For those unaware, I'm spending a couple of months this summer in Boston working in the much maligned world of quantitative finance. It's alternately mindless and reasonably interesting work. (Though the projects I've been working on so far haven't really exercised my inner mathematician all that much.)

As a native Oregonian, I find sales taxes, such as the one imposed on shoppers in Massachusetts, annoying to say the least. Not so much because I resent paying an extra five or six percent for toothpaste, but rather because retailers don't include the sales tax in the price. As good as I am at mental math, it would just be easier if the price tag on an Apple iPad read $530 instead of $499. It's not exactly rocket science — most shops in Western Europe include the VAT in the price shown to consumers.

So I was pleasantly surprised yesterday when I paid exactly $64 for a pair of $64 shoes at the Puma store on Newbury street. For it turns out that shoppers in Massachusetts don't pay sales tax on clothing or shoes, so long as an individual item costs less than $125.

On face this policy seems a sensible way to skirt the somewhat regressive nature of sales taxes. People who can afford to spend $5,000 on a single suit or dress probably won't be "hurt" as much by a sales tax as people form whom a $40 pair of shoes stretches the budget. For the former group the extra $300 spent on an already expensive article of clothing just means their wine cellar will hold one fewer bottle of Château Margeaux. For the latter group, the extra $2.50 might mean one more dinner from a fast food chain instead of something more interesting and less obesity-inducing.

But it seems to me that this policy could be better implemented, provided the relevant data are available. For instance, some classes of clothing just cost more in general due to factor prices. Even H&M can't sell a tailored jacket for $10. Reasonably nice wool costs more than cheap cotton, and the intricate work of attaching sleeves, a lining and so forth requires more person-hours of labor.

The tax regime really ought to assess tax based on the price of a given article of clothing relative to its peers, so that a $50 pair of socks is taxed, but a $50 pair of shoes is not. A 22-year-old straight out of college would likely be hurt more by paying a sales tax on a few $300 suits he needs for his first job than a 45-year-old lawyer who spends $300 on a pair of cufflinks.

If I have time later today, I'm tempted to download product data from Amazon.com to take a look at the distribution of prices among certain classes of apparel.

When the Washington Post feels compelled to run an AP story about a raucous college party, that story bears discussion.

But before I so much as convey my understanding of the situation, I should preface this by noting that I was about 3,000 miles away from the Bates campus in beautiful Portland, Oregon (where I'm still sitting) when the Incident took place. As such, most of what I know comes from secondhand accounts, so take my summary of events with a grain of salt.

That out of the way, I'll start with a little background.

Most seniors at Bates participate in something called "Senior Week," a collection of outings and happenings designed to celebrate students' imminent graduation in the week preceding commencement. This includes a variety of mostly good spirited — though not necessarily wholesome — activities, such as a barbecue and a pub crawl. It also includes an event I'll call "Revisit Your First Dorm Room," in which, on one night in their ultimate week at college, fourth year students pay a visit to the first year occupants of their first college dorm rooms.

This academic year the graduating Class of 2010 held "Revisit Your First Dorm Room" last night, on 25 May 2010. Apparently this year's celebration — for want of a better term — was more raucous than usual. (NB: "Revisit Your First Dorm Room" is also a convenient way for older students to provide those under the legal drinking age with ethanol.) So raucous in fact that, in order to extricate an overzealous partier for medical care, the college's private security team felt compelled to call in the local police department, who ultimately arrested 11 students.

The Incident has ruffled many students' feathers. Many of my peers feel the local police force could have used gentler methods in their bid to give medical personnel the access they needed and to otherwise restore a modicum of order. I've already received a dozen or so invitations to join various groups and events in re the Incident on Facebook, despite my relatively anemic presence on the social networking site, and indeed a group organized a "Protest Against Police Brutality" on the main quad that took place earlier today.

From what I've read and seen, it does seem clear that the local police could have handled the Incident with more finesse. The amateur videos I've watched point to a certain degree of contempt for students on the part of the police.

Yet this is as much a story about shirked responsibility as it is about police ineptitude.

I and all of my fellow students are among an almost incalculably privileged group. Not only do we live in one of the most stable, prosperous nations on earth, we attend one of the most élite tertiary schools in the world. Moreover, most of us come from extremely privileged backgrounds, both in the context of the world and the more immediate "first world" context where we spend most of our time. As such, I feel we have a responsibility to live up to the extraordinary opportunities we've been given.

