Paul Niehaus has a new paper, and here is the abstract:

Why is other-regarding behavior so often misguided?  I study a new explanation grounded in the idea that altruists want to think they are helping.  Frictions arise because perceptions and reality can diverge ex post, especially when helping remotely (as for example with international development projects).  Among other things the model helps explain why donors have a limited interest in learning about effectiveness, why charities market based on need rather than effectiveness, and why beneficiaries may not be able to do better than to accept this situation.  For policy-makers, the model implies a generic trade-off between quantity and quality of generosity.

When in doubt, self-deception about helping is the next best thing to helping itself, and cheaper to produce.  If I recall properly, the original pointer was from Michael Clemens.

The Sad Losers of Politics

by on November 4, 2013 at 7:21 am in Political Science, Religion | Permalink

Pierce, Rogers and Snyder find that political partisans are more upset about an election loss than a random sample of parents were upset by the Newtown shootings.

Partisan identity shapes social, mental, economic, and physical life. Using a novel dataset, we
study the well-being consequences of partisan identity by examining the immediate hedonic
impact of electoral loss and victory. We employ a quasi-experimental regression
discontinuity model that minimizes many of the inferential biases associated with surveys.
First, we find that elections strongly affect the well-being of partisan losers (for about a
week), but minimally impact partisan winners. This is consistent with research on the goodbad
hedonic asymmetry. Second, the well-being consequences to partisan losers are intense.
To illustrate, we show that partisans are affected two times more intensely by their party
losing the U.S. Presidential Election than both respondents with children were to the
Newtown Shootings and respondents living in Boston were to the Boston Marathon
Bombings. We discuss implications regarding the centrality of partisan identity to the self
and its well-being, and the methodological contribution.

The authors suggest that the happiness effects of political losses are surprisingly large but they would have done better to compare elections with something people really care about, sports (and here). Sports and politics share the same irrational attachment to a team, the only difference being that the rivalries and hatreds of the former rarely lead to as much death and destruction as the latter.

I feel fortunate to have never been emotionally invested in the winner of any election. It’s all a carnival of buncombe to me–a giant robbers cave experiment for the amusement of those in the know.

Addendum: the authors make one error, on the eve of the election the Iowa political markets were not predicting a close election but a strong Obama win (the authors confuse the vote share market with the winner take all market.)

Hat tip: Paul Kedrosky.

The new service sector jobs

by on September 21, 2013 at 4:45 pm in Economics, Religion | Permalink

Motivation and inspiration will become more important jobs, and this time the story is from China:

Life coaching is big business the world over, perhaps nowhere more so than in the US. China is still a newcomer, with self-help books and motivational talks beginning to gain traction just 15 years ago. But as in so many other areas of the Chinese economy, the gap is closing quickly. The “success studies” industry, as it is known in China, is dominating bestseller lists, filling conference halls and generating phenomenal wealth for star speakers…

On this occasion, though, Chen [a major motivational coach] needs no extra help. The audience is raring to go. Bursting on to the stage, he asks: “Who wants to be number one?” All 1,500 hands fly up in the air. Then a dose of realism: “You’re dreaming. Only 3 per cent of you will succeed. And to get there, you need the right coach. You need to be in a circle of winners.” A slideshow follows, pictures of Chen posing next to or somehow squeezing himself into the frame with Barack Obama, Bill Clinton, Formula 1 driver Michael Schumacher, basketball star Michael Jordan and more. He replays a phone message from Huang Xiaoming, a Chinese actor, thanking Chen for his coaching.

The message – that Chen is a winner and that his tutelage is a prerequisite to success – proves startlingly effective. At the end of his speech, he gives the audience a two-minute countdown to sign up for a special deal to join his circle of winners: Rmb29,800 [TC: 6.12 Rm to one U.S. dollar] for a year’s access to his Shanghai club and more self-improvement courses. About 150 people seize the opportunity, dashing up to the front of the room. Chen’s assistants form a ring around them with handheld bank card swiping machines, ready to collect their money on the spot.

The fascinating FT article, by Simon Rabinovitch, is here, possibly gated.  Of course the greater is income inequality, the easier it will be to market such services, because the promised gain from leaping the divide will be that much greater.

The problem

by on September 12, 2013 at 1:14 pm in Economics, Education, Medicine, Political Science, Religion | Permalink

One reason that many Americans believe Medicare does not contribute to the deficit is that the majority thinks Medicare recipients pay or have prepaid the cost of their health care. Medicare beneficiaries on average pay about $1 for every $3 in benefits they receive…However, about two-thirds of the public believe that most Medicare recipients get benefits worth about the same (27%) or less (41%) than what they have paid in payroll taxes during their working lives and in premiums for their current coverage.

Here is more, via Amitabh Chandra.

