When using Twitter, both economists and natural scientists communicate mostly with people outside their profession, but economists tweet less, mention fewer people and have fewer conversations with strangers than a comparable group of experts in the sciences. That is the central finding of research by Marina Della Giusta and colleagues, to be presented at the Royal Economic Society’s annual conference at the University of Sussex in Brighton in March 2018.

Their study also finds that economists use less accessible language with words that are more complex and more abbreviations. What’s more, their tone is more distant, less personal and less inclusive than that used by scientists.

The researchers reached these conclusions gathering data on tens of thousands of tweets from the Twitter accounts of both the top 25 economists and 25 scientists as identified by IDEAS and sciencemag. The top three economists are Paul Krugman, Joseph Stiglitz and Erik Brynjolfsson; the top three scientists are Neil deGrasse Tyson, Brian Cox and Richard Dawkins.

Here is further information, via Romesh Vaitilingam.  But I cannot find the original research paper on-line.  These are interesting results, but still I would like to see the shape of the entire distribution…

Some of the world’s best-known economists on Thursday announced plans to create what could be described as the thinking person’s cryptocurrency. Saga aims to address many of the criticisms frequently thrown at bitcoin, the world’s biggest cryptocurrency, to position itself as an alternative digital currency that is more acceptable to the financial and political establishment.

It is being launched by a Swiss foundation with an advisory board featuring Jacob Frenkel, chairman of JPMorgan Chase International and former governor of the Bank of Israel; Myron Scholes, the Nobel Prize-winning economist; and Dan Galai, co-creator of the Vix volatility index. The Saga token aims to avoid the wild price swings of many cryptocurrencies by tethering itself to reserves deposited in a basket of fiat currencies at commercial banks. Holders of Saga will be able to claim their money back by cashing in the cryptocurrency.

The currency also aims to avoid the anonymity afforded by bitcoin, which has raised financial crime concerns with regulators and bankers. Saga will require owners to pass anti-money laundering checks and allow national authorities to check the identity of a holder when required.

Oh so respectable sounding!  They’re not doing an ICO, instead there is a variable fractional reserve system, and the ruling principle is that Saga, the asset, “entitles its investors to a rising number of Saga as usage of the cryptocurrency grows.”  It sounds like a bet on the notion that bootstrapping is central to crypto success.  But do investors really want “safe harbours from the raging volatility”?  Do investors want a currency at all?  By the way, this one is proof of stake, not proof of work.

Here is their web site, and here is the White Paper.  Here are other readings on the asset.  Here is the original FT article, FTAlphaville is less impressed.

Do the participants have too much skin in other games?  So far I don’t see the point of doing this one, as it doesn’t create an asset with a truly different risk profile than the others, not from what I can see.

I will be doing a Conversation with him, no associated public event.  Here is his home page, here is his bio:

Balaji S. Srinivasan is the CEO of and a Board Partner at Andreessen Horowitz. Prior to taking the CEO role at, Dr. Srinivasan was a General Partner at Andreessen Horowitz. Before joining a16z, he was the cofounder and CTO of Founders Fund-backed Counsyl, where he won the Wall Street Journal Innovation Award for Medicine and was named to the MIT TR35.

Dr. Srinivasan holds a BS, MS, and PhD in Electrical Engineering and an MS in Chemical Engineering from Stanford University. He also teaches the occasional class at Stanford, including an online MOOC in 2013 which reached 250,000+ students worldwide.

His latest Medium essay was on ICOs and tokens.  I thank you all in advance for your wise counsel.

In 2003 I wrote The Politician and Mechanic Conspire to Rip Me Off in which I cited a study (another here) showing that annual automobile safety inspections do not increase safety but do waste time and money and generate unnecessary repairs. I have continued to rant about these wasteful policies ever since.

Today, however, there is some good news. As vehicle quality is increasing, some states are actually discontinuing these “safety” inspections including the District of Columbia in 2009, New Jersey in 2010, and Mississippi in 2015. Repeal, however, is still hotly contested in many states:

“If [the repeal] is passed,” said Texas Senator Eddie Lucero, Jr., “I am going to have trouble sleeping at night. Why are you willing to place yourself and Texans in danger by passing [this repeal]?” Similarly, Utah Representative Jim Dunnigan claimed that many of his constituents “would drive their car until their brakes fall off and their muffler falls off and their tires fall off” and that an inspection was the only way to ensure that vehicle owners took care of potential safety concerns. These claims are backed by most automobile service stations, who generally profit from performing the inspections and now claim that repealing the inspection program “will definitely result in more accidents.”

