Month: September 2009
Markets in everything
Yikes!
In one incident highlighted in the report, a male correctional officer
agreed to pay a female inmate with whom he had sex to arrange for his
wife's murder.
The longer article, about prison guard abuse of inmates, is interesting in its own right.
How much will denser suburbs help the environment?
John Thacker points us to a study of California (registration required, but free). I've only browsed it but the introduction states:
In September 2008, the California state legislature passed the first state law (Senate Bill 375) to include land use policies directed at curbing urban sprawl and reducing automobile travel as part of the state’s ambitious strategy to reduce greenhouse gas (GHG) emissions. The legislature recognized that cleaner fuels and more fuel-efficient vehicles would not be sufficient to achieve the state’s goal of reducing GHG emissions to 1990 levels by 2020. The bill requires the state’s 18 metropolitan planning organizations to include the GHG emissions targets established by the state Air Resources Board (ARB) in regional transportation plans, and to offer incentives for local governments and developers to create more compact developments and provide transit and other opportunities for alternatives to automobile travel to help meet these targets. ARB currently estimates that reductions in vehicle miles traveled (VMT) resulting from these actions will contribute only about 3 percent of the 2020 targets–an estimate that reflects uncertainties in the state of knowledge about the impacts of more compact development patterns on travel and the short time horizon involved.
In other words, the environmental benefits of checking pro-suburb subsidies are real, but they are smaller than many people think. That's from the National Academy of Sciences and the authors are no haters of the environment. If you check out p.59, you'll see that a forty percent increase in population density decreases vehicle miles traveled by less than five percent. pp.131-132 offer a summary of the study's conclusions and quantitative estimates.
The authors conclude that density-friendly policies are a good idea, and I agree, but still these are not overwhelming effects. Keep in mind that current trends are strongly pointing toward population dispersion, so to reverse those trends and see greater density would take some doing. We're not close to that margin.
There are many other interesting parts of the report, including case studies of Portland and Arlington.
First debug the child, then the computer
The idea of computers as liberators appealed to Silicon Valley philanthropists and Nicholas Negroponte could certainly tell a compelling story but, as Timothy Ogden explains, today the one laptop per child project seems to be in technical and financial trouble, the evidence that computers increase learning either in the classroom or at home is weak and the demand for the computers (as opposed to say cell phones (pdf)) in the developing world is low. Meanwhile, simpler, cheaper approaches with proven evidence are not being fully exploited. Here's Ogden.
The simplest and least costly of these programs is deworming. Nearly 2 billion people around the world are affected by parasitic worm infections, with children disproportionately affected. While each variety of parasitic worm affects a person differently, they all take a substantial toll on growth, energy and attention, with entirely predictable impacts on school attendance and learning. Harvard economist Michael Kremer has studied the impact of mass deworming in Kenya and India. Delivering deworming medication costs 50 cents per child per year in Kenya but yielded a 25 percent increase in school attendance; a similar program in India cost $4 per student per year and yielded a 20 percent attendance gain. "This is a simple, cost-effective and yet tragically not-done program. It's a scandal that [deworming] hasn't been addressed," Kremer says. There are spillover effects as well. "The most surprising thing about the study in Kenya was the widespread impact," Kremer says. The program drove down infection rates for several kilometers around the schools, he says, and there were significant improvements in attendance for untreated students, in the treatment schools as well as in nearby schools not in the program.
Read the whole thing. Help to deworm the world.
Hat tip to Alanna Shaikh via Chris Blattman and also to Dan in the comments.
How much did highways really matter for suburbanization?
Following up on my earlier post, Dan Klein points my attention to the following piece by Wendell Cox, Peter Gordon, and Christian Redfearn, from Econ Journal Watch. Excerpt:
Suburbanization has, for a long time, been a trend based on consumer preferences and larger trends, notably rising wealth and transportation and communications improvements (including the highways Baum-Snow investigates). Jackson (1985) finds U.S. suburbanization began at the end of the 19century. Indeed, he refers to “streetcar suburbs.” The 20th century U.S. experience is shown in Figure 1, which shows the percentage of US population living in metropolitan areas, and breaks that percentage down into central cities population and suburbs. The growth of the suburbs relative to the central city is seen well before 1950. Moreover, in the figure the relative decline of the central cities is understated because central cities have been annexing suburbs for many years.
The simple broad narrative is that, by and large, suburban living expanded throughout the twentieth century. Around the world, as incomes rise, people choose the mobility of the automobile; they overwhelmingly prefer the range and choice of personal transportation. As they choose automobility, origins and destinations disperse; and as these disperse, the attraction of the auto grows. It is a self-reinforcing cycle that is facilitated by better highways. But as with most public sector infrastructure developments, these usually follow rather than lead.
