Results for “angus deaton” 42 found
A conversation with Angus Deaton about RCTs
The interrogator is Timothy N. Ogden, here is one bit from Deaton:
Something I read the other day that I didn’t know, David Greenberg and Mark Shroder, who have a book, The Digest of Social Experiments, claim that 75 percent of the experiments they looked at in 1999, of which there were hundreds, is an experiment done by rich people on poor people. Since then, there have been many more experiments, relatively, launched in the developing world, so that percentage can only have gotten worse. I find that very troubling.
If the implicit theory of policy change underlying RCTs is paternalism, which is what I fear, I’m very much against it.
The conversation is interesting throughout. Tim indicates:
This is a chapter from the forthcoming book Experimental Conversations, to be published by MIT Press in 2016. The book collects interviews with academic and policy leaders on the use of randomized evaluations and field experiments in development economics. To be notified when the book is released, please sign up here.
The book will contain an interview with me as well.
Angus Deaton update
Angus Deaton wins the Nobel
Angus Deaton of Princeton University wins the Nobel prize. Working with the World Bank, Deaton has played a huge role in expanding data in developing countries. When you read that world poverty has fallen below 10% for the first time ever and you want to know how we know— the answer is Deaton’s work on household surveys, data collection and welfare measurement. I see Deaton’s major contribution as understanding and measuring world poverty.
Measuring welfare sounds simple but doing it right isn’t easy. How do you compare the standard of living in two different countries? Suppose you simply convert incomes using exchange rates. Sorry, that doesn’t work. Not all goods are traded so exchange rates tend to reflect the prices of tradable goods but a large share of consumption is on hard-to-trade services. The Balassa-Samuelson effect tells us that services will tend to be cheaper in poorer countries (I always get a haircut when in a poor country but I don’t expect to get a great deal on electronics). As a result, comparing standards of living using exchange rates will suggest that developing countries are poorer than they actually are. A second problem is the cheese problem. Americans consume a lot of cheese, the Chinese don’t. Is this because the Chinese are too poor to consume cheese or because tastes differ? How you answer this question makes a difference for understanding welfare. A third problem is the warring supermarkets problem. Two supermarkets each claim that they have the lowest prices and they are both right! How is this possible? Consumers at supermarket A buy more of what is cheap at A and less of what is expensive at A and vice-versa for B. Thus, it would cost more to buy the A basket at store B and it would also cost more to buy the B basket at store A! So which supermarket is better? Comparing standards of living across countries isn’t easy and then you want to make these comparisons consistently over time as well! Deaton, working especially with the World Bank, helped to construct price indices for all countries that measure goods and services and he showed how to use these to make theoretically appropriate comparisons of welfare. Deaton’s presidential address to the American Economic Association in 2010 covers many of these issues.
I see Deaton’s work on world poverty as a tour de force, he made advances in theory, he joined with others to take the theory to the field to make measurements and he used the measurements to draw attention to important issues in the world.
Earlier in his career, Deaton developed tools to bring theory to data on consumption. A key contributions is the Almost Ideal Demand System. We all know that demand curves slope down which means that a fall in the price of the good in question increases the quantity demanded but in fact economic theory says that the demand for good X depends not just on the price of good X but at least potentially on the prices of all other goods. If we want to estimate how a change in policy will influence people’s choices we need to allow demand curves to interact in potentially many ways but we still want to constrain those reactions according to economic theory. In addition, economic theory tells us that an individual’s demand curve slopes down but it doesn’t necessarily imply that the aggregation of individual demand curves must slope down. Aggregation is tricky! The Almost Ideal Demand system, due initially to Deaton and Muellbauer, in 1980 and further developed since then shows how we can estimate demand systems on aggregates of consumers while still preserving and testing the constraints of economic theory.
