Why are Olympic Games always more expensive than planned?

Rare are the big sports events that stay within budget, and those that do are criticized as being too "commercial." I would suspect this is because organizers try to submit a budget that seems appealing, knowing that it is the lower end. Of course, by now everyone should realize this, especially legislators, but they may like the idea and care less about the cost and thus may be willing to go along with the mis-representation. Once additional funds are needed, legislators are either to go along anyway or they are forced to accept given all the money that was sunk into the project. And they think about the benefits that come with such events, which is actually not true (previous posts: 1, 2)

Wladimir Andreff has a better take at this than my random thoughts. In the case of the Olympic Games, he notes that the only recent games that did not suffer from a "winner's curse" by overbidding was Los Angeles 1984, which was the only candidate at the time (there was a big financial mess for Montreal 1976 that discouraged other candidates). So it would look like having competition drives candidates to pretending they need too low budgets. The recommended solution is to get rid of candidates altogether: have the games at fixed locations (one for Summer and one for Winter), as I have called for before.

Do not give carbon credits away!

Slowly, the idea of carbon credits is making its way into the minds of legislators. Market based solutions to pollution control are much better than regulation. However, there appears to be a risk than the initial allocation of carbon credits would simply be given to current polluters. This must be resisted.

Indeed, this has several adverse consequences: 1) it rewards polluters, 2) it gives incentives to pollute more ahead of the implementation, in order to obtain more credits, 3) the revenue from credit sales would be lost. The Southern Alliance for Clean Energy is currently inviting economists to sign a statement along those lines. I signed it.

Campaign for affordable textbooks

Just a short note this evening to encourage everyone to sign this petition and commit to using open textbooks when available. As mentioned before, textbooks have become far more expensive than can be tolerated.

Hat tip to Against Monopoly.

Save ATUS

The proposed Federal budget for 2009 does not include any funding for the American Time Use Survey (ATUS). While it probably does not rival the Panel for the Study of Income Dynamics (PSID) in terms of return on the money, ATUS has already proven very useful despite its young age (created in 2003) and its low cost ($6,000,000 a year). An effort is currently under way to prevent the interruption of this survey. Consider signing it.

ATUS is conducted by asking 14,000 people minute by minute what they are doing during the day. This has proven tremendously useful in understanding what happens outside the market, in particular how chores are shared within households and how much children are supervised or taken care of.