Data Source

There is a new NBER paper on this topic by Alexander Wagner, Richard J. Zeckhauser, and Alexandre Ziegler, here is the abstract:

The election of Donald J. Trump as the 45th President of the United States of America on 11/8/2016 came as a surprise. Markets responded swiftly and decisively. This note investigates both the initial stock market reaction to the election, and the longer-term reaction through the end of 2016. We find that the individual stock price reactions to the election – that is, the market’s vote – reflect investor expectations on economic growth, taxes, and trade policy. Heavy industry and banking were relative winners, whereas healthcare, medical equipment, pharmaceuticals, textiles, and apparel were among the relative losers. High-beta stocks and companies with a hitherto high tax burden benefited from the election. Although internationally-oriented companies may profit under some plans of the new administration, several other arguments suggest a more favorable climate for domestically-oriented companies. Investors have found the domestic-favoring arguments to be stronger. While investors incorporated the expected consequences of the election for US growth and tax policy into prices relatively quickly, it took them more time to digest the consequences of shifts in trade policy on firms’ prospects.

Having read through the paper, this does not to me look mainly like a shift from consumers (domestically-oriented and retail stocks are doing well enough).  It is closer to “companies overall benefit from greater wealth creation, though some will benefit considerably more than others, with some trade worries built in.”  The tax component is significant.

Again, the market is often wrong, but this is at the very least a…um…”public relations problem” for the Democrats.  The worse you think Trump is, the worse this problem becomes!

And please, don’t tell me on Twitter about the stock market not predicting your favorite catastrophe from history.  That point would not pass through an Intro to Stats course intact.

1. A Night at the Opera – Queen

2. Queen – Queen

3. Parachutes – Coldplay

In Hawaii it is Bob Marley, AC/DC in Idaho, Alanis Morrisette in Iowa and Maine, Revolver and Coltrane in NY, Michael Jackson in Utah, and the Rolling Stones’ Goat’s Head Soup does surprisingly well.  Coldplay, Fleetwood Mac, and Arctic Monkeys all have multiple placements.  Here is the link, based on eBay data.

I consider this question at some length in my forthcoming The Complacent Class, and now there is a new study by Greg Kaplan and Sam Schulhofer-Wohl, consistent with my conclusions:

We analyze the secular decline in gross interstate migration in the United States from 1991 to 2011. We argue that migration fell because of a decline in the geographic specificity of returns to occupations, together with an increase in workers’ ability to learn about other locations before moving. Micro data on earnings and occupations across space provide evidence for lower geographic specificity. Other explanations do not fit the data. A calibrated model formalizes the geographic specificity and information mechanisms and is consistent with cross-sectional and time-series evidence. Our mechanisms can explain at least half of the decline in migration.

As I put it in the book, if you are a dentist you probably are not going to move from Columbus, Ohio to Denver, Colorado for higher dentist wages.  Rather you will figure out pretty early on which location you prefer and then stay there.

Hat tip goes to the excellent Kevin Lewis.

The vast majority of left-wing protesters arrested on suspicion of politically-fuelled offences in Berlin are young men who live with their parents, a new report found.

The figures, which were published in daily newspaper Bild revealed that 873 suspects were investigated by authorities between 2003 and 2013.

Of these 84 per cent were men, and 72 per cent were aged between 18 and 29.

More than half of the arrests were made in the Berlin districts of Friedrichshain, Kreuzberg and Mitte, mostly during demonstrations.

A third of them were unemployed, and 92 per cent still live with their parents.

The figures published in the Berlin newspaper said of the offences committed against a person, in four out of five cases the victims were police officers.

Here is the article, Eli Dourado was in some manner involved.

Britain has changed since 1998.

Back then, it only took workers about three years to save enough money for a down-payment on a house. Now it takes 20 years, on average, according to the Resolution Foundation, which published a landmark report on income, housing, and inequality in Britain last week.

Here is further information, via the excellent Samir Varma.

Places Republicans viewed much more favorably

Among…
Democrats Republicans
Australia 4th 1st
Israel 28th 5th
Slovenia 72nd 39th
Gabon 111th 53rd
Russia 143rd 129th

 

Here is the NYT article.  Gabon?  The other differences have obvious roots.

A new study by the Taub Center for Social Policy Studies in Israel finds a relationship between the longevity of men in Israel and army service, which contributes to Israeli men’s better physical fitness

Main findings:

  • In 2013, the average life expectancy for men in Israel was 81 years, in contrast to the OECD average of 77.7 and a world average of 68.8 years.
  • Considering other variables that influence longevity – including wealth and education levels, the health system and the country’s general demographic profile – the Israeli advantage is large and increasing.
  • An analysis based on a sample of more than 130 countries found that military service added more than three years to male life expectancy.
  • This conclusion is reinforced in data showing the differences in the average life expectancy of men and women in Israel and in the OECD. In the 34 OECD countries, women live an average of 5.5 years longer than men, but in Israel, where military service is shorter and in most cases less physically demanding for women, women’s life expectancy is only 3 years longer.
  • While military service is an important component in public health, it has not yet been discussed in the academic literature on general health factors, nor has it been discussed in Israeli health literature.

Here is further information.  Here is a link to the cited report.  Here is the study itself.

I am very much against the draft outside of extreme military emergencies, but I suspect when the economic history of the American 20th century is written, the end of the draft will play some significant role in explaining the evolution of conditions for the deplorables.

For the pointer to this work I thank Rafi Bryl.

