Data Source

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.

From Lyman Stone:

…the survey-based immigration method finds essentially no increase in immigration after the immigration reforms of the 1960s: indeed inflow rates may have declined. The implication here is that rising foreign-born population has its roots well before any changes to immigration law, and may be as much about declining outflows as it is about rising inflows.

Notably, both estimates give a similar 1940-Present estimate of average annual migration: 0.51% for the survey method, 0.57% for the category method. The category method is inflated by that bump around the 1950s, which was largely temporary, seasonal illegal immigration. Adjusted for that, it’s about 0.52%. In other words, both methods give similar long-run migration rates, at a long-run average level somewhat lower to the long-run average level in the previous migration period.

But the trend is different. The survey-based method suggests immigration rates peaked around 1970 and have fallen since. The category-based method suggests that immigration rates peaked in the 1990s, and have fallen since.

The longer piece covers a variety of other related topics, including stocks in addition to flows (longer lives and lower native fertility skew the stock), and the connection between immigration and pro-natalist policies.  Via Ross Douthat.

The new NBER paper is “Consumption and Income Inequality in the U.S. Since the 1960s,” by Bruce D. Meyer and James X. Sullivan.  Here is the abstract:

Official income inequality statistics indicate a sharp rise in inequality over the past five decades. These statistics do not accurately reflect inequality because income is poorly measured, particularly in the tails of the distribution, and current income differs from permanent income, failing to capture the consumption paid for through borrowing and dissaving and the consumption of durables such as houses and cars. We examine income inequality between 1963 and 2014 using the Current Population Survey and consumption inequality between 1960 and 2014 using the Consumer Expenditure Survey. We construct improved measures of consumption, focusing on its well-measured components that are reported at a high and stable rate relative to national accounts. While overall income inequality (as measured by the 90/10 ratio) rose over the past five decades, the rise in overall consumption inequality was small. The patterns for the two measures differ by decade, and they moved in opposite directions after 2006. Income inequality rose in both the top and bottom halves of the distribution, but increases in consumption inequality are only evident in the top half. The differences are also concentrated in single parent families and single individuals. Although changing demographics can account for some of the changes in consumption inequality, they account for little of the changes in income inequality. Consumption smoothing cannot explain the differences between income and consumption at the very bottom, but the declining quality of income data can. Asset price changes likely account for some of the differences between the measures in recent years for the top half of the distribution.

This is one big reason why you can believe income inequality is high and/or rising, and not see it as the most significant normative issue.

Overall, the results support co-occurrence theories that predict simultaneous secular gains in specialized abilities and declines in g.

NB: this is for memory tests alone.  Here is the paper, via Rolf Degen.

In the 1960s, an average hit song on the Billboard Top 10 had an average of 1.87 writers and 1.68 publishers each year. Songwriting duos were common, and creativity a simpler endeavor…

During the LP era (60s-80s), the number of songwriters and publishers on hit songs didn’t rise as dramatically.  Based on the Songdex analysis, in the 70s, hit songs on the Billboard Top 10 had an average of 1.95 writers and 2.04 publishers each.  During the 80s, the number of average publishers in top 10 songs slightly rose to 2.06.  The number of writers remained the same.

In the 90s, the number spiked to an average of 3.13 writers and 3.49 publishers per top 10 song.  Incidentally, the change coincides with the rise of digital music formats, such as the MP3.  Napster also launched in 1999.  All of which ushered in an era of massive data overload (and that’s before streaming took hold).

Consumers quickly adopted digital music formats, resulting in a “market need for registration, licensing and reporting systems,” says Music Reports.  In the 2000s, Billboard Top 10 hits had an average of 3.50 writers and 4.96 publishers each year.

This past decade, streaming has emerged as a major source of revenue for record labels.  Using its Songdex catalog registry, Music Reports noted that Billboard Top 10 hits saw an average of 4.07 writers and six publishers.

Here is the full story, I am glad Beethoven never did much co-authoring, with apologies to Diabelli.

Amanda Lea Robinson has a new paper “Nationalism and Ethnic-Based Trust: Evidence from an African Border Region,” here is her main result:

In diverse societies, individuals tend to trust coethnics more than non-coethnics. I argue that identification with a territorially-defined nation, common to all ethnic groups, reduces the degree to which trust is ethnically bounded. I conduct a “lab-in-the-field” experiment at the intersection of national and ethnic boundaries in Malawi, which measures strength of national identification, experimentally manipulates national identity salience, and measures trust behaviorally. I find that shared nationality is a robust predictor of trust, equal in magnitude to the impact of shared ethnicity. Furthermore, national identification moderates the degree to which trust is limited to coethnics: while weak national identifiers trust coethnics more than non-coethnics, strong national identifiers are blind to ethnicity. Experimentally increasing national identity salience also eliminates the co-ethnic trust advantage among weak nationalists. These results offer micro-level evidence that a strong and salient national identity can diminish ethnic barriers to trust in diverse societies.