That’s from a new paper by Hoagland and Woolley that uses New Jersey, a repeal state, to test whether repeal leads to more accidents. Using a synthetic control methodology and precise data on fatal accident rates from throughout the United States, Hoagland and Woolley conclude that:

…removing the requirements resulted in no significant increases in any of traffic fatalities per capita, traffic fatalities due specifically to car failure per capita, or the frequency of accidents due to car failure. Therefore, we conclude that vehicle safety inspections do not represent an efficient use of government funds, and do not appear to have any significantly mitigating effect on the role of car failure in traffic accidents.

It’s time to ditch the annual safety inspection and either move to no inspection system at all or like Maryland move to a system that requires safety inspections only at transfer. I’m not convinced that is necessary either, since at transfer is precisely when the buyer will run an inspection anyway, but at least that system would reduce the number of inspections significantly.

Hat tip: Kevin Lewis.

But because of the way trade deficits are measured, almost all the value of those components is attributed to China, which exports the final product. Reuters reports that 61 million iPhones were shipped from China to the US in 2017 and suggests that just a single phone—the iPhone 7 model, released in 2016 and on sale for all of last year—accounted for $15.7 billion of the trade deficit, or 4.4%.

Louis Kuijs, head of Asia economics research at Oxford Economics, told Reuters if trade deficits were measured to account for the complex nature of global supply chains like the ones used by sophisticated consumer products like smartphones, the US-China trade deficit would be about 36% lower, or $239 billion.

That is from Allison Schraeger.

A sheriff in Alabama bought a house using money that was budgeted to feed jail inmates. When I saw this headlined a week ago I assumed that this was a run-of-the-mill story about white collar fraud and I ignored it. Yesterday, prodded by new developments, I investigated further. The truth is much worse than I had imagined. What the sheriff did was perfectly legal.

Alabama has a Depression-era law that allows sheriffs to “keep and retain” unspent money from jail food-provision accounts. Sheriffs across the state take excess money as personal income — and, in the event of a shortfall, are personally liable for covering the gap.

Etowah County Sheriff Todd Entrekin told the News that he follows that practice of taking extra money from the fund, saying, “The law says it’s a personal account and that’s the way I’ve always done it.”

Sheriffs across the state do the same thing and have for decades. But the scale of the practice is not clear: “It is presently unknown how much money sheriffs across the state have taken because most do not report it as income on state financial disclosure forms,” the Southern Center for Human Rights wrote in January.

And if that isn’t bonkers enough. It gets worse. The primary source for the story, written by journalist Connor Sheets, was Sheriff Entrekin’s lawnmower, Matt Qualls. Qualls has since been arrested and is now in a jail overseen by Sheriff Entrekin.

Sheets’ initial story was published on Feb. 18. On Feb. 22, Qualls was arrested and charged with drug trafficking after an anonymous call complained of the smell of marijuana from an apartment.

Qualls, who had never been arrested before, faces six charges and is being held on a $55,000 bond, Sheets reports. He is detained in a jail that Entrekin oversees.

…The sheriff’s office denies involvement in Qualls’ case, noting that the landscaper was not arrested or charged by the sheriff’s office. The extra charges were added by the Drug Enforcement Unit, which consist of agents drawn from the sheriff’s department, the FBI and other law enforcement agencies.

Addendum: You may be reminded of the story that Tyler and I use to open our principles of economics textbook. Ship captains in the 18th century were paid to ship convicts to Australia according to a very similar procedure as used today (!!!) to fund prisoner food in Alabama–and the results were equally predictable.

The 2018 Public Choice Outreach Conference, a crash course in public choice for students planning careers in academia, journalism, law, or public policy will held June 9-10 in Arlington VA. Graduate students and advanced undergraduates are eligible to apply. Students majoring in economics, history, international studies, law, philosophy political science, psychology, public administration, religious studies, and sociology have attended past conferences. Speakers include Robin Hanson, Bryan Caplan, Shruti Rajagopolan and many others.

