$1 Toronto real estate

Average is like my reciprocating saw: never as useful as I expect. Part of the reason average sticks around is economics, It’s cheap to produce.. Average is a crude tool, like with student loan debt, and often hides the heterogeneity of a situation.

We’re entering an era of precision. One covid lesson has been the effect size of heterogeneity. At the macro level, the impact of covid depends on time and place. At the micro level, the impact depends on age, immunity, and social network. Covid was (is?) difficult to judge because there are a lot of factors that need fitted together.

If we need precision we should probably think about distributions at least as often as we think about averages. An example is the periodic one dollar real estate listing. Yes, this generates attention, spins up the market mechanism, and might be the marketing magic an owner needs. But it also changes the distribution of offers without changing the average offer.

“When you give people a listing price they ask if it’s worth more or less and by how much, so they anchor at the listing. If you don’t have an anchor people build a valuation from first principles. The average (offer) doesn’t change but the distribution does. For a one dollar listing you get some really high rates and some really low ones. In the listing price you get distributions around what the asking price was. This is a world where the seller doesn’t care about the average, they only care about the top end of the distribution.” – Dilip Woman, The Decision Corner, October 2021

Maybe this is being too hard. Average, like the saw, has its uses. The aim here is to combine numeracy with psychology to get by in the world. That means presenting the ‘best’ wait times or predicting rain more often. Being numerate is understanding that the average age is 78, but if you make it to 65 you’ll probably live well past eighty.


“The average looks like 10-12 years lost due to Covid – but that’s an average of a distribution with a very odd shape, a highly skewed distribution, some people have lost forty years of life. The peak of the distribution is people who lost less than a year of life.” – David Spiegelhalter, Risky Talk October 2021

Interval training

One of the perks of this blog is repetition. There are areas afield of the core focus (which itself moves) but there’s a lot of repetition. This is good. Jason Zweig once said that his Wall Street Journal articles were just the same principles in different forms.

There are other intervals. Sleep and exercise seem to be daily intervals. Eating might be longer or shorter. A business’s innovation interval depends on the industry. What’s the interval might be an interesting question.

There are vaccine intervals. Pfizer and Moderna tested three and four weeks and were (largely) administered in that time space too. But not always.

“In Quebec, in early 2021, the world was short on vaccines. To spread the doses in Quebec they decided to spread the interval to sixteen weeks. The researchers looked at the immune responses after the second doses and found a lot of similarities to people with hybrid immunity: high levels of antibodies, and neutralizing diverse coronavirus variants.” – Ewen Callaway, Nature podcast, October 2021

In Quebec at least the longer interval worked better.

Part of what makes cac such an interesting business angle is that there are a lot of ways to reduce the number and a low cac changes a lot of the economics. Intervals are like that too. The cost to experiment in intervals is low but the effect might be large.

DuoLingo experimented a lot with their reminders and what ultimately worked was one of their early interval tests, remind people about a day later. That will happen with experiments, but knowing about intervals as an option expands our field of experiments.

The capacity-efficiency tradeoff components

One of the things brought to light by Covid has been the balance between capacity and efficiency. In general, things with high excess capacity aren’t efficient and things with high efficiency lack excess capacity. Another way to think about capacity is as a margin of safety.

Each link in the medical supply chain, wrote Scott Gottlieb, balances capacity and efficiency. Swabs, like those for Covid, are produced efficiently.

“One of the things I learned at the FDA, watching other critical medical products go into shortage, is that it’s often the lowest-margin constituent in a complex supply chain that’s most vulnerable to shortages. Often the only way to produce such a part profitably is to manufacture it at a very large scale, which means it’s likely to be made by a small number of big, consolidated suppliers.” – Scott Gottlieb, Uncontrolled Spread, published 2021

Sixty percent of the swab market was from an Italian supplied, an Italian supplier in the Lombardy region. Eventually the United States scaled up swab productions only to be limited by the machines that ran the tests, another part of the system where the incentives pointed more towards efficiency than capacity. A system is only as strong as the weakest-link-in-the-supply chain.