Mormons go Keynesian (?)

by on September 10, 2013 at 3:43 am in Economics, Religion, Uncategorized | Permalink

That is his title, not mine, I would instead refer to doubling down.  Matthew Crandall reports:

Despite high profile investments and for profit businesses owned by the LDS church, it is primarily dependent on member donations (tithing, or 10% of one’s income) for its operational budget. Tithing revenue has currently flat-lined due to demographic and geographical factors both inside and outside of the United States. As baby boomers retire, their incomes decrease significantly. Families are having fewer kids and younger people are taking longer to get going in their careers. This coupled with high unemployment for the last five years or so (and likely the next five years or more) all have a negative impact on tithing revenue.

Geographically more and more members are joining from poorer places in the world (Africa for example) and even in the rich parts of the world, like Western Europe, it is immigrants who are more likely to join who tend to be relatively poor. This also has negative consequences for tithing revenue.

Meanwhile demands on tithing revenue continue to increase. New missions need new mission homes and rapid church expansion in many remote areas means more chapels and temples that need to be built. Run-away costs in higher education make subsidies at BYU, BYU-Idaho, and BYU-Hawaii go up as well. The spreading of the gospel to every nation and tongue also means an increase in spending on translation and publishing. What strategy does the church have to combat this problem?

…Overall, the church has not engaged in harsh austerity measures. Rather, it has implemented Keynesian economic principles of targeted spending that it hopes will result in church growth and hence a growth in tithing revenue.

For example the resent “surge” in missionary force will likely increase the number of missionaries from around 58,000 to 90,000 by the end of the year. Currently there are already more than 75,000. This resulted in the creation of 58 new missions which will result in a significant increase in expenses for the church.

Presumably the view is that the “[non-animal] spirits” are on their side.  The article is interesting throughout, and for the pointer I thank Paul Edwards.

*Big Gods*

by on September 2, 2013 at 12:12 am in Books, Religion | Permalink

The author is Ara Norenzayan and the subtitle is How Religion Transformed Cooperation and Conflict.  I found this book insightful, well-written and to the point.  The book itself lists some of its key propositions:

1. Watched people are nice people.

2. Religion is more in the situation than in the person.

3. Hell is stronger than heaven.

4. Trust people who trust in God.

5. Religious actions speak louder than words.

6. Unworshipped Gods are impotent Gods.

7. Big Gods for Big Groups.

8. Religious groups cooperate in order to compete.

The book’s home page is here.

People in 41 cities in China can insure their enjoyment of the full moon during the Mid-Autumn Festival from Monday.

An internet-based insurance product was launched by Taobao Insurance under the Alibaba Group, China’s largest online shopping platform, together with Allianz China General Insurance Company.

Internet users can insure themselves against inconveniences during their moon gazing at the Mid-Autumn Festival, and will be paid off if they cannot see the moon because of poor weather on the day.

Residents of cities of Shanghai, Guangzhou and Shenzhen can pay a premium of 20 yuan (US$3.24) and receive 50 yuan (US$8) from the insurer if they cannot see the moon.

People living in 41 cities of China, including the three cities above and the country’s capital of Beijing, can pay a premium of 99 yuan (US$16) and receive 188 yuan (US$31) if they fail to see the moon through poor weather. Everyone who purchases the insurance will get a box of mooncakes as well.

Here is more, and for the pointer I thank Jonathan Zhou.

A Puzzle in Divorce Law

by on August 13, 2013 at 6:27 am in Economics, Law, Religion | Permalink

It’s easy to see why a divorce law might arise that allows men relatively easy divorce, as in the Old Testament which lets men divorce almost at will (as written, interpretations differ) but gives women no right to divorce at all. It is also easy to see why a society might adopt mutual consent under which both parties must agree in order to get a divorce or no-fault unilateral rules in which either party can get a divorce without the consent of the other. What is difficult to understand, however, is why a society would adopt divorce laws that make it difficult to get a divorce even when both parties want a divorce. Who benefits from such rules? And yet this was the common situation in England and the United States  up until say the end of the 19th century. In England, for example, it took an Act of Parliament to get a divorce. One might argue that such rules benefit children but aside from the questionability of the premise this view would also have to answer how it is that children have political power?

Hat tip to Sasha Volokh for bringing the question to mind with an apropos quote on divorce from a 19th century British judge.

This undated photo shows two Xiamen Airlines stewardesses kneel in prayer at a shrine dedicated to being “on time”.


Here is more.  By the way, this is part of the problem:

The latest statistics shows that the flow of air traffic accounts for as high as 40 percent of the total number of flight delays during the first half of this year. And whether the flight could take off in time or not, it depends on the fellowship with the air traffic controller.

Captain Wang Hai said that as long as one crew member on a flight personally knows the air traffic controller, the flight would be given priority to take off in time.

But some air traffic controllers explain that queue-jumping contributes to flights unpunctuality.