This article offers some striking facts. Before the interstate highway system, the percentage of the U.S. population living in suburbs went from 7.1 percent in 1910 to 23.3 percent in 1950. From 1950 to 2000 it had a smaller proportional increase, namely from 23.3 percent to 50 percent.
The central city of Copenhagen reached its population peak in 1950 and by 1990 had lost nearly 40 percent of its population; that is comparable to some of the highest losses in the U.S. Rust Belt. The central city of Paris reached its peak population in 1920 and has lost one-quarter of its population by 1990.
There are many other interesting points in this piece. I am not suggesting that highways do not matter, but the extent of the influence is maybe not as large as many people think.
The French carbon tax
France is finding is hard to pass a stiff carbon tax, though of course they already use lots of (non-carbon) nuclear power:
Details are finally emerging about the country’s planned “carbon tax,” to be put in place next year. And the idea is anything but popular.
The center-right French government wants to levy a tax of 14 euros per ton of carbon dioxide starting in 2010; carbon taxes are popular with many economists and business leaders because they are seen as easier to implement than carbon-trading plans, which France also belongs to.
In reality, France’s carbon tax is basically just a gasoline tax–and a tiny one at that. The electricity sector, overwhelmingly powered by emissions-free nuclear power, isn’t part of the plan [TC: Duh!], Prime Minister Francois Fillon told Le Figaro. The tax will basically fall on liquid fuels–raising pump prices 3 euro cents a liter (that’s roughly 15 U.S. cents a gallon).
In theory it will be revenue-neutral but most French voters are nonetheless opposed to the measure. Here is further information:
Large CO2 emitters, such as oil refiners and steel makers, will be exempted from paying the new tax. The government will propose special compensations for fishermen, farmers and truckers…
Assorted links
1. Robert Reich teaches Berkeley how to save money.
2. Video on wine and cereal pairings.
3. The culture that is Britain: half of them report having been injured while eating biscuits; hat tip to The Browser.
Did highways cause suburbanization?
Via RortyBomb, that is a research paper by Nathaniel Baum-Snow. Here is the abstract:
Between 1950 and 1990, the aggregate population of central cities in the United States declined by 17 percent despite population growth of 72 percent in metropolitan areas as a whole. This paper assesses the extent to which the construction of new limited access highways has contributed to central city population decline. Using planned portions of the interstate highway system as a source of exogenous variation, empirical estimates indicate that one new highway passing through a central city reduces its population by about 18 percent. Estimates imply that aggregate central city population would have grown by about 8 percent had the interstate highway system not been built.
You can quibble with the model specification but I accept the paper's general conclusion. A few points:
1. I am reluctant to call this a subsidy without qualification. Visit an old medieval city like Esternach, Luxembourg ("a formidable fortress erected by Count Siegfried in 963"). The main buildings are grouped together on a hill. It's value-enhancing that later governments adopted policies, such as near-free trade and national defense, which eased those constraints and spread out the population. I wouldn't say that the resulting population distribution of say Paris is best thought of as resulting from a subsidy because they're not all on top of a hill somewhere, I would say it is the result of greater wealth and trade opportunities and law enforcement, with some element of subsidy. So if you favor the construction of the interstate highway system, as I think most commentators do (try driving for long on Rt.1), it is a rhetorically loaded decision to invoke the word "subsidy" as the major mode of explanation.
2. Greater wealth, transport, and trade naturally cause people to seek out larger homes and greater living space. In a world with no policy distortions this may well be the dominant effect in various long-run settings. The rise of the suburbs is not all subsidy-driven by any means.
3. I recall the D.C. area quite well before it had either the Orange Line on the Metro (serving the Virginia suburbs) or Rt.66 going into Washington. The construction of both enabled the suburbs to spread further westward. But which was more important in driving this process? Mass transit also can encourage suburbanization, especially the city has abominable public schools. A longer and better Metro system — most of all with better parking — would have meant even more people moving to the suburbs.
4. Do not forget "white flight." For American cities, this paper suggests that each black arrival lead to, on average, 2.7 white departures. When it comes to DC, "black flight" has been a significant phenomenon and it is a major reason why the city has been losing population.
5. Canada is much less suburbanized than is the United States and the greater "flight from blight" in the U.S. seems to be a major reason (see p.8 here). When I think of U.S. suburbanization, I think of the failures of our municipal public sector as very important in this process. In contrast, Fairfax County and Fairfax City governments are of reasonable quality.
