A good sentence fragment

by on July 26, 2017 at 1:27 pm in Economics, Medicine | Permalink

Nothing in Arrow predicts higher expenditures. In fact, it predicts fewer expenditures because markets will partially breakdown (not exist)

That is from Jeremy Horpedahl on Twitter.

Wednesday assorted links

by on July 26, 2017 at 11:30 am in Uncategorized | Permalink

From the Museum of Anatolian Civilizations in Turkey via a post on twitter from Isobel Finkel.

1. “For over a century, incomes across states converged at a rate of 1.8% per year…The convergence rate from 1990 to 2010 was less than half the historic norm, and in the period leading up to the Great Recession there was virtually no convergence at all.”

2. After subtracting housing costs, janitors in NYC now earn less than they do in the Deep South.  This was not the case for most of American history.

3. For NYC janitors, housing costs measure at 52% of their income.

4. Income differences across states are increasingly capitalized into housing prices.

5. “…income convergence declined the most in areas with [land] supply constraints.”

6. “Had [cross-state] convergence continued apace through 2010…the increase in hourly wage inequality from 1980 to 2010 would have been 8% smaller.”

That is from a new NBER working paper, “Why has Regional Income Convergence in the US Declined?”, by Peter Ganong and Daniel W. Shoag.  Here are earlier ungated versions.

Note that this paper contains “…the first national panel measure of land use regulations in the US.”

Notice that if a U.S. corporation earns a profit from affiliate operations abroad, the profit will be added to the numerator of CPATAX/GDP, but the costs will not be added to the denominator, as they should be in a “profit margin” analysis.  Those costs, the compensation that the U.S. corporation pays to the entire foreign value-added chain–the workers, supervisors, suppliers, contractors, advertisers, and so on–are not part of U.S. GDP.  They are a part of the GDP of other countries.  Additionally, the profit that accrues to the U.S. corporation will not be added to the denominator, as it should be–again, it was not earned from operations inside the United States.  In effect, nothing will be added to the denominator, even though profit was added to the numerator.

General Motors (GM) operates numerous plants in China.  Suppose that one of these plants produces and sells one extra car.  The profit will be added to CPATAX–a U.S. resident corporation, through its foreign affiliate, has earned money. But the wages and salaries paid to the workers and supervisors at the plant, and the compensation paid to the domestic suppliers, advertisers, contractors, and so on, will not be added to GDP, because the activities did not take place inside the United States.  They took place in China, and therefore they belong to Chinese GDP.  So, in effect, CPATAX/GDP will increase as if the sale entailed a 100% profit margin–actually, an infinite profit margin.  Positive profit on a revenue of zero.

Here is much more, with many visuals and further details at the link, including a treatment of how to measure corporate profits accurately.

For the pointer, I thank @IronEconomist.

Question  What are the neuropathological and clinical features of a case series of deceased players of American football neuropathologically diagnosed as having chronic traumatic encephalopathy (CTE)?

Findings  In a convenience sample of 202 deceased players of American football from a brain donation program, CTE was neuropathologically diagnosed in 177 players across all levels of play (87%), including 110 of 111 former National Football League players (99%).

Here is the research paper, via Peter Metrinko.  Here is NYT coverage of the result.

Tuesday assorted links

by on July 25, 2017 at 12:15 pm in Uncategorized | Permalink

I will be speaking on occupational licensing on Wed. July 26, 2017, 11:00 am – 12:30 pm at Heritage. You can RSVP here and there will also be a livestream.

1. For the population of the average county, 62.8% of friends live within 100 miles.

2. Over distances of less than 200 miles, the elasticity of friends to distance is about – 2.0, and about – 1.2 for distances greater than 200 miles.

3. Conditional on distance, social connectedness is significantly stronger within state lines.

4. “Counties with a higher social capital index have less geographically concentrated social networks.”

5. Social connectedness predicts trade flows, even after controlling for distance, and it also predicts patent citations.

That is all from a new NBER working paper by Bailey, Cao, Kuchler, Stroebel, and Wong.  Here is an ungated version.

In the place of U.S. support, Japan has offered to step in.

“Japan is the only state willing to help India in its Indian Ocean project to develop islands there,” said Abhijit Singh, head of the Maritime Policy Initiative at the Observer Research Foundation, a New Delhi think tank. The reason, he added, is that other nations—notably the U.S.—consider offering such help too provocative to China.

Here is the full WSJ story.

That is the theme of my latest Bloomberg column, here is the concluding bit:

As for 2017, I have been concluding that I should raise my relative opinion of business and lower my view of government. I’m still waiting for millennials — a relatively left-leaning generation — to reach a similar position.

Sometimes we forget about companies, in part because it is the business of business that we don’t notice it too often for the wrong things. And don’t forget that most of the weird stories about Trump or politics refer to a pretty small slice of our world, further amplified by social media.

In a war between the boring and the weird, don’t be surprised if the weird commands the most notice. But the normal and the boring have enormous powers of inertia on their side, not to mention human goodwill, and they are doing better than it might at first seem. So if you think America is falling apart, give the corporate world another look.

I believe that right now we are all too entranced by the “news of the weird.” On the side of business, there are problems with productivity growth and perhaps excess monopoly, but arguably those are about the most normal problems you could have.  I suspect the world of American business is these days a bit too normal, and could use a marginal dose of some more Elon Musk.

As you might expect, they came up with a good photo for the column.

Now it is textbooks:

When primary school administrators in the U.K. choose study materials for the fall semester this year, they will have a new option: math textbooks imported from Shanghai, a city celebrated as a global math power.

In the books, the British pound will replace references to the Chinese yuan. But in just about every other way, the versions of Real Shanghai Maths available in London will be exactly like those used in China, the ideas, sequencing and methods kept intact.

It is a remarkable admission by British education authorities that their own methods have stumbled, and that Chinese educators – after years of racking up world firsts in math scores – have developed something admirable enough to import in whole cloth.

Here is the full article, via A.T., our A.T.

Mr. Ferretti, 36 years old, and Mr. Lopez, 44, had enjoyed themselves under the supervision of a doctor for what some are calling a brosectomy—a vasectomy with friends in a cushy setting of couches, snacks, big-screen TV, and in some clinics, top-shelf liquor.

Here is the WSJ story.  And:

The University of Utah Health in Salt Lake City has run March Madness promotions for the past three years. It offers a vasectomy package that includes a Utah Jazz basketball ticket giveaway, goody bags and basketball-shaped ice packs. This year, its surgeons performed more than three times as many vasectomies in March compared with the average number done in the other months through May, according to the health center’s internal marketing data.

They promised us flying cars, and all we got was…

Our World in Data has an excellent writeup of earlier research by Eisensee and Strömberg. 

How many deaths does it take for a natural disaster to be newsworthy? This is a question researchers Thomas Eisensee and David Strömberg asked in a 2007 study. The two authors found that for every person killed by a volcano, nearly 40,000 people have to die of a food shortage to get the same probability of coverage in US televised news. In other words, the type of disaster matters to how newsworthy networks find it to be. The visualizations below show the extent of this observed “news effect”.

In other words, the famine you haven’t heard much about is more important than you think.

Monday assorted links

by on July 24, 2017 at 2:49 am in Uncategorized | Permalink