There is a tradeoff between efficiency and capacity and that tradeoff depends on time and consequences.

“Flatten the curve” demonstrates this. Our highly efficient (low capacity) healthcare system could have been overrun. The consequences of that were huge. One physician friend thought she might have to work in a field hospital – and she’s a dermatologist.

A smaller example is a student taking Algebra. If an Algebra exam is during a sport season, the student will have less time to study being highly efficient with their use of time. The lack of capacity might lead to a lower grade.

However, in the case of Algebra, the time and consequences are more muddled. Is the goal to ‘learn Algebra’ or ‘score 93% on the Algebra Chapter Two Test’? In the case of the former, the time pressure changes.

Personal finance encompasses this idea too. A large capacity is an emergency fund. Those dollars could be invested to earn the historic seven percent. Time here matters too. Typically a person has one source of income (their job) and these vary in pace of payment. A salesperson can work more – and get paid more faster – than a bookkeeper. Their time aspect is different and the consequences for each depends on the difference between income and expenses.

Like the tuning of stereo, these three aspects can be balanced to fit the conditions. There is a trade off between efficiency and capacity. There are consequences in that exchange. And there is cadence for reaction.

Big shocks, like Covid, are out of our control. But though exogenous to our life, there’s still at least three dials to get things that sound right.

Covid and breakfast cereal

cereal selfie

Me, a box of cereal from Aldi, and our kitten. When I bought this cereal the checkout process was 40% faster than rival stores. Plus the cost savings! Sure I had to collect my cart – with the quarter deposit in hand – and also return the cart, but often I meet someone half way and we do the Aldi parking lot exchange of quarter for cart and some goodwill good-to-see-yas.

This Aldi aesthetic is intentional. The cart, the product, the extra long barcodes for the extra fast cashiers are all tactics that support a strategy. I’d heard tactics are not strategy but it’s through the Aldi aisles and Marc Lipsitch’s interviews that the idea becomes as clear and legible as that bar code.

One of the lessons from Covid is how much conditions matter. We’ve learned that individual treatments are dependent on disease stage. We’ve also learned that societal actions are dependent on infection stage. The travel ban, Lipsitch said in May 2020, “was a tactic not a strategy, it was an attempt to show we were doing something rather than a piece of a strategy to make us safe from this virus.”

Strategy is important because our resources are limited. Sure, I’d love to invest in the cryptocurrency of the moment as a lottery ticket but there’s no extra dollars in our investing budget to allocate to a different strategy.

“In the beginning of the intense phase, New York City was working very very hard to do contact tracing at a time when they knew they had lots of cases and didn’t know about most of them. That’s exactly the setting where contact tracing can’t work. No matter how hard you fight the 10% you know about, you’re not doing anything about the rest.” – Marc Lipsitch, May 2020

When tactics fit together like puzzle pieces it creates a beautiful strategic picture. Aldi’s boxes are optimized for speed rather than customer acquisition. Classic cereals use bright colors and cartoons to scream pick me! The cereal aisle is the competition. It’s Cap’n Crunch vs Cinnamon Toast Crunch. Aldi’s products are private labels, so the competition is between big box stores not boxes in stores. The Aldi CAC is speedy checkouts, self-service, and quality goods.

A good strategy has a collection of homeotelic responses. Aldi is one example, but they’ve had almost eighty years to figure it out. Covid is a non-example, but we’ve learned some good lessons and it probably won’t happen again.


There’s a certain amount of what economists call ‘transaction utility’ at Aldi too, we like finding deals. Also, Lipsitch is such a balanced voice on Covid or any field with some uncertainty in the future.

Mayors jumping queues

One benefit (with distance!) of living through the first year (2020) of Covid was the lesson in ambiguity. Never forget, the thing we did the most of was stock up on toilet paper. It’s silly with hindsight, but at one time the zeitgeist was making up songs so we all washed our hands the appropriate amount. With those actions as a reference, it makes a bit more sense that issues like masks, contact tracing, limited gathering, and vaccines were confusing. How might things have gone better?

