Month: February 2007

Cultural imperialism?

My column from today offers my latest thoughts on globalization and culture, drawing on the very interesting work of Omar Lizardo, a sociologist at Notre Dame.  We are often interested in culture for its symbolic value, and its ability to signal where we stand in local hierarchies.  The more egalitarian a society, the less important this signaling function becomes.  Here is one bit:

Hollywood movies are popular in Europe in part because of the successes
of European welfare states and of European economic integration. 
Western Europe has become more equal in its treatment of citizens, it
has moved away from an aristocratic class society, and it has strong
global connections.  All those factors favor an interest in American and
global popular culture; Hollywood movies often capture 70 percent or
more of a typical European cinematic market.  Social democracy, which
the Europeans often hold up in opposition to the American model, in
fact aided this cultural invasion by making Europe more egalitarian.

Here is Omar’s home page.  Here is Omar’s essay which I drew upon.  Here is one further bit:

…the data supplied by Professor Lizardo show that the poorer a country,
the more likely it will buy and listen to its own domestic music.  This
makes sense given that music is a form of social networking and the
relevant networks are primarily local.

Funes the Memorius


MyLifeBits has also provided Bell with a new suite of tools for capturing his interactions with other people and machines.  The system records his telephone calls and the programs playing on radio and television.  When he is working at his PC, MyLifeBits automatically stores a copy of every Web page he visits and a transcript of every instant message he sends or receives.  It also records the files he opens, the songs he plays and the searches he performs.  The system even monitors which windows are in the foreground of his screen at any time and how much mouse and keyboard activity is going on.  When Bell is on the go, MyLifeBits continually uploads his location from a portable Global Positioning System device, wirelessly transmitting the information to his archive.  This geographic tracking allows the software to automatically assign locations to Bell’s photographs, based on the time each is taken.

To obtain a visual record of his day, Bell wears the SenseCam, a camera developed by Microsoft Research that automatically takes pictures when its sensors indicate that the user might want a photograph.  For example, if the SenseCam’s passive infrared sensor detects a warm body nearby, it photographs the person.  If the light level changes significantly–a sign that the user has probably moved in or out of a room and entered a new setting–the camera takes another snapshot.  A recent study led by researchers at Addenbrooke’s Hospital in Cambridge, England, showed that a memory-impaired patient who reviewed SenseCam images every night was able to retain memories for more than two months.

How many of you would want this?  I wouldn’t.  I prefer the memories I choose to keep, and the ones I make up, over the ones I really had.  Thanks to Robin Hanson for the pointer.

Four new economics journals

Mario Rizzo directs my attention to Andrew Oswald’s 2007 paper (Economica) "An Examination of the Reliability of Prestigious Scholarly Journals: Evidence and Implications for Decision-Makers", here is the abstract: 

Scientific-funding bodies are increasingly under pressure to use journal rankings to measure research quality.  Hiring and promotion committees routinely hear an equivalent argument: ‘this is important work because it is to be published in prestigious journal X’.  But how persuasive is such an argument?  This paper examines data on citations to articles published 25 years ago.  It finds that it is better to write the best article published in an issue of a medium quality journal such as the OBES than all four of the worst four articles published in an issue of an elite journal like the AER.  Decision-makers need to understand this.


I love it when Greg Mankiw gets nasty.

says that, as a requirement for free trade deals, we should tell
developing countries to "set a minimum wage that’s half their median wage." The
proposal raises two questions in my mind:

1. Does Reich pay his nanny,
cleaning person, and gardener more than half the median wage of members of his

2. If not, should I refuse to buy his books?

Shades of Pierre Menard

The riveting music story of the moment is the Joyce Hatto hoax. Gramophone…has revealed that several recordings attributed to the late, cultishly admired British pianist are identical to discs previously issued on other labels – including, remarkably, Yefim Bronfman and Esa-Pekka Salonen’s well-regarded 1990 recording of the Rachmaninov Third Piano Concerto.  The Gracenote database on iTunes exposed the fraud.  The possibility arises that many or most of Hatto’s hundred-odd releases on her husband’s Concert Artist label are stolen property.  Not having heard any Hatto discs, I can’t begin to judge what’s real and what’s not, but it’s a safe guess that anything conducted by the elusive René Köhler (scroll down this page for Concert Artist’s unverified biography) is a fake; in one case he’s Salonen, in another he’s Bernard Haitink…Jessica Duchen links to an internet discussion where one piano expert is quoted as saying that Minoru Nojima’s Liszt playing is "too clinical" and expressing a preference for Hatto – not aware that he’s discussing the same performance!

