Beahrs ELP Blog

The Fenigstein Effect

David Zilberman photo

By Professor David Zilberman, Agricultural and Resource Economics, UC, Berkeley
This article was originally published on The Berkeley Blog.
Read the original article.

 

Every year during graduation season, I encounter many students who are nervous about the job market. Surprisingly, many worry not only about their technical qualifications, but they also worry that they don’t look the part.

Some of these students probably listen to the media and studies that have found that good looking men are considered more competent and good looking women are considered less competent in a work environment, which may lead to sexist discrimination. The study also discovered some strategic behavior in hiring — when you hire someone who will collaborate with you, you will favor the better looking person, but when you hire someone who competes with you (e.g. another salesperson), you will hire the less attractive person.

elegant character in Jane Austen, preening before a mirror

Sir Walter Elliot, of Jane Austen’s Persuasion, before a cheval glass. “Few women could think more of their personal appearance than he did.” (By C.E. Brock via Wikimedia Commons)

These concerns and studies remind me of Jack Fenigstein, with whom I worked in a computer company in Israel. I was a responsible for the payroll application for the company and he was one of our 4 salespeople. Three of them looked like textbook salespeople — blue suits, crisp white shirts, a handkerchief in the pocket, etc.

But Fenigstein was a round ball, never wore a suit and tie, and always had a shirt with buttons on the verge of explosion, but he was our best salesperson. The manager of the company was always upset at his appearance because he was not presentable, yet couldn’t fire him because of his sales success.

Once I asked him, “Jack why don’t you dress like a mensch?” And he replied, “I tried but I actually look worse in a suit than I do like this. When you try to wear a suit and it doesn’t fit, no matter what you do, you look like a failure. But if you dress informally, it is a signal that you don’t care about appearances.”

Besides, he said that this appearance is good for business. He told me that he operates by calling people to make an appointment, and that he has a great body for the telephone. He said, “once they invite me, the secretary gives me a disgusting look but the boss has no choice but to hear me out for 5 minutes. Then, I give them my best pitch — I figure out their needs and provide them with a reasonable solution.

Suddenly their underestimation works in my favor. They think, ‘this guy really cares about the important stuff, not a stupid model for Brooks Brothers.’”

Later on, I learned about another study that found that good-looking men might be considered smarter but get fewer job offers because they come across as intimidating. Another explanation for what I call “The Fenigstein Effect.”

Fenigstein once said that the unique skills of salespeople may not correlate with good skills in economics. We took some classes together and he needed at least a mark of 60 to get his degree. I drove him back to work after he learned that he flunked and he couldn’t get his degree in economics.

He told me, “I thought about it, and my revenge will be that one day all of these professors will work in the Jack Fenigstein building…” I never found out if the building exists or not, but I know he employed many economists as consultants. Jack might not have been a great academic or a sharp-looking person, but when I saw him working with a client, figuring out their needs, and helping to design a computerized solution that fit the customer’s needs, I understood why he was successful.

When I read a study relating performance to appearance, I am always reminded of the Fenigstein Effect, and how insightful people can turn a perceived liability into an asset. It is essential to accept yourself and find ways to take advantage of ‘what you got’ rather than to lament it.


Dining in Slovakia –and thinking about food security

David Zilberman photoBy Professor David Zilberman, Agricultural and Resource Economics, UC, Berkeley
This article was originally published on The Berkeley Blog.
Read the original article.

 

I arrived in Bratislava to participate in a workshop for FoodSecure, a EU project on food and nutritional security in the developing world. Bratislava is the capital of the young republic of Slovakia. It is only 60 kilometers from Vienna, and has a rich and turbulent history of its own. It was a border town of the Roman Empire, was conquered by the Turks, and was the capital of the great Hungarian empire.

I took a tour of the city, and learned that 19 Hungarian kings and queens were coroneted in a beautiful church in Bratislava between 1563-1916, including Maria Theresa, the Austro-Hungarian parallel of Queen Elizabeth I, and Katherine the Great of Russia, perhaps the most important ruler of the Austro-Hungarian empire.