Which is not to say we need to become ascetics or take vows of eternal poverty. I probably spent more today at Whole Foods buying a few bits and bobs for dinner than many people earn in a week.

But when some among us escalate a fête to the point that a police officer sustains a fracture in the course of restoring enough order to extricate an over intoxicated peer, those involved ought to accept that they could have acted with more grace as well.

In particular, this sentiment that students were the victims of some horrible example of police brutality seems to me insulting to the people far less fortunate than us who have suffered at the hands of true police brutality. While I don't have a whole lot of facts at my disposal, that I haven't heard any reports of students being taken to hospital in critical condition or with multiple compound fractures suggests to me no one was. At least in my book, a couple of scrapes inflicted in the course of imposing compliance, while obviously something to be avoided, does not compare with the more gruesome fates of others in their interactions with law enforcement.

As mentioned earlier, I don't have all the facts by any stretch of the imagination. But the public perception of the Incident — I was just informed this story made the front page of the Huffington Post — is hardly what I want people to associate with my degree. It would go a long way to improve the optics of the situation, and my own feelings about my peers, if they acted with a hint more humility.

A few weeks ago Gizmodo, the popular gadgets blog, managed to secure a preproduction fourth generation iPhone, which they dissected for the whole world to see. So, given that everyone more or less knows the hardware specifications of the next iPhone, some commentators wonder whether Apple CEO Steve Jobs will still impress the crowd at Apple's Worldwide Developers Conference on 7 June, where he will likely formally unveil the next iPhone.

I'm of the opinion that Mr. Jobs still has a few tricks up his sleeve. Namely, while the world knows how Apple intends to improve the iPhone hardware — new case, second camera, etc. — very little is known about the software Apple has cooking in the labs to exploit these new hardware features.

For it's the software that makes or breaks today's consumer electronics.

When Apple introduced the iPod in 2001 a number of other companies sold products with very similar hardware specifications. It wasn't hard to find another music player with a hard disk for storing lots of music and a simple five button interface. But the iPod's singular software, married with a superior music jukebox, iTunes, made the iPod a far superior device.

Likewise, it's almost impossible to buy a mobile phone today without a large touch screen, a 3G cellular radio and other features found in the iPhone. But it's the iPhone that has proved a runaway success because the iPhone marries its hardware features with software that makes those features usable and utile.

Or look to the Android operating system. I would wager that most people care more about whether a phone runs Google's Android operating system — that is, uses Google's software platform — than care about the particulars of the phone running the Android operating system. Because it's the software that makes all the difference.

Hence, it's the software that will really make the fourth generation iPhone sing. For instance, mobile phones have had front facing cameras for many, many years. (The Sony Ericsson P990 from 2006 comes to mind.) But, as far as I know, they're not exactly widely used. It's not merely the presence of a front facing camera on the new iPhone that's something to keep an eye on. It's how Apple implements a video conferencing feature in software that will make video calling popular or leave the status quo as it is.

And, notably, neither Gizmodo nor any other news outlets have seen the software implementation that will likely steal the show in a few weeks time when Mr. Jobs takes the stage at Apple's developers conference.

Cecily von Ziegesar, the woman behind the popular Gossip Girl "novels," has a new book set to go on sale in a few week's time. I haven't read even a page of von Ziegesar's earlier work, though I have watched a few episodes of the television adaptation of her popular novels about Manhattan prep school teens. (Between the almost comical melodrama and arrant lack of realism, I've not become a regular viewer. I would, however, highly recommend Modern Family on ABC.) But von Ziegesar's latest work, titled Cum Laude, piqued my interest because it's set an élite liberal arts college in Maine. (It's worth mentioning that von Ziegesar attended Colby College.)

While I doubt I'll buy a copy of the novel, I did take ten minutes this morning to read an excerpt published on the Vanity Fair website. Based on what I read, I don't think Jane Austen or Edith Wharton need worry. Though I couldn't help but smirk when I read the first paragraph:

College is for lovers. At least, this one was. Looming up out of the trees on its hilly pedestal, Dexter College looked so strikingly pretty and at the same time so quaintly academic, it was almost as out of place in its rural setting as some of its students. Homeward Avenue, the road that led uphill to campus from Interstate 95, continued down the hill to the blink-and-you'll-miss-it town of Home, Maine, which consisted of a Walmart, a Shop 'n Save, the Rod and Gun Club, and a few other mom-and-pop shops frequented only by locals.