One potential solution to vaccine hesitancy is a skin-in-the-game approach. Don’t tell me what to do, Nassim Taleb might bark, tell me what you do do. But that can lead to the suggestion that someone is jumping the queue. This pushback came up, rightly, but there is at least one potential solution.

“I think there is a way to do it. We advised mayors and their communication directors to approach it more like: ‘We are opening up a new site, let me show you how safe and effective it is, here’s the shot in my arm.’ Definitely don’t do it in the moment when there is extreme vaccine scarcity, do it as a symbolic moment that the floodgates are opening. It’s about the time, place, and moment.” – Carolina Toth, Inside the Nudge Unit, June 2021

What I liked about this example was the second-order thinking Toth offered. It’s not the line jumping per se but it’s line jumping and-I-can’t-get-mine. Lines aren’t about waiting. Lines are about fairness.

Imagine queueing up for a spring training baseball game. You’re in sunny Florida. It’s March. It’s seventy-eight degrees, Fahrenheit. The sun is out. It’s a beautiful day.

Being a well-prepared baseball fan you bought tickets ahead of time. Section C, Row 4, Seats 15-18. They’re behind the third-base dugout. You told your thirteen-year-old not to be on their phone when a left-handed batter is up. Who knows if they listened. Amid these happy thoughts you see that two groups ahead of you in line a party of two has become a party of six. The duo was saving spots for their friends. Do you care?

Probably not? Your seats are your seats.

There (probably) won’t be another 2020. However any situation can be helped by getting to the first principles: how do viruses transmit, what’s wrong with mayors jumping queues? It’s these answers that remove the ambiguity of a situation and get us all sorted.


Queues exist to solve allocation problems, like the New York Marathon.

Does the bundle explain it?

Defaults are a design tool to frame thinking. One designed-default is mean reversion. For most situations, said Cade Massey, “Try regression to the mean on for size and see if that can explain it.” Another is to start with the base rate: what typically happens in situations like this? During the Summer of 2021 there were many comparisons of vaccinated and unvaccinated Covid infection rates. This was a case of base rate neglect.

Mean reversion and base rates are good starting ideas because they prevent our Narrative Spin Drives from jumping into high-output mode. For instance, there’s an annual NFL video game known as Madden NFL. There’s also a Madden curse. If someone appears on the cover they have a terrible season after. It’s happened to eighty-two percent of the athletes!

Or it is base rates and mean reversion. To earn the cover rights, a player must have an excellent season, and their “success equation” benefited from a few lucky bounces. That happens. But bad luck happens too.

To add to the value of starting with base rates and mean reversion we can add “The Bundle”: the idea that a JTBD is a collection of things.

Marc Andreessen talked about the bundle of education: a dating scene, knowledge, social interactions, signaling, potential professional connections, cheap financing, and so on. Part-of-the-reason education innovation hasn’t gained distribution is that online only addresses parts of the bundle. It’s hard to date or build friendships on a video call.

Another bundle is the meal. Every meal is a combo meal: social interactions, nutrients, calories, taste, and so on. We can see bundles further yet. Food is more than the sum of its vitamins and nutrients. Eating an orange is more than theVitamin C, fiber, and sugar.

Work is a bundle too. Economist Tyler Cowen often notes that part-of-the-problem with Universal Basic Income is that it doesn’t address The Bundle. From NPR:

“Companies, like those in the tech industry such as Google and Apple, built enormous offices and put them all right next to each other in Silicon Valley and the office expanded what it was in people’s lives. They became like a second home. They had fancy food, concerts, dry cleaning, free meals.” – Stacey Vanek Smith, Planet Money, August 2021

Okay, a confession. I love Ted Lasso. It’s my favorite show since Parks and Rec. What I admire about Lasso is that he sets a tone (assuming for a moment it’s a real football club but this ethos may exist in the real production). Players begin the day and “Believe”. That’s what starting with base rates, mean reversion, and the bundle does too. Starting with those prompts prevents the Narrative Spin Drive from generating primarily palatable explanations.