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During the tour, I also learned where every famous composer (Beethoven, Heiden, Mozart, and Liszt to name a few) played when he was in town, and was introduced to some of the famous and beautiful squares, palaces and churches in the old city, including the one where Maria Theresa lived. The dominating structure in the city is a castle overlooking the Danube River, which was able to stand attacks by the Mongols in the 13th century and Turks in the 16th century, and held the crown jewels of the Hungarian Monarchy.

Since the fall of communism, Slovakia has gone through a process of revitalization and renewal. Slovakia has become a major producer of vehicles and has grown much faster than most other EU countries (admittedly not a tough benchmark). Slovakia separated from the Czech Republic in 1993, and one can observe nationalism typical of a new state: flags everywhere and people explaining to you, without being asked, the differences between the Czech and Slovak people, which they present as being huge and unbridgeable.

To the nations’ credit, the division of Czechoslovakia was peaceful. Peaceful divorces between nations are rare (As Jo Swinnen aptly pointed out, one of the reasons Slovakia and Czechs could split peacefully was because they did not share a capital. The capital of Czechoslovakia (Prague) was 100% part of the Czech Republic, which was not contested by the Slovaks.) Hopefully we can reach such a peaceful outcome in the Holy Land.

Bratislava has been largely rebuilt in the last thirty years – since the communists demise. In downtown you see modern shops and high-rise buildings among enormous older brick and cement buildings, remnants of the communist era. The old city boasts large piazzas, impressive statues, clever art (including the statue of a Napoleonic spy with whom I took a picture).

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While there are obvious pockets of poverty — one can observe beggars, homeless people, and drably dressed mostly older people, there are many more hip youngsters and elegantly dressed professionals, junk food outlets, and gourmet restaurants — all signs of growing prosperity. The food is very good here; the dumplings, soups, and my favorite dish, fish with almonds, are especially good. The place is not far from Vienna, and the restaurants feature appetizing cakes, making it very difficult to keep my diet. However, in my humble opinion, the cakes look better than they taste (and are nothing compared to my wife’s baking). However, I am not qualified to comment on food, but it becomes common for people to venture beyond their area of expertise. For example, food critics (in the NY Times, for example) tend to comment constantly on agricultural policy and farming technologies.

FoodSecure: a fascinating project

FoodSecure, the reason for my venture to Slovakia, is a fascinating project. It has four elements: research on the state of food nutrition and development in developing countries, models for predictions, scenario analysis, and outreach. In the workshop, I learned that food security is improving in the sense that the percentage of people that are malnourished is declining (from 24% in 1990 to 14% in 2013). This is because of economic growth in the developing world as well as enhanced trade. Still, the situation varies across countries, and the number of malnourished people is in the 100s of millions, and we are challenged to eradicate it.

As most people consume sufficient amounts of calories, obesity has become a major nutritional threat and the emphasis of nutritional interventions has been shifting from providing calories to improving the intake of micronutrients and protein. A less encouraging finding is that the gap in the growth productivity of farmers between high and low-income countries is increasing, suggesting a growing income gap and continuing rural poverty. I also learned that attitude towards biofuels has somewhat changed — the high prices they caused seemed to be short lived and the negative perceptions mostly dissipated over time.

In some cases the higher prices actually helped some farmers. The media attention on the high prices helped raise awareness to challenges facing agriculture and enhanced investment in agriculture. As usual, agricultural biotechnology was a main talking point — while some studies found that it has actually made significant positive contributions through increased yields, increased farm incomes, and reduced pesticide exposure in places it has been adopted, attitudes towards it among many are still negative.

It was encouraging to see that the capacity of models to combine biological and weather information to reasonably predict the impacts of various policies is improving. What I found even more encouraging is that the access of policy-makers that are on the ground in developing countries to these modeling tools is increasing as computer technology continues to advance. But one needs to realize that these mechanical tools are decision aids and do not replace human judgment. Furthermore, their use requires continuous education of decision-makers and the general public.

The more I become engaged in this type of policy work, the more I appreciate the value of literacy in economics. Basic economics should not be an elective you can select late in high school, but a part of the required educational curriculum. In such forums, I continue to realize how much we need to learn in order to improve our analyses of developing countries’ situations. We need to understand the role of basic supply chains in development, the link between nutrition and cognitive ability, the interaction between economic and political systems, etc.

