Showing posts with label measurement. Show all posts
Showing posts with label measurement. Show all posts

Monday, May 9, 2011

Setting Inflation Straight, Part III (at least)

You ever noticed how inflation seems a lot worse than the official numbers indicate?

Via Yahoo, Fox Business reports on the change in prices for a sample of everyday grocery items. It shows quite a shocking increase over the past year, far more than you might suspect from the "tame" inflation numbers you hear about.

I've reproduced the prices from that article in the table below, showing the current, March 2010, and March 2006 values. (I couldn't find the numbers in the source cited, but will operate on the assumption they all refer to March of that year, even though it suggests they average over 12 months in the previous year; this would mean the results I calculate actually understate inflation.)


Yikes! The average 1-year price increase for this sample is over 8%!

So what is the offical food price increase? The BLS CPI report on page 2 gives their aggregate 1-year food price incease as only 2.9%!!! And if you think 1 year is too short because of volatility, then look at the five-year food inflation numbers, a time period that covers the "massive" price collapse and "deflation" following the 2008 crisis onset: 4.7% per year.

And this is still:

- ignoring all quality debasements, and
- in an environment where banks are holding on to their massive reserves, suppressing price increases!

I've listed the corresponding prices for gold (though they're all relative to the present instead of March of any year), using an ETF (ticker symbol GLD) that tracks it. Looks like it works well (if a bit too well) as a barometer of dollar debasement. Hope you stocked up back then! (By a great coincidence, a financial advisor in April 2006 looked at me like I was insane for suggesting putting any money in gold.)

But don't worry, your iPad holding more memory will make up for this, I'm sure...

Sunday, March 7, 2010

When you can't go back to sleep: thermodynamics

Did you miss my posting? Well, it's been one of those days when you wake up early and can't go back to sleep. My mind's running wild this morning, and I figured I'd make some good use out of it. (It is no longer early as of completing this post because of interruptions from a playful kitty.)

I'm going to continue the lesson about thermodynamics that last left off about a year ago, by discussing some more interesting implications of the idea that "energy per unit temperature" is a measure of degrees of freedom. You see, in the time since then, I read John S. Avery's book Information Theory and Evolution, which, as you might have inferred, discusses life from the perspective of that ever-so-useful field of information theory. He also applies it to cultural (often called "memetic") evolution.

The first interesting insight that this book alerted me to is about molar entropy. Some background: in your chemistry class, you might have learned about the Gibbs free energy of a reaction, ΔG, which is calculated from ΔH - TΔS, where H is the molar enthalpy (internal + flow energy per mole), T is absolute temperature, and S is the molar entropy. For a chemical reaction, you look up the molar enthalpies of the products and subtract off the enthalpies of the reactants. Then you do the same for molar entropies, multiplying by the absolute temperature at which the reaction takes place, and add them. A negative sign for ΔG means the reaction happens spontaneously (well, as long as there is an available pathway).

With that out of the way, what are the units for S? Most tables give them as J/K*mol (Joules per Kelvin per mole, or energy per unit temperature per quantity of molecules). But, as the last post in this series showed, energy per unit temperature measures degrees of freedom, which can also be expressed in bits. So, as Avery neatly derives on pages 81-82, you can also express molar entropy in bits per molecule. (The conversion factor is 1 J/K*mol = 0.1735 bits/molecule.) I find this a much more intuitive way to think about it, because it connects the concept of molar entropy to the underlying dynamic: how many bits of information (on average) do you need to specify a molecule's current state, beyond that which you know from the temperature?

Also, rather than having to empirically derive this value directly (either from reaction data or by integrating its specific heat capacity per unit temperature from 0 K to its current temperature), it can be inferred from the known properties of the molecule: its shape, size, and bond strength. The stronger ("stiffer") its bonds are, the lower the entropy of the molecule, because large deviations from its equilibrium configuration are less probable. (Diamond, with its very strong covalent bonds, has the incredibly low molar entropy of 0.24 bits per carbon atom at STP, meaning you need less than one bit of information to specify every four atoms.)

