Assorted links

by on January 26, 2013 at 3:20 pm in Uncategorized | Permalink

1. What does Brexit look like?

2. Not everyone is living longer.

3. Profile of Kristin Forbes.

4. Markets in everything: “He is the only person in the world who makes a living at stair racing (his sponsors include a German health care company), which makes him the lord of an obscure but nonetheless codified sport.”

5. In defense of management consultants.

6. Rajan on stimulus and sectoral shifts.

1 FYI January 26, 2013 at 3:36 pm

I bet that the life expectancy issue is directly linked to obesity. Which kind of muddy the waters for both sides. Yes, everyone is (at least at the consumption level) better off than before but some of that extra spending is making them less healthy. Does that make you better off or worse off than when you consumed less?

That is why this kind of discussion on who is better off is always subjective. How do you measure what actually matters to people and how much of that is available at a certain point in time?

2 Thor January 26, 2013 at 5:45 pm

A paramedic friend of mine is fond of asking: “how many OLD overweight people do you see?”

3 JonF January 26, 2013 at 6:31 pm

Beyond a certain point elderly people tend to lose weight, since as their sense of smell declines so too does their appetite. Also as ones metabolism grows less efficient, it takes more calories for just normal activity.

4 IVV January 28, 2013 at 11:41 am

Plenty, actually. Like most of my family. Or all around my neighborhood. Lots of fat old people. All kinds of them.

Honestly, whenever I hear people say this, I keep wondering: do these people ever look around?

5 Ricardo January 28, 2013 at 12:07 am

I don’t see how this muddies the waters at all. Life expectancy is falling for white high school dropouts and is rising for white college graduates. If your hypothesis is correct that prosperity brings with it obesity and other conditions that tend to shorten life expectancy, why do we see the divergence that we do?

6 FYI January 28, 2013 at 1:48 pm

Information and ability to use it. Cost of fast food. Ability to deal with impulses. Several factors will cause people with less education to misuse this new wealth in ways that decrease their health while not causing the same effect on more educated people.

7 JWatts January 26, 2013 at 4:25 pm

2) Was there a significant increase in high school graduation during the period in question? If so the groups aren’t comparable.

8 Anthony January 26, 2013 at 4:40 pm

Indeed. That seems like a pretty obvious question to raise. It could just be a Simpson’s paradox situation.

9 Turkey Vulture January 26, 2013 at 5:31 pm

I’m not sure whether the data in (2) means a high school dropout born in that year, a high school dropout dropping out in that year, or a high school drop out dying in that year, or something else.

But according to the link above, high school graduation rates actually peaked in 1970 at around 77%, were around 70% by 1990, and are around 69% today.

10 Turkey Vulture January 26, 2013 at 5:43 pm

But then there’s this story:

Which says:

“Based on data collected from the states for the Class of 2010, the National Center for Education Statistics estimated that 78 percent of students earned a diploma within four years of starting high school. The graduation rate was last at that level in 1974, officials said.”

So I don’t know how to reconcile the numbers, unless like 10-15% never even start high school at any point.

11 Anthony January 26, 2013 at 6:17 pm

From the paper abstract: “It is important to note that the size of the least educated subgroup of the U.S. population has been shrinking in recent decades (down to about 8% for whites). This is good news on the one hand since this suggests that younger cohorts moving up through the age structure are more highly educated than their predecessors. The bad news is that this decline in the least educated population is occurring, in part, because they die younger than their more highly educated counterparts. This leads to what is known as selection bias – that is, the dynamics of the group being investigated are changing with time. This selection process is quite common as it accounts for the changing dynamics of all subgroups of a population facing different levels of mortality – such as smokers versus non-smokers or people at low versus high risk of cancer. This may partially explain the trends in life expectancy we observe here, but the rising death rates are nevertheless quite real.”
I would bet that, based on the “8% for whites” bit that they are defining high school dropouts as people without a high school degree and without an alternative certification like a GED, whereas the NCES data defines high school degree as a traditional hs credential, not a GED.

12 Barclay January 27, 2013 at 12:10 am

The drop out rate among whites has declined from 9% to 5% in the last 20 years.

The decline in life expectancy is primarily driven by the exit of the relatively higher potential individuals from the cohort. The remaining individuals are not necessarily living short lives, but the group average lowers.

