"A man writes because he doubts, because he is tormented."

Wednesday, September 27, 2017

On 26


"Lord of my love, to whom in vassalage
Thy merit hath my duty strongly knit,
To thee I send this written embassage,
To witness duty, not to show my wit:
Duty so great, which wit so poor as mine
May make seem bare, in wanting words to show it..."
(William Shakespeare - Sonnet XXVI)

Reading Shakespeare's 26th sonnet feels like a kindred spirit to me. He, as I do, felt an agony, that having a "wit so poor" makes his poetry seem bare, for his lord of his love is so great that there are no adequate "words to show it."

Verbiage and profundity are of no use. So, let me speak about your 26th year in a parlance that I am familiar with. For, as Pablo Neruda also said in his 26th sonnet, "...in every pure landscape, the earth has imitated you."

You may think 26 as a mundane number, unwarranted for further peroration. But behind its unremarkable facade, lies interesting things.

I can speak of 26 as the atomic number of iron. Seems trite, indeed, as iron is the most common element of the earth. But lest you forget, iron is the backbone of mankind and its civilization – in our machines, in our houses, in our weapons. It is also there as the core of the earth, and it is also there in blood that runs in our veins.

26 is also the number of letters of Latin alphabets, without which there will be very little ideas to communicate.

26 is, quite simply, what moves our world. And so when you think that this year is just another year, you may miss its importance to your life.

In fact, 26 in itself is not just a boring number. It is the only solution for Fermat's sandwich theorem. Named after the great mathematician, Pierre Fermat, who was the first to prove that 26 is the only number between a perfect square number (25, which is 5^2) and a cube (27, which is 3^3).

You can count from 1 to infinity, and you would find that 26 – and only 26 – is uniquely sandwiched between a square and a cube. And so is this year may not like any other in your life.

You know, N, things are actually getting a bit more interesting if you mix numbers with the words of God. YHWH – the name of biblical God – for instance, turns into 26 when you assign it using gematria. (Yod is 10, Waw is 6, and He is 5 each. So together 10 + 5 + 6 + 5 makes 26.)

But I like this one better: if you search at Greek Strong's Concordance, the 26th entry is ἀγάπη – agape, which means love.

So may your 26th birthday be full of Godly blessing, and be full of love.

Happy birthday, N.


With love, A.

Wednesday, August 16, 2017

How to Reduce Inequality in Indonesia

This piece is a more technical appendix of what I’ve wrote in Birokreasi about inequality. You can read the article here http://birokreasi.com/2017/08/rusak/.

In that article, I mentioned the research of Martinez-Vazquez, et al. (2014) concerning what fiscal policies (i.e., taxation and expenditure policies) that can reduce inequality.

The aforementioned study measures inequality by using Gini ratio, in which the closer it is to zero, the more equal society is. Martinez-Vazquez and co. found that progressive taxes such as corporate and personal income tax can reduce Gini ratio. Therefore, the better a country collects income taxes, the better she is in reducing inequality. It is also understandable as progressive taxation levies higher rate for entity with higher income.

On the other hand, Martinez-Vazquez, et al. found that regressive taxation (such as Value Added Tax) will increase inequality. It is understandable because in regressive taxation, the tax burden is similar across the population, regardless of their levels of income. Meaning that a billionaire and a farmer will pay the same amount of taxes when they purchase similar goods/services.

With regards to expenditure policy, generally it is found that the more a government dedicate their revenue to fund social expenditure, housing, education, and healthcare, the better she is in reducing inequality. As middle and lower income households are provided better access towards such needs by the government, not only they have better living standards, but they will also have more disposable income.

I am not interested in testing whether their findings are similar in the case of Indonesia. (My friend, Mikhail Nugroho Adi Setiawan, replicated Martinez-Vazquez, et al.’s study in his junior thesis. He found that their conclusions also hold for ASEAN countries.)

What I am interested to find out is how those policies play out during the periods after they were implemented. One of the tools for this is Vector Autoregression (VAR).

VAR models the how a variable (for instance, inequality) changes over time by the influence of its own lagged value (inequality in the previous year) and the past value of the variable that influences it (say, last year’s education expenditure). VAR modeling is also useful because it does not require as much a priori assumption about how the forces influencing a variable. Therefore, we can set aside econometric issues such as simultaneity and endogeneity. What is needed is a list of variables which can be hypothesized to affect each other within certain period of time.