[ADDENDUM: Avery also adds that if you divide the Gibbs equation through by T, you can describe a reaction in terms of the "information lost", i.e., the greater number of degrees of freedom you have permitted by letting the reaction take place.]

By recognizing this interconnection between molecule properties and complexity (needing more information to fully specify = more complex), one sees more unity ("consilience") to the science as a whole: entropy and bond properties aren't just off in their own domains, but have a lawful relationship. Unfortunately, however, I haven't worked out how to derive entropy from stiffness of a degree of freedom, and I haven't found a text that does it either.

Next in the series: A discussion of Eric J. Chaisson's Cosmic Evolution: The Rise of Complexity in Nature, which proposes specific energy flux (energy flow through a system per unit mass) as a measure of complexity that is applicable to everything from stars to planets to life to vehicles to computer chips to culture.

Sunday, August 30, 2009

What "interference" with radio signals really means, and its implications for property rights

A common confusion often arises: people talk of the "interference" with radio tower transmissions, without understanding what physical process the term refers to. This misunderstanding makes it hard to see the logic in my analogy between intellectual property and rights to radio frequencies.

In a recent debate on intellectual property, I finally decided to set the record straight, and what follows in this post borrows heavily from what I said in the debate.

First, how does radio communication actually work? I'll admit that I don't know the answer all the way down to the nuts-and-bolts level. But I can explain it from the perspective of information theory.

Radio communication works, to the extent that it works, because a listener can perform a measurement, and thereby learn something about the source, i.e. the message transmitted. (This "something" they learn is called the "mutual information" between the two points, and is equivalent to so-called "Bayesian evidence".)

And when it comes to your radio, what is that actual measurement? Setting a dial on it that changes a circuit's properties so that it resonates when the surrounding area is filled with electromagnetic (EM) waves around a certain frequency. And when it resonates, an electrical signal in the radio follows a certain pattern that's correlated to the signal the radio tower is sending. Your radio then converts the circuit's electrical signal into sound that is meaningful to you.

All of this functioning relies on an assumption: that by performing the measurement, you do in fact learn something about the source. That assumption is violated when more than one tower transmits with enough intensity at the frequency you perform a measurement on. In this case, no measurement result tells you anything about either source: the transmitted waves overlap each other, coming across a gibberish on your radio. (In the lingo, there's no "mutual information" between you and either source.)

So whenever you talk about "interference" with radio communication, what you really mean is "violation of an assumption some parties were using to communicate which, when violated, makes them unable to communicate."

To understand the significance of using the term "interference" in this way, let's look at a more practical, intuitive example with the same dynamic, but unrelated to the EM spectrum.

An Illustrative Example

Let's say that I live in a small village where I have a few friends. I want an easy way to communicate to them that I expect a rainstorm today. So, I work out an "encoding scheme" with them in advance: if they hear me hit my gong before 8 am, I predict rain. If they don't hear me hit my gong, I don't predict rain. So, instead of having to tell them all individually, I can just hit the gong. They'll hear it, and they'll get a message from me. By "measuring" the sound they hear before 8 am, they learn the "signal" I'm sending.

So far, so good.

But there's a little snag: my friends will hear a gong sound as long as anyone hits a gong not just me! So, our communication scheme only works as long as we can rely on no one else hitting a gong before 8 am. If we can't rely on that, I can't send them the message, at least not as reliably. Because when they hear a gong, sure, it could be me, but it could also be anyone else with a gong. Hearing the gong sound is no longer a reliable sign that I think it will rain.

So there you see it: our communication system can be defeated by "interference" from other people, either because they're trying to set up their own similar system, or because they just like being mean. But this "interference" simply means: violating an assumption that we, rightly or wrongly, thought we could rely on.

And how does this relate to radio communication? Simple: the existence of the gong sound before 8 am is just like a radio signal within a given frequency range: it can provide information to others, but only if others don't try to use the same means to communicate.

Conclusion

So do you think people should be able to "homestead" such "communication assumptions" like that? Should I be able to assert rights as "the only one who can hit a gong in this area before 8 am"? (Or, to be less greedy, the right to hit a gong in this area in a certain five-minute window, with a certain rhythm.) Your answer to that question tells you a lot about how you should look at other issues.