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In many ways, the visit to Bratislava provided a most valuable lesson in economics and politics. Speaking with our delightful host, we learned that only thirty years ago this wonderful city was terribly polluted, grim, and much poorer. Of course, Slovakia has its problems, but increased personal freedom, introduction of democracy and rule of law, market institutions, and integration with the EU have contributed to form the lively and elegant city we enjoyed.


Keystone Pipeline and the Carbon Tax: A shotgun marriage that can work

David Zilberman photoBy Professor David Zilberman, Agricultural and Resource Economics, UC, Berkeley
This article was originally published on The Berkeley Blog.
Read the original article.

 

We recently learned that Senators Pat Toomey (R-Pa.) and Dianne Feinstein (D-Calif.) suggested amending a bill that approves the building of the Keystone pipeline and abolishes the corn ethanol mandate. This is a very unwise proposal. If Congress needs a face-saving way to approve the Keystone pipeline, it should be done in a way that enhances the national interests rather than erode them.

I suggest an alternative amendment of a 50 cent gasoline tax (or better, an equivalent carbon tax) with the proceeds going towards infrastructure, reducing the burden of student loans, and/or reducing the burden of other taxes. In other words, keep the mandate and tax greenhouse gases.

There are interesting linkages between the Keystone pipeline, biofuel, and a carbon tax in my proposal. The Keystone pipeline that carries Canadian crude oils to the Gulf of Mexico is obviously unappealing. It provides a mechanism to move carbon-intensive petroleum and increases the profitability of producing oil from tar sands, and its existence is likely to enhance greenhouse gas emissions.

However, it is quite clear that the fuel will be utilized with or without it, and it will be shipped by means that are even ‘dirtier’ and more dangerous if it is not built. We recently witnessed a tragedy where 47 people were killed as a train full of fuel derailed in Quebec. The Keystone pipeline may decrease the likelihood of such events. Thus, from an environmental and public health perspective, the net benefit of the pipeline is questionable, even though I am quite sympathetic to those opposing it.

However it seems that if the pipeline is built to move, say, American oil produced from South Dakota to the Gulf, it probably would have been approved already. As I understand it, the legal system did not find the ‘smoking gun’ that justifies rejecting the pipeline, so the debate is political.

It seems that the U.S. environmental community and our administration are trying to impose standards on other countries that we cannot keep ourselves. We have to realize that we didn’t sign the Kyoto Protocol and the world remembers.

However British Columbia, a Canadian province, is the first region in North America that established a carbon tax, and we can learn from their example. Not supporting the pipeline might offend our Canadian neighbors for years to come. This stark political reality is likely to lead to an approval. The President has threatened to veto a proposed bill to allow the pipeline and he needs a face-saving way to justify not exercising the veto that will also satisfy the environmental community. But an amendment eliminating biofuel standards is the wrong choice. A carbon tax would be a real contribution to the health of the planet.

The investment in infrastructure to produce oil from tar sands, including the Keystone pipeline, was introduced because oil producers expected high oil prices. Such investments would be curtailed if expected future prices will be reduced–here is where the carbon tax becomes important. It will produce a wedge between the price consumers pay at the pump and price that producers receive, discouraging the expansion of GHG-intensive fossil fuels, and encouraging conservation and low-carbon alternative energy.

Corn biofuel has proven itself to be a viable alternative fuel. I was among the first who was alarmed by the food price effect of biofuel, and indeed food prices rose drastically around 2008. But, to their credit, corn producers adopted technologies that increased supply, and now with the mandate, the prices of corn have stabilized. If tomorrow the corn biofuel mandate is eliminated, the price of corn will plummet and politics will require introducing a heavy subsidy to the growers, and there will be new pressure to increase the price of oil.

