A new paper (another summary) in Nature reports on what is perhaps the world’s biggest field experiment which has successfully shown how to, at scale, increase crop yields and reduce fertilizer usage in China. The scope of the 10 year experiment is astounding. The researchers first conducted thousands of field experiments all over China to discover and validate best practices:

A total of 13,123 site years of field trials were conducted from 2005 to
2015 for the three crops (n=6,089 for maize, 3,300 for rice and 3,734 for wheat), with sites spread across all agro-ecological zones…Each field trial included two types of management: conventional farmers’ practice (control) and ISSM-based recommendations (treatment; developed specifically for a given area). The recommended practices were discussed with local experts and participating farmers. Adjustments were made when necessary. Finally, the agreed-upon management technologies were implemented in the fields by the farmer; the collaborators provided guidance on-site during key operations, such
as sowing, fertilization, irrigation and harvest. Campaign collaborators recorded fertilizer rate, pesticide and energy use, and calculated nutrient application rate. At maturity, grain yield and above ground biomass were sampled by the collaborators for plots with a size of 6m^2 for wheat and rice, and 10m^2 for maize. Plant samples were dried at 70 °C in a forced-draft oven to constant weight, and grain yield was standardized at 14% moisture for all crops.

With validated best practices in hand the researchers and tens of thousands of collaborators then fanned out across the country to convince farmers to adopt the best practices.

During the campaign, about 14,000 training workshops, 21,000 field days, and more than 6,000 site demonstrations were organized by campaign staff; more than 337,000 pamphlets were distributed….During the campaign, we also encountered barriers and experienced challenges.  For example, we observed that some farmers appeared indifferent during some  outreach events. We later learned that it was mainly, because they could not comprehend the scientific content that we were trying to deliver. We solved the problem by having local (county or township) agents acting as an on-site ‘interpreter’ in  ways that speaks/connects with those farmers.

This was amusing:

It is also worth noting that the interests of agribusinesses do not always align with those of our campaign staff. For example, one of our main strategies used in the campaign was to select a site (for example, a village) for a given area, establish the base with field demonstrations of ISSM-based practices, then attract and engage more farmers from the same as well as neighbouring villages, creating  a snowballing and lasting effect. But sometimes, our partners in the private sector were more interested in changing sites so as to reach more farmer-clients. Vigorous  debates and discussion ensued. Eventually, the private sector personnel conformed to our reasoned schemes while using the established sites as demonstrations for  visitors from other areas.

Outputs and inputs among the treatment and control farmers were then measured (here I would have liked more information about the randomization. A lot can go wrong or be mismeasured at this stage.).

Farmers conducted all field operations. Campaign collaborators and/or extension agents were responsible for information and data collection. Typically, 10–30 farmers were randomly selected per ISSM-adopting site; another group of randomly selected 10–30 farmers from a nearby village without ISSM intervention served as a control/comparison. From the selected pool of farmers (roughly 14,600 paired data points), information on key management practices were obtained through a questionnaire survey, including crop varieties, planting densities, planting dates, fertilizer rates and harvest dates. For some sites, grain yields were directly measured in the same way as the field trials (see ‘Field trials’) for the selected 10–30 farmers. Yield and nitrogen rate were then averaged for each site.

The results were impressive.

Aggregated 10-year data showed an overall yield improvement of 10.8–11.5% and a reduction in the use of nitrogen fertilizers of 14.7–18.1%, when comparing ISSM-based interventions and the prevailing practices of the farmers. This led to a net increase of 33 Mt grains and a decrease of 1.2 Mt nitrogen fertilizer use during the 10-year period, equivalent to US$12.2 billion.

The entire experiment cost on the order of $56 million and generating $12.2 billion dollars of increased output, not including any environmental gains.

As if this weren’t enough the researchers then surveyed over 8 million smallholder farmers in China to estimate how much output could increase if the intervention were fully scaled.

What’s especially encouraging about this project is that no new technologies, seeds or infrastructure was involved–just basic science and a tremendous outreach campaign. Moreover, since the campaign increased profits it may continue to generate gains in the future even without further intervention as the practices spread. Repeated interventions will be necessary as climate changes, however. Information technology may makes this easier. China can be intimidating.

