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New Blog! Comments, observations and insights from host Tess Vigeland as she prepares for each week's Marketplace Money show. Post your comments, too. Your ideas could end up on the air.

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Tire rolling resistance standards and your fuel efficiency

From Cindy Skrzycki’s business column at WashingtonPost.com.

Now, as gas prices have hit $4 a gallon and more, the idea of reducing tire “rolling resistance” to improve vehicle gas mileage is gaining traction. After 12 years of blocking any such standard, Congress has ordered a consumer information program by next year to inform buyers on what to expect from tires on fuel economy.

The $34 billion tire industry was long divided on the issue. Michelin North America has favored a standard and has started running ads extolling the gas-saving virtues of its tires. Other manufacturers lobbied Congress to block any rule requiring that tires be labeled to indicate their fuel efficiency.[…]

A 2006 study by the National Academy of Sciences concluded that it was feasible to reduce rolling resistance by 10 percent. This would increase the fuel economy of vehicles by 1 to 2 percent, saving up to 2 billion gallons of gasoline and diesel annually.

I wonder what the rolling resistance rating is of the square tires on this bicycle at Macalaster College.

Vioxx clinical study influenced by marketing

The painkiller Vioxx, which was found to double the risk of heart attack and stroke, has been off the market for nearly four years. This morning, a report on Vioxx published by the Annals of Internal Medicine has reached a startling conclusion. Merck’s original study on the drug’s side effects was done primarily to support a marketing campaign.

From Bloomberg.com:

The study, which recruited 600 doctors, was crafted by Merck’s marketing department to get physicians to prescribe Vioxx, the researchers wrote. The report provides some of the first evidence of what is thought to be a widespread practice: enlisting doctors for a study to boost their confidence in a new drug and get them to promote it to colleagues, they said.

The Advantage study “was marketing masquerading as science,” said lead author Kevin Hill, of Harvard Medical School in Boston, in an Aug. 15 telephone interview. “They went about this in a very analytic way, picking doctors who would be most influential, who will talk to other doctors and recommend Vioxx to them, and thus increase prescriptions in the area, planting the seeds of additional Vioxx use.”

Most startling quote to me: Jonathan Edelman, executive director of Merck Research Laboratories’ global center for scientific affairs, said: “As with all Merck clinical research, there is a commercial interest.”

We’re hearing about this about nine years after the first Vioxx trials. It certainly makes you wonder about the validity of other drug studies out there, and what kind of backlash we’ll see as a result of this one.

Wine expert: boxed wine better for the environment

From an op-ed piece by Tyler Cowen in The New York Times.

More than 90 percent of American wine production occurs on the West Coast, but because the majority of consumers live east of the Mississippi, a large part of carbon-dioxide emissions associated with wine comes from simply trucking it from the vineyard to tables on the East Coast. A standard wine bottle holds 750 milliliters of wine and generates about 5.2 pounds of carbon-dioxide emissions when it travels from a vineyard in California to a store in New York. A 3-liter box generates about half the emissions per 750 milliliters. Switching to wine in a box for the 97 percent of wines that are made to be consumed within a year would reduce greenhouse gas emissions by about two million tons, or the equivalent of retiring 400,000 cars.

(via Daring Fireball).

Thankfully, unlike the recent redesign of the milk jug, which helps save on shipping costs, the wine box is already user friendly. Here’s a photo of the new milk jug.

Open-source textbooks

In response to rising textbook prices, some academics are writing their own textbooks — for free. From an article in the Los Angeles Times:

Caltech economics professor R. Preston McAfee finds it annoying that students and faculty haven’t looked harder for alternatives to the exorbitant prices. McAfee wrote a well-regarded open-source economics textbook and gave it away — online. But although the text, released in 2007, has been adopted at several prestigious colleges, including Harvard and Claremont-McKenna, it has yet to make a dent in the wider textbook market.

“I was disappointed in the uptake,” McAfee said recently at an outdoor campus cafe. “But I couldn’t continue assigning idiotic books that are starting to break $200.”

McAfee is one of a band of would-be reformers who are trying to beat the high cost — and, they say, the dumbing down — of college textbooks by writing or promoting open-source, no-cost digital texts.

What are some of the responses from textbook publishers?

Representatives of the textbook industry say they have invested in new products because instructors have demanded it.

