Data Source

Is it clever or stupid of us to be avoiding the problem of “overeducation” in our Army officer corps?

As shown previously, the higher an officer’s cognitive ability, the lower that officer’s chance at early promotion and battalion command selection. As a curious anecdote, the promotion rate to colonel for officers with PhDs was lower than the Army average from 2011 to 2013. Surprisingly, the Army does not actively invest in advanced civilian education for its personnel managers or OES instructors. In the 1980’s, the Army sent as many of 7,000 officers per year to graduate school. The Army reduced that to 415 in the 1990s. Currently, the Army sends 600- 700. A not-so-long ago discussion at the joint flag officer orientation course, typically referred to as “Capstone,” revolved around how much education “was too much” for senior officers. The quorum of newly selected flag officers from all services concluded that a public school or distance learning masters was fine, but certainly not a PhD or Ivy League masters.

That is from Spain, Mohundro, and Banks (pdf), via Paul Musgrave.

Opioids for the masses?

by on November 24, 2015 at 1:45 am in Data Source, Economics, Law, Medicine | Permalink

This has long seemed to me an understudied topic, so I was interested to read the job market paper of Angela E. Kilby, who is on the market this year from MIT.  And she does what I like to see in a paper, namely try to figure out whether some practice or institution is actually worth it.

The background is this: “…In the face of concerns that undertreatment of pain was a “serious public health issue,” medically indicated use of these drugs over the past 15 years has increased dramatically, and attitudes have liberalized towards the use of opioids for chronic non-cancer pain.”

When it comes to the increased use of opioids, she finds the following trade-offs:

1. Since 1999, there has been a fourfold increase in drug overdose deaths linked to opiod pain relievers.  In 2013, the number of opiate-linked overdose deaths was 25,117, a higher number than I was expecting.  (But note that most of these can no longer be reduced by the feasible interventions under consideration.)

2. The increased use of opioids seems to pass a cost-benefit test, compared to the passage of a tougher Prescription Monitoring Plan.  With a host of caveats and qualifiers, she measures the pain reduction and other benefits from looser regulation at $12.1 billion a year and the costs of higher addiction rates, again from looser regulation, at $7.3 billion per year.

There is much more to it than what I am reporting, and in general I believe economists do not devote enough attention to studying the topic of pain.

With the elimination of mandatory retirement, the average age of college and university faculty members has increased. While this has raised some concerns, relatively little research has tried to measure the impact of this aging on productivity inside the classroom. Using data from the website for a large sample of instructors in a broad cross-section of colleges and universities, we find that age does affect teaching effectiveness, at least as perceived by students. Age has a negative impact on student ratings of faculty members that is robust across genders, groups of academic disciplines and types of institutions. However, the effect does not begin until faculty members reach their mid-forties and does not seem to increase even when they reach the former retirement ages of 65 or 70. Moreover, the quantitative impact of age on student ratings is small and can be offset by other factors, especially the physical appearance of professors and how easy students consider them to be. When we restrict our sample to those professors deemed hot by student raters, the effect of age disappears completely. We conclude that ending mandatory retirement has had little impact on student perceptions of faculty quality.

That is from a new paper by Rovbert J. Stonebreaker and Gary S. Stone, via Kevin Lewis.

Between 1989 and 2010, U.S. attorneys seized an estimated $12.6 billion in asset forfeiture cases. The growth rate during that time averaged +19.4% annually. In 2010 alone, the value of assets seized grew by +52.8% from 2009 and was six times greater than the total for 1989. Then by 2014, that number had ballooned to roughly $4.5 billion for the year, making this 35% of the entire number of assets collected from 1989 to 2010 in a single year. According to the FBI, the total amount of goods stolen by criminals in 2014 burglary offenses suffered an estimated $3.9 billion in property losses. This means that the police are now taking more assets than the criminals [emphasis added].

That is from Martin Armstrong, via Noah Smith and Michael Hendrix.  While private sector robberies are underreported by a considerable amount, this is nonetheless a startling contrast.

Can this be true?

This sounds like a combination of a David Brooks column and a Robin Hanson blog post, and what could be better than that?:

Surprisingly, the most effective leaders did not have the highest level of self-awareness. Indeed, the more they underrated themselves, the more highly they were perceived as leaders. We assume this is caused by a combination of humility, high personal standards, and a continual striving to be better.

That is from Jack Zenger and Joseph Folkman, via the excellent Samir Varma.