You can find an application and more information here. If you are a professor please invite your students to apply.

Here are some quotes from past attendees of the Outreach Conference:

It was so useful to hear such varied and intriguing aspects of public choice thought. The other members of the conference were fantastic to meet and now I’m sure we all have so many new paper ideas and updated perspectives on our original interests, thank you!

Clara Jace, Creighton University

 I found the conference insightful into many different topics. What I think was most unique about the conference was the diversity of ideas, theorems and most importantly, ideas for solutions to these prevalent problems. I think my favorite part of the econ conferences is how quick presenters are to say “I don’t know” to questions and proceed to give the analytical reasoning for both sides of the argument instead of giving a BS answer that may or may not be true. Overall, I have loved this conference.

 Jalee Blackwell, West Texas A & M, School of Business

 Wow, this conference was absolutely exceptional. It provided some of the most interesting and thought-provoking Econ lectures and conversations I have ever had the privilege of engaging in. The opportunity to have one on one discussions with some of the world’s leading minds in these fields was truly an eye opening, educational, and inspiring experience that I won’t soon forget.

 Daniel Corley, University of Texas School of Law

I am agnostic on this question, but Jay L. Zagorsky presents the case for no:

First of all, the Mint creates coins in response to demand, and demand for small-denomination coins is soaring. Over the past decade, the Mint roughly doubled the number of pennies and nickels it shipped. Both coins enjoy widespread popular support in opinion polls as well.

It’s true that it costs more to mint these two coins than they are worth. In 2017, it cost the U.S. Mint 1.8 cents to make each penny and 6.6 cents for each nickel. Overall, however, the Mint is a profit machine. In 2017, it earned almost $400 million in profits producing circulating coins. For every dollar’s worth of coins it shipped out, the Mint made 45 cents. That is a profit margin many business owners dream about.

So, think of pennies and nickels as the Mint’s loss leader. They help create demand for more profitable coins in the cash economy. Eliminating pennies and nickels could make people think coins overall aren’t useful. And if we stop using all coins, the Mint will lose $400 million of profit a year.

…Stores and other businesses bothered by small-denomination coins can set prices so the final cost ends up in round numbers that eliminate using pennies or nickels. Food trucks and restaurants have used this kind of flat pricing to speed up checking out.

At the WSJ link, Henry Aaron argues the other side of the issue.  I should note that I have acted privately to abolish pennies (and occasionally nickels) from my own life.  Think of it as unilateral privatization, quite literally an idea for the trash and gutter.

It seems far more likely that Facebook will be directly regulated than Google; arguably this is already the case in Europe with the GDPR. What is worth noting, though, is that regulations like the GDPR entrench incumbents: protecting users from Facebook will, in all likelihood, lock in Facebook’s competitive position.

This episode is a perfect example: an unintended casualty of this weekend’s firestorm is the idea of data portability: I have argued that social networks like Facebook should make it trivial to export your network; it seems far more likely that most social networks will respond to this Cambridge Analytica scandal by locking down data even further. That may be good for privacy, but it’s not so good for competition. Everything is a trade-off.

Here is the link to the longer piece, to get them regularly you have to pay, definitely recommended, now more than ever.

White boys who grow up rich are likely to remain that way. Black boys raised at the top, however, are more likely to become poor than to stay wealthy in their own adult households…

Gaps persisted even when black and white boys grew up in families with the same income, similar family structures, similar education levels and even similar levels of accumulated wealth.

This is pathbreaking work by Raj Chetty, Nathaniel Hendren, Maggie R. Jones, and Sonya R. Porter [full paper here].

The study, based on anonymous earnings and demographic data for virtually all Americans now in their late 30s, debunks a number of other widely held hypotheses about income inequality. Gaps persisted even when black and white boys grew up in families with the same income, similar family structures, similar education levels and even similar levels of accumulated wealth.

The disparities that remain also can’t be explained by differences in cognitive ability, an argument made by people who cite racial gaps in test scores that appear for both black boys and girls. If such inherent differences existed by race, “you’ve got to explain to me why these putative ability differences aren’t handicapping women,” said David Grusky, a Stanford sociologist who has reviewed the research.