For example, how about asserting rights as "the only one who can broadcast radio waves in this area within a particular frequency band"? How about asserting rights as "the only one who can distribute books containing Harry Potter stories"?

Hey! That last one kinda sounds like intellectual property rights...

Tuesday, March 17, 2009

Another interesting thermodynamics result

Here's another interesting insight on thermodynamics and information theory to add to my previous: I realized why "joules per kelvin" is a measure of entropy. Not exciting? Wait, you'll see.

In the previous post on this topic, I mentioned all the parallels between entropy in information theory and entropy in thermodynamics. Also, some properties can be calculated by their information-theoretic definition or their thermodynamic definition, such as the thermodynamic availability, which can be calculated as the Kullback-Leibler divergence, a measure from information theory. But what's interesting is that this value can be expressed in terms of bits, or in terms of Joules per Kelvin, which has units of energy over temperature, with a simple constant multiplier for conversion.

Huh?

You see, there's the hard part: why on earth would bits -- which measure how much memory your computer has -- possibly refer to the same property as "Joules per Kelvin", the way that inches and meters refer to the same property?

And that's where we get to the interesting part. First of all, what is temperature? It's not how much internal energy something has, but rather, it's internal energy per degree of freedom. In this context, a "degree of freedom" is a distinct way that something can be modified at the molecular level. A single-atom molecule may be viewed as having three degrees of freedom, since it can translate in three dimensions. Once the molecule has shape, however, it can rotate in addition to translating. So, two different substances at the same temperature can have different internal energy, because one of them may be stuffing that energy into more degrees of freedom.

So where does that get us with Joules per Kelvin and energy per unit temperature? Well, watch what happens when you expand out temperature in the entropy expression:

energy
------------------------
energy/degree-of-freedom

= energy * degree-of-freedom/energy

= degree-of-freedom (!)

So there you have it! Once you expand it out, energy per unit temperature is simply a roundabout way of saying "degrees of freedom".

Now you may ask, "Nice, but that still doesn't explain what that has to do with bits." But then, what is a bit but a binary degree of freedom? When you have memory of n bits, then there are n values that you can independently set to one of two possible values, making it likewise a measure of degrees of freedom. (Note that this capability allows you to store 2^n possible states.) And informational entropy, in turn -- also expressed in bits -- is the logarithm of the number of possible states a system can be in, making it proportional to the degrees of freedom as well.

The two lessons to take away are that:

1) The number of degrees of freedom a system has depends on the arbitrary choice of what you count as a degree of freedom, just like the number of "units of length" something is.

2) Whichever consistent method you use of counting degrees of freedom, the number of degrees of freedom is proportional to the logarithm of the number of possible states.

Mystery solved! (No, I don't know if this discussion is given in any textbook treatment of the issue.)

Oh, and: Happy Saint Patty's Day!

Sunday, November 30, 2008

Inflationary product debasement turns tragic

Previously, I had highlighted the problems in inflation measures that don't take into account when a product is debased in order to hide its true cost. Well, another case of that has come up in the news: the FDA melamine regulations permitting trace amounts of the stuff in baby formula. From the beginning:

This weekend, I saw a news story on TV where a doctor was explaining that, while melamine is most likely safe in these trace amounts, it "has no business being in baby formula" because there's no benefit to the baby, there's a risk of harm, and you just don't need it to make formula.

My immediate reaction was: Okay, if it's so bad, there must be some reason producers would want to include it. After all, businesses don't e.g. pollute just for fun; they do it because that improves product quality and/or cost -- er, at least it appears that way to the most highly-visible parties.

As the story continued, the doctor answered my question by saying that it's included in order to fool the tests used to determine protein content. I don't remember the channel, but I found a San Francisco Gate story substantiating that claim:

Melamine contamination became major news when it was discovered that China was adding it to milk to disguise test results that measure protein levels. Since the chemical was found in infant formula in September, it has sickened some 50,000 Chinese infants and killed 4.