Substitute "Bates" for "Dexter," and swap out some of the other street and place names, and one has a remarkably good description of my school.

A few weeks ago, the US Bureau of Engraving and Printing — the folks responsible for printing US paper currency — took the wraps off the refreshed $100 bill due to enter circulation in February 2011. It has a slew of new security features, including a 3D security ribbon, designed to better thwart counterfeiting. The BEP also seems to think the new $100 bill looks better than its predecessor. But in both respects the new bill is a disaster.

As long as the old $100 bills remain in circulation and remain legal tender, the new bills will have a limited effect on counterfeiting. Any criminal sophisticated enough to forge the non-trivial security features of pre-2011 $100 bills — such as the watermarked paper or color shifting ink — are probably smart enough to continue counterfeiting the pre-2011 notes. After all, as long as their forgeries are good enough and the old $100 bills remain legal tender, retailers and other parties have no choice but to take the risk that someone passes them counterfeit currency. The less sophisticated criminals who use scanners and inkjet printers, or other equally crude measures, are likely thwarted by the watermarks and microprinting alone.

The BEP and others argue that, due to wear and tear, the old $100 notes will eventually fall out of circulation, mitigating this issue. But there are two problems with this argument. First, even if the vast majority of $100 bills in circulation are of the new design, it does nothing to change the fact that US law mandates all currency ever printed remains legal tender indefinitely. So criminals have no reason to stop forging the older notes. Nor does the new currency really increase their probability of being caught

Second, unlike smaller denomination bills, the $100 bill does not experience a whole lot of wear and tear. Even today banks issue their customers $100 bills from the late 1980's or early 1990's — bills designed in the pre-Photoshop era — because so few people use $100 bills in quotidian transactions. Hence, even if this argument holds water, it would take such a long time for this phenomenon to manifest itself that it's moot. By the time counterfeiters feel compelled to forge the new notes, technology will probably have advanced to the point it's not that much of a deterrent.

The Bank of England has a much more sensible policy with respect to this issue. They're currently on the verge of switching in a new £20 note in the UK. But rather than leave the note to "organically" go out of circulation, they've mandated that 60 days after the new note is issued shop owners and other parties are no longer legally obliged to take the new £20 as payment. And, for those people who don't exchange their notes immediately, the Bank of England agrees to exchange old £20 notes for new £20 notes indefinitely. Counterfeiters are thwarted at shops, since owners don't have to accept the old notes and the new notes are difficult to forge, and they're further deterred from forging old notes as the Bank of England can more readily detect subtle forgeries of less secure notes than bank tellers or clerks.

Then there's the issue of the new $100 bill's design. It's absolutely hideous: more a haphazard pastiche of various images than something coherent. The front of the note is now graced by the aforementioned 3D security strip, which runs right down the middle of the bill, intersecting Ben Franklin's shoulder. It's definitely not subtle. The front is also covered by a mishmash of words, letters and numbers in a goldenrod that does not go well with green. A giant "100" in a similarly unpleasant hue dominates the back, printed in such large type the digits are probably visible from the International Space Station on a clear day.

In one sentence, the new $100 bill looks more like Monopoly money than something that stands as a symbol for the power of markets and capitalism.

It's not impossible to design an attractive, secure currency. The Euro has had a 3D security strip, a polychromatic look and other security features new to US currency for years. And I would contend that the Euro notes are far more attractive than US currency writ large. (Note that, for instance, the Euro notes come in different physical sizes — the 5€ note is smaller than the 200€ note — which obviates the need for features like the gigantic "100" for low vision people and allows the blind to pay with cash without the risk of being swindled.) The Bank of England has also managed to incorporate many of the features found in the new $100 bill into their new £20 note without making it hideous.

Fortunately I tend to transact with my debit or credit card, especially for large purchases, so I suspect my exposure to the new $100 bill will be limited. But even if I don't use the new notes, counterfeiting harms me and many other consumers and businesses. And, as something that stands as much as a symbol as it serves a set of economic functions, the BEP ought to have spent the time and money to make the new notes attractive. Perhaps we'll have better luck when the $100 receives another facelift in another 10 to 15 years.