The study of consumption leads naturally to the study of savings, consumption in future periods. Here we have Keynes’s famous propensity to consume theory (consumption is a fraction of current income), Milton Friedman’s permanent income hypothesis (consumption is a fraction of estimated lifetime income), Modigliani’s Life Cycle Hypothesis (borrow young, save when middle aged, dissave when old). Robert Hall, building on the work of Ramsey, showed in the 1970s that rational expectations implies the famous Euler equation that bedevils graduate students, which shows that suitably discounted changes in marginal utilities should follow a random walk. Deaton played a big role in testing the new theories, mostly finding them wanting.
Deaton’s book, The Great Escape, on growth, health and inequality is accessible and a good read. A controversial aspect of this work is that Deaton falls squarely into the Easterly camp (Deaton’s review of Tyranny of Experts is here) in thinking that foreign aid has probably done more harm than good.
Here is Deaton on foreign aid:
Unfortunately, the world’s rich countries currently are making things worse. Foreign aid – transfers from rich countries to poor countries – has much to its credit, particularly in terms of health care, with many people alive today who would otherwise be dead. But foreign aid also undermines the development of local state capacity.
This is most obvious in countries – mostly in Africa – where the government receives aid directly and aid flows are large relative to fiscal expenditure (often more than half the total). Such governments need no contract with their citizens, no parliament, and no tax-collection system. If they are accountable to anyone, it is to the donors; but even this fails in practice, because the donors, under pressure from their own citizens (who rightly want to help the poor), need to disburse money just as much as poor-country governments need to receive it, if not more so.
What about bypassing governments and giving aid directly to the poor? Certainly, the immediate effects are likely to be better, especially in countries where little government-to-government aid actually reaches the poor. And it would take an astonishingly small sum of money – about 15 US cents a day from each adult in the rich world – to bring everyone up to at least the destitution line of a dollar a day.
Yet this is no solution. Poor people need government to lead better lives; taking government out of the loop might improve things in the short run, but it would leave unsolved the underlying problem. Poor countries cannot forever have their health services run from abroad. Aid undermines what poor people need most: an effective government that works with them for today and tomorrow.
One thing that we can do is to agitate for our own governments to stop doing those things that make it harder for poor countries to stop being poor. Reducing aid is one, but so is limiting the arms trade, improving rich-country trade and subsidy policies, providing technical advice that is not tied to aid, and developing better drugs for diseases that do not affect rich people. We cannot help the poor by making their already-weak governments even weaker.
Here is Tyler’s post on Deaton.
Addendum: Chris Blattman offers a very good perspective and appreciation.
The Economics Nobel Prize winner is Angus Deaton
A brilliant selection. Deaton works closely with numbers, and his preferred topics are consumption, poverty, and welfare. “Understanding what economic progress really means” I would describe as his core contribution, and analyzing development from the starting point of consumption rather than income is part of his vision. That includes looking at calories, life expectancy, health, and education as part of living standards in a fundamental way. I think of this as a prize about empirics, the importance of economic development, and indirectly a prize about economic history.
Think of Deaton as an economist who looks more closely at what poor households consume to get a better sense of their living standards and possible paths for economic development. He truly, deeply understands the implications of economic growth, the benefits of modernity, and political economy. Here is a very good non-technical account of his work on measuring poverty (pdf), one of the best introductions to his thought.
He brought a good deal of methodological individualism to the field of consumption studies, most of all by using household surveys more than macroeconomic data.
I think of this as a prize for “a whole body of work” rather than for one or two key papers. David Leonhardt has a good NYT summary of some his work and its deep underlying optimism about the situation of the poor in the global economy.
Here is the popular version of the Committee statement, here is the more detailed version (pdf), an excellent overview.
Deaton was born in Scotland but has taught at Princeton for some time. Here is Deaton on Wikipedia. Here is Deaton’s home page. Here are some recent working papers, he even has published in Review of Austrian Economics, an interesting review of Bill Easterly on experts. Here are previous MR mentions of Deaton, there are many of them. Here is Deaton on Google Scholar. Here is a Russ Roberts EconTalk with Angus Deaton. I think of Deaton as someone who is relatively willing to share himself with the world, let’s hope the Prize doesn’t ruin that openness. Here is 21 minutes of Angus on YouTube, on his core ideas.
