Though online technology has generated excitement about its potential to increase access to education, most research has focused on comparing student performance across online and in-person formats. We provide the first evidence that online education affects the number of people pursuing formal education. We study the Georgia Institute of Technology’s Online M.S. in Computer Science, the earliest model to combine the inexpensive nature of online education with a highly-ranked degree program. Regression discontinuity estimates exploiting an admissions threshold unknown to applicants show that access to this online option substantially increases overall enrollment in formal education, expanding the pool of students rather than substituting for existing educational options. Demand for the online option is driven by mid-career Americans. By satisfying large, previously unmet demand for mid-career training, this single program will boost annual production of American computer science master’s degrees by about seven percent. More generally, these results suggest that low-cost, high-quality online options may open opportunities for populations who would not otherwise pursue education.

That is from a new NBER paper by Joshua Goodman, Julia Melkers, and Amanda Pallais.  And here is a new NBER paper by Deming, Lovenheim, and Patterson: “Our results suggest that by increasing competitive pressure on local schools, online education can be an important driver of innovation and productivity in U.S. higher education.”

Even more inventive computer crooks have used online pornography as a reward for human web surfers who break the Captcha…

Here is the John Markoff NYT piece, very interesting throughout.  Imagine an evil AI agent that can mimic your voice and call your loved ones and…

The deal may “feel wrong” to a lot of people, but for the regulators it ought not to be a big deal:

AT&T’s proposed acquisition of Time Warner…is considered “vertical” because the two companies largely do not compete against each other but operate on the same supply chain.

This is the bottom line:

“By standard antitrust metrics, this deal should be O.K. in Washington,” said Paul Gallant, a technology, media and telecommunications policy analyst with Cowen & Company. “But the Democratic Party is moving left, and if Clinton wins, this could become an early test for her ‘tougher on business’ rhetoric.”

The negative arguments are speculative or quite a stretch:

AT&T could make it more expensive for its competitors to gain access to Time Warner’s content or give preferential treatment to its own programming, said John Bergmayer, senior counsel at Public Knowledge, a digital rights advocacy group.

That is all from Leslie Picker and Cecilia Kang at the NYT.  I would stress that “entertainment” and “content” are sectors where choices have exploded more or less without precedent.  If the goal is to stop Time-Warner content from spreading to multiple sectors of the consumer media universe, I don’t see this one as a winner.

More generally, it is hard to see where the efficiencies from the deal are supposed to come from.  About the recent Bayer and Monsanto proposed merger I wrote:

There is a well-known academic literature, dating to the early 1990s, showing that acquiring firms usually decline in value after tender offers, especially after the biggest deals. Mergers do not seem to make companies more valuable or efficient.

Why then do so many mergers and acquisitions happen? Well, some of them do pay off (Google buying YouTube), but also many managers engage in empire-building by increasing the size of their companies, even at the expense of the shareholders. Another possibility is what economists call “winner’s curse,” namely that the winner of an auction or contest or bidding war tends to be the person or institution most optimistic, and in fact overly optimistic, about the value at stake.

So from a social point of view, I doubt if there is so much at stake here.

Addendum: Matt Yglesias comments.  And here is FT coverage.

Overall, our results suggest that investing in secure payments infrastructure can significantly enhance “state capacity” to implement welfare programs in developing countries.

That is from Muralidharan, Niehaus, and Sukhtankar in the latest American Economic Review.  Their main result is this:

We find that, while incompletely implemented, the new system delivered a faster, more predictable, and less corrupt NREGS payments process without adversely affecting program access.

Most of all there is lower leakage of benefits, and program participants strongly prefer the biometric arrangements and the accompanying direct cash transfers.  The measurements of this paper, by the way, are based on 19 million data points.

I believe the Indian biometric smartcard initiative remains under-discussed and underappreciated.  It is actually one of the greatest achievements of contemporary times, based upon the innovative mobilization of the labor of millions in a manner that probably only India could do and that at first sounded quite ridiculous.  Scan, record, and use the biometric information of over a billion people, and in a “backward” country at that.  Well, they haven’t finished but it is well on track to succeed.

I do worry about the privacy implications of the technology and the data collection, but as it stands today so many Indians don’t have that much privacy in any case.

Here are ungated versions of the paper.  Here is my earlier post on the paper and the technology.  I had written:

One broader lesson here is that developing nations are not merely copying and applying the inventions of the West, but innovating on their own.  But a lot of their innovations take labor-intensive rather than capital-intensive forms, and thus they do not always look like innovations to our sometimes ethnocentric eyes.

