Cigar Economics

The Wall Street Journal has an interesting article about the Cuban cigar industry and the problems it will face with increased demand from the US. The short takeaway is that the industry is not going to be able to meet the demand.

The cigar industry, like the rest of the Cuban economy, is mired in government-imposed inefficiency. Production has declined in recent years. Attempts to ramp up production will run into several problems.

Just how much Cuba would be able to boost production—and how quickly—is difficult to predict. Most land is farmed either with oxen or tractors built in the 1940s. Farmers say fertilizer must be imported from Venezuela. Often cigar shipments are held up because cigar boxes don’t show up in time, workers say.

The Cuban government has a hand in every aspect of production. It funnels the supplies needed by tobacco growers through the farming cooperatives, which farmers say set tobacco quotas for members and retain 2% of farm revenue. Farmers say they must apply to the government to buy tractors, irrigation systems or other expensive equipment, and Tabacuba, the government cigar-production company, decides who gets what.

Reduction in quality is one of the problems Cuba will likely face. Fine cigars are rolled by hand, not by machine.

[C]igar rolling is an art that takes years to get right. Roll a cigar too loosely or too tightly and it doesn’t smoke properly. That is exactly what happened when Tabacuba hired inexperienced cigar rollers, known as torcedores, as part of an effort to boost production by 60% in the 1990s.

“It wasn’t uncommon to have customers open a box of 25 cigars and find six or seven that were bad,” says Roberto Pelayo Duran, president of Miami-based Duran Cigars, who worked for a Habanos distributor in Asia at the time.

The reputation of the Cuban cigar worsened. After the government scaled back production, quality gradually improved.

Now, rollers go through a nine-month training program that is challenging enough that only 35% finish.

According to the article, an experienced roller can produce about 100 cigars a day. At 25 cigars a box, that is four boxes of cigars. There’s a limit to what most people will pay for a box of cigars, and the cost of the rolling is only one of many costs that must be recovered in the sales price. Cigar rollers will never live an American-style middle-class life.





A Hazard I Never Considered When Shopping at a Nursery

A North Carolina man was bitten by a copperhead when shopping for a tree at a home improvement store. The article assured readers such bites are rarely fatal. I have no personal knowledge of snake-bite consequences but assume that to be true. Even so, I take cold comfort. There are many things short of death I would prefer to avoid, such as gangrene and amputation. See here and here. If you get prompt medical care, those complications are unlikely. But I’ll keep wearing snake boots when I tromp around on my land.

A Good Year to be a Cow

It’s a wet year. In dry years, the cattle have it a lot rougher.


The white ones are Brahmas, which do well in the Texas heat and are resistant to certain diseases. The others are Herefords. The bull is a Brahma. Crossing that with Hereford cows yields something called a zebra stripe, which is considered desirable. I am told it is a good trade off between the benefits of the Brahmas and the meat yield of a Hereford, but I am a city boy and cannot speak from personal knowledge.

This was taken this past weekend in Lavaca County, Texas. “La vaca” means “the cow.” A “vaquero” is a person who works with cattle. An English corruption of “vaquero” is “buckaroo.”




Coin Tosses Not Random?

Professor Bainbridge offers a possible explanation for Hillary winning so many coin tosses in Iowa.

By now you will have heard that tied results in multiple Iowa Democrat caucuses were decided by coin flips, with Hillary Clinton beating Bernie Sanders in 6. Assuming the coin was unbiased, the odds of her doing so were 1 in 64.

So was Hillary very lucky? Maybe not. Maybe she (or her reps) were skilled. Because it turns out that US coins are not unbiased. I came across a while back a paper by Persi Deacons on “Dynamical Bias in the Coin Toss.” Deacons and his coauthors “prove that vigorously-flipped coins are biased to come up the same way they started.” The effect is not large and there are lots of variables, but it would give a statistically significant advantage to the person calling the flip if (s)he can see the initial starting position. (By the way, even more bias can be introduced if the coin is spun on a table top instead of flipped in the air, because the minting process results in different shapes on the sides, which means that one side weighs more than the other, and the heavier side tends to end up facing down.)

This doesn’t suggest Hillary’s supporters did anything unethical. Taking advantage of this phenomenon would have been smart. I’ll keep it in mind.

Even so, surely a significant amount of luck was involved. It’s hard for me to believe this bias is so large that six consecutive wins were likely.


A World With Clean Rail Cars?

Just yesterday I sat waiting for a train to pass an intersection. Rail cars covered in graffiti are nothing new, but I was struck by how ugly some of the cars were because of multiple graffiti layers. The world around us is uglier and our life experience is degraded by this vandalism.

This morning I read something that gives me hope there may be an end to graffiti. University of Massachusetts scientists have developed what they call SOCAL surfaces. “SOCAL’ to me means South California, because I heard the term used that way daily when I was stationed at MCAS El Toro in the 1970s. But these scientists use the term to mean slippery, omniphobic, covalently attached liquid. That is, neither oil nor water will attach to a surface coated with this liquid. So neither oil nor water-based paints will adhere.

These new coatings are transparent, thermally stable, and robust. Their outstanding omniphobic properties are maintained even after a year in storage. The ease with which they can be produced should make application on an industrial scale practical.

If the paints won’t adhere, objects coated with the liquid will be immune to graffiti. Hallelujah. Let’s hope this product is commercialized soon. It will have benefits far beyond rail cars.