In their continuing effort to generate traffic (and thereby generate revenue), a number of sites have added what I have dubbed "social bars" to their interfaces. They usually peek up at the bottom of the page, and have a variety of tools to allow users to more easily share stories with their friends through Twitter, Facebook or other social networks. (See, for instance, the newly added social toolbar at All Things Digital, that protuberance at the bottom of every page.) If the title of the post didn't give it away, I find these toolbars more of a distraction and an annoyance than useful.

First off, it's not as if one needs a computer science degree to know how to share a webpage with one's social network. I find it hard to believe these social toolbars lower the cost of sharing stories sufficiently — as compared to the copy-paste-post method — to really make that much of a difference to traffic. Unless a user visits a site frequently, it's probably quick to copy and paste the URL into Twitter instead of going through the rigamarole of authorizing the site to connect to Twitter and "automatically" share the story.

Further, I suspect most of the sites that have these toolbars have visitors with high levels of computer literacy. Among the sites I visit regularly, this is certainly the case. For instance, neither The New York Times nor Le Monde, two general interest sites, have added such a feature. But CNet and All Things Digital, two sites with a definite tech bent, have added social bars. (I considered testing this theory with a random sample, but that seemed like overkill.) Which makes me think these toolbars do virtually nothing to make sharing easier. On the other hand, their presence might induce people to share stories more often than they otherwise would. So I could see how social toolbars do result in a net gain in traffic.

Most of these social toolbars are also ugly and buggy. I had to reload one page three times before its social bar would so much as respond to my clicks, much less automatically repost a story to Facebook. And most of the ones I've encountered make it impossible to completely eliminate their presence, encouraging me to read stories with Readability or Instapaper, which deprives the sites of analytic data and advertising revenue.

When I first came across one of these toolbars, I hoped they were a flash in the pan. But my intuition tells me I may need to find a way to cope. The Meebo Bar I mentioned earlier makes it a cinch for the millions of WordPress bloggers to add the feature, and I have to think Facebook has something similar cooking in their labs. And, since they apparently drive more traffic to sites than repel interface snobs, sites have every incentive to add them. Yet again, the lowest common denominator ruins it for the rest of us.

(Another programming note: I've decided to put the new blog on ice until Rails 3 goes final. When that will be is anybody's guess.)

I've been a member of the "exclusive" online shopping site Gilt for a number of years. (If you care to help me fill my closet with button down shirts, join the site here, buy something, and I'll receive a $25 credit.) The concept is quite genius from a marketing perspective. Gilt peddles high-end designer clothing and accessories at huge discounts, but in extremely limited quantities and in sales that last just a few days. Pretentious luxury goods companies love this low-key channel as a way to unload excess inventory or to prime the market by selling to "trendsetters" at cut-rate prices, but without the risk of tarnishing their brands' exclusive reputations.

The site likes to bill itself as, "exclusive" and "members-only," which no doubt gives it consumer appeal in the same way the exclusivity of owning a Range Rover appeals to consumers. (Though that's pretty much the only reason I can think that anyone buys what is truly a terrible, unreliable and overpriced vehicle.) No doubt the folks supplying Gilt with their merchandise also like that, even if they have to sell their wares at huge discounts, at least they're doing it to an "exclusive" group of people.

In reality, however, the site is anything but exclusive: anyone who wants to join can do so by clicking a standard signup link on their splash page.

But it wasn't always so. Back when I joined the site, becoming a member required cunning and skill. That is, finding another member and persuading that existing member to parcel out one of his or her invitations to the site. It reminded me of Gmail in its early days. On the one hand, this exclusivity was snobbish and frustrating. On the other hand, though, Gilt was a much better place to shop when the competition for goods was less intense.

This morning, for instance, Gilt had Seven for All Mankind jeans on sale at about half of retail prices. Seduced by the prospect, I made a point to be at my computer at 8:59 AM on the dot, just as the sale kicked off at 9:00. This, I reasoned, would give me a good shot at snagging a pair of jeans at a great price. It was, however, not to be. For even at 9:01 — I had to spend a few seconds scanning the goods on offer — the site had completely sold out of "Sevens" in sizes better suited for hominids than members of the elephant family.