He is married to Princeton economist Anne Case, a notable scholar in her own right and sometimes a co-author with Deaton. Here are their co-authored papers, many dealing with South Africa.
Deaton has long had a special working relationship with India and South Africa. Here are his key pieces on measuring poverty and poverty reduction in India. Here is his work on the Indian health survey. Here is his 2010 AER piece on how to measure poverty globally in a consistent manner, by the way he suggests that asking people should be part of the answer.
He also has written on gender discrimination within the family in developing nations. Some of his work has helped direct our attention to the viability of cash transfers as a way of fighting poverty.
At first, say circa 1980, he was known for his work in developing Almost Ideal Demand Systems for analyzing consumer expenditures; much of this early work was with Muellbauer. That made a big splash, but it was more of a theoretical and technical advance than what was to follow. One message was that studies based on the idea of a “representative consumer” were likely to prove misleading.
It is interesting to note the trajectory of his career, as Alex noted on Twitter. He first did theory, then filled in the numbers and did empirics, applying the theory. Eventually he took theory + empirics and used it to tackle some of the big issues of poverty and development.
Here is his long survey piece on foreign aid and growth. He favors the move away from project evaluation, is skeptical of instrumental variable methods, and believes that RCTs need to be supplemented with a better theoretical understanding of mechanisms. He knows a lot about many, many topics.
I do not know him, but he is described by many as a colorful character. Dani Rodrik has strong praise for Deaton as a teacher.
Here are short, popular essays by Angus Deaton; you can call that the “what he really thinks page.” He is critical of the Republican war against ACA and connects that topic to Downton Abbey. He argues for regional price indices for the United States. He discusses American inequality and why it is often ignored as an issue. He warns against the creeping regulation of science. And he considers why the Stern report had a greater impact in the UK than in America.
I very much liked Deaton’s recent book The Great Escape, which focuses on how modernity revolutionized standards for consumption.
This award is no surprise at all and he has been on the short list for a while. Is it a slight surprise that Deaton won this prize on his own? Many thought he would be paired with Anthony Atkinson, but I see Deaton as worthy of a stand-alone prize and Atkinson’s chance has not passed him by. In any case, Tirole was a stand-alone prize too, so maybe in that regard there has been a shift in the Swedish regime.
Last but not least here is Alex’s post on Deaton.
Short essays by Angus Deaton
Find them here, hat tip to Tim Harford.
Sunday assorted links
1. The suburban YIMBY movement (NYT).
2. Chess Fever, a Soviet silent movie. 27 minutes, Buster Keaton-style.
3. Angus Deaton makes a nationalist turn.
4. Is Silicon Valley pricing academics out of AI research? (I hope so.)
5. List of names you cannot give your Icelandic daughter (sorry Abigail! Aisha eventually was approved, though). For men, they have banned Fabio, but not Elmer. I believe in laissez-faire for names, but if you are going to ban anything, surely Elmer is worth some consideration?
6. Are Florida voters tiring of the culture wars?
7. “Mr. Musk has not hired any staff for his foundation, tax filings show. Its billions are handled by a board that consists of himself and two volunteers, one of whom reports putting in so little time that it averages out to six minutes per week.” (NYT, quite possibly he is doing this well?)
The “Deaths of Despair” narrative is somewhat wrong
Matt Yglesias does an excellent job laying out the case against the “deaths of despair” narrative and putting it bluntly.
Over the past few years, Anne Case and Angus Deaton have unleashed upon the world a powerful meme that seems to link together America’s troublingly bad life expectancy outcomes with a number of salient social and political trends like the unexpected rise of Donald Trump.
Their “deaths of despair” narrative linking declining life expectancy to populist-right politics and to profound social and economic decay has proven to be extremely powerful. But their analysis suffers from fundamental statistical flaws that critics have been pointing out for years and that Case and Deaton just keep blustering through as if the objections don’t matter. Beyond that, they are operating within the confines of a construct — “despair” — that has little evidentiary basis.