Ghana fact of the day

by on March 11, 2018 at 12:57 pm in Current Affairs, Economics | Permalink

After a sluggish period, Ghana seems to be doing well again:

…Ghana is on track to make a remarkable claim for a country mired in poverty not long ago: It is likely to have one of the world’s fastest-growing economies this year, according to the World Bank, the African Development Bank, the International Monetary Fund and the Brookings Institution.

Its projected growth in 2018, between 8.3 and 8.9 percent, might outpace even India, with its booming tech sector, and Ethiopia, which over the last decade has been one of Africa’s fastest-growing economies thanks to expanding agricultural production and coffee exports.

According to the I.M.F.’s projections, only Bhutan, with a minuscule economy, and Libya, whose war-ravaged economy plunged in recent years, may have a higher rate of growth this year.

The danger is that commodities — oil and cocoa — are driving the boom.  Here is more from Tim McDonnell at the NYT.

Compared with the heyday of antiques collecting, prices for average pieces are now “80 percent off,” said Colin Stair, the owner of Stair Galleries auction house in Hudson, N.Y. “Your typical Georgian 18th century furniture, chests of drawers, tripod tables, Pembroke tables,” he noted, can all be had for a fraction of what they cost 15 to 20 years ago.

That is from Tim McKeough at the NYT, there is plenty more evidence in the article.  I can think of a few hypotheses:

1. eBay and the internet have increased supply more than demand.  It is much easier to sell an estate, or the contents of your attic, than before.  But the upward potential for demand in the market isn’t nearly as significant.  Some people say “well, I would in fact buy and collect antiques if I could get the right 18th century pieces at 40% their current values,” but many more people just aren’t interested at all.

2. The article also demonstrates that many buyers are refocusing their demands on newer pieces.  Our attitude toward the past may have changed in some fundamental way, with items before a certain date just not existing in most people’s aesthetic universes.  It’s a bit like how people collect Elvis memorabilia, or even just treat Elvis as less iconic than they used to.

For many people today, “an English antique represents something that is kind of sad and tired,” said Thad Hayes, a New York interior designer who has recently been emptying antiques-filled homes and designing new rooms with contemporary pieces for wealthy clients both young and old.

Contemporary design, he said, “represents something that’s a lot more optimistic and positive.”

3. Homes have changed: “More homes have open-concept, casual living spaces rather than formal dining rooms and studies, which reduces the need for stately mahogany dining tables, chairs and cabinets.”

4. The aesthetic of the internet itself has pushed people away from “old and musty.”  Just look at the kind of images you see on Instagram.

What else?

Researchers at the Reserve Bank of Australia estimate that house prices in major Australian cities are pushed well above the cost of production, including the land, by zoning regulations such as floor space index (video link) restrictions.

Zoning regulations provide benefits, but they also restrict housing supply and hence raise prices. This paper quantifies their importance by comparing prices to the marginal costs of supply at different points in time. For detached houses, marginal costs comprise the dwelling structure and the land that other home owners need to forego. Relative to our estimates of these costs, we find that, as of 2016, zoning raised detached house prices 73 per cent above marginal costs in Sydney, 69 per cent in Melbourne, 42 per cent in Brisbane and 54 per cent in Perth. Zoning has also raised the price of apartments well above the marginal cost of supply, especially in Sydney. We emphasise that this is not the amount that housing prices would fall in the absence of zoning. The effect of zoning has increased dramatically over the past two decades, likely due to existing restrictions binding more tightly as demand has risen.

Hat tip: Matt Yglesias.

That is the topic of my latest Bloomberg column, here is one bit from it:

Imagine a “right-wing” supermarket chain and a “left-wing” alternative. The right-wing chain could offer discounts for NRA members and send money to the Republican Party. The left-wing version might have a commercial relationship with Planned Parenthood, sell more vegan products and take special care to promote women up through the ranks.