6. For competitive Tiebout-related reasons, it is no accident that the public schools are so often better in the suburbs than in major cities. Countries with strong social norms, such as Sweden, have this problem less.
7. One simple model (which I am not endorsing straight up) is that most American people with kids have a near-lexical preference for living in the suburbs. Anything that enables them to do so can be called a cause of suburbanization and measured as such. But isolating and measuring these marginal impacts, in the econometric sense, distracts us from seeing how general and how strong the underlying infra-marginal forces are and those are very often preference-based.
The Power of the Poor: Blog Contest
On October 8, PBS will be showing, The Power of the Poor, a new documentary featuring the great Hernando de Soto and from the team that brought you Free to Choose. You can see a preview below. To increase awareness, Free to Choose Media is sponsoring a blog contest on the question:
What institutions can enable the world’s poor to realize their power
and achieve prosperity?
The best blog post–under 500 words–on this theme will receive $250 and a DVD of the show. See the rules for more information. Yours truly will be one of the judges.
Conniptions coda
Last night one of my law students — who is also a realtor — informed me that many parts of northern Virginia do have a form of effective rent control. Various apartment buildings have to set aside a certain percentage of their apartments for low-rent uses and try to attract people who receive housing subsidies. He said this was true for Arlington but he wasn't sure about Fairfax County. (This article suggests Fairfax County does have a similar program, with rent subsidies. Although it does not state that the resulting rents are below market-clearing my student indicated that was true for Arlington County and also in Fairfax putting aside these apartments for low-income groups does seem to be a burden for the landlord.) I wouldn't call this "stringent" rent control but it has effects much like those of rent control. We should expect excess demand for those apartments, people masquerading as low-income when they are not, supplier reluctance to participate, and landlords who look for other ways of charging people for access to those apartments. My student claims we do observe these phenomena and that the program is a mess.
Should I throw a conniption?
In any case I probably will, as I had once pledged, spend a few days soon blogging local issues only. That's not a strict commitment; you'll still get Assorted Links and I'll break the truce if/when big news breaks elsewhere.
Recent trends in top income shares
You may recall that some time ago Alan Reynolds (Reynolds responds here) challenged the results of Piketty and Saez on rising income inequality in the United States. There has now been a systematic look at biases in the data, with the goal being to reconcile data from the Current Population Survey with IRS measurements. Burkhauser, Feng, Jenkins and Larrimore report their results:
Although the vast majority of US research on trends in the inequality of family income is based on public-use March Current Population Survey (CPS) data, a new wave of research based on Internal Revenue Service (IRS) tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates can largely be reconciled once one uses internal CPS data (which better captures the top of the income distribution than public-use CPS data) and defines the income distribution in the same way. Using internal CPS data for 1967–2006, we closely match the IRS data-based estimates of top income shares reported by Piketty and Saez (2003), with the exception of the share of the top 1 percent of the distribution during 1993–2000. Our results imply that, if inequality has increased substantially since 1993, the increase is confined to income changes for those in the top 1 percent of the distribution.
An ungated version is here. As I read this paper, the Piketty and Saez result, with some modifications for 1993-2000, basically holds up. It's also worth noting that recent increases in inequality do relate mostly to the top one percent. That's all for pre-crash times, of course.
Assorted links
1. Paul Graham on writing by enumeration.
2. Doing Business: Rwanda's is the world's top reformer of business regulation this year.
3. New Malcolm Gladwell book of collected essays.
4. Why do so few U.S. college students graduate?
5. Ho-hum: James Patterson signs 17-book deal.
6. "…you'd rather add 17 more items to the line than one other person": a statistical look at when the express lane is faster. Remember: the y-intercept isn't zero!
Nose jobs
According to a number of sources, Iran is the "nose job capital of the world" probably because other signals of beauty are shrouded (by law). Iran also has plenty of well-educated doctors. Gene Expression has some links and a few alternative hypotheses.
Why do universities grant honorary doctorates?
A longstanding MR reader writes to me:
My father will be granted
an honorary doctorate from a European university. While he is
undoubtedly deserving of the honor (he is a well-known professor in his
field), I don't understand the European institution's incentives in
granting the doctorate. My father in not from Europe, holds no degrees
from there, has never worked there, and is unlikely to attract others
to go there. Outside of altruism, why is he being honored? More
broadly, why would any university grant an honorary degree, especially
relatively high-status universities of the Stanford/MIT/Oxbridge ilk?
Especially when conferred to non-academics, don't such degrees dilute
the brand value of the university?