That is the subject of a new paper by Devin Caughey, Christopher Warshaw, and Yiqing Xu (pdf).  It turns out that before the 1980s it hardly mattered at all which party controlled a state government.  These days it matters much more, but how much?

Even today, for example, electing a Democratic rather than Republican governor should be expected to increase monthly welfare payments by only $1-2 per recipient, and to increase by just half a percentage point the proportion of policies on which a state has the liberal policy option. These eff ects are small relative to policy diff erences across states. They are also small relative to the partisan divergence in legislative voting records. These results thus partially assuage the normative concern that partisan polarization has led to extreme policy swings, degrading the congruence between policy outcomes and citizens’ preferences.

OK, you can all go home and relax now…and just to be clear, these estimates are adjusting for what is already the ideology of the state.

Some other things to note from this paper:

1. The effect of having a Democratic governor seems to be rising.

2. Whatever Democratic governors accomplish, they accomplish in their first two years in office.  Policy effects do not seem to cumulate over time.

3. “The estimated policy effect of a switch in unified party control is one-twentieth the size of the typical difference between states…”

The bottom line?  Worry about the culture people, not about the election.

From an email from the Harvard Kennedy School:

“Identifying Barriers to Muslim Integration in France”
Adida, Claire L.; Laitin, David D.; Valfort, Marie-Anne. Proceedings of National Academy of Sciences (PNAS), 2010, Vol. 107, No. 52, doi: 10.1073/pnas.1015550107.

Abstract: “Is there a Muslim disadvantage in economic integration for second-generation immigrants to Europe? Previous research has failed to isolate the effect that religion may have on an immigrant family’s labor market opportunities because other factors, such as country of origin or race, confound the result. This paper uses a correspondence test in the French labor market to identify and measure this religious effect. The results confirm that in the French labor market, anti-Muslim discrimination exists: a Muslim candidate is 2.5 times less likely to receive a job interview callback than is his or her Christian counterpart. A high-n survey reveals, consistent with expectations from the correspondence test, that second-generation Muslim households in France have lower income compared with matched Christian households. The paper thereby contributes to both substantive debates on the Muslim experience in Europe and methodological debates on how to measure discrimination. Following the National Academy of Sciences’ 2001 recommendations on combining a variety of methodologies and applying them to real-world situations, this research identifies, measures, and infers consequences of discrimination based on religious affiliation, controlling for potentially confounding factors, such as race and country of origin.”

There are other interesting papers at the top link, many of them topical with regard to recent events.  This article, by the way, argues that 9-11 decreases the rate of Muslim assimilation in the United States.

The paper is by David Hugh-Jones, and this is from the research summary:

The study examined whether people from different countries were more or less honest and how this related to a country’s economic development. More than 1500 participants from 15 countries took part in an online survey involving two incentivised experiments, designed to measure honest behaviour.

Firstly, they were asked to flip a coin and state whether it landed on ‘heads’ or ‘tails’. They knew if they reported that it landed on heads, they would be rewarded with $3 or $5. If the proportion reporting heads was more than 50 per cent in a given country, this indicated that people were being dishonest…

The countries studied – Brazil, China, Greece, Japan, Russia, Switzerland, Turkey, the United States, Argentina, Denmark, the United Kingdom, India, Portugal, South Africa, and South Korea – were chosen to provide a mix of regions, levels of development and levels of social trust.

The study’s author Dr David Hugh-Jones, of UEA’s School of Economics, found evidence for dishonesty in all the countries, but that levels varied significantly across them. For example, estimated dishonesty in the coin flip ranged from 3.4 per cent in the UK to 70 per cent in China. In the quiz, respondents in Japan were the most honest, followed by the UK, while those in Turkey were the least truthful. Participants were also asked to predict the average honesty of those from other countries by guessing how many respondents out of 100 from a particular country would report heads in the coin flip test. However, participants’ beliefs about other countries’ honesty did not reflect reality.

This is interesting:

“Differences in honesty were found between countries, but this did not necessarily correspond to what people expected,” he said. “Beliefs about honesty seem to be driven by psychological features, such as self-projection. Surprisingly, people were more pessimistic about the honesty of people in their own country than of people in other countries.

And consider this from Hugh Jones:

“I suggest that the relationship between honesty and economic growth has been weaker over the past 60 years and there is little evidence for a link between current growth and honesty,” said Dr Hugh-Jones. “One explanation is that when institutions and technology are underdeveloped, honesty is important as a substitute for formal contract enforcement. Countries that develop cultures putting a high value on honesty are able to reap economic gains. Later, this economic growth itself improves institutions and technology, making contracts easier to monitor and enforce, so that a culture of honesty is no longer necessary for further growth.”