Maybe that sounds implausible, but many retailers have already segmented their markets through frequent buyer programs. You get better deals from the companies you patronize regularly, most of all from airlines and hotels. It requires only some stretch of the imagination to think that more of those programs could be organized around ideology. After all, if you are going to be “a Hilton customer” or “a Westin customer,” maybe politics could play a role. You personally don’t have to be very ideological; you simply might accept an ideological division over one that is purely arbitrary. Once in place, the continuing existence of the better deal from your preferred supplier will make this arrangement self-enforcing, just as I keep on flying United because of all my accumulated miles.


Social media accounts tie companies to ideologies more tightly than in the past. Who would have thought Delta Air Lines was a “left-wing” company? Maybe it isn’t really deep down, but it’s all over Facebook and Twitter that the airline revoked a discount for NRA members and just lost a tax break from the state of Georgia. At some point, the company might start acting out a left-wing persona to cultivate their available allies, whether or not it reflects the company’s true views.

Do read the whole thing.

RV puts in a query:

What do you see as the real value of academic conferences today, given that working papers and the internet have made it very easy to disseminate works in progress, get feedback, and collaborate? As a mid-career economist, certainly not a superstar by any metric, my impression is that conferences are largely social in nature, affording me the opportunity to spend time with my friends from grad school and from earlier stages of my career.

I would say there are a few kinds of conferences.  Let’s say you go to a top-level NBER event.  In part, you are going to receive some of the very best comments you ever might get – ever heard Bob Hall rip someone’s paper to bits?  Or maybe praise one or two parts of it? Alternatively, you might be there to signal that you are worthy of this circuit, which is of high value.

Or let’s say you are untenured junior faculty, presenting at the yearly AEA meetings.  You know you might meet some of the senior people in your field at your session, and you can get to know them a bit. You can show them you are not a jerk, and you can signal to them that you are willing to trade favors with them throughout your career.  That makes them more likely to write a positive tenure evaluation for you.

Yet another scenario is that you are a mid-career economist, say at a school ranked #60.  You’d like to move to another school ranked about #60, but maybe in a better area, or where you don’t hate your colleagues quite as much.  Someone has to end up having you in a mind for a slot, and this is more likely if they have met you at conferences and do not hate you.

So yes, many of the major purposes of conferences are “social.”  But the social functions are not so distinct from career-relevant functions either.

That all said, I believe these conferences could be improved significantly.  First, we could have fewer of them.  Second, we could ban long paper presentations, which bore everybody, and move to many more shorter presentations.  For many sessions, the commentator should have more time than the paper presenter, or perhaps equal time.  Third, we could have fewer of them.  Some of the currently existing big conferences are too unwieldy, but they could be rethought to give smaller in-groups more chances to interact with each other.

I am intrigued by the idea that opinion articles, blog posts and tweets can have “give away” phrases that reveal more bias than the author intends, or perhaps are correlated with errors in economic reasoning. I have a candidate for such a phrase: “massive share buybacks,” or the variation, “massive share repurchases.” The words sound innocuous enough, but such talk ought to raise red flags in your mind.

That is from my latest Bloomberg column, the defense of massive share buybacks then follows.  Of course the share buybacks just push around money, they don’t have to draw real resources away from investment or for that matter a wage boost.  As this piece was coming out I also saw this excellent complementary treatment by John Cochrane.

What are other such “red flag” phrases?  “The big tech companies are selling your data” is a recent one.  I’ve already outlined my “law of gut“: beware anyone who tells you that a particular government program is being “gutted.”  Another bad one is when a review or critique is described as a “takedown.”  That’s a sign that either the reviewer, or the reviewer of the review, is trying to lower the status of somebody rather than to learn from them.

This is from my email, I have done a bit of minor editing to remove identifiers.  It is long, so it goes under the screen break: Read More →

A lot of psychological research has failed to replicate, throwing cold water on the entire field. “Grit” and the “growth mindset”, the two taglines of superstar researchers Angela Duckworth and Carol Dweck, checked all the boxes for predictive failure including the requisite TED talks (Duckworth, Dweck), best-selling popular books (Duckworth, Dweck) and genius awards and, to be sure, there has been lots of puffery about the “incredible potential” and “profound impact” of grit and the growth mindset. But, to their great credit, Duckworth and Dweck have taken the replication crisis to heart and have sought to address it. Working with a large team (PI David S Yeager), the authors have tested a growth mindset intervention in 65 randomly chosen schools with over 12,000 students representative of the United States grade 9 population.

