tool box (not available in the latest version for Mac) to do descriptive statistics, correlations, regression models, and other statistical tests.
  2. If your analysis goes beyond the basic regression models where you may have to estimate models using maximum likelihood routines, use SPSS. It is easy to learn and is fairly powerful for undergraduate level research needs. (www.spss.com)
  3. If you need to write custom code, such as writing user defined maximum likelihood functions, I would recommend Stata, which is very similar to SPSS, but a whole lot powerful. Stata is sufficient for even doctoral level research in Econometrics while continuing to be fairly easy to learn. (www.stata.com)
  4. SAS is another option for advanced analytics. However, SAS is the tool of choice for the older generations. SAS has reluctantly embraced the changing computing platforms and therefore has the look and feel of a software from 70’s. SAS is very powerful, but least bit Sassy! (www.sas.com).
  5. My favorite statistical software is R, which is a freeware. R is fast becoming popular, especially after John Fox of McMaster university developed the GUI for R giving it the point and click capabilities. R is similar to Stata. There are hundreds, if not thousands, of researchers developing advanced tools for R and making them available from R’s website. The number of R add-ins exceeded 2,000 in October 2009. Lastly, a new book in 2009, R Through Excel, allows R to be run almost seamlessly from within MS Excel. The two best features of R are:
    1. It is absolutely free, no strings attached.
    2. It is extremely flexible for any advanced research in statistical methods.

A quick view of internet site traffic suggests that SAS continues to lead the market share in statistical software. However, the graph below suggests that SAS is fast loosing the market’s interest where the daily traffic to its site collapsed from almost 30,000 unique visits in July 2007 to 15,000 in August 2009.  Even though R is a freeware, it is attracting more traffic to its website than the other commercial vendors, i.e., SPSS and Stata.

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I have created a channel on YouTube to post training videos using R, SPSS, and Excel. In December, I will be uploading 20-hours of videos on a course in statistical methods and research.