A more likely possibility, the authors suggest, is that test scores don’t accurately measure the abilities of black children in the first place.

If this inequality can’t be explained by individual or household traits, much of what matters probably lies outside the home — in surrounding neighborhoods, in the economy and in a society that views black boys differently from white boys, and even from black girls.

“One of the most popular liberal post-racial ideas is the idea that the fundamental problem is class and not race, and clearly this study explodes that idea”…

The NYT piece is by Emily Badger, Claire Cain Miller, Adam Pearce, and Kevin Quealy.  And from the paper itself:

Conditional on parent income, the black-white income gap is driven entirely by large differences in wages and employment rates between black and white men; there are no such differences between black and white women.

According to no less an authority than Danny Baker, this story is absolutely true.

Harrods in the sixties employed someone to be sacked- surely the best job in the world.

Apparently  the employee was paid to sit among the boxes on Harrods top-floor smoking his pipe and reading the Sporting Life. From time to time a bell would ring and he would be summoned to a department where an irate customer was  being mollified by the Head of the Department.

Let us say today that Lady Ponsonby-Waffles has discovered one of the precious china teacups she recently purchased is chipped.

The Department Head greets our friend with “Lady Ponsonby-Waffles is a most valued customer, your failure to check the quality of her china cups has led to her current predicament, you sir are fired”

Despite Lady Ponsonby-Waffles pleas for mercy, the Head cannot be swayed. Our friend slopes disconsolately to the exit. Lady Ponsonby-Waffles drops her complaint convinced to the store’s determination to enforce the highest standards. Our friend, once passing the Department’s exit, slips back to his Sporting Life and his Pipe, to await the next occasion he would be called upon to be sacked.

Here is the link from Henry Tapper, via Steve Stuart-Williams.

The town of Plattsburgh, New York, has become the first in the US to place a moratorium on cryptocurrency mining. It’s not an outright ban, at least not yet — it doesn’t affect miners currently operating in the city, just new ones looking to set up shop, and it’s only in place for 18 months.

Why Plattsburgh, New York? It’s simple: the small town has the “cheapest electricity in the world,” as Mayor Colin Read told Motherboard. Mining involves using high powered computers to solve complex problems, and thus be rewarded with cryptocurrency. It generates a lot of heat and uses an inordinate amount of electricity. It makes sense that these mining enterprises would look for places with inexpensive electricity. The problem is that it’s resulted in higher electric bills for everyone else in the town.

Here is the full story, via the excellent Samir Varma.


by on March 15, 2018 at 7:25 am in Data Source, Economics, Education | Permalink

The Richmond Fed has a good overview of apprenticeships in the United States and some of the academic literature:

According to a 2013 World Bank and International Labour Office study, only about 0.3 percent of the total U.S. workforce is in registered apprenticeships — about a 12th of the share in Germany. But some states, including South Carolina, have expanded “dual system” apprenticeships in recent years by building partnerships between colleges and firms and, in some cases, offering tax credits. Through the state’s “Apprenticeship Carolina” program, about 27,000 workers have been trained since 2007, including many at foreign-owned firms. Nationwide, there were about 505,000 registered apprentices in 2016, according to the U.S. Labor Department.

The review offers some useful ideas on why apprenticeships are less common in the United States. One problem is cultural:

In other countries, it’s more likely that college is seen as one option among many, and apprenticeships are con­sidered a worthwhile route to middle-class employment. In the United States, parents are more likely to see college as a vital investment without considering other alterna­tives…

As I said in Launching the Innovation Renaissance:

The U.S. has paved a single road to knowledge, the road through the classroom. “Sit down, stay quiet, and absorb. Do this for 12 to 16 years,” we tell the students, “and all will be well.” Most of them, however, crash before they reach the end of the road — some drop out of high school and then more drop out of college. Who can blame them? Sit-down learning is not for everyone, perhaps not even for most people. There are many roads to knowledge.

