Archive for the 'Back of the Envelope' Category

Lifeboats on the Titanic

Published
by
Steve Landsburg
on April 16, 2012
in Back of the Envelope and History
. 59 Comments

titanicShould RMS Titanic have carried more lifeboats? Yes, probably. But it took me a few minutes to convince myself.

Roughly 1500 died on the Titanic; according to Wikipedia, it would have cost about $16,000 to equip her with additional lifeboats sufficient to save them all. Call it $10 per life saved. The price level today is roughly 22 times what it was in 1912, so in today’s terms that’s $220 per life.

Now, if I were boarding a ship for a luxury cruise, and was offered the chance to pay an additional $220 for a guaranteed seat on a lifeboat in the event of a sinking, I’m quite sure I’d take a pass — and I’m quite sure so would virtually all of my fellow passengers. So if the Titanic had been designed to cross the ocean once and then spend the rest of its days in a museum, it would have been insane to equip her with extra lifeboats. But of course if the Titanic had been designed to cross the ocean once and then spend the rest of its days in a museum, it would have been insane to build her in the first place. So that’s not the right calculation.

The right calculation accounts for the fact that a single lifeboat provides security to passengers on multiple voyages. How many voyages? Well, the Titanic was intended to make the round trip between Europe and America every three weeks; that’s two voyages per three-week period. I’m not sure how long the sailing season was, but we know it was underway by mid-April (and perhaps earlier; it’s often mentioned that if the Titanic had been ready earlier she would have sailed earlier) so (assuming sailing conditions are roughly symmetric around the solstice) it must have lasted till at least mid-August. That’s time for five round trips at a minimum, and I’m guessing this is a quite conservative assumption.

If a lifeboat lasts a year, then, it does its job at least ten times. If it lasts five years (which is, I suspect, another quite conservative assumption), it does its job fifty times. Now we’re in the vicinity of $4 per passenger (and of course much less if my assumptions are indeed quite conservative).

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Women’s Wages and the Back of My Envelope

Published
by
Steve Landsburg
on October 6, 2010
in Back of the Envelope, Bad Reasoning and Economics
. 25 Comments

Yesterday’s breathtakingly dishonest graph from the AFL-CIO touched off some discussion in comments about whether the male/female wage differential could plausibly be driven by employer discrimination.

The usual argument to the contrary runs like this: If the differential is driven by employer discrimination (as opposed to, say, the abilities and/or preferences of the workers), then non-discriminating employers (i.e. those who care only about making a buck, regardless of who they have to hire to do it) would draw only from the relatively cheap female labor pool. It wouldn’t take many of these non-discriminating employers to drive women’s wages up to the same level as men’s. We don’t see that happening, ergo the hypothesis of employer discrimination is refuted.

The problem with that argument is that it assumes employers won’t ignore a profit opportunity, whereas in fact employers ignore profit opportunities all the time — by keeping on their incompetent nephews, taking Wednesday afternoons off to play golf, or, yes, hiring people they like having around instead of people who could do a better job.

Continue reading ‘Women’s Wages and the Back of My Envelope’