That is a recent paper by Lee Epstein and Eric A. Posner, and here is the abstract:

A statistical analysis of voting by Supreme Court justices from 1937-2014 provides evidence of a “loyalty effect” — justices more frequently vote for the government when the president who appointed them is in office than when subsequent presidents lead the government. This effect exists even when subsequent presidents are of the same party as the justices in question. However, the loyalty effect is much stronger for Democratic justices than for Republican justices. This may be because Republican presidents are more ideologically committed than Democratic justices are, leaving less room for demonstrations of loyalty.

You can read it here.

…the entire gain in the U.S. stock market since 1926 is attributable to the best-performing four percent of listed stocks.

Here is the paper, via the excellent Kevin Lewis.

https://econjwatch.org/issues/volume-14-issue-1-january-2017

Volume 14, Issue 1, January 2017

In Memoriam (.pdf)

Government Propaganda Watch: Three investigations of economic discourse and research issued by governments and government agencies:

Classical liberal economic thought in Italy, since 1860: Alberto Mingardi contributes the 13th article of the “Classical Liberalism in Econ, by Country” series.

Econ 101 Morality: J. R. Clark and Dwight Lee tell teachers to embrace a moral purpose and to teach students where their instincts came from and why instincts often mislead.

Must moral judgment involve sympathy? Thomas Brown’s 1820 critique of Adam Smith.

Mitchell Langbert and coauthors rectify a coverage error in their study of faculty voter registration.

EJW Audio

Alberto Mingardi on Liberalism in Italy

Benny Carlson on Swedish Economists

EJW News

Professor Sir Angus Deaton joins EJW Advisory Council.

What accounts for misery?

by on January 27, 2017 at 2:20 am in Data Source, Medicine, Science | Permalink

Sarah Flèche and Richard Layard have a new paper on this topic, and they suggest a focus on mental illness:

Studies of deprivation usually ignore mental illness. This paper uses household panel data from the USA, Australia, Britain and Germany to broaden the analysis. We ask first how many of those in the lowest levels of life-satisfaction suffer from unemployment, poverty, physical ill health, and mental illness. The largest proportion suffers from mental illness. Multiple regression shows that mental illness is not highly correlated with poverty or unemployment, and that it contributes more to explaining the presence of misery than is explained by either poverty or unemployment. This holds both with and without fixed effects.

I don’t like the term “mental illness,” yet at the same time I reject the Szaszian rejection of the concept.  I would say that mental processes can deviate from procedural rationality in especially disadvantageous (and sometimes systematic) ways, and that this is something above and beyond merely having “different preferences.”

For the pointer I thank the excellent Kevin Lewis.

San Francisco, population 865,000, has roughly the same number of dogs as children: 120,000. In many areas of the city, pet grooming shops seem more common than schools.

There is also this:

San Francisco’s public school system has around 53,000 students, a sharp drop from 90,000 in 1970.

The decline is a reflection both of families leaving the city and wealthier parents sending their children to private schools. Around 30 percent of San Francisco children attend private school, the highest rate among large American cities.

More than 10 private schools have opened in San Francisco since 2009, according to a tally by Elizabeth Weise, a journalist who writes a blog on the subject.

What percentage of those people also support the idea of further experimentation with school vouchers?  And do they require proof that private schools will raise their children’s test scores, before becoming emotionally committed to sending them there?

That is from Thomas Fuller at the NYT.  You will note that some angles in that article may require revision, here is a good comment from Medium.

I loved Jason Barr’s Building the Skyline a history of New York from the point of view of the economics of skyscrapers. Where else will you learn so much of interest about elevators?

Elevators create a particular problem. On one hand, adding more floors to the building will produce more space from which the developer can collect more money. But at some point, a new shaft and set of elevators need to be added to handle the additional traffic. This then eats into the rentable space….Do the additional floors on top generate enough rents to cover the loss of new space from the elevators?

…skyscrapers must devote about 30% of the total space to elevators, including their shafts, hallways and machine rooms.

And then you have to get the people where they want to go quickly:

The new One World Trade Center will have the fastest cars in the Western Hemisphere, operating at a top speed of 2,000 feet a minute, though a relative snail compared with the Burj Khalifa, which delivers its tenants to any of its 164 floors at a rate of 3,543 feet per minute.

…Maximum [elevator] speed has increased at an average annual rate of 1.7% since 1913.

Barr loves skyscrapers and he writes about them beautifully. Building the skyline also has excellent photos and illustrations. It’s not for everyone but if the statistics, economics, and history of New York’s skyscrapers appeals, then this is the book to get.

Hat tip: Michael Hendrix.

Shenzhen, a city in southern China known for electronics manufacturing, stood out last year, completing 11 such skyscrapers. That’s more than the US and Australia combined. The city was also China’s hottest real estate market last year.

Next was Chongqing, noted for its fast GDP growth (link in Chinese), and Guangzhou, which completed a new finance center with 111 stories and especially fast elevators.

There is much more information at the link.

Hunt Allcott and Matthew Gentzkow have a new paper (pdf) on this topic.  I haven’t had a chance to look at it, but here is the bottom line:

… we find: (i) social media was an important but not dominant source of news in the run-up to the election, with 14 percent of Americans calling social media their “most important” source of election news; (ii) of the known false news stories that appeared in the three months before the election, those favoring Trump were shared a total of 30 million times on Facebook, while those favoring Clinton were shared eight million times; (iii) the average American saw and remembered 0.92 pro-Trump fake news stories and 0.23 pro-Clinton fake news stories, with just over half of those who recalled seeing fake news stories believing them; (iv) for fake news to have changed the outcome of the election, a single fake article would need to have had the same persuasive effect as 36 television campaign ads.

Self-recommending…