So there's our answer! They use melamine instead of the good stuff in order to pass some protein measurement test. And they only use melamine because it's cheaper, or else what's the point? But, that test has a "blind spot" that will give a "pass" rating to baby formula that only achieved that rating by compromising the "design constraints" of baby formula! So it fits into my template of "compensate for inflation by debasing the product instead of raising the price".

Now, it certainly doesn't take a bout of inflation to make people try to get "something for nothing". But it's a very plausible suspect for why it wasn't tried before.

Of course this is not to take away from the culpability of those who conjure up such unethical policies. And, to some extent, you have to understand the position they're in: when consumers reward those who can keep the visible price low, while ignoring the other costs thereby incurred ... well, don't be surprised when they're all too willing to oblige :-/

Wednesday, November 19, 2008

My plan to destroy the universe won't work

And I'll bet you're relieved!

Maybe a little background is in order.

A question of interest to philosophers and theoretical physicists is whether or not the universe is just a simulation running on some computer, one level up. (See e.g. Nick Bostrom's Simulation Argument.) Of course, many ridicule this idea as being non-falsifiable and thus non-scientific.

Not so fast! I said. Of course it's falsifiable. Here's how: if the universe is a simulation, then its programmers probably try to economize on computational resources (computing cycles, memory, disc space, time, etc). And to do that, they will make the program reveal to "us" (the conscious entities) the minimum required to make everything appear "believable". That in turn, means that as long as we "wouldn't know the difference" if some physical process developed in a way contradicting the rest of our observations, the simulator won't bother to churn through the calculations needed to make the process match up with known universal laws. In other words: "If we're not looking, why bother making sure something's there?"

And that tells us how to test the Simulation Hypothesis: have everyone set up as much measurement equipment as they can, and therefore observe as much as they can. This will force the simulator do many more calculations than it would otherwise have to, since now it has to keep consistent with that many more observations. The programmers then have to devote an ever-increasing amount of resources to keep it running, which will eventually force them to "cut corners" in implementing the laws of physics, revealing violation of Standard Model physics, or ... um, make them pull the plug on our existence.

Hence, my "plan to destroy the universe".

Now, the good news: the plan wouldn't work, based on what we already know about how the universe would react to such a "hypermeasurement" scenario! And the reason is shocking: because we can't actually increase our total knowledge.

"What in the hay-ll? I did me some book-larnin' not but three yurs ago!"

Sorry, that was Cletus, our resident country bumpkin.

Well, I'll need to some more background now to justify that claim. First, I want to point you to a post on OvercomingBias.com that introduced me to a lot about what I'll discuss here: Engines of Cognition.

Now, consider the 2nd law of thermodynamics. There are many ways to express it, but a simpler way is: "The amount of disorder ('entropy') in the universe must always increase." Sure, you can increase the order any one specific place -- say, when you form crystals -- but it will always be counterbalanced by an increase in disorder somewhere else. The most common application of this law is in heat engines (such as the one in your car): when you burn fuel to turn your engine and thus your tires, you are extracting a kind of order: the useful mechanical "work" (as it is called in physics) of a spinning engine. However, to do so, you burn fuel and transfer heat to the environment, which, when tabulated, generates entropy/disorder exceeding that which you destroyed in extracting mechanical work from the system to drive.

Now, here's the kicker: there are deep parallels between the concept of entropy in thermodynamics, and the concept called "entropy" in information theory. In the latter, it refers (roughly) to the uncertainty one has about the content of a message before reading it. Any knowledge that some kinds of messages are more likely than others therefore reduces that "entropy". Similarly, entropy is at a maximum when all messages are equally likely.

And the truly mind-blowing part is that the connection between the two kinds of entropy is so deep that entropy in the information-theoretic sense affects entropy in the thermodynamic sense. (This is going somewhere, just be patient.) In short, if you are able to reduce your uncertainty (information-theoretic entropy) about the "message" contained in the molecules of a system, that knowledge can actually be exploited to reduce the thermodynamic entropy of the system and thereby extract useful work! (For reference, and early exploration of this idea is called the Maxwell's Demon thought experiment, and a hypothetical engine that extracts work this way is the Szilard engine.)