Here is what is notable: The analyses were pre-registered, the data were collected by independent researchers and key parts of the model were analyzed by independent statisticians in a blinded dataset.

To achieve arms-length independence, a research firm not involved in designing the materials or study hypotheses drew the sample, recruited schools, facilitated treatment delivery, obtained administrative data, and cleaned and merged data. Data were processed blind to treatment status.

…A random sample of schools, rather than a convenience sample, meant that it represented the full array of the U.S. public educational contexts.

Data were analyzed following a pre-registered analysis plan (the so-called “preregistration challenge,” that was developed by an interdisciplinary team, including one external evaluator. All analyses were “intent to treat” (ITT); data were analyzed as long as students saw the first page of the randomized materials.

independent statisticians reproduced the key moderation findings by estimating a hierarchical, nonlinear Bayesian model using a blinded dataset that masked the identities of the variables, to further reduce the possibility of chance findings.

Ok, so what were the results?

Based on administrative records, 9th grade adolescents assigned to the growth mindset
intervention, as compared to the control activity, earned slightly higher GPAs in core classes at
the end of 9
th grade. On a 4-point grade metric (“A” = 4.0, “B” = 3.0, etc.), the average treatment
effect was 0.03 grade points,
SE = .01, N = 12,542 students, k = 65 schools, t = 3.09, P = .003.

In other words, a small, positive effect. But this small effect is coming from a small intervention, two online survey/interventions of 25 minutes each that could be easily scaled to the entire country or even worldwide. We have come a long way from the “mindset revolution” but who am I to discount a marginal revolution? Moreover, the average effect hides heterogeneity, the effect was bigger on the students who needed it most.

as expected, average effects were small because many students
are already doing well, do not have motivational issues, or are not in environments that
encourage or support growth-mindset behaviors. When we take account of such factors, more
noteworthy effects emerge. The improvements in the gateway outcome of 9
th grade GPA were
concentrated among adolescents who are at significant risk for compromised well-being and
economic welfare: those with lower levels of prior achievement attending relatively lower achieving schools. The finding that an intervention can redirect this adolescent outcome in this
sub-group, in under an hour, without training of teachers, and at scale (i.e. in a random sample
of nation’s schools), represents a significant advance.

Overall, this is a very impressive study and one that I suspect will be used to mark the beginning of the post-replication-crisis era.

The ending of the post-replication-crisis era also makes another trend clear–the future of social science will be even more hierarchical and unequal–future social science will be done by large, well-funded teams, run by superstar researchers at top universities. This study, for example, had 10 co-authors from multiple universities and probably cost well over a million dollars. The smaller the effect the bigger the team that will be needed to find it.

Addendum: A big meta-analysis out today also finds very small effects for growth mindset (correlation of growth mindset with achievement=.01) but the effects are probably real especially for academically high-risk students and low-SES students and perhaps they could be magnified by better interventions.

Hat tip: Stuart Richie.

Collin asks:

Answer me the riddle: The richer the society becomes the less families can afford children? (Note look at India being at replacement level fertility and it is the rich areas bringing the average down.)

I have three boys and wonder how they are ever going to be able to afford a family of more than 1 children in 2030.

“Afford” is a tricky word here.  If the goal is simply to avoid bankruptcy, at the expense of the life satisfaction of the main child rearer (usually the wife), that isn’t so difficult for most Americans and Europeans.  But of course people wish to maximize utility.  And so here are some trends operating against having large numbers of children:

1. Jobs for women are higher-paying and more satisfying than ever before, and that raises the opportunity cost of having large families.

2. Divorce is these days socially imaginable, and for many people desirable if feasible.  The larger the number of children, the harder it is to take advantage of the divorce option, and so that too encourages smaller families.

3. Living space has become especially costly in so many of the major Western cities and suburbs.

4. Given the connection between where you live and your public school system, the very best neighborhoods have become very costly positional goods, in part because of their school systems and the embedded social peers for your kids (even if they bus away to private schools.)

5. Child care is subject to some version of the cost disease, as is higher education.  Those services have risen in relative prices and some would say they also have decreased in reliability.