Here is the link, which includes further references, and also this account.  It should be noted that Hatto’s discs had no real chance of making money and in fact cost some money to put out; her husband created an independent label for the music.  In any case, I have heard Ms. Hatto play (albeit under different names), and the results were very impressive.  She can play just about anything, and she has mastered many styles.  Here is an earlier and indeed glowing review of Ms. Hatto’s work.  She was sadly unable to play in public, citing an unpredictable illness.

Addendum: I’ve been told by credible sources that an economist once submitted a paper to the QJE which the journal already had published, albeit by the real author.  The journal at least had the good sense to accept and publish the work again.

Are Parliamentary systems better?

Matt Yglesias writes:

As a general matter, I tend to think parliamentary systems as seen in Britain or Canada are superior to our method of government.  A system like that puts less formal restraint on the head of government in terms of his ability to act, but also makes it much easier to dump a head of government whose policies have failed and whose leadership is widely considered inept.

Totally maybe.  Parliamentary systems do work better for small countries with well-educated populations.  Accountability is higher, and voters enforce some discipline upon government.  The openness of the economy imposes other constraints.  See this paper.

But when the country is large and diverse, I see more reason to favor the American Constitution or in general a more pluralistic system.  Why trust voters as the major source of constraint, and what do "the voters" want in any case?  Furthermore the American system offers a decent chance of divided government and thus greater limits on the executive.  Parliamentary systems often allow the Prime Minister and cabinet to manipulate the legislature by offering intra-party perks and promotions.  There is plenty of gerrymandering, and bringing down a government is an extreme option which is not very easy to exercise in political equilibrium.  If nothing else the rebelling party faces the danger of many of its members — including the rebels — being kicked out in a new election.  Elections can be called at strategic times, and so on.  The Prime Minister is hardly a captive of the voters or the legislature.

Federalism is another issue.  If so much of policy is decided in decentralized fashion, as it must be in a large nation, maybe the federal/national part of those policies should be decided on grounds in rough concordance with a federalistic system.  That will mean a division of powers.  I also worry that as the nation becomes big enough, and states matter more, that there is not enough party unity to sustain a Parliamentary system.

When the executive and legislature are unified, as under a Parliamentary system, the Supreme Court, or its equivalent, will be weaker.  No one will trust a hand-picked court, with no major obstacles to confirmation, with so much power.  Yet weakening judicial review in America would worry me; it also also one step toward eliminating a written constitution altogether.

A final question is whether the USA — the country most likely to use nuclear weapons — needs a President with a certain amount of autonomy and secrecy for a fixed time period.  In general I favor a constrained executive, but that one is harder to call.  Can you imagine a Parliament debating nuclear strategy?

Organ Donation in Israel

Israel may begin something like a no-give, no-take rule for organ donation.  Under a new proposal someone who had previously signed their organ donor card would be given points helping them to move up the waiting list should they one day need a transplant organ.  See here for more on the no-give, no take rule.   

Thanks to the ever-entrepreneurial Dave Undis for the pointer.

I can’t decide whether this paper is politically incorrect

We study the relation between gender and job performance among brokerage firm equity analysts.  Women’s representation in analyst positions drops from 16% in 1995 to 13% in 2005.  We find women cover roughly 9 stocks on average compared to 10 for men.  Women’s earnings estimates tend to be less accurate.  After controlling for forecast characteristics, the difference in accuracy is roughly equivalent to four years of experience.  Despite reduced coverage and lower forecast accuracy, we find women are significantly more likely to be designated as All-Stars, which suggests they outperform at other aspects of the job such as client service.

Here is the link.  Here are non-gated versions.  The authors claim that more women don’t enter the sector because of their preferences, rather than discrimination; after all, They Win Prizes!.  Is the implication that women analysts are less productive, but men receive consumption value from voting them as "All-Stars"?  I don’t know how the voting works, but possibly the companies lobby for them, so as to show they have visible female stars.  I see the possibility of patronizing condescension in the data.  That’s not quite the same as outright discrimination, but I suspect the real story remains uncovered.  The odd mix of positive and negative discrimination that women, and some minorities, face, has not yet made its way into good models.

Assortative mating

Last month the New York Times’ David Leonhardt published a fascinating article, listing 13 young (untenured) in his piece The Future of Economics Isn’t So Dismal… 

Of the 13 up-and-coming academic economists, six are married to each other.  For example, Chicago’s Emily Oster is married to fellow Chicago economist Jesse Shapiro.  Not only that, Dr Oster is the daughter of two economists, Yale’s Ray Fair and Sharon Oster.  Talk about keeping it in the family.  The other two couples were MIT’s Amy Finkelstein and Harvard’s Benjamin Olken, and Berkeley’s Ulrike Malmendier, and Stefano DellaVigna.