“Do you think all these PhDs are so lazy, so stupid they buy junk?” asked Bruce Hildebrand, the Assn. of American Publishers’ executive director for higher education. “God bless anybody who has got the energy and commitment to put three, four, five years of labor in on a book and then give it away.”

Well, the blessed are relatively few so far. But at least one business based on free textbooks is on the horizon. From APP.com:

[Eric] Frank and his business partner, Jeff Shelstad, in January plan to launch Flat World Knowledge, the first commercial open textbook publisher. It will offer free online textbooks that can be printed and bound, for about $25 for black and white and $35-$39 for full-color copies. The average price of a traditional textbook varies by subject; many new textbooks cost about $150, Allen says.

I can imagine one of the benefits of open-source textbooks is just how easily and quickly they can be updated or corrected, especially if you’re the author and publisher.

Rob Beezer, a professor at the University of Puget Sound in Tacoma, Wash., says he wrote ”A First Course in Linear Algebra” mainly because he was frustrated with the frequent new editions publishers release every few years. He decided to write his own textbook in 2004, basing it on his lecture notes. Students can download it, print it or buy a soft-cover copy for $24.50.

Beezer earns $5 for every professionally bound copy sold and uses the money to update the content. He pays students who find mistakes in the book.

Saving money on textbooks — actually, making money from professors’ mistakes — how could this not go over well with college students?

Rupert Murdoch is now frenemies with Facebook

From The New York Times.

Fox News Channel wants more friends. But instead of reaching out on the News Corporation’s own social network, MySpace, the cable news channel is choosing to network on the site’s chief rival, Facebook.

Well played. Facebook offers what MySpace doesn’t.

Facebook is “currently the leading social network” worldwide, said Joel Cheatwood, the senior vice president for development at Fox News. “They also have a user that’s a little older and a little more sophisticated.”

I for one welcome what may be a trend toward openness on the Web. If your competitors have strengths, use them to your advantage. For example, BusinessWeek.com plans to refocus a major portion of its online business around a set of user-generated, but closely moderated topic pages that are supported by links to relevant sources across the Web — even if they’re on a competitor’s site.

A few other magazines and newspapers have also become serious about building verticals, but they tend to jealously guard control of their online audiences and content. Not this one.

Each Business Exchange topic page links to articles and blog posts from myriad other sources, including BusinessWeek’s competitors, with the contents updated automatically by a Web crawler. Nearly all traditional news organizations offer only their own material, spurning the role of aggregator as an invitation to readers to leave their sites.

Users want good, reliable content. Give it to them, even if you’re pointing them to the competition. They’ll remember that you pointed them to the good stuff, and they’ll come back.

So, er, come back soon please?

Technology is the new retail therapy

Americans love technology, and the stats are proving it. Consumer electronic sales 4.8 in July, according to U.S. government estimates. The Financial Times reports the jump is thanks to sales of flat screen TVs, computer games, digital music players and newer items like the iPhone and Amazon’s Kindle, to name a few. I mean, what else are you going to do when it’s too expensive to go anywhere? Case in point, turning your house into a vacation spot. From the Financial Times:

The release of Apple’s new $200-$300 3G iPhone had supposedly cash-strapped customers lining up outside its stores. Amazon, the online retailer, saw its shares surge last week after a Wall Street analyst predicted strong sales of its $359 Kindle wireless electronic book reader.

Some electronics retailers have sought to exploit the frugal mood to drive sales. Amazon is urging customers who want to save money to skip their vacations and invest in electronics instead, arguing that its “great selection of MP3 players, speaker docks, and other accessories will make your house feel like a five-star resort.”

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Web Surfer: Items mentioned on air

Marketplace Confessional

"Great story focusing on independent American Frame builders that somewhat ironically seem to makes bikes that mostly look very retro European bikes. For the rest of us who aren't able to shell out about $3,000 for a new commute bike, it is possible to retrofit and/or upgrade vintage bicycle frames for daily use. My own personal commuter is a 1980's Fuji Palisade road bike I completely rebuilt with new and used parts. It weighs just over 22 pounds and costs less than $400 to rebuild. With all due respect to small independent bicycle frame builders, I wouldn't want to wait for an expensive "custom fitted" built frame I don't need because most fit adjustments can be made with the components"

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