The data used in this post is collected from IMF Government Financial Statistics, Laporan Keuangan Pemerintah Pusat and Anggaran Pendapatan dan Belanja Negara of various years, also Badan Pusat Statistik. The data I used in VAR modeling is from fiscal year 1990-2014.

To implement VAR, we must test how much lags are needed for the independent variable to affect dependent variable. For instance, increasing education expenditure for the current year may not directly reduce inequality for that year. The effect may be felt 2 or 3 years after the policy was implemented.

To obtain the best lags, we can subject the variables to a battery of tests. We can then select which one is the best based on several criteria. The usual criteria for lag selection test are, inter alia, final prediction error (FPE), Akaike’s information criterion (AIC), Schwarz’s Bayesian information criterion (SBIC), and the Hannan and Quinn information criterion (HQIC). Luckily, the command “varsoc” in statistical software STATA can do a comprehensive job.

After obtaining the appropriate lags, I subject all variables into VAR equations. However, reading VAR statistical output can be tedious.

To ease how we picture the relationship between fiscal policies and Gini ratio, I transform the VAR results into Impulse Response Function (IRF). In this case, fiscal policies such as corporate income tax (CIT), personal income tax (PIT), indirect taxes (INDIRECT), social expenditure (SOCIAL), housing expenditure (HOUSE), education expenditure (EDU), and healthcare expenditure (HEALTH) can be seen as the “impulse”. That is, they trigger a response in Gini ratio in the form of ups (worsening inequality) and downs (reducing inequality) in the periods that follow. To better illustrate how IRF works, imagine you throw a stone into a pond. The stone is the impulse, and the waves that show on the surface are the responses.

So, in terms of taxation policy, the IRF results are as follow:





In general, we can expect personal income tax to reduce Gini ratio in the next year after policy implementation. On the contrary, increasing VAT in the current year will lead to an increase in Gini ratio in the next year.



Interestingly, I found that an increase in corporate income tax may even worsen the inequality. There may be several causes. First, following the finding of Martinez-Vazquez, et al., the more open the economy, the higher share of the CIT that would fall on labor income, making this corporate income tax less progressive (Martinez-Vazquez, et al., 2014:110). Secondly, as in the case of Indonesia, our corporate income tax is not progressive to begin with. Currently, our corporate income tax rate is flat at 25%. (It started to be a flat tax since fiscal 2009, with the issuance of Law Number 36 Year 2008 concerning Income Tax, in which the corporate tax rate changed from progressive into single 28% rate). This may be the case to redesign our corporate income tax rate to be progressive again.

On the public spending side, the results are as follows:





An increased spending in healthcare and social expenditure will lead to a decrease in Gini ratio at least two years after implementation. An increase in education expenditure, however, increases Gini ratio one year after implementation, yet reduces it afterward in year two. Similarly, an increase in housing expenditure will increase Gini ratio in the first year.







It can be theorized that housing expenditure (at least in Indonesia) generally benefits middle-to-higher class instead of the poorest part of the population. In other words, it only enables middle to high class – who already have a steady stream of income – to accumulate more wealth. But this conjecture may be wrong. Thus, a further study is needed.

Conclusion: to reduce inequality, we need to better redistribute income via personal income tax. We also want to increase healthcare and social spending. A more progressive corporate income tax and a better-targeted housing policy are also needed if we want to reduce inequality.

(H/T to Mikhail for providing the necessary dataset.)

Reference:

Martínez-Vazquez, Jorge, Violeta Vulovic, and Blanca Moreno Dodson. 2014. “The Impact of Tax and Expenditure Policies on Income Distribution: Evidence from a Large Panel of Countries.” Hacienda Pública Española 200 (2012): October, 6th. 2014

Wednesday, September 28, 2016

Many Happy Birthday, N

‘Tis the time of the year when I hate to write. Not because it is a tedious task, but because this day is the day the siren of our old age rings again. I hate birthday because I don’t want to grow old. I don’t want you either to grow old. I hope you won’t get old. I want you to be forever young. You know, I always imagine you as a sempiternal doe, running around in the steppes. You are fascinatingly beautiful. So free and blissful, even death dares not conquer. That, my love, is my first and foremost prayer.