Not that this ought to surprise anyone. The quantity demanded of — otherwise known as the number of people willing to pay for — Seven for All Mankind jeans is much higher when they're priced at $100 per pair, as opposed to when they're priced at $200 per pair. At the same time, Gilt severely limits the quantity of goods it can supply. Combined, these two ingredients make a shortage, which tends to make people, like myself, angry.

If I had my way, the site would revert back to its genuinely exclusive state. But those are the words on an incumbent with every reason to exclude others. The situation has many parallels with rent ceilings, a classic example from intro economics. At the prices imposed on rents through a ceiling, far more people want apartments than there are landlords willing to supply apartments at the mandated price. Those people who manage to snag an apartment at the imposed price are pretty happy — and would probably support rent controls going forward — whereas people willing to pay more than the imposed price wind up quite unhappy.

But I doubt Gilt will raise prices. That they have huge discounts is the principal reason they exist. Nor do I imagine they will kick members out to help sort out the shortage. (Technically speaking, if people don't have access to the market, then they don't contribute to demand. This can be done through prices — it's why I don't influence the market for Ferraris — or through mechanisms like membership.) It would be a PR nightmare.

Given those two conditions, I feel the most equitable solution to this annoyance is some kind of lottery. Say for the first 10 minutes of a given sale, users could add any items they might want to purchase to their shopping carts. Then, after the first ten minutes of the sale some users would randomly be given another 10 minutes to buy items. It's not the best solution in absolute terms, but, given the context, it would remove one (albeit very minor) frustration from my life.

Many people swear by the folks at the Consumers Union who publish, among other titles, the immensely powerful Consumer Reports magazine. At an intellectual level, I like the concept. That the Consumers Union does not accept advertising and pays full retail prices for the products it reviews gives their opinions authority. But I feel like the reviews in Consumer Reports do a poor job of giving consumers good, actionable advice.

The way they review computers — the cover story in their latest issue — particularly irritates me. They spend an inordinate number of column inches on the nitty-gritty technical specifications of each machine, rather than on more understandable metrics. Telling "average" consumers a particular model comes with an Intel Core i7-720QM serves only to confuse them. It's akin listing the specific nozzle configuration of each dishwasher in their kitchen appliance reviews. As with dishwashers — where all that really matters is how well a particular nozzle configuration actually cleans dishes — all that really matters when it comes to reviewing computers is how well it computes. I feel like it would be much more illuminating for Reports to score each model from "Poor" to "Excellent" on more understandable, if less easily quantified, metrics, such as, "Web Browsing," "Cutting-Edge 3D Games," or, "Video Editing."

Moreover, the folks writing in Reports have a tendency to, perhaps implicitly, "over recommend" when it comes to computers. In their latest ranking, the top-of-the-range Apple iMac with a 27" display, which runs nearly $2000 as tested, earned the top score among all-in-one desktop computers. At some level, the machine probably ought to be the top-rated machine. The 27" iMac is indeed very fast; it has a gorgeous, enormous display; and it comes with a lot of consumer features like a wireless keyboard-mouse pair. But I'm sure many people wind up buying that model rather than a similar PC or a smaller (and cheaper) 21" iMac better suited to their needs. I would wager that most consumers would be much happier with a $1500 21" iMac and $500 to spend on a new kitchen television or leaf blower. (This does a good job of illustrating the power of deciding at the margin.)

Likewise, some of their reviews of "chain services" (e.g., chain restaurants, chain hotels) always strike me as rather off. In this month's review of chain hotels, for example, they listed "typical" nightly rates at the Ritz-Carlton as somewhere between $200 and $400, which struck me as low. A quick availability check on the Ritz-Carlton website reveals that the range is appropriate for a basic room, on average: $150 in Dearborn, Michigan compared to $750 in New York City. With services like hotels, I feel like information that accounts for regional differences in living costs would be useful.

The way the hotel ratings are structured also provides a useful lesson in statistics. The review divides the chain hotels into categories on the basis of "fanciness." The Hilton brand falls in the "Luxury" category, while the Radisson brand falls into the "Upscale" category, for instance. And within each category the hotels differ in overall score by very few points, so few, in fact, the differences must be statistically insignificant. Meaning the magazine should scrap their cute table of bars and circles and just say, "Pick a hotel that fits your budget."