One thing I’ve changed my mind on is reading fiction. Fiction, like Ted Lasso, appeals to us because it is a fake premise sharing a human truth.
Also, the idea of online education needing distribution is from Alex Rampell, a colleague of Andreessen, who asks: Will disruptors gain innovation before innovators gain disruption? This is the “TiVo Problem.”

Show the way or in the way

One common mistake in our understanding of “how the world works” is to think that lack of action is due to a lack of information. If people just knew how important X was they would definitely do it.

One form is seen in the social media question: What would you add to the high school curriculum? Answers tend to hover around statistics instead of calculus, personal finance, or decision making.

Those are well intentioned suggestions, and on net, students would be better off if we could download a stats module in place of the first derivative. But information is not action.

Orlando Marriott hand washing sign

Geez. We’ve looked at hand washing (twice!) and there’s probably a well designed study that notes signs like that, in bathrooms such as this, change a proxy for health in some-such-way.

But, there’s a better example. It’s a real life example. It’s been tested on thousands. It’s also in Orlando. Arrange hand sanitizers to be avoided. To hijack Ryan Holiday: the obstacle is the way. But after two days people watching in the theme parks it’s very clear, this works.

And the reason for signs showing the way and not sanitizer stations in the way is incentives.

Back to Twitter. Some schools offer personal finance. From Kris’s nephew.

“I have this assignment for school where I have to invest $1,000 into a company’s stock. And I know you’re a stocks person so I was wondering if you know a good company i should invest in. Because the winner gets a prize of who makes the most money.”

Just give every twelfth grader $200. But there’s no action in that. There’s no standards or benchmarks or assessments about net learning in the second quarter of the school year. So in a way, Kris’s nephew is getting exactly what the system incentivized.

This is the system. In education it’s hard to measure “financial literacy”. In public health it’s hard to measure “healthy place”. In these systems optics are rewarded. Theme parks are in the optics business too, but for them results like: Person Gets Sick at World Famous Theme Park matter more. It’s important to know the rules if we want to play the game.


In finance there’s paper returns and there’s “moolah in the coola”, that’s another analogy. Paper returns are optics. Money in the pocket is an outcome.

Being better than Superman

Maxim four from Richard Zeckhauser is: “When trying to understand a complex real-world situation, think of an everyday analogue”.

Alex Tabarrok has been using this strategy to communicate about vaccines.

“To me the vaccines are like a superpower. Superman is immune to bullets and I tell people: ‘Wouldn’t you like to be immune to bullets? The virus has killed many more people this year than bullets have, and the vaccine makes you immune to the virus, it’s better than being immune to bullets!'” – Alex Tabarrok, July 2021

In Dan Levy’s book about Richard Zeckhauser he includes a section from Gary Orren who used the everyday analogy strategy to describe the AmeriCorps service program. AmeriCorps, Orren told legislators, is like a Swiss Army knife, it does many things well though it’s never the perfect tool. A few weeks after addressing the governmental staff Orren returned to their offices. “Oh yeah, I remember you. Swiss Army knife.”

This strategy helped, Orren explained, because it focused his thinking and the audience’s understanding. A lot of times our thinking is FAST and analogies shift complex concepts into simpler situations.

Simplification isn’t the end though. Extremes, like questioning the Ohio vaccine lotto, are not the final answers but a first foothold. If we can understand an issue’s basic components first, it can be easier to build up to the rubber-meets-the-road challenges of IRL.


My year of AmeriCorps was health based, and I remember many vision screenings .

Hurdling past covid

One way to think about “adoption” is as series of hurdles. If something is “adopted” it has succeeded by crossing the set of hurdles. There are few food bacteria “adoptions” because of hurdle technology: hot, cold, salt, and acid all make the process harder for food bacteria to survive.

Another metaphor for this approach is Swiss cheese: one layer has multiple holes but if the layers are independent, then stacking one on top of another removes the holes.

