Our three new hires at George Mason economics

Nataliya Naumenko

Northwestern Ph.D, Brown post doc, Joel Mokyr student.  Here is her job market paper:

Job Market Paper

The Political Economy of Famine: the Ukrainian Famine of 1933 Download Job Market Paper (pdf)

Abstract: The famine of 1932–1933 in Ukraine killed as many as 2.6 million people out of a population of approximately 30 million. Three main explanations have been offered: negative weather shock, poor economic policies, and genocide. This paper uses variation in exposure to poor government policies and in ethnic composition within Ukraine to study the impact of policies on mortality, and the relationship between ethnic composition and mortality. It documents that (1) the data do not support the negative weather shock explanation: 1931 and 1932 weather predicts harvest roughly equal to the 1925 — 1929 average; (2) bad government policies (collectivization and the lack of favored industries) significantly increased mortality; (3) collectivization increased mortality due to drop in production on collective farms and not due to overextraction from collectives (although the evidence is indirect); (4) back-of-the-envelope calculations show that collectivization explains at least 31\% of excess deaths; (5) ethnic Ukrainians seem more likely to die, even after controlling for exposure to poor Soviet economic policies; (6) Ukrainians were more exposed to policies that later led to mortality (collectivization and the lack of favored industries); (7) enforcement of government policies did not vary with ethnic composition (e.g., there is no evidence that collectivization was enforced more harshly on Ukrainians). These results provide several important takeaways. Most importantly, the evidence is consistent with both sides of the debate (economic policies vs genocide). (1) backs those arguing that the famine was man-made. (2) — (4) support those who argue that mortality was due to bad policy. (5) is consistent with those who argue that ethnic Ukrainians were targeted. For (6) and (7) to support genocide, it has to be the case that Stalin had the foresight that his policies would fail and lead to famine mortality years after they were introduced (and therefore disproportionately exposed Ukrainians to them).

Jonathan Schulz

Cultural economics and economic history, St. Gallen Ph.D, Harvard post doc, co-author with Joe Henrich.

Job market paper, “Catholic Church, Kin Networks, and Institutional Development“:

Political institutions vary widely around the world, yet the origin of this variation is not well understood. This study tests the hypothesis that the Catholic Church’s medieval marriage policies dissolved extended kin networks and thereby fostered inclusive institutions. In a difference-in-difference setting, I demonstrate that exposure to the Church predicts the formation of inclusive, self-governed commune cities before the year 1500CE. Moreover, within medieval Christian Europe, stricter regional and temporal cousin marriage prohibitions are likewise positively associated with communes. Strengthening this finding, I show that longer Church exposure predicts lower cousin marriage rates; in turn, lower cousin marriage rates predict higher civicness and more inclusive institutions today. These associations hold at the regional, ethnicity and country level. Twentieth-century cousin marriage rates explain more than 50 percent of variation in democracy across countries today.

Jonathan P. Beauchamp

Harvard Ph.D, assistant professor of economics at University of Toronto, he works in the new field genonomics and has co-authored with David Cesarini.  Here is his presentation on GWAS of risk tolerance:

Here is his paper (with co-authors) “Genome-wide association analyses of risk tolerance and risky behaviors in over one million individuals identify hundreds of loci and shared genetic influences.”

I am very much looking forward to their arrival, they all seem like great colleagues, and I am honored to have played a role on the recruiting committee.

Families and social networks don’t always help stroke victims

A recent study in Nature Communications shows that when stroke patients are surrounded by close connections like their immediate family, they are less likely to get to the hospital in time for treatment, compared to patients with looser social connections.

Amar Dhand is a neurologist at Harvard Medical School with a PhD in sociology from Oxford who studies the relationship between social connections and health. His team surveyed 175 stroke patients in Boston and St. Louis, and mapped their social networks against the time it took them to arrive at the hospital. The 67 patients who took more than six hours to arrive had both smaller and tighter-knit social networks than the 108 who arrived in under six hours…

“This is the biggest problem in stroke therapy today,” Dhand says. “The delay that is caused by patients and the caregivers. The social context is the largest part of the delay, hands down, in stroke patients arriving in hospital in time.” There’s a predictable sequence of events for stroke patients in close networks, he notes. Initially, a patient may delay telling their family about their symptoms, not wanting them to worry.  “Secondly, they [the family] over-negotiate the symptoms, and perhaps even argue about them,” Dhand says. “Then they all validate each others opinion to watch and wait.”

He calls it an”echo chamber,” where family members, hoping for the best, minimize the gravity of the situation and conflate it with previous, less severe illnesses.

In contrast, when patients with only loose social networks have a stroke, there isn’t as much dithering. Patients who suffer strokes in a public place may be sent to the emergency room out of an abundance of caution by employees of the mall, store, or restaurant where they are afflicted. In some cases, an ambulance may be called by someone who doesn’t want the responsibility of caring for the sick person.

Here is the full article.