…Novosad, Rafkin, and Asher have provided a compelling analysis of a very concentrated problem of worsening health outcomes for the worst-off Americans. Case and Deaton, by contrast, have delivered a very misleading portrait of worsening health outcomes for the majority of Americans that (because they mistakenly think it’s a majority) they attribute to broad economic forces that exist internationally but which for some reason only cause “despair” in the United States.
…The point is that we face a set of discrete public health challenges that we need to think about both as policy matters and in terms of politics and public opinion. But there is no “despair” construct driving any of this, and the linkage to big picture political trends is simply that Republicans are more hostile to regulation. Case and Deaton, meanwhile, have sent us on the equivalent of a years-long wild goose chase away from well-known ideas like “smoking is unhealthy” or “it would be good to find a way to get fewer people to use heroin.”
I tend to agree with Matt but I would offer a few cautions. Case and Deaton have been too broad in identifying the at-risk population. Identifying more carefully the at-risk group(s) is important so that we can target different problems with different solutions. Indeed, part of what makes the very important opioid crisis so bedeviling is precisely that it is not limited to “despairing” populations but cuts across many groups.
I wouldn’t, however, throw out despair as an organizing principle. The evidence on “despair” goes beyond death to include a host of co-morbidities such as mental stress, marriage rates, labor force participation rates and other measures of well being. Regardless of the precise population to which these problems attach they are co-morbidities and I suspect not by accident. Education is a proxy for the underlying problem but likely not causal. Matt’s cheeky suggestion to promote ideas like “smoking is unhealthy” illustrates part of the issue. Education and information will not solve that problem. Smokers know that smoking is unhealthy but they do it anyway–perhaps because it’s one of the few easily available pleasures if you are unmarried, out of work and stressed.
Nevertheless, do read the whole thing.
What I’ve been reading, new books sent my way
Cara Fitzpatrick, The Death of Public School: How Conservatives Won the War Over Education in America, is quite a good and also objective book.
Florian Illies, Love in a Time of Hate: Art and Passion in the Shadow of War. Take the top Continental artists and thinkers of the 1920s, and write a book about their affairs, and this is what you get.
Paul Lendvai, Austria Behind the Mask: Politics of a Nation since 1945 is quite good.
Colleen P. Eren, Reform Nation: The First Step Act and the Movement to End Mass Incarceration, is a good and useful history of the recent criminal justice reform movement.
There is Angus Deaton, Economics in America: An Immigrant Economist Explores the Land of Inequality.
David Leonhardt is soon publishing Ours Was the Shining Future: The Rise and Fall of the American Dream.
Geoffrey M. Hodgson, The Wealth of a Nation: Institutional Foundations of English Capitalism, is a useful neo-institutionalist survey of some of the different factors behind the rise of England.
There is Shane Parrish, Clear Thinking: Turning Ordinary Moments into Extraordinary Results.
What I’ve been reading
Bjorn Lomborg’s Best Things First delivers the expected dose of correct common sense.
Charles Horsnby, Kenya, A History since Independence is a very good long treatment of everything up to about 2010, conceptual too.
David Schleicher, In a Bad State: Responding to State and Local Budget Crises. An important, unfortunately timely, and very intelligent book on how the federal government has responded to state and local insolvency in the past. My main complaint is that at 171 pp. of text it is far too short.
Norman Lebrecht, Why Beethoven: A Phenomenon in One Hundred Pieces. A good introduction to Ludwig van, even if some parts do rush by too quickly. Also a good introduction for how to think about different recorded versions of the same piece.
There is Markus K. Brunnermeier and Ricardo Reis, A Crash Course on Crises: Macroeconomic Concepts for Run-ups, Collapses, and Recoveries.
And also Angus Deaton, Economics in America: An Immigrant Economist Explores the Land of Inequality.
