Showing posts with label information asymmetry. Show all posts
Showing posts with label information asymmetry. Show all posts

Tuesday, May 10, 2011

VFS: The most expensive courier service

The first thing you need, if you have to travel abroad, is a visa to the countries you have to visit. And so, begins the hunt for what is the type of visa you need, the checklist of documents, photographs, etc. In India, most of the embassies, those who witness a large amount of visa applications for their countries, have now begun outsourcing part of their work to VFS.The VFS centres of the particular embassy/consulate collects your visa documents and passport, on behalf of the embassy, sorts them in the order required by the embassy and deposits those with them. On the scheduled day, VFS collects those documents and brings it back to its centre for you to collect those.

For all this business, VFS charges every applicant a processing fee, which ranges from Rs. 600 onwards. If the embassies themselves were to do all the administrative jobs that VFS does, they wouldn't be charging us any service fees, as it is included in the visa fees. But we pay these fees to VFS, because it helps us escape those long queues that we might encounter at the embassies/consulates. Also, it helps us realise whether our form is correctly filled and the right set of documents are attached, thus reducing the chances of visa being rejected due to incomplete documents, incomplete forms, etc.

This means, the VFS website listing the document requirements itself should be updated with the latest visa application requirements of the concerned embassy. If not, then there is a chance of a ruined trip to the VFS office. E.g., take the VFS website for the Chinese consulate. To apply for any visa, it does list the requirements. But, after you have gathered everything and gone to the VFS centre, you are told, "Sir, for the business visa, you need to submit your savings bank account statement." You tell them, that isn't mentioned on the website. Then "executive" says, "Sorry sir, the website might not have been updated." So, how am I supposed to know about what documents are required? I cannot have the latest requirements planted into my dreams. Then, she says, "If your airline isn't a Chinese/Hong Kong airline, you need to get your ticket stamped by the airline office." Again, you tell her that this isn't mentioned anywhere on the website.

You start feeling helpless. You have double, triple checked whether all the documents are in order. And you have referred to the website of the organisation authorised by the consulate for the document requirements. And for all this outdated information, VFS charges you Rs. 610 as service fees. Plus, costs you a futile journey to the VFS centre. Makes you wonder, is VFS only a courier service, transporting your documents to and from the embassy for you? Seems to be a pretty expensive service.
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Wednesday, December 16, 2009

What is common between Al Gore, Steven Levitt and Stephen Dubner?

In his world famous and super successful documentary, An Inconvenient Truth, Al Gore utilises a lot of research and some sensational material that highlights the harm that the present lifestyle of humans can cause to mother Nature. He uses this to encourage and promote lifestyle changes that can atleast slow down, if not prevent, global warming. But, he faces a very steep uphill, because of the kind of opposition he is going to face to induce such lifestyle changes. Lobbyists from the oil industry, who need people to keep consuming oil and petrochemicals, even the automobile and airlines industries and many more people. These industries are easy targets as you can just give some large numbers on the carbon dioxide emissions emitted by them and introduce a guilt in the peoples' minds everytime they travel.

While I am not debating about who is the biggest villain and the best target to knock off first, let us look at how Al Gore has made his documentary. Let us accept that the only research that Gore has done is to collect data that highlights the causes of global warming. This has been done through published literature and talking to experts who have worked in this area for a long time. Gore has himself not performed any of the studies that have been used to build his documentary. Thus, Gore relies on and believes in the studies of the experts.

In their book Superfreakonomics, Steven Levitt and Stephen Dubner argue that while Al Gore's campaign is definitely good, it entails a lot of cost as it involves inducing behavioural changes in the humans. Instead, they suggest an alternate route that is cheaper and yet effective. Economists always attach a cost with any activity. But, what is forgotten, or deliberately avoided, is the fact that while we pay each other for the goods and services obtained, how do we pay back the nature, who is the source of all things living and nonliving? Nature doesn't accept currency. What it is currently accepting, is the burden of waste and emissions created by unmindful human activity.

In the chapter on Global Warming, Levitt and Dubner highlight some innovative(?) solutions that people are working on to reduce global warming. For most of their chapter, they rely on work done by a company called Intellectual Ventures (IV). IV is a company that is "building a portfolio of patents and creating an Invention Capital." It has also recently started its own research labs, where they try to find cost effective solutions to various existing problems. In this lab, IV researchers found out that injecting sulphur dioxide into the stratosphere from strategic locations, global warming can be avoided. This has been based on atmospheric studies that followed the volcanic eruption of Mount Pinatubo in 1991. These studies found that the eruption caused discharge millions of tons of sulphur dioxide in the atmosphere, which resulted in lower temperatures all around the world. Now, these studies and conclusions are drawn by scientists who are from prestigious institutes like MIT, Stanford, CalTech, etc. Levitt and Dubner have reported major parts of their conversation with the IV scientists.

But, what IV doesn't mention is that in 1992-93, the Ozone hole over Antarctica also reached an unprecedented size. This is merely six to eight months after the volcano exploded. Ofcourse, this may be because the amount of sulphur discharged in a short period of 1-2 days was unprecedented and staggering. And IV doesn't intend to release such amounts. Detailed arguments to oppose this strategy can lead to an independent posting on the blog.

Now, coming to the title of the post. So, what is common between Al Gore, Steven Levitt and Stephen Dubner. They rely on the information presented by "experts" who may not have an unbiased view about their ideas. They place belief in the experts and report their views without seeming to question them too much. However, each of their experts does have an agenda in propagating his/her ideas. Getting more funding, generating profit through sale of tools and ideas are some such motives. In their first book Freakonomics, Levitt and Dubner mention how information asymmetry leads to a bias in making decisions and forming views. Information asymmetry is when one party has access to certain information that it can use to its advantage, when the other party doesn't have any access to it. In this case, both parties, Gore and Levitt & Dubner are victims of information asymmetry.
What is common between Al Gore, Steven Levitt and Stephen Dubner?SocialTwist Tell-a-Friend