Saturday assorted links

Compensating differentials

And even though [David] Crosby underwent a liver transplant in 1994, all four are active today. Does this mean we’ll see them together onstage again? [Graham] Nash stated in an interview not long ago that the band was offered $100 million to go on tour. But that’s not going to happen, he said, for one simple reason: “We don’t like each other.”

That is from David Kirby’s review of the other CSNY biography to have come out this month, also a good book.

*An Economist Walks into a Brothel*

That is the new Allison Schraeger book, the subtitle is And Other Unexpected Places to Understand Risk, and here is one excerpt:

In many ways, the brothel is like any other workplace.  There are weekly staff meetings (in a departure from the tradition at most companies, the women often wear outlandish hats and drink tea), access to financial advisers, performance bonuses, and even corporate housing…

But where Hof [the owner-manager] provided value was by reducing risk for both buyers and sellers of sex.

The top-earning woman at that brothel pulls in about $600,000 a year, and about half of that goes to Hof.  And to audition for the brothel, women have to invest about $1500 in upfront costs (travel, clothing), with no guarantee of a job at the end of the process.

Here is an NPR interview with Allison.

Kevin Williamson reviews *Big Business*

Here is part of the review:

Professor Cowen has a reputation as a contrarian, but that is not exactly right. He has a great talent for revealing truths that are right under our noses but oddly overlooked — or willfully obscured. His latest book, Big Business: A Love Letter to an American Anti-Hero, is an excellent, easily digestible exercise in exactly that. Why is it, he asks, that Big Business is not more widely admired and appreciated? Large-scale corporate enterprises provide a great many jobs; relative to smaller firms, they typically pay their workers more and treat them better, invest more in research and development, are more productive and more innovative, and conduct their business at least as ethically. He knocks down a series of myths about excessive executive compensation, “quarterly capitalism” obsessed with short-term profits, monopolistic temptations, and the purportedly outsize role of finance in our economy.

On the last of those, Professor Cowen offers one of his extraordinarily useful, obvious-if-you-think-about-it insights: The argument that finance has grown too large as a share of U.S. economic activity is based in part on the fact that in the 1960s finance accounted for about 4 percent of GDP whereas it recently has been above 8 percent. That’s the wrong comparison, he argues: Finance is engaged in the business of managing wealth, not in the business of managing current income flows exclusively; it makes more sense, then, to examine the share of assets that the financial sector controls, which, as is turns out, has not changed very much over the years, floating around 2 percent. While other social critics have written great volumes about “financialization” — where it comes from, what it means, whether it is desirable — Professor Cowen first stops to ask whether the thing that everybody knows is happening is in fact happening.

There is much more at the link.

Friday assorted links

Is Dentistry Safe and Effective?

The FDA may be too conservative but it does subject new pharmaceuticals to real scientific tests for efficacy. In contrasts, many medical and surgical procedures have not been tested in randomized controlled trials. Moreover, dental care is far behind medical care in demanding scientific evidence of efficacy. A long-read in The Atlantic spends far too much time on a single case of egregious dental fraud but it’s larger point is correct:

Common dental procedures are not always as safe, effective, or durable as we are meant to believe. As a profession, dentistry has not yet applied the same level of self-scrutiny as medicine, or embraced as sweeping an emphasis on scientific evidence.

…Consider the maxim that everyone should visit the dentist twice a year for cleanings. We hear it so often, and from such a young age, that we’ve internalized it as truth. But this supposed commandment of oral health has no scientific grounding. Scholars have traced its origins to a few potential sources, including a toothpaste advertisement from the 1930s and an illustrated pamphlet from 1849 that follows the travails of a man with a severe toothache. Today, an increasing number of dentists acknowledge that adults with good oral hygiene need to see a dentist only once every 12 to 16 months.

The joke, of course, is that there’s no evidence for the 12 to 16 month rule either. Still give credit to Ferris Jabr for mentioning that the case for fluoridation is also weak by modern standards–questioning fluoridation has been a taboo in American society since anti-fluoridation activists were branded as far-right conspiracy theorists in the 1950s.

The Cochrane organization, a highly respected arbiter of evidence-based medicine, has conducted systematic reviews of oral-health studies since 1999….most of the Cochrane reviews reach one of two disheartening conclusions: Either the available evidence fails to confirm the purported benefits of a given dental intervention, or there is simply not enough research to say anything substantive one way or another.

Fluoridation of drinking water seems to help reduce tooth decay in children, but there is insufficient evidence that it does the same for adults. Some data suggest that regular flossing, in addition to brushing, mitigates gum disease, but there is only “weak, very unreliable” evidence that it combats plaque. As for common but invasive dental procedures, an increasing number of dentists question the tradition of prophylactic wisdom-teeth removal; often, the safer choice is to monitor unproblematic teeth for any worrying developments. Little medical evidence justifies the substitution of tooth-colored resins for typical metal amalgams to fill cavities. And what limited data we have don’t clearly indicate whether it’s better to repair a root-canaled tooth with a crown or a filling. When Cochrane researchers tried to determine whether faulty metal fillings should be repaired or replaced, they could not find a single study that met their standards.