Hat tip goes to Ben Southwood.

1. Turkey $1200

2. Brazil $1,115

3. Russia, $1,086

4. Greece $1,028

5. Poland $1,005

6. Italy $995

7. Czech Republic $994

8. Norway $993

9. Denmark $986

10. Sweden $982

See the whole list, but the United States is cheapest at $815, tied with Japan, with Hong Kong next at $821.  One lesson is that having crummy, overregulated retailing is worse for some of your prices than being an expensive country.

Students in India who cheat on a simple laboratory task are more likely to prefer public sector jobs.

Furthermore:

…cheating on this task predicts corrupt behavior by civil servants, implying that it is a meaningful predictor of future corruption. Students who demonstrate pro-social preferences are less likely to prefer government jobs…

That is from Dishonesty and Selection into Public Service: Evidence from India, by Rema Hanna and Shing-Yi Wang.  Here are ungated copies.

In 2005, I thought housing prices were rising above the fundamentals and I said so. In 2008, as the fall in housing prices was well under way, I wrote a blog post and later a NYTimes op-ed saying that the housing price bubble was not nearly as big as people thought. I wrote:

I think that housing prices went beyond the fundamentals sometime around 2004…but 2004 levels are still well above long run trend.

…Prices will probably drop some more but personally I don’t expect to ever again see index values around 110.  Do you?  If we don’t see the massive drop back to “normal” levels then the run up in prices should be described as a shift to a new equilibrium…[with some overshooting, rather than as a bubble.]

To put it mildly, not everyone agreed with my argument. I certainly got the timing wrong–I didn’t think the recession would be as long or as deep as it was. Nevertheless, some people are coming round to my point of view. Karl Smith, for example, has a new post Was There Ever a Bubble in Housing Prices? which concludes more or less, as I did nearly ten years earlier, that the answer is no. What happened was greater liquidity which made housing prices gyrate more like stock prices but “the fundamental driver isn’t irrational bubble behavior. It is competition over a scarce resource.”

Let’s go back to the Shiller graph, now updated to 2017. Over the entire 20th century real home prices averaged an index value of about 110 (and were quite close to this value over the the entire 1950-1997 period). Over the entire 20th century, housing prices never once roce above 131, the 1989 peak. But beginning around 2000 house prices seemed to reach for an entirely new equilibrium. In fact, even given the financial crisis, prices since 2000 fell below the 20th century peak for only a few months in late 2011. Real prices today are now back to 2004 levels and rising. As I predicted in 2008, prices never returned to their long-run 20th century levels.

Now one might argue that there is still a bubble or perhaps another bubble in housing prices. But the United States does not look anomalous compared to other countries. In fact, in many other countries prices have risen more than in the United States. Here is the Economist’s Global Price Index of real house prices for a variety of countries. (Do note that some countries not shown, such as Germany, haven’t seen big increases in prices.) Are all these countries experiencing bubbles? Or has the equilibrium changed?

Understanding why the equilibrium has changed is a fundamental issue that I don’t think we yet have a good handle on. My view, is that it’s a combination of expected long-run lower interest rates, greater liquidity, and supply constraints on land. Lower interest rates, for example, mean that durable assets increase sharply in price, all the more so if the rates are expected to stay low. Combine this with greater liquidity (see Smith’s post) and supply restrictions and you can explain most of what is going on in the United States. What I don’t know is if the same explanations work worldwide and can the same factors also be used to explain why land prices haven’t risen in Germany, Japan or Switzerland?

Hat tip: Nathaniel Bechhofer.

According to a study recently published in The Review of Economic Studies, access to legal marijuana may significantly reduce academic performance.

The study took advantage of a natural experiment in the Dutch city of Maastricht. In 2011, the city sought to pull back some of the marijuana tourism going to its coffee shops, where marijuana sales are legally tolerated. So through the local association of cannabis shop owners, it banned some foreigners of certain nationalities from buying pot at these venues.

This let researchers Olivier Marie and Ulf Zölitz, in the cleverly titled “‘High’ Achievers? Cannabis Access and Academic Performance,” compare the academic outcomes of Maastricht University students with varying levels of access to legal pot.

What they found: The students who weren’t allowed to legally access marijuana saw their grades significantly improve, especially in classes that require numerical and mathematical skills.

