Data Source

From Lyman Stone:

…no matter the adjustment, the US is always one of the lowest-concentration countries, along with China, India, Brazil, Germany, and Japan. We have a very diversified metropolitan ecology, as do those countries.

Third, I’ve highlighted Nordic (purple) and Anglo (orange) countries. Notice that all of the Nordics are much more concentrated than the United States, as are all of the Anglo countries! That one was surprising to me, as I expected large countries like Australia and Canada to be much more comparable to the US. As it is, in terms of population concentration, Poland is more American than Canada.

…my most concentrated countries are indeed Mongolia and Peru. Not kidding here. Both results surprised me given that both countries are fairly large and have big rural populations and, in Peru’s case, my impression was that there were a good number of meaningfully sized cities. But it turns out that, in Peru, Lima metro area alone is almost 30% of the population, and then the other cities are pretty small by comparison; and Lima is, of course, also the capital. In Mongolia, Ulaanbaatar metro area is over half of the nation’s population!

So. If you want to know what country is the most city-state-ish, I would have to answer… it’s Mongolia.

Here is the full essay, noting that Singapore is normalized as a polar option at 100% and thus cannot win the competition.  Also scroll down to the interesting graph on “State and Local Taxes Collected as a Share of GDP”: I am surprised to see Sweden come in at number one.  For all the talk of American federalism, we are just at the OECD average and in fact slightly behind Iceland in these rankings.

West Virginia’s average ACT score and percentage taking the test are almost identical to the national average.

That is from Slocum, here is the comment and link.

We study the effects of interest rate ceilings on the market for automobile loans. We find that loan contracting and the organization of the loan market adjust to facilitate loans to risky borrowers. When usury restrictions bind, automobile dealers finance a greater share of their customers’ purchases, which allows them to price credit risk through the mark-up on the product sale rather than the loan interest rate. Despite having little effect on who receives credit, usury limits therefore have a substantial effect on who provides credit and on the terms of credit granted. Usury limits may harm defaulting borrowers, who face greater liabilities in default than they would if loan contracts were unconstrained.

That is from a new paper by Brian Melzer and Aaron Schroeder, via Kevin Lewis.

Here is one bit:

I am reminded of a study of college friendships conducted by psychologists Angela Bahns, Kate Pickett and Christian Crandall. They found that students in a large, diverse campus sought out and befriended other students very much like themselves. In smaller universities with fewer friendship options, young people had more varied groups of friends because the alternative was to have no friends at all.

Our bias towards the status quo is not new — but perhaps we are taking advantage of new opportunities to indulge it.

Here is the full FT piece.

*Everybody Lies*

by on April 11, 2017 at 2:54 am in Books, Data Source, Economics, Web/Tech | Permalink

That is the new and fascinating book by Seth Stephens-Davidowitz, with the subtitle Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are.  Here is one of many interesting bits:

Urban areas tend to be well supplied with models of success.  To see the value of being near successful practitioners of a craft when young, compare New York City, Boston, and Los Angeles.  Among the three, new York City produces notable journalists at the highest rate; Boston produces notable scientists at the highest rate; and Los Angeles produces notable actors at the highest rate.  Remember, we are not talking about people who moved there.  And this holds true even after subtracting people with notable parents in that field.

Many of the results in the book are taken from Google data and Google searches.  I was a little chuffed to read this part:

A child born in New York City is 80 percent more likely to make it into Wikipedia than a kid born in Bergen County.

[Actually I was born in Hudson County, but grew up in Bergen.]  And this:

Of the trillions of Google searches during that time [2004-2011], what do you think turned out to be most tightly connected to unemployment?  You might imagine “unemployment office” — or something similar…The highest during the period I searched — and these terms do shift — was “Slutload.”  That’s right, the most frequent search was for a pornographic site.

Here is previous MR coverage of Seth Stephens-Davidowitz.

Here is from a new research paper by Christina Starmans, Mark Sheskin, and Paul Bloom:

…despite appearances to the contrary, there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality.

As I said in a talk at Harvard Business School a few days ago, “if you hear the word “inequality,” the chance that what follows will be wrong is at least 3/4.”

