Tag Archives: pollution

Spam externality cost ratio higher than stealing cars: what to do about that?

Spammers only make about $200 million a year, yet they cost everybody else around $20 billion a year, for an externality cost 100 times spam income. That turns out to be higher externality than stealing cars. What can we do about that?

Alexis C. Madrigal wrote for The Atlantic 7 August 2012, All the Spammers in the World May Only Make $200 Million a Year

Now, in a new paper in the Journal of Economic Perspectives, Justin Rao of Microsoft and David Reiley of Google (who met working at Yahoo) have teamed up to estimate the cost of spam to society relative to its worldwide revenues. The societal price tag comes to $20 billion. The revenue? A mere $200 million. As they note, that means that the “‘externality ratio’ of external costs to internal benefits for spam is around 100:1. Spammers are dumping a lot on society and reaping fairly little in return.” In case it’s not clear, this is a suboptimal situation.

Many activities impose costs on society that are not “internalized” by the firms or individuals. Air and water pollution are the paradigmatic examples. You get to drive your car around emitting particulates and various other smog-causing molecules that increase the cost of treating asthma and other illnesses for other people by a tiny bit.

Spam has a remarkably high externality ratio, not just relative to driving an automobile, but stealing one, too. Here’s a chart that Rao and Reiley include in their paper, which just looks at the direct costs of spam to end users (which they estimate at $14-$18 billion):

The article examines those costs more, and then gets to the point:

So what’s the way forward? The researchers gloss a variety of techniques like “attention bonds,” in which you’d be paid some tiny amount (say, $0.05) for reading unsolicited emails, and government interventions. But their preferred solution is to find ways to raise the cost of business for spammers, so that their campaigns become unprofitable.

“We advocate supplementing current technological anti-spam efforts with lower-level economic interventions at key choke points in the spam supply chain, such as legal intervention in payment processing, or even spam-the-spammers tactics,” they conclude. “By raising spam merchants’ operating costs, such countermeasures could cause many campaigns no longer to be profitable at the current marginal price of $20-50 per million emails.”

Interesting ideas, but legal intervention requires dealing with multiple legal regimes throughout the world, while spammers can shift from a botnet in one regime to another elsewhere, as just demonstrated by the Grum botnet takedown being followed by a huge surge in spam from Festi botnet including from Turkey where even when one infested organization (TTNET) ejected Festi, spammers just moved to another (KOCNET). Oh, and Grum botnet is staging a comeback.

I would argue the first thing to do is to make it more obvious which organizations are infested by what, when, and where, as in for example SpamRankings.net. Reputation alone may then cause the infested organizations themselves to take action. At the least, long experience indicates that if nobody knows about such infestations, the infested organizations will not try to stop outbound spam, which they also consider an externality.


World PM2.5 Map as reputation

NASA posted 22 October 2009, New Map Offers a Global View of Health-Sapping Air Pollution
In many developing countries, the absence of surface-based air pollution sensors makes it difficult, and in some cases impossible, to get even a rough estimate of the abundance of a subcategory of airborne particles that epidemiologists suspect contributes to millions of premature deaths each year. The problematic particles, called fine particulate matter (PM2.5), are 2.5 micrometers or less in diameter, about a tenth the fraction of human hair. These small particles can get past the body’s normal defenses and penetrate deep into the lungs.
Even satellite measurements are difficult (clouds, snow, sand, elevation, etc.). But not impossible:

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Air reputation in Beijing

Measuring something as basic as air quality and posting it frequently can have reputational effects, demonstrated by the U.S. Embassy in Beijing.

France24 posted today, Beijing air goes from ‘hazardous’ to off the charts, literally,

Two years ago, Chinese officials asked the US Embassy to stop tweeting about pollution in Beijing on the grounds that the information was “confusing” and could have “social consequences”, according to a confidential US State Department cable made public by WikiLeaks.
Hm, so measurement can affect reputation and have social consequences….

The measurements postings didn’t stop, and the pollution got worse: Continue reading