Here is the full Vox story.  I strongly believe it is morally wrong to throw people in jail for smoking such substances, but still policy decisions have real consequences, we should know what those are, and I am not convinced that full availability of marijuana is the optimal approach.

Here are ungated copies, noting there have been significant revisions in the paper along the way.

In countries with a tradition of plough use, women are less likely to participate in the labor market, own firms, and participate in national politics.

And:

…societies that historically used the plough are characterized by higher parental authority granted to the father, by inheritance rules that favor male heirs, and by less freedom for women to move outside the house. She also finds that, in these societies, women are more likely to wear a veil in public and polygamy is less accepted or illegal.

Furthermore:

Past societal norms, too, are related to domestic violence today: women in societies formerly characterized by bride-price have a lower probability and lower intensity of violence today.

That is from a new NBER working paper by Paola Giuliano.  Among other things, this means that how you treat people today really matters for the longer run.

My health care question

by on July 31, 2017 at 1:41 am in Data Source, Medicine | Permalink

In the United States, Medicare starts at age 65.  So to the extent health care improves health outcomes, we should see a noticeable uptick in results as people reach 65, at least relative to the trajectory of aging they otherwise would experience.  Of course many other national health care systems treat 64 and 65-year olds as the same, so we can compare the American case to those alternatives.  That would give us a better sense of the relative performance of single-payer coverage, no?

Has such a study been done, and if so what did it yield?

The Economist reports on the work of three GMUers, Robert Warren Anderson, Noel Johnson, and Mark Koyama, all leaders of the next generation of GMU economists and up-and-coming stars:

A new study* by Robert Warren Anderson, Noel Johnson and Mark Koyama suggests that, historically, economic shocks were more strongly associated with outbreaks of violence directed against Jews than scholars had previously thought. The authors collected data for 1,366 anti-Semitic events involving forced emigration or murderous pogroms in 936 European cities between 1100 and 1800. This was then compared with historical temperature data from a variety of sources, including tree rings, Arctic ice cores and contemporary descriptions of the weather.

Cold spells hit medieval agriculture hard: a one-degree Celsius fall in temperatures reduced the growing season by up to four weeks. Lower yields caused widespread economic pain: up to 57% of people relied on farming for work in medieval England, for instance. The authors find that a fall in average temperatures of only a third of a degree increased the probability of a pogrom or expulsion by 50% over the next five years. They argue that violence against Jews was not simply caused by religiously-motivated anti-Semitism: “The Jews were convenient scapegoats for social and economic ills.”

The authors find that economic shocks had greater effects where soils were less suited to farming or where governments were weaker, and so less able to stop violence.

Here is a link to the published paper.

Partner Choice, Investment in Children, and the Marital College Premium, by Pierre-André Chiappori, Bernard Salanié and Yoram Weiss

We construct a model of household decision-making in which agents consume a private and a public good, interpreted as children’s welfare. Children’s utility depends on their human capital, which depends on the time their parents spend with them and on the parents’ human capital. We first show that as returns to human capital increase, couples at the top of the income distribution should spend more time with their children. This in turn should reinforce assortative matching, in a sense that we precisely define. We then embed the model into a transferable utility matching framework with random preferences, a la Choo and Siow (2006), which we estimate using US marriage data for individuals born between 1943 and 1972. We find that the preference for partners of the same education has significantly increased for white individuals, particularly for the highly educated. We find no evidence of such an increase for black individuals. Moreover, in line with theoretical predictions, we find that the “marital college-plus premium” has increased for women but not for men.

Full-Text Access | Supplementary Materials

Here are ungated versions.

There is a new paper in the JPE on this, with encouraging results:

A Pari-Mutuel-Like Mechanism for Information Aggregation: A Field Test inside Intel
Benjamin Gillen, Charles Plott & Matthew Shum
Journal of Political Economy, August 2017, Pages 1075-1099

Abstract:
A new information aggregation mechanism (IAM), developed via laboratory experimental methods, is implemented inside Intel Corporation in a long-running field test. The IAM, incorporating features of pari-mutuel betting, is uniquely designed to collect and quantize as probability distributions dispersed, subjectively held information. IAM participants’ incentives support timely information revelation and the emergence of consensus beliefs over future outcomes. Empirical tests demonstrate the robustness of experimental results and the IAM’s practical usefulness in addressing real-world problems. The IAM’s predictive distributions forecasting sales are very accurate, especially for short horizons and direct sales channels, often proving more accurate than Intel’s internal forecast.

Hat tip goes to the excellent Kevin Lewis.  Here are earlier, ungated versions.