6. These days, there is much more you can do for your single kid (or two), including fancy SAT tutors and unending extracurricular activities.  You thus are less likely to arrive at the “I can’t do any more for this kid, let’s summon up another to keep me busy” point than formerly was the case.  In Beckerian language, you always have the option of a greater investment in quality, in lieu of boosting quantity.

7. Daughters are no longer less popular than sons and arguably they have become somewhat more popular (NYT).  So the notion that you must keep on having kids until a son arrives is weaker than it used to be.  The first child is already a “quality child,” no matter what the gender.

8. Most Westerners are on the whole less religious, and this too diminishes the motives for having a larger number of children, for whatever reasons.

9. The decline of the extended family, with babysitting grandparents, is hardly new news.  Still, I suspect both work and leisure opportunities for the elderly have improved, which lowers their desire to babysit.  Some prefer watching those same babies on Facebook.

That’s a lot of weight operating against multiple children — praise to those who manage nonetheless!

That is the topic of my latest Bloomberg column, here is one excerpt:

My radical proposal is therefore for the federal government to pre-empt as much occupational licensing as is possible. That’s right, these functions would be taken away from the state and local governments.

Unfortunately, I don’t expect the federal bureaucracy to usher in the reign of Milton Friedman’s Chicago School economics. But the federal regulatory process would likely pay less heed to local special interests, and it would produce a more homogenized and less idiosyncratic body of regulatory law more geared toward the most important cases, such as medicine and child care. The federal government is less likely than many state and local governments to obsess over licensing rules for fortune tellers, florists and athletic trainers.

A federal approach to these regulations would also bring standardization and uniformity across state lines, making it easier to move from one part of the country to another, and helping restore the great American tradition of mobility. As it stands now, imagine yours is a military family and you are transferred every few years or so, and your spouse works in a profession that would require relicensing. What justification could there be for such a hardship and inconvenience?

I consider how legally difficult this would be, and toward the end I argue:

If my idea sounds too ambitious, a smaller first step against anti-competitive licensing would have state governments pre-empt requirements at the city level, as Tennessee did last year. That doesn’t raise major constitutional issues, and at least it limits the possibility that American cities become a crazy patchwork of mobility-limiting interventions.

Keep in mind that the alternative to my suggestion is not the status quo but rather a regime where occupational licensing becomes progressively worse at multiple levels of government.

Do read the whole thing.

I think the chances of a populist land grab in South Africa (never very high) have actually gone down over the past few months. Look at the ANC’s actions during its 24 years in power, not its rhetoric. Many bad policies for sure, but never anything close to radically populist, of the sort that would seriously scare the financial markets. Destruction of the (well entrenched and sophisticated) property rights system would certainly do that. So it’s unlikely to happen.

The only time there seemed to be a risk of edging in that direction was when Zuma and his faction started seriously losing support (2016-17). They responded by ratcheting up the populist and racist rhetoric (“white monopoly capital” etc), but ultimately it didn’t work. They lost, and power in the ANC has shifted back to the more market friendly centrists, typified by Ramaphosa.

That’s why I think the risks have gone down (since Zuma was ousted), despite the recent parliamentary vote to “expropriate without compensation”. The sound bite plays well to a certain audience, as other commenters have noted, but I agree it’s mostly just signaling. When you look at the details it’s not as scary as it sounds.

Firstly, they didn’t vote to do it, they voted to set up a committee to investigate doing it, subject to various caveats and constraints, e.g. must increase agricultural production and improve food security; there must be public and expert consultation; appropriate mechanisms, etc. It seems extremely unlikely that the ANC’s intention is to summarily expropriate all land without compensation, nor does it say that in the parliamentary motion or in any ANC policy statement (that is indeed the EFF’s position, but they have less than 10% electoral support). Far more likely is we’ll end up with some sort of watered down constitutional amendment that allows expropriation without compensation in certain defined and limited circumstances, but overall system of property rights remains intact for vast majority of land and other assets.

By the way, I suspect the most outsiders seriously underestimate the strength of South Africa’s constitution and supporting institutions. They have stood remarkably firm over the past few years in the face of concerted attempts by Zuma and his cronies to undermine them. Compared, for example, to a country like Turkey, whose constitution, judiciary, media and civil society have been crushed in the space of a few years by a similarly venal and power-deluded single politician.