Corn biofuel is not ideal from a GHG perspective (it reduced GHG emissions by 20 or 30% relative to gasoline), so it does not deserve a big subsidy, but still it makes a contribution. More importantly, the mandate encourages investment in renewable fuels because it is assured a market for the product, requiring oil refineries to use the fuel and potentially reducing their profits. Now there is evidence that the corn biofuel program has been effective and no longer needs an explicit subsidy, but the mandate provides protection against the producers of fossil fuels that represent their competition. While there is evidence that subsidies for some biofuels have been excessive, performance of corn ethanol assured investors that biofuels and renewables can be viable, and after a few years of support, they can stand on their own. I don’t expect the mandate to last forever, but it should be evaluated on its own merit within a larger context, rather than hastily written into a Keystone bill.

Because of biofuel and fracking, the monopoly power of OPEC has been reduced; this contributes to their reluctance to reduce oil production and to increase prices. When prices are low, there is no incentive to invest in production, but consumers may increase their demand, which will lead to an increase in future prices, spurring new investments in fossil fuels. A carbon tax will increase the price consumers pay, slowing their demand. Since consumers have become used to paying much higher prices for gasoline, their objection to a carbon price now will be much lower than if it was introduced during a period of high prices. Since cleaner fuel would be subject to a lesser tax (or be exempt altogether), it will give them an advantage in the market and encourage the energy sector to ‘think outside the barrel’.

If the country has to swallow the Keystone ‘pill’, we should use it as an opportunity. Some GOP lawmakers are rumored to support a carbon tax and tying it to the Keystone would provide additional political cover. So a bill approving the Keystone with a carbon tax amendment will maintain our friendly relations with Canada and benefit the environment.


Announcing “Beyond GIS: A Spatial Data Bootcamp” Organized by UC Berkeley – May 20 – 22, 2015

by Mio Katayama Owens, International and Executive Programs, UC Berkeley

Mio Katayama OwensGreetings ELP-ers!

This summer, the Beahrs ELP will be celebrating 15 years of successfully training over 540 participants from 110 countries in environmental leadership. At times such as these, we reflect on the trials and triumphs of ELP’s history, from its beginnings in 2000 with seed funding from Carolyn and Richard Beahrs to our upcoming program with over two hundred applicants from countries all over the world.

As ELP continues into the future as part of the College of Natural Resources (CNR) at UC Berkeley, the Dean’s office has decided to expand our professional development and executive education offerings with the creation of a new unit called International & Executive Programs (IEP). The creation of this unit comes at a strategic time, when educational needs are shifting with more and more professionals eager to expand or galvanize their skillsets through short, intensive trainings. IEP’s goal is to draw from the success of ELP, one of the proudest activities of the College of Natural Resources, to develop and deliver additional programs that complement ELP.

IEP celebrated its creation with the delivery of its first in-house program last October titled, “The Economic Impact of Climate and Energy Policy on Public and Private Sectors.” Taking California as its case-study, our faculty – which included professors that ELP alumni are familiar with like Professors David Zilberman, David Roland-Holst, Dan Kammen, and Max Auffhammer – instructed participants on subjects ranging from water and energy to climate policy. Since this workshop catered to a group of participants with diverse backgrounds, discussions were insightful with multi-sided perspectives, and by the end, there was a friendly, ELP-like atmosphere with lively conversations and participants who wanted to stay connected.

For its next program, we are partnering with the Geospatial Innovation Facility (GIF) in UC Berkeley to offer an intensive, 3-day bootcamp on Spatial Data Science, a new field that goes beyond what is usually known as Geographic Information Systems (GIS). Aimed at professionals already working with GIS who hope to expand their skillset beyond conventional proprietary programs, this program will utilize hands-on tutorials and instruction to facilitate the transition to powerful open-source and web-based technologies.  If you would like to learn more about this exciting program, please visit our website.

We are especially intrigued by how Spatial Data Science complements the college’s efforts in fields such as climate and energy policy and conservation of natural resources. GIS is crucial in integrating and visualizing disparate data, demonstrated by GIF’s innovative approach to work with climate data, Cal-Adapt, showcasing how these technologies are shaping the way we present and analyze data. As always, these programs are also inflected by the mission of the College of Natural Resources: to “see the bigger picture, make a better world” by providing the tools necessary to both protect the Earth’s natural resources and ensure economic and ecological sustainability for future generations.

There is always a home at Berkeley for ELP alumni, and we look forward to seeing you in our future programs.

Go Bears!