Part of the problem with studying, treating, and living with Covid is that it’s hard to figure out what works. There are models, but we’re still kinda guessing. As of August 2021, more than one-fifth of all FDA approved drugs were tried as off label treatment for Covid. Ironically, there’s not enough Covid to study it.

“What should give us reason to be hopeful is that there’s this cumulative effect that if you give the right drug at the right time along the way…there are these 15-30% reductions at each step so if you are someone that gets a monoclonal antibody early on, if you get fluvoxamine, you get remdesivir on admission, you get dexamethasone once you are on oxygen. We should model out where this puts you at.” – David Fajgenbaum, Wharton Moneyball, August 2021

Ah not so fast, Eric Bradlow follows up. How independent are these? Is this like a piece of Swiss cheese? “It’s shocking,” says Fajgenbaum, “they all seem to hit it from a different angle.” That angle appears to be time. Vaccines are like sunscreen, David explains, and that’s the pre-infection prevention. Then it’s one drug to stimulate the body’s immune response, then it’s another to slow that response way down.

Abraham Lincoln is attributed as saying, give me an hour to chop down a tree and I will spend the first fifty minutes sharpening an axe. Rather than trees and axes we can ask: Is our situation a hurdle condition? With Mr. Lincoln and the suggestion of Charlie Munger to invert, always invert (!), we can come up with a simple situational:

For deceleration, we want to create a series of independent hurdles an agent must cross. In the case of covid this might mean that a place mandates masks, vaccines, and social distancing — or maybe just be outside.

For acceleration, we want to create fewer hurdles for an agent. If not possible, we want homogenous hurdles. Smartphones did this for ride sharing: the who (payments), where (location), and when (on-demand) were all integrated into an app. Another way to consolidate hurdles is find the JTBD.


Even 17 months into it still feels early to say these are the treatments. While they may not be this approach still feels okay.

Apples to apples in Iceland

The basic base rate question is: what should I expect in situations like this? Most often we have looked at base rates through the lens of projects. We have an optimistic tendency to think, “yeah but…”. Sometimes it is! Sometimes it’s not.

but it might work for us

The general advice for using base rates has been to start with them, rather than our impressions, and then adapt from there.

Another way to think about base rates is as sampling. It’s important to get the “situations like this” part right, right? This is tricky, and this came up during the summer of 2021 as more and more covid vaccinated people became infected with the covid virus. At one point 67% of Iceland’s cases were among the vaccinated.

“When you look at Iceland and graph out (cases) by who is vaccinated, who is not, and where the cases are, you can see that there are more cases in the vaccinated group than the unvaccinated group.” – Dr. Kat, NPR Planet Money, August 2021

That sounds like the vaccine doesn’t work, or doesn’t work as well, or never-worked?! Maybe, but maybe our conclusions are muddied by an initial assumption that’s wrong.

Rather than jump right to Iceland, let’s pull a Zeckhauser and simplify everything. Imagine in Indiana there is a group of 100 people, half are vaccinated and half are not. In the vaccinated group there are five infections and in the unvaccinated group there are five infections. Putting aside “long-infection”, hospitalization, and death, it-looks-like, in-this-case, that the vaccine is meh.

Okay, now in Nevada there is another group of 100 people. This time there are 90 which are vaccinated and 10 are not. In the vaccinated group there are five infections and in the unvaccinated group there are five infections. Putting aside the same other-factors, in this case the vaccine is doing a lot of work! This was the case in Iceland too. Six of every thousand vaccinated people caught covid while fifteen of every thousand unvaccinated people caught covid. And all of the other-factors were much worse for the unvaccinated group. Vaccination reduced someone’s risk by more than half.

This idea is known as the “base rate fallacy” but really it’s comparing apples to apples which will make the idea stick better anyway(another bit of Zeckhauser advice is to keep explanations simple). BRF is good for talking with economists and behavioral scientists but for implementing this idea it’s an apple-to-apples question a day that will keep the bad decisions at bay.