Wharton’s Justin Wolfers,
by the way, has a partner with a PhD in economics from Harvard, who
worked for two Federal Reserve banks and who is now an Assistant
Professor of Business and Public Policy at Wharton: Betsey Stevenson.  So that means over half (7 out of 13) of the rising US economic stars have an economist as partner.

Here is the link.

The economics of traffic fines

“Everyone seems to have a pre-programmed “set point” for happiness — a level of happiness they’re genetically programmed for, and to which they’ll always tend to return. There isn’t much that can be done to change this set point.

Genetics and inheritance seem to be responsible for as much as half your tendency towards happiness or unhappiness.

Even huge positive changes in a person’s life — getting married, winning the lottery — only affect happiness levels for about six months.

The rich are certainly happier than the abject poor. But for most people, more money doesn’t tend to lead to much additional happiness, at least once basic material needs have been met.

Three of the hardest things to cope with emotionally are widowhood (or widowerhood), longterm unemployment, and caring for a sick loved one.

The best way to deal with a case of severe, long-lasting unhappiness is to take a mood-boosting pill. In many cases, a six-month course of treatment will effectively jolt the depressed person out of his or her rut.

Pursuing sex and status don’t make people happy. They’re things that we, being human, do — but they don’t necessarily lead to happiness. [TC: What if they conducted these happiness surveys *during* the act?]

People who are forever chasing after happiness — who crave blasts of euphoria — tend to be much less happy than people who are willing to let life (and their moods) take their own course.

Some tips for being happy:

If your job isn’t especially rewarding, pursue a hobby you love, one that delivers experiences of “flow.”

Don’t focus too much on making money and buying things.

Maintain a wide variety of friendships, and don’t spend too much time alone.

Cultivate gratitude and forgiveness, including forgiveness towards yourself.

Don’t try to feel great all the time — that’s not the way life works.”

My take: The conventional (academic) wisdom underrates money, status, sex, and marriage. [Could it be that academics do not always get these goods, and thus hope to manage their expectations and feel better about their failures?] As pure “ends in themselves,” they can be a mixed bag. But if you can pursue them in a meaningful way, enjoy the process, and meet with relative success…well…you won’t forget Oscar Wilde: “The only thing worse than being famous is not being famous,” etc.

Here is Michael’s full post, replete with useful happiness links at the end.

Here is some earlier advice from MR guest-blogger Bryan Caplan, who recommends “gratitude journals.” And here are some philosophical ruminations on happiness and utilitarianism, from Will Wilkinson.

Executive pay fact of the day

…while overly generous executive pay may be maddening, it is a drop in the bucket compared to the size of these companies and the impact it has on shareholder prices and employee compensation.  The top 50 companies alone have a market capitalization approaching $5 trillion.  Limiting CEO pay, as some neopopulists propose would have little to no impact on overall wages or compensation.  If every penny of the $14.4 billion earned by the "fortunate 2500" were distributed to all workers, it would amount to only $100 apiece.

That is from The New Rules Economy, a "Third Way" Project, and full of remarkable common sense.  Or try this bit:

Corporate profits as a share of both corporate net income and as a share of national income were higher in the 1940s and 1960s.  But that, admittedly, is splitting hairs.  What they don’t highlight is that in 2001, corporate profits were at one of their lowest points in recent history.

The neat trick is that the authors invert the usual right- vs. left-wing take on living standards: "Yes, living standards are way up, that means we have lots of money to spend on creative social programs."  It will make some people want to say "Whoa….living standards aren’t up that much…"

Behavioral public choice: the next subfield in economics

Jane Galt writes:

The post below also applies to behavioural economics, which the left
seems to believe is a magical proof of the benevolence of government
intervention, because after all, people are stupid, so they need the
government to protect them from themselves.  My take is a little subtler
than that:

1)  People are often stupid
2)  Bureaucrats are the same stupid people, with bad incentives.

There are few subfields in economics that have not been fleshed out with every possible combination of mechanisms, but this is one of them.  Yes, it is hard to come up with generalizable results about the psychological and behavioral biases of bureaucrats, but that hasn’t stopped many other areas in economics (like, um…behavioral economics) from taking off.  In fifteen years someone will write a JEL survey on Behavioral Public Choice, and you will regret not having written at least one of the early papers in the field.

I might add that Behavioral Public Choice gives us a better sense of when government programs actually work.  When morale is high, many people in government will "feel they matter," even if they do not, and do a very good job.  So Behavioral Public Choice is not just government-bashing, although there is a place for that too.  Behavioral factors also help account for why corruption becomes the norm in some settings but not others; psychological propensities are one way to narrow the set of possible equilibria.