My second prayer is for you to be able to forgive me. I, for lack of better word, am nothing but thorns in your wilderness. I give you nothing but wounds. Yet you always give me grace and compassion. I took you – took us – for granted. I stopped listening to small things. I was clumsy and forgetful as ever. I harangued you even when you want me to just shut up. Yet you were always patient. Yet I did those mistakes again and again.

You offered me salvation. I put you on the cross instead.

I have nothing to give you as a birthday present but an apology for all these clashes I caused during this year.

Speaking of our little fights, here’s an equation I remember:
They say this is the key for lasting relationship. But what does it mean? It means that it would be better for a couple to argue on small problem and fix it as soon as possible than to keep the resentment build up. Of course, a relationship without a fight is more desirable. But it is impossible. After all, maybe it is true what Publius Terentius Afer once wrote in his comedic play: “Amantium irae amoris integratio est.” Fights are what bring lovers together.

So my next prayer is that I wish we can still argue about kittens and puppies and today’s millenials for years ahead, rather than become strangers again. Because I love you, and won’t cease to do so even when time and space divide us. I won’t cease, unless you wish for it.

Oh, and I hope we can travel somewhere. Of course you’ll be paying. Last year I wish you’d be richer than I am, and now you are. I’ll promise this time I won’t prefer staying on bed.

Live long. Live happily. And be prosper.

Amatus es. Ego semper amabo te.

Your kitten,


A


PS: Just this afternoon I saw a culinary travelogue on AFC. There's this bakpao vendor in Malaysia whose mom is still working in the kitchen, making the dough. She's 83. She's been working on the shop since 70 years ago. Yet she chooses to work there simply because she doesn't want to stay idle. I always imagine that how you'd be like 70 years from now.

Monday, September 19, 2016

A Game Theory of Essay Grading

So, it's been awhile since my last post.

What intrigued me to write in here again was my lecturer. My taxation seminar lecturer, Mr. Riko Riandoko, has a very interesting grading method. (He's an awesome guy.) Basically, Mr. Riko gave us task to each write an essay every week. However, the grading system was like this (with some adjustments to make the assumption simpler):

- Everyone submits the essays to one designated student.

- That student removes the writers' names from every essay, leaving only the title. The essays then are put online on a cloud drive.

- Everyone then read and ranks the essays from the best to the worst EXCEPT for her own essay. (Thus A ranked B, C, D's essays; B ranked A, C, and D's, and so forth.)

- To make it simple, the ranking used scoring system, with the best essay given highest score, 2nd best given the 2nd highest score, and so forth. So if there are 10 essays, one would give the best essay 9, the 2nd best 8, and so forth. One must give her own essay a 0 score, due to the above rule. The winner is the one with most total score.

This system makes me think of some questions.

a) Assuming full honesty (no coalition in which the members give the highest score to members of that coalition, and no one give her own essay score > 0) what is the probability of one winning?

b) Is such coalition possible?

-------------

The first ones is not so easy to calculate. First, the possible combination of scoring (or the probability space) from a student's perspective with regard to her own essay is (n-1)^(n-1), with n as the total students in the class. This configuration got large the more the students are. For instance, if there are 3 students, there are 2^2 or 4 possible scores from A's perspective (2, 3, 3, and 4):

2 if both B and C give A each 1 score;
3 if either B gives 1 and C gives 2, or the reverse;
4 if both B and C give A score of 2.

If there are 4 students, the possible configuration of scores becomes 27. If there are 5 students, 64. 6 students? 125.*)

This makes calculation of exact probability get increasingly difficult in scale. Remember that it is basically similar to the probability of getting k in n-run. Even for binary outcomes (coin flip, "success"/"failure"), the equation is ugly, moreover the calculation. The equation is:



And that is only for two kinds of outcome. But Mr. Riko's essay grading have (n-1) possible outcomes. I'd rather pass this one over.

However! one can calculate the average expected score of her own essay. Since these scores are independent and identically distributed random variables, we can calculate the expected score E(s) using mid range method. This estimation is robust, as the n of students got large enough the expected mean will follow the central limit theorem.