That is from Greg.

That is the new and excellent Sendhil Mullainathan NYT column, here is one excerpt from many good points:

Corporate success has similar consequences: Women who become chief executives divorce at higher rates than others.

Another study found that the same is true in Hollywood: Winning the best actress Oscar portends a divorce, while winning the best actor award does not.

Of course, the divorce itself may be a preferred outcome, one that is better than enduring a poisonous relationship. Even then, I’d argue that the tax was exacted in the emotional toll and the time lost in a failed marriage.

Men react particularly negatively to their spouses’ relative success. Marianne Bertrand and Emir Kamenica, economists at the University of Chicago, and Jessica Pan, an economist at the National University of Singapore, examined the wages of spouses. Because women generally earn less in the work force, they generally earn less than their husbands, too.

What is more surprising in the data is that it is far more common for the husband to earn just a tiny bit more than the wife than the other way around. The fact that women on average earn less does not account for such a sharp asymmetry.

The piece is interesting throughout.

A candidate in the race for a South Texas state House seat has reportedly received $87,500 in campaign donations — more than half of which is made up of deer semen.

The Dallas News reported Thursday that Ana Lisa Garza, a district court judge running a primary challenge against eight-term Democrat Ryan Guillen, has received $51,000 in in-kind donations to her campaign, listed as individual donations of frozen deer semen straws.

The containers are reportedly a common way for deer breeders in the state to donate to political campaigns. Garza’s campaign has valued the straws at $1,000 each.

Fred Gonzalez, a Texas deer breeder who serves as treasurer of the Texas Deer Association, told the Dallas News that the group’s political action committee has received more than $975,000 in deer semen donations since 2006, and has given more than $885,000 in the same period of time.

“Semen is a very common way for us to donate,” Gonzalez told the paper. “One collection on a buck could lead to 60 straws sometimes. If you have a desirable animal, it’s a way to bring value without breaking the bank.”

Straws from bucks named Bandit, Sweet Dreams and Gladiator Sunset were among the donations listed.

Here is the story, via Patrick and also Peter.

That is a request from dearieme, and the answer is yes, the case for free trade is still valid.

First, some welfare states, such as the United States and Denmark, are quite compatible with full employment, or could be compatible with full employment if say monetary policy were better.  The welfare state may still, through say tax rate effects, keep some family second earners out of the work force.  That is likely inefficient, but it doesn’t boost the case for protectionism.

Second, the actual second best problem comes when a welfare state (especially a poorly designed one, and there are some of those) interacts with job churn.  Given that some people are out of work, the welfare state may limit their incentive for job search, or the associated taxes and regulations may limit job creation on the employer side.  So some workers will lose their jobs due to foreign competition, and find reemployment difficult or not sufficiently desirable relative to the dole.

Overall, though, a lot of those jobs were going to disappear anyway, because of either automation or simply shifts in consumer demand.  In that sense free trade is simply the “messenger,” rather than a unique villain.  Are jobs more precarious in larger trade zones?  I can’t recall seeing a protectionist make that case, instead they simply rely on the superficial observation of the first-order, visible effect, namely that some jobs have gone away for trade-related reasons.  The possibility of importing intermediate goods makes many jobs more stable, as do exports.  There is no a priori reason to expect free trade to under-perform in this regard.

Free trade still gives an economy more wealth for dealing with transition problems, and it gives workers a better chance of finding a new job somewhere else.  To be sure, not all classes or regions of workers will benefit from this dynamism at any point in time.  But a welfare state will help protect those workers who do not.

For all of those reasons, the case for free trade is robust to having welfare states.

Alternatively, you might try a “race to the bottom” argument for thinking that free trade and welfare states may interact in counterproductive ways.  Let’s say that free trade causes governments to compete to lure or keep business activity.  That tends to encourage a social welfare state funded through consumption taxes (not corporate taxes), accompanied by a minimum of regulation.  That sounds like an OK enough race to me.  I’m not even sure there is a race to the bottom on the regulatory side, but at the very least there are incentives for regulation not to exceed a manageable level, again all to the better.