Thursday assorted links

by on August 17, 2017 at 11:51 am in Uncategorized | Permalink

1. Is the claim of increasing alcoholism based on flawed data?

2. Poverty and housing insecurity along Jefferson Davis Highway.  By the way, did you know that a 1963 law required North-South streets in Alexandria to be named after Confederate generals, “insofar as possible”?  And in one poll, a plurality of African-Americans think the statues should stay.

3. What does the CBO say about cutting off CSR subsidiesNB: We do not know if this is correct!

4. The Haitian dollar as an abstract unit of account.  And viewing the 2015 eclipse from the Faroe Islands.

5. Why is pop music slowing down?

6. New major study of the Bank of England coming out.

This city removed several Confederate monuments before dawn Wednesday in a stealth operation that highlights the growing backlash against such memorials across the country.

“I said I would move as quickly as I could, and I did,” Baltimore Mayor Catherine Pugh, a Democrat, said in an interview. “We didn’t need those kinds of symbols.”

Bravo, and let’s hope Old Town Alexandria — wihch frankly I have never liked — does the same with its prominent Lee statue.  But, posturing aside, the real import of this story has not yet been digested.  This statue removal was done suddenly, without democratic input for the final decision to proceed, and, as far as I can tell, without much in the way of leaks.  The mayor just did it.  Physically.  Overnight.  The importance of physical space, and how we shape and present it, must have been paramount in her mind.

That is what the end of complacency looks like.  It may just be a blip, but keep the nature of this episode in mind as you track subsequent news developments in this and other areas.

Here is the WSJ article.

Where to even begin enumerating the wealth of fruitful work — some of it highly critical — that continues to emerge from real engagement with Freud’s ideas? Consider Marina Warner’s musings on Freud’s mediation of Eastern and Western cultural tropes told through the story of his Oriental carpet-draped couch; Rubén Gallo’s panoramic exploration of the reception of Freud’s work in Mexico and the reciprocal influence of Mexican culture on Freud; and the rich medley of sociopolitical critiques grounded in Lacan’s reinterpretation of Freud’s thought.

The idea that large parts of our mental life remain obscure or even entirely mysterious to us; that we benefit from attending to the influence of these depths upon our surface selves, our behaviors, language, dreams and fantasies; that we can sometimes be consumed by our childhood familial roles and even find ourselves re-enacting them as adults; that our sexuality might be as ambiguous and multifaceted as our compendious emotional beings and individual histories — these core conceits, in the forms they circulate among us, are indebted to Freud’s writings. Now that we’ve effectively expelled Freud from the therapeutic clinic, have we become less neurotic? With that baneful “illusion” gone, and with all our psychopharmaceuticals and empirically grounded cognitive therapy techniques firmly in place, can we assert that we’ve advanced toward some more rational state of mental health than that enjoyed by our forebears in the heyday of analysis? Indeed, with a commander in chief who often seems to act entirely out of the depths of a dark unconscious, we might all do better to read more, not less, of Freud.

That is from an excellent NYT book review by George Prochnik.

PayPal, the popular online payment platform, announced late Tuesday night that it would bar users from accepting donations to promote hate, violence and intolerance after revelations that the company played a key role in raising money for a white supremacist rally that turned deadly.

The company, in a lengthy blog post, outlined its long-standing policy of not allowing its services to be used to accept payments or donations to organizations that advocate racist views. PayPal singled out the Ku Klux Klan, white supremacist groups or Nazi groups — all three of whom were involved in last weekend’s Charlottesville rally.

“Intolerance can take on a range of on-line and off-line forms, across a wide array of content and language,” the company wrote. “It is with this backdrop that PayPal strives to navigate the balance between freedom of expression and open dialogue — and the limiting and closing of sites that accept payments or raise funds to promote hate, violence and intolerance.”

Here is the full Wonkblog article by Tracy Jan.