The highest possible score for A is (n-1)^2, that is if everyone else votes A's essay with highest score. The lowest possible score for A is (n-1), in which everyone else thinks A's essay is the worst. Using midrange, it is easy to see that the expected score for A is:



Interestingly, this is also the score where there is no winner! Recall that the expression n(n-1)/2 is formula for 1+2+3+...+(n-1). This score is what everyone gets when there is Condorcet voting paradox. Condorcet voting paradox happens when the situation is as follows:

A voted B > C > D
B voted C > D > A
C voted D > A > B
D voted A > B > C

So everyone basically gets voted highest exactly once, 2nd highest exactly once, and so forth until she also gets the lowest score exactly once. Therefore, for the example above, A gets 1, 2, and 3, with the total score of 6. But so do B, C, D! They all get 6. In which no one wins (or everyone wins, if you're that "glass half full" guy.) What a bummer.

-------------

Now, the second question. Is it possible to form a coalition with some friends so that at least one of the members wins, or at least guaranteed above average score? It is interesting to answer that in game theory perspective.

My theorem is that, yes, such coalition is possible. Such coalition has to adhere to some rules, however. 


1) Members of coalition must vote cyclically among themselves. If a coalition exists between A, B, and C, A must vote B > C; B must vote C > A; and C must vote A > B.

2) There must exist at least someone who is outside the coalition, a.k.a. that forever alone guy who doesn't have friend.

My theorem: there exists coalition c with members of (k+1) so that E(c) > E(s). In other words, maximizing the possibility of getting the most score. Such coalition must have k that satisfies the equation:



The left side is derived from the total score from Condorcet voting amongst its members, plus the additional expected scores from non-members.

There exist finitely many solutions for this, except where k = 0 (no coalition) and k = n-1 (i.e. everyone is in the coalition, which is basically going back to the Condorcet voting paradox above). However I can't prove the generality of this theorem. In other words, I don't know if this always applies in general. My math is rusty.

If, however, this is the case, then the best strategy for a rational agent is indeed to form a coalition. A student will have better chance of winning if she makes a deal with her friends.


I don't know if anyone has put some thoughts to this type of game theory. If I recall correctly, most of social choice literature dealt with voters that are clearly distinct from the candidates. For example, election, in which Marquis de Condorcet, Kenneth Arrow, Allan Gibbard, and Amartya Sen extensively concerned themselves with. Or maybe Keynesian beauty contest-like situation.

In Mr. Riko's grading case, all voters are also all the candidates, except that they can't vote for themselves – creating the incentive to cooperate with opponents. Another difference from election is that a vote does not necessarily correspond to a score of 1, but ∈ of {1, 2, 3, ..., n-1}.

All in all, this got me spending much time in warkop, looking at its walls like a dumb ass.


-------------

Post script:

*) The all possible ordering, class-wide, is even nastier as the n of students gets increasingly large. It is the (n-1) permutation of (n-1) elements, to the power of n. In other words, it is.
(n-1)!^(n)

Even for 3 students, the possible class score ordering is large. Take a look:

0, 1, 2   0, 2, 1
1, 0, 2   1, 0, 2
1, 2, 0   1, 2, 0

0, 1, 2   0, 2, 1
2, 0, 1   2, 0, 1
1, 2, 0   1, 2, 0

0, 1, 2   0, 2, 1
1, 0, 2   1, 0, 2
2, 1, 0   2, 1, 0

0, 1, 2   0, 2, 1
2, 0, 1   2, 0, 1
2, 1, 0   2, 1, 0

For a class with 4 students? It's 6^4 possible ordering, or exactly 1296. I'd rather not imagine how big it is for a class with 39 students like mine.

Wednesday, October 7, 2015

Tentang Cinta yang Menua

Kita masih muda, sayang. Kita hanya merasa dikejar usia, dikejar cita-cita. Terlalu sering berlari, tanpa ada waktu untuk berpikir, tanpa ada waktu untuk menangis. Lantas cermin-cermin seakan selalu memantulkan betapa tuanya kita. Mempertontonkan kekalahan kita.