“International flights and those carrying important passengers, such as government officials, business tycoons and senior officials in civil aviation, do not have to wait in long queues to take off”, an air traffic controller in south China’s Guangzhou said.

Here is related coverage from The Economist, excerpt:

The first and oldest problem is that China’s armed forces control most of the nation’s airspace—perhaps 70-80% of it. This is especially the case above and around cities, leaving very narrow corridors for aeroplanes to take off, land and navigate nasty weather.

I will once again recommend to you the James Fallows book on aviation in China.

For the pointer I thank D.

In Japan, where palm reading remains one of the most popular means of fortune-telling, some people have figured out a way to change their fate. It’s a simple idea: change your palm, change the reading, and change your future. All you need is a competent plastic surgeon with an electric scalpel who has a basic knowledge of palmistry. Or you can draw the lines on your hand with a marker and let him work the magic you want.

The story is here, hat tip goes to Robert Martinez.  There are some other interesting points in the article, but I shall not reproduce them here.

Tarek Osman offers four reasons why maybe not:

But this Islamization will not succeed. First, despite the piousness of the vast majority of Muslim Arabs, themselves the commanding majorities of the region, the Islamization efforts inherently challenge the national identities of each country. Despite clever rhetoric, Islamization means the domination of one component of Egyptianism, Tunisianity, Syrianism, etc, over other components that had shaped these entrenched identities. This is especially true in the old countries of the Arab world, the ones whose borders, social compositions, and crucially identities had been carved over long, rich centuries. And the more the Islamist movements continue to thrust their worldviews and social values, the more they will disturb these national identities, and the more agitated—and antagonized—the middle classes of these societies will become.

Second, these efforts at Islamization take place when almost all of these societies are undergoing difficult—and for many social classes, painful—economic transitions. And there is no way out. The ruling Islamist executives are compelled to confront the severe structural challenges inherent in the economies they inherited. Some are able to buy time and postpone crucial reforms through foreign grants (which come at a political price). But sooner or later, they will have to make the tough socio-economic decisions that these structural reforms require. Islamists in office will be blamed for the pains that will ensue. Rapidly, some of the constituencies that had voted them into power will seek other alternatives.

Third, demographics will work against these efforts at Islamization. Close to 200 million of the Arab world’s 340 million people are under 30-years old. As a result of the many failures it has inherited, this generation faces a myriad of socio-economic challenges on a daily basis. A culture of protest and rejection has already been established amongst its ranks, and young people will not accept indoctrination—even if it was presented in the name of religion. Almost by default, the swelling numbers of young Arabs, especially in the culturally vibrant centers of the Arab world (Cairo, Tunis, Beirut, Damascus, Casablanca, Kuwait, Manama), will create plurality—in social views, political positions, economic approaches, and in social identities and frames of reference.

Finally, this Islamization project, in its various parts, will suffer at the hand of its strategists and managers. The leaderships of the largest Islamist groups in the Arab world have immense experiences in developing and managing services and charity infrastructures, operating underground political networks, fund-raising, and electoral campaigning, especially in rural and interior regions. But they suffer an acute lack of experience in tackling serious political-economy challenges or administering grand socio-political narratives. Lack of experience will result in incompetence.

That is via @GideonRachman.

It seems the Israeli Electric Corp. will offer “kosher electricity” by 2014.  That means (in addition to other factors) automation of the major power stations on Saturdays, with some non-Jewish workers to oversee the automation.  The practice eventually may spread to weekdays too.

Do note:

And of course this will all be subject to the religious supervision of the Scientific-Technological Halacha Institute.

For the pointer I thank Mark Thorson.

“So, are you a regional thinker?”

If they say no, fail them.  If they say yes, ask them to explain.  Here is my old favorite question to ask, and therein you find links to the very first question of this kind.

For US$249 a company in the United States is promising to send curious and competitive players of computer games an unusual headset. The device, the company claims, will convert electronic gamers into electronic-gamers. At the touch of a button, the headset will send a surge of electricity through their prefrontal cortex. It promises to increase brain plasticity and make synapses fire faster, to help gamers repel more space invaders and raid more tombs. And, according to the publicity shots on the website, it comes in a choice of red or black.

The company is accepting orders, but says that it will not ship its first headsets to customers until next month. Some are unwilling to wait. Videos on the Internet already show people who have cobbled together their own version with a 9-volt battery and some electrical wire. If you are not fussy about the colour scheme, other online firms already promise to supply the components and instructions you need to make your own. Or you could rummage around in the garage.

Here is more, with further interesting points, via Michelle Dawson.

Our main result is that an increase in per-capita Muslim expenditures generates a large and significant increase in future religious conflict.  An increase in Hindu expenditures has negative or no effect.

Here is more, from Mitra and Ray.  The pointer is from Andres Marroquin.