The research paper is here, and for the pointers I thank Charles Klingman and Samir Varma.

Jones, by the way, makes it clear there are a variety of kinds of honesty, and inferences from any single test should be limited.  For Japan in particular the measured level of honesty depends critically on which test is applied.  The real lesson of the study may simply be that most groups are dishonest, and people are not even honest with themselves about their views of the dishonesty of others.  Honesty depends a good deal on context too.  On some of these questions, see some skeptical comments from Kevin Drum.

If you are looking for simple correlations: “…at individual level, there is no evidence that religious adherence is associated with honesty.”  How about having a Ph.d.?

U.S. counterterrorism officials reported in February that more than 20,000 foreign fighters have joined the fray in Syria to fight with the rebels, with most going to help the Islamic State. Of these, 150 or so are from the United States and over 3,000 are from the West.

According to British scholar Peter Neumann, the Syria conflict has generated more foreign fighters than Afghanistan, post-2003 Iraq, Somalia, Mali and other fields of jihad combined.

That is from Daniel Byman at Monkey Cage, with other points at the link.

Sang Yoon Lee, Yongseok Shin, and Donghoon Lee have a new NBER paper:

Going to college is a risky investment in human capital. However, we highlight two options inherently embedded in college education that mitigate this risk: (i) college students can quit without completing four-year degrees after learning about their post-graduation wages and (ii) college graduates can take jobs that do not require four-year degrees (i.e., underemployment). These options reduce the chances of falling in the lower end of the wage distribution as a college graduate, rendering standard mean-variance calculations misleading. We show that the interaction between these options and the rising wage dispersion, especially among college graduates, is key to understanding the muted response of college enrollment and graduation rates to the substantial increase in the college wage premium in the United States since 1980. Furthermore, we find that subsidies inducing marginal students to attend colleges will have a negligible net benefit: Such students are far more likely to drop out of college or become underemployed even with a four-year degree, implying only small wage gains from college education.

This is a very important result…Bryan Caplan, telephone!

Ungated versions of the paper are here.

How smart are CEOs anyway?

by on November 15, 2015 at 2:14 am in Data Source, Economics, Education | Permalink

Here is a new paper by Wai and Rindermann.  It seems to be saying that CEOs are quite smart, but perhaps not as smart as…journalists.  Hm..perhaps this may get some media pick-up, here is the abstract:

The path to becoming a CEO (and performance on the job) can be viewed as a difficult cognitive challenge. One way to examine this idea is to see how highly selected CEOs are in terms of education and cognitive ability. The extent to which Fortune 500 CEOs were selected on education and cognitive ability at an earlier age was retrospectively assessed at four time points that spanned 1996 to 2014 (Total N = 1991). Across the last 19 years, between 37.5% and 41.0% of these CEOs were found to attend an elite school which likely placed them in the top 1% of cognitive ability. People in the top 1% of ability, therefore, were likely overrepresented among these CEOs, at about 37 to 41 times the base rate. Even within each of the four samples, higher CEO education and cognitive ability was associated with higher gross revenue of the CEO’s company. Although Fortune 500 CEOs were highly selected on education and cognitive ability, when placed in the context of a broader array of occupations in the extreme right tail of achievement (e.g., politicians, judges, billionaires, journalists, academics, powerful people, and other business elites), CEOs were not at the top. This showed the wide cognitive ability range (and mental test difficulty) across various occupations that compose the U.S. elite. That Fortune 500 CEOs had similar education and cognitive ability selectivity over time shows that the CEO (and perhaps business) occupational and filtering structure has remained relatively unchanged across the last two decades.

I would gladly read more papers on this topic…

Apparently.  Heather Sarsons has a paper on this phenomenon (pdf), the abstract is this:

Within academia, men are tenured at higher rates than women are in most quantitative fields, including economics. Researchers have attempted to identify the source of this disparity but find that nearly 30% of the gap remains unexplained even after controlling for family commitments and differences in productivity. Using data from academic economists’ CVs, I test whether coauthored and solo-authored publications matter differently for tenure for men and women. While solo-authored papers send a clear signal about one’s ability, coauthored papers are noisy in that they do not provide specific information about each contributor’s skills. I find that men are tenured at roughly the same rate regardless of whether they coauthor or solo-author. Women, however, suffer a significant penalty when they coauthor. The results hold after controlling for the total number of papers published, quality of papers, field of study, tenure institution, tenure year, and the number of years it took an individual to go up for tenure. The result is most pronounced for women coauthoring with only men and is less pronounced the more women there are on a paper, suggesting that some gender bias is at play. I present a model in which bias enters when workers collaborate and test its predictions in the data.