Tak ada yang perlu dikhawatirkan, sayang, biar matahari hari-hari ini sedang dingin dan senja selalu gelap. Kita hanya perlu mencinta. Entah seberapa besar. Entah sampai kapan. Rasanya tidak perlu ditanyakan. Bagiku itu cukup, dan semoga cukup juga bagimu.

Semoga telingaku juga cukup bagimu untuk mendengarkanmu saat kau sedang lelah dan marah pada dunia. Semoga pelukanku cukup bagimu untuk menghangatkanmu saat kau sedang menggigil. Karena aku tak punya apa-apa dan tak tahu apa-apa tentang jalan nasib dan sisa waktu kita. Semoga aku, dalam bagian umurmu, menjadi salah satu di antara penanda-penanda bahagiamu.

Tak ada lilin dan kue malam ini. Doa-doa sudah terucap seperti biasa. Kini saatnya berlayar lagi. Temukanlah bintang selatanmu. Menjelajahlah. Janganlah lupa untuk sesekali menikmati samudera, serta berbuat baik kepada semesta. Kelak jika perahumu sudah penuh, atau sauhmu terasa lebih berat dari biasa, aku akan ada sebagai tempatmu pulang. Kujanjikan akan selalu ada cinta di rumah yang menyambutmu pulang.

Selamat ulang tahun.

Friday, September 25, 2015

A Writing for a Birthday

Just like every year before, A's girlfriend, N, demands a writing for her birthday gift. In return, she will write one on A's birthday. Back then, A and N were separated for more than 900 kms, so exchanging gifts in the form of writing was more of convenience and budget-consciousness than a romantic gesture. But they are now in one town, already for two years. They no longer having to deal with the perils of a long distance relationship. Yet the writing grew to became a ritual. None of them weren't sure who decided this to be a yearly ritual.

It is better, A thinks, that N asks for a dinner in a restaurant or a handbag than a writing. Not that A is rich, of course. He's just a staff, a middle-class at most. Moreover the company A is working can only manage to achieve 50% of this year's target so A is expecting his wage to be cut in half. But A'd rather giving up his lunch to save for birthday gift than to write. He thinks he can no longer write.

Every time A looks at his laptop trying to write something not related to work, he feels numb. Years of writing corporate letters and mountains of data renders his mind bureaucratic, if not robotic.

"I cannot write anymore," said A to N on one lazy afternoon.

"Just write something about me. Something about us."

A looked at the wall, waiting for some divine inspiration. The divine inspiration came and told him of a trap question that's about to come.

"Or... is it that you don't know me at all after all these years?", N broke the silence.

The divine inspiration was right.

No, of course A knows N. Well, most of her. He knows her habits and quirks, her traits and personalities. He knows her family. He knows some of her secrets. He knows their stories together even though he's often forgetful. He knows what a decent boyfriend is supposed to know about his girlfriend. A just feels that telling her about her, repeating the same points and stories he's made in his previous writings is of no use.

A can write N a romantic letter – words of praise slapdashed with poetic phrases copied from Pablo Neruda's or Shakespeare's love sonnets. But the romantic era is over. At best his writing will be as cheesy as a double cheese burger designed to kill its consumer. N will laugh at his silly poems, and everyone else who happens to read his blog post will get eyesores.

A can also write their stories during this year in detail, like a diary of an obsessive person. He may try to write it in long, winding prose like that "great" Pulitzer winner Jonathan Franzen. But that verbose writing will more likely make N yawn, and everyone else who happens to read will probably think that they've just read a brickwall.

After a long meditation, A finally gives in to N's idea. He will just write something about her as usual. It's not that difficult. After all, they have some similarities. For instance, they both love eating and sleeping – the actual, literal sleeping, not the one involving nakedness and child-making. He remembers that one Sunday when the sun was so hot up high it was almost blinding. The road was reduced into a platform of dusts, with walls of torrid wind sweeping here and there. They were both hungry. But the heat that separated them with the food vendors nearby was too much of a hassle that they rather sleep away the hunger.

"Perhaps one day we'll die because of our laziness," N commented at that time.

"You know what's sadder than that?"

"What?"

"That those damn online news portals will cover our stories for days and turn them into profits."

"And your friends will make statuses of us, complete with hashtags."