For the pointer I thank Michelle Dawson.

That is a new NBER working paper from Ed Glaeser and Wentao Xiong.  Here are a few things I learned from it:

1. “As agglomeration size doubles, wages rise by approximately five percent in the U.S. and Brazil, but the link is much larger in India and China.”

2. “Soichiro Honda began his remarkable career as a car mechanic.”

3. Per capita gdp is three times higher in Shenzhen than in the rest of China.  Bangalore per capita gdp is 2.5 times higher than the rest of India.

4. In the United States, urbanites earn 30% more, and this gap does not disappear with controls for human capital attributes.

5. The urban to rural earnings gap is 45% in China, 122% in India, and 176% (!) in Brazil.

6. In the U.S….”as area size or density doubles, wages increase by…about five percent.”  But agglomeration economies are much stronger for India or China than for the U.S. or Brazil.  Brazil is a city vs. countryside effect, not so much about size of the city per se, Sao Paulo aside.

7. “In 1961, Benjamin Chinitz argued that New York City was more resilient than Pittsburgh during the 1950s, because New York City had a culture of entrepreneurship that meant that its business leaders were good at adapting to industrial decline.  In modern language, we might describe New York as having a healthy endowment of entrepreneurial capital because its dominant industry, garment production, had limited-scale economies and few barriers to entry.  In contrast, Pittsburgh had U.S. Steel, and the steel industry had large-scale economies, which meant that Pittsburgh trained company men instead of entrepreneurs.”

Overall I found this a very good paper for stimulating thought.  There is also a new paper by Joan Hamory Hicks, Marieke Kleemans, Nicholas Y. Li, and Edward Miguel on agricultural productivity gaps, it is receiving high praise on Twitter.  I have not yet had a chance to look at it.

The study, by David Blau and Bruce Weinberg, both professors of economics at Ohio State University, found that the average age of employed scientists increased from 45 in 1993 to nearly 49 in 2010. Scientists aged faster than the U.S. work force in general, and across fields — even newer ones, such as computer and information science. The study includes those natural and social science, health and engineering degrees.

The trend will only continue, with the average scientist’s age increasing by an additional 2.3 years within the near future, without intervention, according to a model included in the study.

I found this sentence illuminating:

Still, McDowell said he wouldn’t want to bring back mandatory retirement for professors.

Here is the study, here is the story, with some useful visuals as well.  As the article notes, even if older scientists are still productive, this can skew or limit the incentives for younger scientists and limit their creativity.

Òscar Jordà, Björn Richter, Moritz Schularick, and Alan M. Taylor have a new and somewhat unsettling NBER paper on that topic:

Higher capital ratios are unlikely to prevent a financial crisis. This is empirically true both for the entire history of advanced economies between 1870 and 2013 and for the post-WW2 period, and holds both within and between countries. We reach this startling conclusion using newly collected data on the liability side of banks’ balance sheets in 17 countries. A solvency indicator, the capital ratio has no value as a crisis predictor; but we find that liquidity indicators such as the loan-to-deposit ratio and the share of non-deposit funding do signal financial fragility, although they add little predictive power relative to that of credit growth on the asset side of the balance sheet. However, higher capital buffers have social benefits in terms of macro-stability: recoveries from financial crisis recessions are much quicker with higher bank capital.

Here is Christopher Balding on whether China is deleveraging.

I don’t usually “go after” news stories and headlines but this one is such a bad mistake, and it so affected my Twitter feed (I was swindled too), that it deserves comment (the pointer by the way comes from Alex, our Alex).  Stephanie Saul wrote in The New York Times:

Nearly 40 percent of colleges are reporting overall declines in applications from international students, according to a survey

Here is what the opening of the survey itself said:

39% of responding institutions reported a decline in international applications, 35% reported an increase, and 26% reported no change in applicant numbers.

The NYT article does not reproduce the more positive pieces of information, from its own cited study, which may be suggesting international applications are not down at all, or perhaps down by only a small amount.  If you look at all the data, they probably are down, but by no conceivable stretch of the imagination should the 40% figure be reported without the other numbers.  The headline of the piece?:

Amid ‘Trump Effect’ Fear, 40% of Colleges See Dip in Foreign Applicants

I look forward to not only a correction but in fact a retraction of the entire article and its headline.