The very very highly rated but still underrated Chris Blattman was in top form, here is the transcript and audio.  We had a chance to do this one when he was in town for a week.  We talked about the problem with cash transfers, violence, child soldiers, charter cities, Rene Girard, how to do an Africa trip, Battlestar Galactica, why Ethiopia is growing rapidly, why civil war has become less common, why Colombia and the New World have been so violent, the mysteries of Botswana, and Chris’s favorite Australian TV show, among other topics, including of course the Chris Blattman production function.  Here is one excerpt:

BLATTMAN: There’s this famous paper on Vietnam veterans in the US where they find that being conscripted into fighting in Vietnam had positive effects on the wages of blacks and negative effects on the wages of whites. The reason was, it was really down to, what was your alternative labor market and training experience in the absence of this war?

We found something similar in Uganda, something eerily familiar, which is that the women economically weren’t so worse off. I wouldn’t say they were better off, but they weren’t necessarily affected adversely in an economic sense — they were adversely affected in other ways 5 or 10 or 15 years down the road — while the men were.

It spoke to just how terrible women’s options were. Being conscripted and abducted to be a rebel wife, to some degree, wasn’t that different than what your marriage opportunities looked like if there wasn’t a war.

For men, it just meant that you were out of the civilian labor market, getting a bunch of skills that had turned out not to be very useful. It was bad for them. A different war, a different context, and a different labor market, and that can switch.

COWEN: How many northern Ugandan child soldiers have you interviewed?

BLATTMAN: A few hundred. At least a couple hundred, maybe more. It depends if you count someone who’s involved for a month versus two years. Certainly, the long, long-term soldiers who were there for many, many years are few, maybe only a couple dozen.

COWEN: Those contacts, those conversations, how have they changed your outlook on life emotionally, intellectually, otherwise?


COWEN: True or false, most humans are bad at violence?

BLATTMAN: I think they learn quickly. Probably they’re bad at first.

COWEN: In the micro evidence on violence, and the more individual-level evidence, and then finally macro evidence — like will there be a civil war? — do you think there’s ultimately an overarching theory that ties these all together? Or are they just separate levels of investigation, where you have empirical results, and they stand somewhat separate, and they’ll always be distinct areas?

How optimistic are you about a grand unified theory of violence?

BLATTMAN: I think these individual, how I react in the moment, fight-or-flight-type mechanisms are quite distinct from the way that small groups or large groups or nations go to war. But once you get beyond that to the level of small groups and larger groups and nations, I see a lot of unity in the theory.

Do read or listen to the whole thing.  By the way, he says the Canadian political system is overrated.

If you want to lower the price of housing and still house lots of people there is really only one way: build more housing. Yet politicians and voters continually seek to repeal the laws of supply and demand. A case in point, many states reduce property tax rates for seniors, veterans or the disabled or combinations thereof. Great for seniors, veterans and the disabled, right? Wrong. If supply doesn’t increase, lowering property taxes simply increases the price of housing.

If the property tax relief is targeted to a very small group then demand won’t increase much and the benefits will accrue to the targeted group but seniors and veterans are both a significant fraction of the population and an even more significant fraction of homeowners. Thus, we might expect that a significant fraction of the tax relief will be capitalized into housing prices–that’s exactly what Moulton, Waller and Wentland find in a new paper:

While property tax relief measures are often intended to aid specific groups, basic supply and demand analysis predicts that an unintended consequence of this particular kind of tax relief is that, on the margin, it increases demand for homeownership among its expected beneficiaries. Accordingly, we examine two property tax relief measures in Virginia that applied to disabled veterans and the elderly, finding that these policy changes had an immediate effect on home prices after the
voters approved them on Election Day. Overall, we find that home prices rose by approximately 5 percent in response to the increase in demand for homeownership. Indeed, the tax relief policies provide a unique, quasi-experimental methodological
setting where the treatment is exogenously assigned to specific groups within this market. We find that the effect was as much as an 8.1 percent price appreciation for homes in areas with high concentrations of veterans, 7.3 percent in areas with
more seniors, and 7.4 percent for senior preferred homes in all areas. The effect was highest, 9.3 percent, in areas with high concentrations of seniors and veterans, which translates to about $18,900, or roughly full capitalization, for the average
home. Conversely, the tax relief measures had little if any effect on homes in areas with fewer potential beneficiaries….

A cynic might argue that the true intent of the policy is to raise housing prices but this gives politicians and voters too much credit. The intent is sincere, it’s the means that are false.