But this hypothetical capability of decreasing the entropy of a system does not actually contradict the 2nd Law, which, you'll remember, says that total entropy must increase. Rather, for reasons I won't go into, this acquisition of knowledge itself is limited by the 2nd Law. Just as the extraction of "organized" mechanical work from fuel requires the generation somewhere else, of at least as much counterbalancing disorganization, so too does the collection of information that could permit extraction of the same work without the fuel require a counterbalancing loss of information somewhere else, i.e. increased uncertainty.

This principle reveals a fundamental limit that your brain (in a deep sense, a "cognitive engine") faces: in order to learn something true about your environment (whether via the senses or inferences), you must sacrifice knowledge somewhere else. Fortunately, nothing requires you to care much about that lost knowledge, which takes the form of "lost certainty about aggregate statistical properties of thermodynamic variables".

Now, back to the main point: from the perspective of hypothetical beings running the universe's simulator, my idea to gather more measurements has no impact. Any time we make a measurement, we are gathering knowledge, which must therefore correspond to lost knowledge somewhere else. So, far from threatening the computer's ability to simulate our universe, all our measurements will (amazingly) decrease the computational resources the simulator requires.

Which neatly returns the Simulation Hypothesis to non-falsifiability, and assures us that even if people acted on my idea, we're still safe and sound. Alternatively, it reveals the universe's programmers to be really, really clever :-)

Wednesday, September 10, 2008

So I was right again. Now, let's fix inflation measures.

There's a story on CNN Money today about shrinking and degrading products in response to inflation. Unfortunately, it doesn't give more than passing mention to the real stickler in inflation, the "degrading" part, which is harder for measurers to notice.

Consumers are discovering more air in their bag of chips, fewer sheets of paper towels on the roll, thinner garbage bags and even smaller squares of toilet paper. (emphasis mine)


You don't say! I've been noticing this for a while, and haven't been convinced the BEA and BLS capture the impact. When you pay the same for a debased product, that is price inflation, and precisely what you need to measure. But like the fool who won't search for his keys outside of the light, the BEA and BLS don't do the lab testing necessary to incorporate critical quality-related aspects of products.

In my personal experience, I have noticed cereal boxes and paper cups as being flimsier and thus harder to hold -- about as big an inconvenience as you can tag onto such a simple, trivial product. Soda bottles also had confoundingly irritating changes: in addition to the 25% vending machine price increase, they shrunk the cap height beyond all reason so that it's nearly impossible to get a good enough grip to twist open with your hands. The fact that Coca-Cola even made this decision is a testimony to either a) the low quality of their engineering teams, or b) how desperately they needed to debase the product. Neither is encouraging. (To their credit, the caps have returned to "good enough", meaning they've hidden the price increase somewhere else.)

I should feel fortunate to live in a country where "difficulty in opening products" ranks highly enough to complain about. But that's also worrying: in a country with such enormous, overflowing wealth (which the US has, right?) shouldn't producers have kept such noticeable inconveniences out as a matter of course? Something's not right about that picture...

So, if you really want to measure inflation, you're going to have to track these very tricky quality changes. But there's an alternative: focus on measures were this quality debasement just isn't possible. As I'm sure I've argued here and on several boards by now, the ideal candidate is an insulin index which does the work of policing quality improvements for you. If you debase insulin, someone dies. The other benefits are:

-Steady, predictable demand
-Global market with many buyers
-Many inputs, so it's immune to any one specific input's volatility
-No transient intellectual property effects

Which probably accounts for why such information is so durn hard to find!

Second, in addition to capturing quality degradations, they need to fundamentally rework how luxury-type items are accounted for. Those typically "scale" with what other people have. Faster computers mean enabling nicer software, but they can also mean having to pay for hardware I don't need, as the older stuff isn't available, and my current one can't run the latest software that assumes I have a faster machine. And the value I can squeeze out of it doesn't increase one-to-one with the MegaHertz rating!

I absolutely accept that modern technologies have vastly expanded the entertainment and learning options available to me, but an inflation measure must at the same time account for when food and energy prices put the squeeze on me.

I'd be interested in transforming these ideas into an academic paper, except there are a few things ahead on that list...