So far I see the backlash to recent events as very much harming the noxious elements behind the Charlottesville protests.  I wonder how many businesses — including those who do not supply essential services to such groups (or maybe not any services at all) — will move to make similar announcements.  I feel the country has reached a tipping point where businesses will not find neutrality across extremist or fringe or possibly violent groups a profitable or acceptable attitude in the public eye.  I applaud this move from PayPal, as I don’t think we are close to a “slippery slope” point where it becomes problematic to decide who should be banned from PayPal services and who not.  Nonetheless I do wonder what it will look like when American business gets to the more difficult cases of judgment.  Sooner or later, the ideological computational burden placed on businesses will rise considerably, as Twitter and Facebook and YouTube discovered not long ago, and are still struggling to deal with.  It will be a kind of mandate placed on business, but put there by public opinion and social media, rather than government.  I’ve yet to see a good, data-based research paper on that topic, but it seems that boycotts and refusal to deal are headed back into the public limelight.

This very nice article covers “…a line of people wrapped around the block outside a newly opened restaurant”:

…Surkus, an emerging app that allowed the restaurant to quickly manufacture its ideal crowd and pay the people to stand in place like extras on a movie set. They’ve even been hand-picked by a casting agent of sorts, an algorithmic one that selects each person according to age, location, style and Facebook “likes.”

They may look excited, but that could also be part of the production. Acting disengaged while they idle in line could tarnish their “reputation score,” an identifier that influences whether they’ll be “cast” again. Nobody is forcing the participants to stay, of course, but if they leave, they won’t be paid — their movements are being tracked with geolocation.

Here is the WaPo Peter Holley piece, interesting throughout.  Note that women are often paid more than men, and comedians are starting to use it to fill seats in the nightclub.

Wednesday assorted links

by on August 16, 2017 at 12:59 pm in Uncategorized | Permalink

Here is the transcript and audio (no video).

We discuss what makes Florida special, why business writing is so terrible, Eddie Murphy, whether social conservatives can be funny (in public), the weirdness of Peter Pan, how he is so productive, playing guitar with Roger McGuinn, DT, the future of comedy, and much much more.  Here is one excerpt:

COWEN: If I look at old slapstick, it doesn’t seem funny at all. Intuitively, you would think slapstick, being only physical, would have a much longer half-life. What I find funny is very culturally specific references. Now, am I strange?

BARRY: Well, not about slapstick. When I was a little guy, I maybe thought that the Three Stooges were kind of funny but that stopped a long time ago. Some physical humor is still funny to me. Abbott and Costello were pretty physical, but they were funny without being slapstick. Just hitting each other in the nose and going, “nyuk, nyuk, nyuk” never struck me as funny at all. I have forgotten the second part of your question.

On different comedians and what’s not funny anymore

COWEN: You mentioned Abbott and Costello. If you’re willing, I’ll talk about a few comedians, or mention a few, and you can tell me what you found funny with them, didn’t find funny.

Let’s start with Abbott and Costello. Favorite of my father. I’ve watched almost all the movies. As I kid, I didn’t find them funny, but I actually started to find them funny in retrospect after having watched a bit of Seinfeld and Larry David. What’s your take on Abbott and Costello?

BARRY: Yeah, I can see the connection there. It more relies on you letting it — the humor — slowly develop and the characters themselves being the humor without coming right out and saying what’s funny about it: The one who never understands what’s going on, the one who’s always losing his patience with the other one. The first, maybe, three or four times, it’s just mildly amusing. But after a while, when you see it coming, that becomes very funny to you.

It’s very rare to find that kind of patience in humor anymore. I don’t think the audience is as generous as it used to be, allowing humor to build the way it did in an Abbott and Costello sketch.

COWEN: And is Abbott or Costello funnier to you? Abbott being the straight man.

BARRY: Yeah, I think Abbott is funnier.

COWEN: I think he’s much funnier.

Most of all, I was impressed by Dave Barry as a managerial force for his own career.  Again, here is the link.

Yes.  The context is female jockeys in horse racing, and so we turn to Alasdair Brown and Fuyu Yang in the Journal of Economic Behavior and Organization:

Highlights

Male and female jockeys compete side-by-side in horse racing.

Betting market prices provide a window onto society’s beliefs about female ability.

Women are slightly underestimated, winning 0.3% more races than the market predicts.