Mostly yes, that is a result for cosmetic surgeons, and that may be one reason why online evaluation of medical services has been relatively slow to evolve in an effective manner.  Here is part of the abstract of a new paper:

I argue that surgeons see reviews overwhelmingly as a threat to their reputation, even as actual review content often positively reinforces physician expertise and enhances physician reputation. I show that most online reviews linked to interview participants are positive, according considerable deference to surgeons. Reviews add patients’ embodied and consumer expertise as a circumscribed supplement to surgeons’ technical expertise. Moreover, reviews change the doctor-patient relationship by putting it on display for a larger audience of prospective patients, enabling patients and review platforms to affect physician reputation. Surgeons report changing how they practice to establish and maintain their reputations. This research demonstrates how physician authority in medical consumerist contexts is a product of reputation as well as expertise. Consumerism changes the doctor-patient relationship and makes surgeons feel diminished authority by dint of their reputational vulnerability to online reviews.

Here is the paper, by Alka V. Menon, and the pointer is from the excellent Kevin Lewis.

If you recall, Robert D. Putnam, in his last book, expressed surprise that Chetty and Hendren, et.al. (2014) did not find evidence of a decline in intergenerational mobility.  Putnam predicted that researchers would find such evidence soon enough.  After all, it seems the returns to education have been rising, geographic mobility has been falling, market concentration is up slightly, life expectancy is behaving in funny ways, and regional disparities seem to have grown.  Chetty and Grusky, et.al. (2016) seemed to paint a more pessimistic picture than did his work from a few years ago, and now we have a new paper by Jonathan Davis and Bhashkar Mazumder:

We demonstrate that intergenerational mobility declined sharply for cohorts born between 1942 and 1953 compared to those born between 1957 and 1964. The former entered the labor market prior to the large rise in inequality that occurred around 1980 while the latter cohorts entered the labor market largely afterwards. We show that the rank-rank slope rose from 0.27 to 0.4 and the IGE rose from 0.35 to 0.51. The share of children whose income exceeds that of their parents fell by about 3 percentage points. These findings suggest that relative mobility fell by substantially more than absolute mobility.

So far this seems to be the current version of the final word.  The authors also argue, by the way, that Chetty (2016) is somewhat too pessimistic, though correct in suggesting mobility has indeed fallen.

By the way, this seems to be the best link for a download.

A new study in press at the Journal of Hand Therapy (yes, a real thing) finds that millennial men may have significantly weaker hands and arms than men the same age did 30 years ago.

Researchers measured the grip strength (how strongly you can squeeze something) and pinch strength (how strongly you can pinch something between two fingers) of 237 healthy full-time students aged 20 to 34 at universities in North Carolina. And especially among males, the reduction in strength compared to 30 years ago was striking.

This surprised me:

But today, older millennial men and women are roughly equal when it comes to grip strength.

Here is the full story, by Christopher Ingraham, via Sonal Chokshi.

The value of household services was equal to about 37% of GDP in 1965, but is currently equal to about 23% of GDP.

That is from Timothy Taylor.

The central finding of our regression analysis is that firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output. A one standard deviation larger increase in import penetration decreased a firm’s patent output by 15 percentage points. Using data from the 1975 to 1991 period and a regression setup that accounts for the diverging secular innovation trends in computers and chemical, we confirm that firms in China-exposed industries did not already have a weaker patent growth prior to the arrival of the competing imports.

…The innovation activity of US firms did not merely shift from the US to other countries. We estimate similar negative effects of import competition on patents by US firms’ domestic employees and by their foreign employees. Instead, our results are most consistent with the notion that the rapid and large increase in competition squeezed firms’ profitability and forced them to downsize along many margins, including innovation. Consistent with that interpretation, we find that the adverse impact of import competition on patent output was concentrated in firms that were already initially more indebted and less profitable.

That is from David Autor, David Dorn, Gordon Hanson, Gary P. Pisano, Pian Shu, with much more at the link.