Still true.

In 1980, 66% of high-skilled men worked in cognitive occupations. Over the next 20 years, this proportion fell by 3 percentage points (pp) to 63%. Interestingly, this fall in the probability of working in a COG job was accompanied by a 3 pp rise in the fraction of college educated men not working (unemployed or out of the labor force).

That is from recent research by Cortes, Jaimovich, and Siu (pdf).  You will note that the chance of a woman working in those jobs rose over the same period, even though the supply of educated women relative to the supply of educated men went up a great deal over that same time period.  They find that the increasing importance of “female-oriented” social skills is a major reason for why women have so increased their presence in cognitive occupations.

Similar claims are very much a theme in my last book, Average is Over, so I am happy to see them verified in a more definitive manner.

The very beginning is a little slow, but I thought Ezra was one of the very best guests.  The topics include the nature and future of media, including virtual reality, the nature of leadership (including Ezra’s own), how running a project shapes your political views, a wee bit on health care, what he thinks are the Obama and Clinton models of the world, Robert Putnam’s research on the costs of diversity, the proper role of shame in society, animal welfare, and of course Ezra’s underrated and overrated, with takes on Bob Dylan, The Matrix, William F. Buckley, Joe Biden, and more.  There is no video but here is the podcast and transcript.  Here is one excerpt:

COWEN: …Now Putman, let me ask you about Putnam, and how Putnam relates to Donald Trump. As you know, Robert Putnam at Harvard, he has some work showing that when ethnic diversity goes up that there’s less trust, less cooperation, less social capital.

If you think of yourself in the role of an editor, so you have an American society, diversity has gone up, and a lot of people have reacted to this I would say rather badly — and I think you would agree with me they’ve reacted rather badly — but there’s still a way in which the issue could be framed that while diversity is actually a problem, we can’t handle diversity.

Putnam almost says as such, and do you think there’s currently a language in the media where you have readers who are themselves diverse, where it’s possible not to just be blaming the bigots, but to actually present the positive view, “Look, people are imperfect. A society can only handle so much diversity, and we need to learn this.” What’s your take on that?

KLEIN: I strongly agree. We do not have a language for demographic anxiety that is not a language that is about racism. And we need one. I really believe this, and I believe it’s been a problem, particularly this year. It is clear, the evidence is clear. Donald Trump is not about “economic anxiety.”

COWEN: A bit, but not mainly, I agree.

KLEIN: That said, I think that the way it’s presented is a choice between economic anxiety and racism. And one I don’t think that’s quite right, and two I don’t think that’s a productive way of having that conversation.

COWEN: Why don’t we have that language? Where did it go, or did we ever have it?


COWEN: You see this with Medicaid. A lot of people don’t sign up. They don’t have addresses. You can’t even get them, whatever.

KLEIN: They don’t like doctors. They’re afraid of doctors.

COWEN: This is me.

KLEIN: You’re afraid of doctors?

COWEN: “Afraid” isn’t the word.

KLEIN: Averse. [laughs]

COWEN: Maybe dislike. Averse. [laughs] They should be afraid of me, perhaps.

Definitely recommended.  The same dialogue, with a different introduction, is included in The Ezra Klein Show podcast.

Fresh off his defeat (according to me!) in the signaling battle, Tyler is on fire in the rematch. Some heavy blows are thrown in our battle over artificial intelligence and the future of jobs. Is there a knockout? You be the judge! Either way, I guarantee a better debate than any you have seen recently.

From the comments, on cyberattacks

by on September 30, 2016 at 2:18 pm in Science, Web/Tech | Permalink

As someone who does software and hardware, I don’t think we are anywhere near the point where a mix of hardware and software in everyday things will give us anything more than sorrow. We are already seeing rather scary things with the Internet of Things: Denial of service attacks larger than anything we’ve ever seen, because networked software is often faulty, and selling it only in hardware means vulnerabilities stay forever. It’s not just that someone can take over your CCTV camera, or the system controlling your lightbulbs, but that their computing power can be used to attack any business or individual at any time.

We have seen attacks this week that were large enough to shut down any online payment processor. For instance, imagine that the set of people with the resources for launching those attacks wanted to stop Hillary from taking online donations for as long as possible: I’d not bet against them being able to do that for a couple of weeks at the least, and that’s today. Every day more devices with weak security and no updates are sold. We see records of attack strength beaten every month: Akamai has trouble handling them today. The more devices we sell, the bigger the weapon we are handing out, and we are lacking any mechanisms to increase security because incentives are all wrong.