Underestimation is greater in jump racing, where female participation is low.

Here is the paper link, ungated, via Michelle Dawson.

Here is the piece (pdf), here is the broader symposium, with other notable contributors, including Bill Easterly, Charles Kenny, and Brandon Fuller.  Here is one excerpt from my essay:

…we should keep in mind the strictures of Dani Rodrik that every country, or sometimes every region, is different. Nonetheless this reorientation of measures of progress would have some implications for policy analysis. In particular, high levels of inequality, inequality of opportunity, and relative income mobility would not be seen as problems per se.

Furthermore, the frequent appearance of those concepts in political and also scholarly rhetoric would be seen as misleading and a distraction. The focus instead would be on expanding the absolute size of opportunities for the poor. To make this more concrete, consider a policy change which benefitted both the rich and the poor. Many of the equality metrics would have to struggle with such a policy, which might increase inequality in some manner, whereas the approach recommended in this paper could endorse it wholeheartedly.

It is interesting to note the recent visit of Thomas Piketty to South Africa. He called for a national minimum wage, greater worker participation in company boards, and land reform. Those are all attempts to provide equalizing measures across one dimension or another. Although some parts of those ideas may have merit, they do not seem overall focused on incentivizing wealth creation and opportunity. Piketty even stated: “I think it’s fair to say that black economic empowerment strategies, which were mostly based on voluntary market transactions […] were not that successful in spreading wealth.” It perhaps would have been more appropriate to note South Africa remains a highly regulated, highly legally privileged, and indeed mercantilist economy; the country ranked only number 72 on the 2015 Heritage Foundation Index of Economic Freedom. So perhaps empowerment based on voluntary market transactions has not yet really been tried.

The absolute opportunities approach also suggests a different emphasis for a topic such as land reform. Many arguments for land reform focus on the difference in the land holdings between the rich and the poor, yet perhaps those are not the relevant numbers. A better focus would be the following question: “by how much would receiving more land elevate the opportunities of the poor?” If indeed the answer to that question is optimistic, the case for land reform will be stronger.

Do read the whole thing.

Tuesday assorted links

by on August 15, 2017 at 1:34 pm in Uncategorized | Permalink

President Donald Trump named Tomas Philipson, an economist at the University of Chicago who has specialized in health-care policy, to the three-member Council of Economic Advisers on Monday.

Mr. Philipson briefly served as an adviser to the Trump transition team last fall on health-care matters and was a senior economic adviser to the head of the Food and Drug Administration and the Centers for Medicare and Medicaid Services during the George W. Bush administration. Mr. Philipson is the co-founder of Precision Health Economics, a consultancy. He is professor of public policy at the University of Chicago’s Harris School of Public Policy and a director of the Health Economics Program at the university’s Becker Friedman Institute for economic research.

Mr. Trump’s nominee to lead the CEA, Kevin Hassett, hasn’t been confirmed by the Senate. His nomination cleared the Senate Banking Committee with only one lawmaker, Sen. Elizabeth Warren (D., Mass.), voting against him in June.

The two other members of the CEA aren’t subject to Senate confirmation and typically serve for around two years. Mr. Trump hasn’t announced the third member of the council, which has advised presidents for over seven decades on the economic impact of their policies.

That is from the WSJ.

Are U.S. Cities Underpoliced?

by on August 15, 2017 at 7:25 am in Economics, Law | Permalink

Aaron Chalfin and Justin McCrary have a forthcoming paper in the Review of Economics and Statistics that takes a new approach to estimate the effect of police on crime. If you run an ordinary regression using the number of police to explain the number of crimes you typically find small or even positive coefficients, i.e. the police appear to have no effect on crime or maybe even a positive effect. The usual explanation is endogeneity. The number of police influence the number of crimes but the number of crimes also influences the number of police. The recent literature has focused on breaking this endogeneity circle by finding a change in the number of police that is exogenous, i.e. random with respect to crime. My paper with Jon Klick, for example, uses random movements in the terror alert level combined with the fact that the police go on double shifts when the terror alert level rises to estimate the effect of police on crime in Washington, DC. If the assumption of exogeneity is satisfied then you have pulled a random experiment out of natural data, hence a natural experiment. Obviously, if the exogeneity assumption isn’t satisfied the technique doesn’t work. But even if the exogeneity assumption is satisfied there is another problem–by focusing only on changes in police and crime when the terror alert level changes you are throwing out most of the variation in the data so the estimates are going to be less precise than if you used more of the variation in the data.