I can think of a few reasons for honorary doctorates:
1. The recipient is a major donor or potential major donor or friend of major donors.
2. The awarding of the doctorate creates press releases and attracts attention for the university. If the recipient is sufficiently prestigious, this involves no reputational cost for the granting institution and perhaps it creates slight reputational benefits. The university also has some chance to make a favorable impression on famous people.
3. Awarding the degree signals the strength of interest groups within the university. Some universities have squabbled over whether President Obama should be given an honorary degree. Last year St. Ambrose, a Catholic school in Iowa, awarded an honorary degree to a "pro-abortion activist," as it was described. In 1985 Oxford broke precedent and refused to award Margaret Thatcher an honorary degree, as the school had done with previous Prime Ministers. They were upset that she had cut funding for British universities.
4. An honorary degree may spur student interest in the school and in the graduation ceremonies, such as when Knox College awarded Stephen Colbert an honorary degree in 2006. Keep in mind that current students are often future donors, so you want to give them a ceremony to remember.
5. Honorary degrees are often a lure to attract commencement speakers.
Cambridge University has given honorary degrees to Albert Einstein, Nelson Mandela, Bill Gates, and now its roadsweeper. I guess they don't want to seem intellectually elitist. Yale gave Paul McCartney an honorary degree.
The UC system gave 700 honorary degrees to former Japanese-American students, namely the ones who were placed in concentration camps during WWII. They thought this was the right thing to do and it may have garnered them points with some local Asian communities.
The question in my mind is the opposite of the reader's: why does anyone accept honorary degrees? Maybe it's hard to say no. David Schindler, a leading environmental scientist, has the right idea:
…there is a saturation limit. I've started to turn down about half of
the honorary degree invitations. I feel badly about it, but each one
takes at least three days, including travel, and I am starting to feel
anxious about the few years I have left to accomplish things that I
want to do.
The practice of honorary degrees dates back to medieval times. The Archbishop of Canterbury has the power to award (non-honorary) degrees, in what I am not sure.
Al Lewis, who played Grampa Munster, claimed to have a Ph.d. in child psychology but it seems this was neither honorary nor real.
Alex’s conniptions
The Voluntary City: Choice, Community and Civil Society, edited by David Beito, Peter Gordon, and Alex Tabarrok. It's very much anti-zoning. Here you can look inside the book. I am genuinely puzzled by this progressive meme that GMU economists don't speak out adequately against zoning and in favor of more diverse, more vital, and more practical urban environments.
Conniptions from me on urban economics
Matt Yglesias, picking up from Ryan Avent, writes:
…some libertarian economists at George Mason University go so far as to
laud America’s large houses and plentiful parking specifically as
evidence of the superiority of America’s free market economic policy,
blissfully unaware that in the United States pervasive regulation
requires the construction of bigger houses and more parking spaces than
the market would provide.
Matt refers to:
…the kind of libertarians who one would expect to go into conniptions if
Fairfax County, Virginia were to propose a stringent rent control law seem surprisingly blasé
about the vast array of land use restrictions that infringe economic
liberty in that county and most other American jurisdictions.
Just for the record, I'd like to add my conniptions on the issue:
1. I would not have brought the U.S. down the path of water subsidies, many of which are pro-suburban. (Admitted they are not always easy to repeal.)
2. I think pollution externalities should be priced in Pigouvian fashion; this would penalize many suburban developments.
3. I oppose the widening of Route 7 at Tysons Corner and I expect a disaster from the current plans.
4. I favor school choice and charter schools, which would make many U.S. cities livable again for couples with children.
5. I would price many roads for congestion, although as Bryan points out this could either help or hurt cars as a mode of transport.
6. I would allow U.S. cities to become much taller, thereby accommodating more residents. I would weaken many urban building codes in the interests of a greener America.
7. I much preferred the time when I lived near a gas station and a 7-11.
Maybe Matt and Ryan are picking on Bryan Caplan rather than me but I suspect Bryan would agree with most of this list, maybe all of it.
If I don't throw conniptions on these issues more often, it is because I regard them as unlikely or in some cases they are simply not issues I follow closely. Fairfax County zoning has such strong political support, most of all from the wealthy Democrats who supported Obama but from Republicans too. If you find anyone in Fairfax screaming about the horrors of zoning, that person is likely to be a libertarian and not a blase one. Or maybe they are a Best Buy shareholder.
But today is the day of conniptions. I truly wish that Fairfax County were more like central Arlington or for that matter Falls Church City and I curse those who have made it otherwise.
Here is a picture of The Conniptions. Don't forget them. They are mine! My conniptions.
Fairfax, by the way, did have rent control before 1973. Oddly, my main post on rent control is a chat with Tyrone, who of course favors the idea.