It sucks being nearly 2 stand deviations below the mean, but it is far from conclusive that it sucks more than 20 years ago.

13 Urstoff January 26, 2013 at 10:02 pm

Exactly. But even aside from that obvious problem life expectancy is such a blunt statistic that papers over so many things (particularly cause of death) that I’m not sure what use it is.

14 derek January 26, 2013 at 4:40 pm

I’m curious why the Brexit alternatives are so tame. There is an assumption of rationality that doesn’t take into account the fragile state. Britain would presumably be considering such a move to avoid the liabilities attached to membership. Why wouldn’t that trigger others in the same direction, with the impetus of fewer members available to spread the costs? What about the reaction of the EU power structures? All their bargaining chips are giving away something belonging to someone else, which would probably go over well. An odd situation where the consensus that gives it power would be questioned.

One could argue that betting against the preservation instinct of a bureaucracy is a sure loser.

Then again, betting that the Europeans would follow their historical tendancies and do the wrong thing when pressured may be better.

I suppose someone could be Lincolnesque and raise an army to keep them in. The whole EU project has a certain US envy to it. The ironic twist would almost be worth it.

Interesting times.

15 Millian January 26, 2013 at 7:03 pm

“betting that the Europeans would follow their historical tendancies and do the wrong thing when pressured may be better”

They don’t usually. Europe is about as well-off as the United States, the part that wasn’t Communist at least, which suggests a lot of good decisions over time.

16 TMC January 27, 2013 at 1:32 pm

European PPP = 34,500 vs US 49,000
42% advantage. How is that ‘about as well off’?

17 Bender Bending Rodriguez January 27, 2013 at 7:45 pm

Their Coca-Cola has real sugar, the bread is better, and so is the beer. Plus, they’re an entire ocean away from Justin Bieber, Celine Dion, and Nickelback.
Game. Set. Match.

18 Urso January 28, 2013 at 12:02 pm

Basically all we need to do is stop Canadian musicians at the border.

19 Bryan Willman January 26, 2013 at 5:50 pm

The comment thread around the Kevin Drumm post is, uh, vigorous. But not so illuminating.

Averages can be very deceiving. Without the base data (and maybe with it) one wonders if there’s some other cohort (people born to mother’s who lived in houses with street addresses which are prime numbers, say) who suffer high infant mortality, low general life success, and therefore show up as high school dropouts who die younger than other cohorts.

There are various serious commentors who claim that people learn little in school, that it’s more signaling than development (a view I find bizarre, but…) – if that is to some extent true, then one might really wonder what “didn’t finish high school” really means. And what that meaning implies for life expectency (or anything else?)

There was discussion about “couterfactuals of history” maybe a better question would be counterfactuals of current reality – for example, what if noone ever conceived or fathered a child before the age of 25? So no teenage mothers, no teenage males siring children. How would crime rates, high school completion rates, and life expectency be affected?

20 Brandon Berg January 26, 2013 at 6:50 pm

Ctobserver gets it right in the first comment. There are significant selection effects at work. The responses are…characteristic. If I were Kevin Drum, I’d take a look, hard look at myself and wonder exactly what it is I did to attract the kind of commenters I did.

21 Zachary January 26, 2013 at 6:22 pm

I think that Rajan is hitting the nail on the head. Low sales is always a sign of low demand (duh!). But like he said, not all demand is the same. Just like there is a structure of capital, there is a structure of demand also. When the structure of the two do not coincide prices will do the work to equilibrate them. When policies affect price signals which cause the equilibration to be at difference quantities, within the structure, we get a too active and too inactive sectors. What do I mean by ‘too’? I mean different from what the real values of the goods would have the quantities be without the false signals.

22 Ghost of Christmas Past January 26, 2013 at 7:34 pm

The divergence in life expectancies by education level is best explained by cognitive sorting. As Linda Gottfredson showed, intelligence predicts health and lifespan quite well. As Murray and Hernstein reported, since the mid-20th Century the likelihood that smart people would go on to higher education increased steadily (it may have started to fall off recently), leaving fewer and fewer smart but “uneducated” (or at least unschooled/uncredentialled) people around. So we’ve been concentrating smart people into the well-educated cohort and leaching them out of the less-educated cohort, confounding the health and longevity benefits of intelligence with the much smaller benefits of higher education per se. Of course, until recently higher education predicted higher earnings and higher earnings predicted longevity, but as the signalling model of returns to education predicts, now that “everyone” goes to college (in the US, or more accurately, very many young Americans even if they aren’t very intelligent), the education-earnings connection is attenuating and likely the education-longevity link will weaken as well. We shall see!