See also this very interesting paper on “Confidence Men,” in economic science, women seem to have more epistemic modesty than men.

Hat tip goes to Dina Pomeranz.

How is China doing?

by on November 12, 2015 at 12:01 am in Current Affairs, Data Source, Economics | Permalink

From Fathom Consulting, here is the latest, based in part on momentum indicators:

Contrary to the picture painted by the official statistics, we believe that China’s economic growth rate has more than halved since the beginning of early last year, from just over 6% to less than 3%. Indeed, our preferred measure of economic activity — our China Momentum Indicator (CMI) — slipped 0.2 percentage points to 2.8% in September.

Looking at the individual components of our CMI, rail freight volumes reached a six-and-a-half year low, while electricity production also fell — down 3.1% in the twelve-months to September. The third and final component, growth in bank lending, has been broadly stable at around 15% per annum over the past four years.

In response, the PBoC has eased policy on no fewer than six occasions in the past twelve months. We see further substantial cuts in China’s policy rates of interest over the next year, not least because in real terms they remain stubbornly high.

As benchmark interest rates continue to fall in China, capital outflows are likely to rise, putting further downward pressure on the currency. Back in August, the RMB was allowed to fall by 3.0% against the USD in the space of a week – the biggest one-week move in 20 years.
Last Friday’s appreciation aside, we view further devaluations as more or less inevitable. Accordingly, we see the RMB falling at a pace of 2.0% to 3.0% a quarter over the next two years as China attempts to export some of its pain.

In my admittedly biased view, signs of “good news” coming from China, especially on the asset price side, are often bad news.  They are signs that the government is not allowing markets to adjust, or does not feel politically strong enough to get certain transitions over with.  Here is the FT on what is keeping the Chinese economy going at whatever growth rate it may be at:

Beijing has ramped up fiscal spending to fill the gap. Fixed-asset investment by local governments rose 10.6 per cent in the year to October.

Be careful what you wish for of course.

A key question in reading a lot of China indicators is how to think about changing prices.  Imports are plunging in value terms, in part because the prices of commodities are falling, but imports in pure volume terms are rising.  Which matters more?  We usually count the value figure. and besides, some of those prices are falling because Chinese demand began to decline at the older prices.  Measuring the value of the imports will make you much more pessimistic than merely considering the volume.

Glasgow fact of the day

by on November 11, 2015 at 2:07 am in Books, Data Source, Medicine | Permalink

For 1998-2002, male life expectancy in the Calton district of Glasgow was fifty-four.

For those same years, male life expectancy in the well-off district of Lenzie, Glasgow was eighty-two, a rather large gap.

For purposes of contrast, by the way, at that time average life expectancy for men in India was sixty-two, eight years longer than for Calton.

That is all from Michael Marmot, The Health Gap: The Challenge of an Unequal World, pp.24-25.

An article in The Wall Street Journal explores higher education as a lobbying force, and find colleges to have large and effective representation in Washington. Based on data from the Center for Responsive Politics, the article finds that higher education had 1,020 lobbyists in 2014, third among industries (after pharmaceuticals and electronics). In terms of effectiveness, the article notes the extent to which the Obama administration pulled back on its initial plans for rating colleges.

That is from InsideHigherEd, there is nothing more at the link.  And here is another, meatier piece from the same issue, perhaps not totally unrelated, excerpt:

…they [the researchers] found that on only one of the five measures, cognitive complexity of the course work, did the elite colleges in the study outperform the nonelite institutions.

On two, standards and expectations of the course work and the level of the instructors’ subject matter knowledge, there were no meaningful differences by prestige level. On two others, though — the extent to which the instructors “surfaced” students’ prior knowledge and supported changes in their views, the lower-prestige institutions outperformed the elite ones.

That is from a new study which tries to measure, through classroom visits, whether classes at elite colleges are really any better.  That article has many interesting points, including the usual evasive reply from commentators as to whether this really measures anything (“If I’m teaching a 15-week course, does one class really represent the quality of my teaching?” — TC says yes).  Believe it or not, three elite institutions actually permitted such visits to take place, even though they presumably had nowhere to go but down.  I cannot however find a copy of the paper on-line.

Please note by the way that I still adhere to my transformational/acculturation theory of higher education.