That is from Bob.

That is my latest Bloomberg column, here is one excerpt:

Self-driving vehicles are also likely to help the suburbs most. One of the worst things about the suburbs is the commute to the city or to other parts of the suburbs. But what if you could read, text or watch TV – safely — during that commuting time? What if you could tackle your day’s work just as you do on a train or plane? Commuting would seem a lot less painful. As driverless vehicles evolve to accommodate work and leisure uses of the automobile space, pleasure will replace commuting stress.

What about drones? They too would seem to favor remote areas where it is harder to access useful goods and services. Drones may do more for exurbs and rural areas than for the suburbs, but it seems cities will gain least. Walking or biking to nearby shops is a potential substitute for drone delivery. Rolling sidewalk drones might find it harder to negotiate crowded cities, and cities with a dense network of tall buildings may be less friendly to flying drones. Population density may increase the risk of a drone falling on someone.

And another:

Or consider the advent of the “smart home” and the Internet of things. Wouldn’t it be nice to just talk to your stove/computer/3-D printer/robot and say, “Make me some pureed squash”? Any forecast on this topic seems speculative. Still, the suburbs often have more new homes and more new appliances because it’s harder to rebuild or to re-equip older city apartments. So I suspect the arrival of the smart home will favor the suburbs, too.

There is much more at the link.  Note that unlike the earlier “telecommuting revolution,” which did not harm cities at all, many of these changes will speed the actual movement of people and goods, not just information.  Their effects will be more like those of the interstate highways of the 1950s and 60s, and that favored the suburbs not cities.

Sean Illing in particular, here is one excerpt:


Nate Silver

Underrated. Nate Silver is famous, and he writes on topics where everyone has their own view. When you do that, people think you’re always wrong, and when you are actually, as he was on Trump, people don’t give you a break for it. So he has designed his life to be the kind of person who is condemned by others, so that means he almost has to be underrated.

Karl Marx

Right now he’s probably underrated, but for almost all of history he’s been overrated. He makes very basic errors in economics. People put Marxism into practice and everywhere it has failed, and it failed in very dramatic, sometimes violent ways. But that said, he’s a brilliant and deep thinker. He understood the 19th century in capitalism better than almost anyone.

Kanye West

Underrated. I think Kanye is the musical mind of our time. Every one of his albums is different, original, takes chances. My favorite is the 808 album and then Yeezus.

Do read the whole thing.

It was said before that wedding that there would be ‘White House-level security,’ and there was an anti-drone falconer on the property.

The headline of the story is:

Art scion, 46, marries billionaire’s daughter, 23, in $5million French Riviera fete with ‘White House-level security’ and guests including Heidi Klum, the Olsen twins, Princess Bea and groomsman Owen Wilson

And do note:

The wedding took place at the Hotel du Cap-Eden-Roc in Antibes, France

For the pointer I thank Neville Andrew Mehra.

China fact of the day

by on September 26, 2016 at 1:34 am in Data Source, Web/Tech | Permalink

The Chinese government estimates females found 55 percent of new Internet companies and more than a quarter of all entrepreneurs are women. In the U.S., only 22 percent of startups have one or more women on their founding teams, according to research by Vivek Wadhwa and Farai Chideya for their book ‘Innovating Women: The Changing Face of Technology.’

That is from Shai Oster and Selina Wang.  Some of that may stem from the one-child policy, but note ex-communist countries have relatively good records of producing female CEOs.

I am not endorsing these claims, but I do enjoy a good rant.  It is an object lesson in showing how (some) people think about jobs, status, rivalry, and money.

First venture capital is generally consider where washed-out Wall Streeters go, when they can’t cut it in real finance. Very few b-school students start out trying to get into VC. And no, generally Silicon Valley people are not nearly as smart as HFT/algo quants. The type of kids who go to Google or Facebook are generally the Ivy CS students from the upper half of their class who are good at white-boarding problems (e.g. reverse a linked list). The truly brilliant kids, Putnam winners, math olympiads, core kernel contributors, etc. disproportionately go the quant route. (In which at least half will wind up in Chicago).