Eating and sleeping are not marvellous quality. A thinks that they are the most boring hobbies that a child usually uses to describe herself on her biodata, besides reading. So he thinks of their differences.

He opens his laptops and begins to write.

"Frankly, my dear, I don't know how you could fall in love with me. I am even more confused how could we last for years. Back then, I predicted that we only last for three months. Why three months, you may ask. Three months is usually the time one realises that she's dating a jerk or she's dating someone much worse than she expects. And I think you couldn't pick someone worse than me, especially your other potential suitors were more successfull and better than I am..."

A proceeds to list their differences. He is sloppy, she is organized. He is so-so, while she, who always aims for the great things, is herself great. He is the armchair-theorising leftist whose best activism is sharing news contents online almost no one in his online friends actually pays attention. She, on the other hand, is a full-fledged disciple of capitalism, a proud corporate slave, and a devout Über (and other sharing economy apps) user. A lists several more but then deletes them, concerned that they actually gives N comprehensive reasons of why she should break up with A.

He looks at his laptop.

What to write for a birthday?

How to write good as a gift?

A remembers, long ago, a god apparently gave someone to be crucified as the "greatest gift for the world". One unknown man, inspired by this revelation, write about that thusly: in the beginning was the Word.

A begins to type.

"In the beginning was the Word. And the Word was with God. And the Word was Love..."

And the Love was her.

And that's enough.


 



Wednesday, June 10, 2015

Grim, Grim Birthday

20 years ago, there was the joy. There’d be fast-paced heartbeats, in an insomniac night of imagining tomorrow. The next day, there’d be presents and friends, and – even if perhaps there’d be no cake – a little, simple celebration. Fire of the number-shaped candle danced before the bright, wide eyes. The little soul inside was restless and couldn’t wait any longer. But he knows that he must wait for five more seconds, for there would be a mandatory prayer and wish-making before blowing it. Older folks used to say that it was one of the moments when gods were summoned, just like when a star fell from the sky. They said that gods would grant whatever childhood desires and dreams that went up with the faint smokes from the dying wicks. So the little soul complied and couldn’t care more. For him, today was more important than tomorrow.

But that day has long gone and died have the tomorrows.

The little soul in me is malnourished, awaiting demise. Sorrow lurks above, vulture-like, ready to consume whatever left from him when he transformed into just another part in the machinery of the capital and the state. There’s only this god-forsaken life in this god-forsaken city.

Now I see birthday as the day of lamentation. Grim is the day because life’s also grim. Another year has passed, and in that year countless of mistakes and bad decisions were made. But the more sinister part is that I can’t even know for sure of how would my life be if I took different steps or decisions.

Birthday is also a day of giving up. One year older means one less year of opportunities. One year older means one more year of wasted opportunities. It is painful, moreover knowing that some people managed to achieve things that I can only dream of achieving, at the same age, or even at younger age. That’s why it is the day to sort everything all over again, to see which ones that have failed or are nearing failure, and to toss them to garbage. Peter Pan was right when he refused to grow up. The loss of innocence in being adult turns dreams into targets. Targets turn into obligations, and obligations turn into oppressions – oppressions in the form of fearing failure. 20 years ago I still have this childhood freedom. Now I have to opt for stability again and again, which happens to bring along with itself mediocrity into my life.

All those above notwithstanding, I find the notion of celebration for the sake of feeling good as transitory, or worse, cosmetic happiness. Early Christians believe in happiness through humility and suffering, while Buddhists believe in happiness through detachment. In a sense, I share their views inasmuch I am no longer religious. In detachment, or in viewing the world through somber lens of misery I am able to see the reality, to demand for justice, to be critical of consensus. The maturity of thought is the only thing worth celebrating in being older. Hopefully, this year, I finally attain it, because I feel dumber and dumber in each year passed. This is what I will whisper to the candle, should I have one.

And I of course will whisper for she who loves a junkyard like me: a hope that may her love don’t taper into vanity.

May I become an old anchor, sunk in her ocean.

May I stay with her even in the worst of tides, and be drowned in her till the end of time.

Ah, what is birthday but a curse. Blessed are those don’t know how many years have passed, for they don’t have to mourn.

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