Kelly Smith offers his account of Prenda micro-schools in his A Fire to Be Kindled: How a Generation of Empowered Learners Can Lead Meaningful Lives and Move Humanity Forward.
Patrick Mackie, Mozart in Motion: His Work and his World in Pieces is a good introduction to what the title promises.
Larry Temkin takes half a red pill
His new book is Being Good in a World of Need, and most of all I am delighted to see someone take Effective Altruism seriously enough to evaluate it at a very high intellectual level. Larry is mostly pro-EA, though he stresses that he believes in pluralist, non-additive theories of value, rather than expected utility theory, and furthermore that can make a big difference (for instance I don’t think Larry would play 51-49 “double or nothing” with the world’s population, as SBF seems to want to).
So where does the red pill come in? Well, after decades of his (self-described) intellectual complacency, Larry now wonders whether foreign aid is as good as it has been cracked up to be:
In this chapter, I have presented some new disanalogies between Singer’s original Pond Example, and real-world instances of people in need. I have noted that in some cases people in need may not be “innocent” or they may be responsible for their plight. I have also noted that often people in need are the victims of social injustice or human atrocities. Most importantly, I have shown that often efforts to aid the needy can, via various different paths, increase the wealth, status, and power of the very people who may be responsible for human suffering that the aid is intended to alleviate. This can incentivize such people to continue their heinous practices against their original victims, or against other people in the region. this can also incentivize other malevolent people in positions of power to perpetrate similar social injustices or atrocities.
The book also presents some remarkable examples of how some leading philosophers, including Derek Parfit, simply refused to believe that such arguments might possibly be true, even when Nobel Laureate Angus Deaton endorsed one version of them (not exactly Larry’s claims, to be clear).
Another striking feature of this book is how readily Larry accepts the rising (but still dissident) view that the sexual abuse of children has been a grossly underrated social problem.
What is still missing is a much greater focus on innovation and economic growth.
I am very glad I bought this book, and I look forward to seeing which pill or half-pill Larry swallows next. Here is my post on Larry’s previous book Rethinking the Good. Everyone involved in EA should be thinking about Larry and his work, and not just this latest book either.
What I’ve been reading and browsing
1. Camilla Townsend, Fifth Sun: A New History of the Aztecs. I read this one straight through, it does more to bring the Aztecs (a misnomer, by the way, as it is technically the name of the military alliance…a bit like referring to “NATO people”) to life than any other book I know.
2. Daniel M. Russell, The Joy of Search: A Google Insider’s Guide to Going Beyond the Basics. I don’t need this, but I suspect useful for many.
3. Thomas O. McGarity, Pollution, Politics, and Power: The Struggle for Sustainable Electricity. A very useful of the last four decades of transformation in the electricity industry.
4. Norman Lebrecht, Genius & Anxiety: How Jews Changed the World 1847-1947. An informative and engaging account of what the title promises (you can learn more about Heine and Alkan and Moholy-Nagy). Nonetheless the author never really addresses the question of why that period was quite so remarkable for Jewish achievement, relative to the rest of world history.
5. Edmund Morris, Edison. Lots of impressive research, but this book didn’t have the emphasis on innovation and institutions that I was looking for.
There is also Anne Case and Angus Deaton, Deaths of Despair and the Future of Capitalism.
People expect happiness improvements that don’t quite arrive
Among the young, expectations for future well-being run far ahead of reported well-being today. The gap diminishes with age, and in the rich countries, the lines cross around age 65 after which the future is expected to be worse than the present. Except for this, people appear to be perpetually optimistic about their futures even though this optimism is perpetually frustrated by actual outcomes.
…This (unjustified) optimism seems to happen everywhere in the world…
That is from a new paper by Angus Deaton.