Chalfin and McCrary acknowledge the endogeneity problem but they suggest that a more important reason why ordinary regression gives you poor results is that the number of police is poorly measured. Suppose the number of police jumps up and down in the data even when the true number stays constant. Fake variation obviously can’t influence real crime so when your regression “sees” a lot of (fake) variation in police which is not associated with variation in crime it’s naturally going to conclude that the effect of police on crime is small, i.e. attenuation bias.

By comparing two different measures of the number of police, Chalfin and McCrary show that a surprising amount of the ups and downs in the number of police is measurement error. Using their two measures, however, Chalfin and McCrary produce a third measure which is better than either alone. Using this cleaned-up estimate, they find that ordinary regression (with controls) gives you estimates of the effect of police on crime which are plausible and similar to those found using other techniques like natural experiments. Chalfin and McCrary’s estimates, however, are more precise since they use much more of the variation in the data.

Using these new estimates of the effect of police and crime along with estimates of the social cost of crime they conclude (as I have argued before) that U.S. cities are substantially under-policed.

Hat tip Kevin Lewis.

Addendum: After writing this post I discovered that I had covered the Chalfin and McCrary paper when it was a working paper, five years ago! This tells you something about how long it can take to get an economics paper published.

The mostly male crowd that participated in Friday night’s tiki-torch-lit rally did not cover their faces, and they were widely photographed. A Twitter account, @YesYoureRacist, began posting photographs of participants and uncovering their identities. White was among the first it named. The account would soon identify students enrolled at the University of Nevada and Washington State University, leading both of the schools to issue statements condemning racism.

And:

A white nationalist who participated in the torch-lit march through the University of Virginia’s campus this weekend has lost his job at a Berkeley, Calif., hot dog restaurant after Twitter users posted his photo and place of employment. The employee, Cole White, was identified online after he was photographed among a shouting and torch-wielding mob during the march Friday night in Charlottesville.

Effective social monitoring, or dangerous slippery slope?  Or both?  Sometimes the undercover sleuths are wrong (NYT).  Many colleges are being asked to expel those students.

Here is the full article, via Michael Rosenwald.

It is long, and thus below the fold… Read More →

That is the topic of my latest Bloomberg column.  Excerpt:

Virginia is the location of the Pentagon, and military and national intelligence establishment have been a cash cow for the state. That has boosted prosperity and minimized cyclical downturns, two factors that help alleviate racial and interethnic tensions, in turn raising upward mobility for immigrants. The state has also encouraged real estate growth and created a favorable environment for small and midsize businesses. For all the criticism of ugly strip malls, they are an ideal place for immigrants to start a new business.

The result has been a strong upper middle class rather than a playground for billionaires. That offers immigrants a good chance to move up the social and income ladders fairly quickly.

Almost 70 percent of Virginia immigrants have settled in Northern Virginia, very close to Washington and Maryland. The D.C. metropolitan area, due to the primacy of politics, has attracted migrants and temporary residents for a long time, including American-born citizens from other states. There is little stigma to being an outsider or new arrival.

When I first moved to Northern Virginia in 1980, it was common to see Confederate flags and to hear “good ol’ boys” talk with racist overtones. Today the region is a multicultural success, has some of the best schools in the country, and is renowned for its globe-spanning ethnic food.

Another big part of the Virginia economy has been the significant naval presence in the Norfolk area. In addition to creating lots of jobs, the U.S. military long has been one of the most successfully integrated and tolerant institutions in the country, setting a good workplace and cultural precedent.

It also helps that Virginia’s immigrants are a mix of nationalities, with no one dominant ethnic group. That has encouraged broad-based assimilation, and prevented any single, easily identifiable group from being a source of social tensions.

Do read the whole thing.