(Aside: I was disappointed the hotel review didn't include the Four Seasons. They have a really bizarre management and ownership structure, and I was hoping Reports would confirm the genius of their unorthodox arrangement.)

That said, I do tend to trust the Consumers Union when it comes to cars. In that product category they blow their competitors out of the water. Note that they don't usually spend a whole lot of time discussing the intricacies of vehicles' breaking or steering systems. Instead, they simply provide a nice concise evaluation, using stopping distances — a metric far more easily understood and meaningful than, say, FLOPS, in measuring computational speed — in the case of a car's breaking system. And it's doubtful people will buy "too much car," as they break their car reviews down not by form factor, but by vehicle classes, which tend to correspond quite closely to price and features.

I'm not entirely sure what the "lesson" is in this case. Perhaps that any organization with the aim of helping people make informed decisions should map domain-specific knowledge to metrics meaningful to readers. Think, "great for editing HD video," instead of, "60 gigaFLOPS of computing power."

(Programming note: For those wondering why I haven't posted anything for quite awhile, I'm currently working to migrate my blog to a bespoke Ruby on Rails application. Needless to say, it's taking longer than I had anticipated. Hopefully that will go online late this month. Until then, I'll probably post somewhat more infrequently than usual.)

Given the hubbub surrounding FOX's latest television hit Glee, I interrupted my studying this morning to watch the first twenty minutes or so of last night's episode. I'm not going to become a regular viewer, nor do I intend to provide a critical commentary that's particularly broad or insightful.

No, I want to comment on the way that the producers of the show have chosen to present the musical numbers that have (or so I understand) made the show as popular as it has become. As is obvious to anyone watching with even a modicum of understanding of television production, the music backing the musical numbers is recorded and mixed in a studio. It sounds good, from a technical perspective, as it should, given that it was recorded and mixed in a studio with lots of post. And to a certain extent I can understand why the producers choose to do this. It's hard enough to use the live sound from the sound stage or location that most big budget commercial films go to the trouble of dubbing the dialog in a studio.

But I don't understand why the producers choose to give the music a "recorded in a studio" feel. With modern music mixing and editing tools, I feel like it must be possible to process and mix the music so that the music at least sounds like it was recorded on the stage at some high school (or an idealized high school auditorium setting) rather than in a recording booth.

First and foremost, it would make the show sound more realistic. It smacks of Hollywood trickery when the vocal tracks don't echo or reverberate at all, even when a character is singing in a tiled hallway. Beyond that though, the technical quality the producers lend to the kids when they descend into a musical number gives people unrealistic expectations of what they ought to achieve if they decide to take up singing, or another musical pursuit. I'm sure more than a few reasonably talented teenagers have given up on singing or the violin because they can't match the professional musicians' meticulously edited and manipulated performances.

Not that the producers changing the way they post the show's music tracks would likely have an influence on my becoming a regular viewer. The music aside, I just don't find Glee all that compelling.

I've had my iPad for over a week now. It hasn't changed my life nearly as much as the iPhone, but I'm not sure how I ever managed to live without it. It's certainly preferable to my laptop for "light" computing, such as reading research papers and blogs, or browsing the iTunes Store.

(Some people have complained to me about the lack of PDF annotation tools. One can't, for instance, highlight a sentence in a PDF document on the iPad. I'm of the opinion that highlighters serve no purpose, so I can't say I really mind.)

But there is one feature of the iPad I could live without: the attention it gives me. While many people don't give me a second glance when I'm sitting in a corner reading Les Echos on my iPad, many other people have what seems an uncontrollable urge to exclaim, "Is that an iPad?" and ask me for a demonstration. Admittedly, if I'm not doing anything particularly important, it doesn't bother me all that much to pause and show off the pinch-to-zoom features in the Photos application. And, given I'm on a college campus, it's not as if I don't know most of these people anyway. Still, there are occasions when I just want to sit and read my economics journal without any disturbance.

I really hope everyone on my flight to Portland this Saturday has an iPad. People have shown no hesitation in inquiring about my Kindle, and I doubt they'll attempt to contain their curiosity any more when it comes to a product as "hot" as the iPad. And, unlike encounters on the street or in the grocery store, it's not as if I have a credible excuse (or even the possibility) of walking away to avoid answering a litany of basic questions about the device's specifications one could easily find on Apple's website.

Should be fun.