Saturday assorted links
1. Chatbots that recognize your facial expressions and react accordingly.
2. American suburbanization is continuing.
3. Is capitalist growth pushing countries toward lower inequality again?
4. China Daily covers The Complacent Class.
5. Diminishing convergence in global productivity growth.
6. Attitudes of current slaveholders.
7. From Pol Pot to Peter Drucker (NYT).
8. Angus Deaton’s book review considers recipes for fixing inequality (NYT).
The Baffling Politics of Paid Maternity Leave in India
Policy makers and intellectuals in India are well informed about politics and intellectual developments in the United States and Europe. Among this group, for example, one can easily strike up a conversation about say Angus Deaton on RCTs versus structural econometric modelling. The similarity in the conversation extends far beyond the scientific, however, in ways that I sometimes find baffling.
When I gave a lecture at a local university, for example, I apparently shocked the students when I said matter-of-factly:
India would be a better country if it were richer and more unequal.
I think India’s extreme poverty makes this obviously true in a utilitarian sense, i.e. better for Indians, but it wasn’t so obvious to the students some-of-whom discussed inequality in terms that could easily have been duplicated at Berkeley. The inequality conversation has jumped the pond in ways that seem to me to be completely inappropriate.
Writing in the Times of India, Rupa Subramanya gives another example, a bill for paid maternity leave that has just passed the Indian parliament (waiting only on the president’s signature). As I pointed out earlier, by far the majority of Indians are self-employed and in the informal sector. The very idea of paid maternity leave, therefore, is bizarre. Is the right hand to pay the left?
As Subramanya writes, even fewer women than men work in the formal sector:
[W]omen’s labour force participation in India is 25% or less, as variously estimated by the International Labour Organisation (ILO) and from India’s National Sample Survey Organisation (NSSO) data. What is more, estimates by MLE and ILO suggest that less than 5% of female workers aged 15-49 are in the formal or organized sector. What this implies is that effectively those covered by paid maternity leave whether the old or the new provision are at best a small number of relatively privileged women working in formal sector jobs. The vast number of women working in the informal sector effectively have no social protections at all, forget about paid maternity leave benefits.
Add to this the well-known reality of poor implementation and even poorer monitoring and the truth is relatively few women benefit from paid maternity leave now, and by definition, therefore, very few stand to gain from the benefits being increased.
…Legislating generous benefits in a still poor country is putting the cart before the horse and is sure to fail. All that will happen are more frustrated women unable to find work, employers unwilling to hire women, and more non-compliance and non-enforcement of existing laws for a state that is already stretched thin trying to do far too many things with too few resources.
So why pass a bill which is so at odds with the real issues facing women on the ground? I think Subramanya is correct:
It’s hard to escape the impression that the main purpose of the increased maternity leave benefits is public relations, either aimed at educated urban women or targeted for international consumption where India is approvingly clubbed with rich countries like Norway and Canada as having the highest paid maternity leave in the world.
New issue of Econ Journal Watch
https://econjwatch.org/issues/volume-14-issue-1-january-2017
Volume 14, Issue 1, January 2017
Government Propaganda Watch: Three investigations of economic discourse and research issued by governments and government agencies:
- Propagandistic Research and the U.S. Department of Energy: Energy Efficiency in Ordinary Life and Renewables in Electricity Production, by Daniel Sutter
- Slip and Drift in Labor Statistics Since 2007, by Clifford Thies
- “Stop This Greed”: The Tax-Avoidance Political Campaign in the OECD and Australia, by Chris Berg and Sinclair Davidson
Classical liberal economic thought in Italy, since 1860: Alberto Mingardi contributes the 13th article of the “Classical Liberalism in Econ, by Country” series.
Econ 101 Morality: J. R. Clark and Dwight Lee tell teachers to embrace a moral purpose and to teach students where their instincts came from and why instincts often mislead.
Must moral judgment involve sympathy? Thomas Brown’s 1820 critique of Adam Smith.
Mitchell Langbert and coauthors rectify a coverage error in their study of faculty voter registration.
EJW Audio
Alberto Mingardi on Liberalism in Italy
Benny Carlson on Swedish Economists
EJW News