SV is generally a worse deal than HFT or quant trading. Starting comp is at least 50% higher than the big five tech firms, and goes up at a much faster rate. And definitely way higher than startups, which nearly always under-pay. It’s true in tech you can become a multibillionaire, but that’s extremely unlikely even for the most talented. In general SV is a bad deal for everyone except the small set of people lucky or connected enough to be at the top. Outside founder level, virtually no one gets rich from startups anymore. The equity and options comp is pathetic at best, if not outright fraudulent. (“You’ll be getting 1% of outstanding shares… from this round…”). Even founders have to live on 70k salaries in the Bay Area, then are frequently screwed over or cliff’d by their VCs. For every Google, heck for every Apigee, there’s a thousand no-name flame-outs, where no one but the VCs walk away with a dime.

Compare to quant trading. Compensation is cold hard cash, usually paid out annually, if not quarterly. Not lottery ticket equity with four year cliffs, unlimited dilution and byzantine share classes. Most comp is directly tied to individual trading performance, with clear results from trading everyday. No politics, extremely meritocratic, no being at the random whims of whether your app takes off fast enough to overcome your burn rate. Firms actually compete for talent and pay accordingly, instead of colluding to keep wages suppressed. Unless your ambition is to top the Forbes list, HFT’s a much better deal for someone extremely intelligent like a Math Olympiad. The probability of making “f-you money” before 40 is at least an order of magnitude higher as a prop quant than in the Valley.

That is from Doug.

Bot wars

by on September 21, 2016 at 3:35 am in Web/Tech | Permalink

In particular, Yasseri and co focus on whether bots disagree with one another. One way to measure this on Wikipedia is by reverts—edits that change an article back to the way it was before a previous change.

Over a 10-year period, humans reverted each other about three times on average. But bots were much more active. “Over the 10-year period, bots on English Wikipedia reverted another bot on average 105 times,” say Yasseri and co.

And this:

Bots and humans differ significantly in their revert habits. The most likely time for a human to make a revert is either within two minutes after a change has been made, after 24 hours, or after a year. That’s clearly related to the rhythms of human lifestyles.

Robots, of course, do not follow these rhythms: rather, they have a characteristic average response time of one month.  “This difference is likely because, first, bots systematically crawl articles and, second, bots are restricted as to how often they can make edits,” say Yasseri and co.

Nevertheless, bots can end up in significant disputes with each other, and behave just as unpredictably and inefficiently as humans.

Many of the bots seem to be designed to make varyin- language versions of the same Wikipedia pages consistent with each other, yet the bots do not always agree.  Solve for the equilibrium, as they say…

Here is the article, via Michelle Dawson.

Here is more from Erik Hurst discussing his new research:

On average, lower-skilled men in their 20s increased “leisure time” by about four hours per week between the early 2000s and 2015. All of us face the same time endowment, so if leisure time is increasing, something else is decreasing. The decline in time spent working facilitated the increase in leisure time for lower-skilled men. The way I measure leisure time is pretty broad; it includes participating in hobbies and hanging out with friends, exercising and watching TV, sleeping, playing games, reading, and so on.

Of that four-hours-per-week increase in leisure, three of those hours were spent playing video games! The average young, lower-skilled, nonemployed man in 2014 spent about two hours per day on video games. That is the average. Twenty-five percent reported playing at least three hours per day. About 10 percent reported playing for six hours per day. The life of these nonworking, lower-skilled young men looks like what my son wishes his life was like now: not in school, not at work, and lots of video games.

How do we know technology is causing the decline in employment for these young men? As of now, I don’t know for sure. But there are suggestive signs in the data that these young, low-skilled men are making some choice to stay home. If we go to surveys that track subjective well-being—surveys that ask people to assess their overall level of happiness—lower-skilled young men in 2014 reported being much happier on average than did lower-skilled men in the early 2000s. This increase in happiness is despite their employment rate falling by 10 percentage points and the increased propensity to be living in their parents’ basement.

It’s hard to distinguish “push” unemployment that is made more pleasant by video games from “pull” unemployment created by video games. I’m not even sure that distinction matters very much, at least if we aren’t talking about banning video games to increase employment. If elderly people started playing a lot of video games (as soon they will) would we worry that this was making retirement too much fun?

I’d be interested in knowing how much video games have displaced television. I watch more television than my kids, who play more video games. It’s not obvious that this is to their detriment.

Perhaps the issue is that video games like slot machines are so enticing that young people discount the future too heavily or don’t recognize the future cost of not being in the workforce. Maybe. Perhaps what we really need is a 3D, virtual reality, total sensory simulation, awesome video game that is so expensive that it encourages people to work.

Overall, the video game worry is a bit too reminiscent of the Dungeons and Dragons panic, or the earlier panics that books and radio were ruining children’s minds, for me to jump on board.