Are volunteers better fighters?

It seems so:

A voluntary army’s quality exceeds or falls below a drafted army’s average quality depending on whether selection is advantageous or adverse. Using a collection of data sets that cover the majority of the US Army soldiers during World War II, we test for adverse selection into the army. Rather, we find advantageous selection: volunteers and drafted men showed no significant difference in fatalities, but volunteers earned distinguished awards at a higher rate than drafted men, particularly after the attack on Pearl Harbor. Analyses at the level of units concur with our findings based on enlistment records.

That is from a newly published article by Javier A. Birchenall and Thomas G. Koch, via Robin Hanson.

Baseball umpires are not so great, and older umpires are much worse

This deep-dive analysis demonstrated that MLB umpires make certain incorrect calls at least 20 percent of the time, or one in every five calls. Research results revealed clear two-strike bias and pronounced strike zone blind spots. Less-experienced younger umpires in their prime routinely outperformed veterans, and umpires selected in recent World Series were not the best performers. Results showed a declining but still unacceptably high BCR score, but on a positive note, only a marginal inter-inning call inconsistency.

The most likely mistakes are made at the top of the strike zone.  And older umpires really are worse:

Based on the research, professional umpires, similar to professional baseball players, have a standard peak. The study revealed that home plate umpires who made the Top 10 MLB performance list (2008-2018) had an average of 2.7 years of experience, and averaged 33 years of age with a BCR of 8.94 percent. None of these top performers had more than five years of experience or were older than 37…

In contrast to the overall top performers, research uncovered that umpires on the Bottom 10 MLB performance list (2008-2018) had an average experience level of 20.6 years, were 56.1 years of age, and had an average BCR of 13.96 percent. This group’s error rate was a staggering 56 percent higher than the top 10 MLB performers. Umpire Jerry Layne, with 29 years on the job and at age 61, sported the highest BCR, 14.18 percent. This performance research clearly indicates that more experience and age does not necessarily produce the best umpires.

Here is the full story, wiritten by Mark T. Williams, who also did the data work, via the excellent John Chamberlain.

Solve for the (tri-state) equilibrium

New York recently approved congestion pricing, a plan to make it more expensive to drive into the heart of Manhattan. Officials in New Jersey are enraged and have griped, half-jokingly, that it will cost less to travel to California than to cross the Hudson River.

And they are vowing revenge.

The mayor of Jersey City suggested that New Jerseyans should toll New Yorkers entering their state.

Here is more from Emma G. Fitzsimmons at the NYT.

Thursday assorted links

1. Robin Hanson wants to publish tax returns.

2. How to charm Trump, Japanese style?

3. University rejects call to fire Camille Paglia.

4. Jennifer Doleac, first episode of Probable Causation podcast: “Episode 1 is now available! talks about the intergenerational effects of Head Start on criminal behavior.”

5. Paul Krugman markets in everything, this one seems to be for real.

6. SMBC comic version of Stubborn Attachments.

7. *Big Business* podcast with Jonah Goldberg.

Quadratic Voting in the Field

The Democratic caucus in the Colorado state legislature wanted to get their member’s feedback on the bills most important to them. That’s hard to do because each member has an incentive to claim that their pet bill is by far the most important bill to them. Thus, Chris Hansen, the chair of the House Appropriations Committee, who also happens to have a PhD in economics, decided to use a modified form of quadratic voting. Each voter was given 100 tokens to vote and the price of x votes for a policy was x^2 so you could buy 10 votes on your favorite policy for 100 but you could also buy 5 votes on each of your four favorite policies (5^2+5^2+5^2+5^2=100).

Wired: So in mid-April, the representatives voted. Sure, each one could have put ten tokens on their pet project. But consider the or: Nine votes on one (cost: 81 tokens) but then three votes on another (cost: nine tokens). Or five votes each (25 tokens) on four different bills!

In Colorado at least, it worked, kind of. “There was a pretty clear signal on which items, which bills, were the most important for the caucus to fund,” Hansen says. The winner was Senate Bill 85, the Equal Pay for Equal Work Act, with 60 votes. “And then there’s kind of a long tail,” Hansen says. “The difference was much more clear with quadratic voting.”

Is the IT Revolution Over? An Asset Pricing View

I develop a method that structures financial market data to forecast economic outcomes. I use it to study the IT sector’s transition to its long-run share in the US economy. The method uses a model which links economy-wide growth with IT’s market valuation to match transition data on macroeconomic quantities, the sector’s life cycle patterns, and, importantly, market valuation ratios. My central estimates indicate that the revolution ends between 2028 and 2034 and that future average labor productivity growth will fall to 1.7 percent from the 2.7 recorded over 1974–2015. I show empirically the IT sector’s price-dividend ratio univariately explains over half of the variation in future productivity growth.

By Colin Ward.  Speculative, as they say!  Still, interesting to see someone go through the exercise.  Via the excellent Kevin Lewis.