The Loudest Call for Climate Action in History: Will it be Heard?

by Alexander Iscenco, Moldova, ELP 2013
Written on September 23, 2014.
 

September 21st, 2014 became one of the historical moments in the global action to raise awareness about climate change issues and mitigate them. On this very day the largest march calling for climate change action in human history took place. More than 675 thousand people (around 0.01% of global population) marched on the streets of New York, Barcelona, Paris, London, Rome, Berlin, Istanbul, Jakarta, Buenos Aires, Rio de Janeiro, Melbourne, Sydney… There were over 2800 climate-change-related events in 166 countries that day. This so-called People’s Climate March became the largest and loudest call for action to mitigate climate change and its negative consequences so far.

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All that was organized to push the global leaders, who are gathering on September 23rd, 2014, at the UN Headquarters in New York City for the UN Climate Summit 2014 to discuss the state of climate change nowadays, what is currently being done, and what still needs to be done in order to reduce (as avoidance is already not feasible) the economically, socially and environmentally damaging consequences of global climate change caused by anthropogenic activities. The one-day programme of the Summit includes announcements of national action and ambitions from the participating countries, forum for private sector, and then announcements of multi-stakeholder initiatives agreed upon. All in all, it is expected to be a surprisingly short event with quick discussions on such a complex and crucial issue as global climate change.

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As I am currently doing research at IÖW in Berlin, Germany, I managed to participate in the Climate March and Festival here. Approximately 10,000 Berlin residents marched in a Silent Climate Parade from the Neptune Fountain (Neptunbrunnen) towards the Brandenburg Gate, where the Parade transformed into a Festival with music, dances and climate-change-related exhibits. Different environmental organizations, both local and international, such as Avaaz and Greenpeace, put up their stands to inform people about the issue of climate change, what it leads to, and how we can mitigate it through common action.

Indeed, such an event attracted much attention of pedestrians, visitors, local residents, and mass media. Still, did it succeed in communicating the whole complexity of the issue and the urgent need for action? This is the question I keep asking myself since my participation in the Berlin Climate March.

Firstly, the general message was mostly about the problems related to climate change. Much less focus was on possible solutions for climate change mitigation. What can a person do to reduce his/her carbon footprint and at the same time maintain the same level of happiness and wellbeing (and perhaps increase it)? It would have been great to have more showcasing of solutions to climate change offered for the people by the people.

Secondly, although there were some solutions expressed, they were targeting dominantly the transport and energy sector. Indeed, these are the largest greenhouse gas (GHG) emitting sectors (approximately 20% and 30% of the global emissions respectively), but they are not the only ones. Industrial processes (~15%), unsustainable agricultural practices (~10%), and commercial and residential activities (~10%) also contribute to the release of carbon dioxide, methane and other GHGs into the atmosphere. So, we also need to account for them in shaping up the global climate action. For instance, the Climate Festival in Berlin created quite a volume of paper and other waste that could have been avoided. Yes, much of it will probably be recycled. But that also means that energy will be used for the recycling process. And what have I pointed out about the energy sector above?

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Thirdly, the way we communicate messages about climate change and environment protection should be improved. For instance, the Berlin Climate Festival ended up as an ordinary music festival with people around selling merchandise, dancing and getting drunk. Only those participants, who already knew about the importance of climate change, kept the interest and passion for climate action till the end.

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Overall, the People’s Climate March became a significant historical moment within the global people’s movement to address and mitigate the climate change issue. People succeeded in coming together and raising their voice full of desire to reduce the negative effects of the issue now and in the future. Still, as the Berlin Climate Festival showed, the ways of communicating the climate-change-related messages need to be improved. Climate change is a multi-faceted issue that should be considered in all its complexity and from all its sides. Our call for climate action should reflect that. And I hope it will be so in the near future.

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For now, we will see what outputs the UN Climate Summit 2014 produces and whether the People’s Climate March have had any effect on them. Then we should prepare for the next important event – the UN Climate Change Conference, or COP-20, that is going to happen in Lima, Peru, in the period of December 1st – 12th, 2014. It is there the global climate agreement is expected to finally be decided upon. And it is there that our loudest call for change in history is expected to be heard.


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