23 Adam Calhoun January 26, 2013 at 7:38 pm

How well does health predict IQ?

24 mike January 26, 2013 at 8:08 pm

Since IQ is mostly fixed at birth barring extreme circumstances, and health is enormously highly variable, the question is nonsensical.

25 Urstoff January 26, 2013 at 10:07 pm

It’s a well-formed question; “predict” is a statistical term, not causal. So, knowing your level of health, can I make a judgement that you are more/less likely to be above/below a certain IQ.

26 JonF January 27, 2013 at 4:04 pm

A person’s intelligence is NOT fixed at birth. It subject to all sorts of environmental influences, especially in early childhood, but even in later life disease and serious trauma can affect it adversely. How well does a head trauma patient (with permanent damage) do on an IQ test? How about someone in late stage Alzheimer’s?

27 Ghost of Christmas Past January 26, 2013 at 9:45 pm

Curiously, and apparently due to brain support being prioritized in H. Sapiens (look at photos of malnourished children– big heads on spindly bodies), apart from head injuries or rare diseases health doesn’t seem to affect IQ much after early childhood. Severe prenatal or childhood malnutrition may harm IQ, such as when iodine deficiency causes cretinism. However, few people born in the US in the last century or so are so malnourished. A small fraction of the US population suffers from fetal alcohol syndrome or analogous injuries (“crack babies”). Serious researchers agree that all “environmental” influences on IQ development, of which the foregoing physical insults are examples, account for 50% or less of variation in IQ at adolescence among individuals in the US, with other variation stemming from genetic influences. Even more interesting is that the effects of environmental influences (such as education) diminish as people age, so that statistically the IQ’s of old people converge on their genetic-potential IQ’s (leaving aside brain trauma, etc. victims– statistical outliers anyway).

28 Non Papa January 28, 2013 at 12:05 pm

We haven’t necessarily fully tapped the source of high-intelligence, low-income people out there. Check out the work of Caroline Hoxby at Stanford who has argued persuasively that many smart but poor people systematically sort themselves out of the most prestigious universities because of cohort/neighborhood effects.

It may be more accurate to say that there are fewer and fewer “smart but uneducated” people around who behave like “smart and educated” people.

29 Dismalist January 26, 2013 at 7:38 pm

The comments on the Drum post [# 2] up-thread are all good.

I would add something more general: At base, the author is expecting equality in life-expectancy outcomes. Why would anyone expect such in the first place? This generalizes to the commentariat expecting equality in outcomes in everything. If policies were implemented to actually attain equality of outcomes among humans along all dimensions, we would become extinct in a moderately short period of time.

This is not a moral statement, merely a prediction.

30 TV January 26, 2013 at 9:14 pm

Wow, that Rajan piece was awful on so many levels… The call for tighter monetary policy — why? The prediction that stimulus in Japan will be a failure. What a gem…

31 zbicyclist January 27, 2013 at 1:22 am

#5. Tyler’s head and the article headline refer to “management consultants”. But “management consultants” and “management” aren’t the same thing, particularly in companies where “management” uses “management consultants” as a crutch.

And perhaps Accenture not only donated their management services, but perhaps advised on the evaluation. They can be helpful that way.

That said, I have no doubt that if a top consulting team came into a company that had not had consultants before, that top consultants could find enough low-hanging fruit to pay for themselves if the company implemented a good number of the recommendations.

32 Andrew' January 27, 2013 at 6:19 am

2. So now finishing high school is “privilege”?

I feel like I’m at Sea World for the new Shark Jumping exhibit.

33 jkl January 27, 2013 at 6:10 pm
34 Floccina January 27, 2013 at 9:50 pm

2. Not everyone is living longer.

The argument at the link is so badly flawed that it hard to believe any intelligent person would make it.

35 Floccina January 27, 2013 at 10:03 pm

To clarify what he is actually saying is:
Since the bottom 5% today are living less long than the bottom 25% lived 25 years ago life expectancy is not increasing for all group.

Flawed badly flawed logic! They need to use some thought before writing.

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