Month: April 2010

Indian call centers promote school enrollment

Emily Oster and Bryce Millett report:

Over the last two decades in India there have been large increases in outsourced jobs and large increases in schooling rates, particularly in English. Existing evidence suggests the trends are broadly related. In this paper we explore how localized these impacts are; this has implications for understanding how quickly information about these jobs diffuses. We use panel data on school enrollment from a comprehensive school-level administrative dataset. This is merged with detailed data on Information Technology Enabled Services (ITES) center location and founding dates. Using school fixed effects, we estimate the impact of introducing a new ITES center in the vicinity of the school on enrollment. We find that introducing a new ITES center results in a 5.7% increase in number of children enrolled; these effects are extremely localized. We argue this result is not driven by pre-trends in enrollment or endogenous center placement, and is not a result of ITES-center induced changes in population or increases in income. The effect is driven entirely by English-language schools, consistent with the claim that the impacts are driven by changes in returns to schooling.

Markets in everything, evil clown edition

Dominic Deville stalks young victims for a week, sending chilling texts, making prank phone calls and setting traps in letterboxes.

He posts notes warning children they are being watched, telling them they will be attacked.

But Deville is not an escaped lunatic or some demonic monster.

He is a birthday treat, hired by mum and dad, and the ‘attack’ involves being splatted in the face with a cake.

‘The child feels more and more that it is being pursued,’ said Deville.

‘The clown’s one and only aim is to smash a cake into the face of his victim, when they least expect it, during the course of seven days.’

There is more information here, with an excellent photo.  For the pointer I thank Tim Johnson.

How politically segregated are the networks of the internet?

For all the complaints you hear, internet reading is much less segregated than the networks of our work, family, and friends (all given formal measurements in the paper).  Jesse Shapiro and Matt Gentzkow report:

We use individual and aggregate data to ask how the Internet is changing the ideological segregation of the American electorate. Focusing on online news consumption, offline news consumption, and face-to-face social interactions, we define ideological segregation in each domain using standard indices from the literature on racial segregation. We find that ideological segregation of online news consumption is low in absolute terms, higher than the segregation of most offline news consumption, and significantly lower than the segregation of face-to-face interactions with neighbors, co-workers, or family members. We find no evidence that the Internet is becoming more segregated over time.

Here are some details:

The average Internet news consumer’s exposure to conservatives is 57 percent, slightly to the left of the US adult population. The average conservative’s exposure is 60.6 percent, similar to a person who gets all her news from The average liberal’s exposure is 53.1 percent, similar to a person who gets all her news from The isolation index for the Internet is 7.5 percentage points, the difference between the average conservative’s exposure and the average liberal’s exposure.

News consumers with extremely high or low exposure are rare. A consumer who got news exclusively from would have a more liberal news diet than 95 percent of Internet news users, and a consumer who got news exclusively from would have a more conservative news diet than 99 percent of Internet news users.

…Visitors of extreme conservative sites such as and are more likely than a typical online news reader to have visited

This is one of the best papers on on-line media.

*Christianity: The First Three Thousand Years*

The author is Diarmaid MacCulloch and here is one excerpt:

…it was small wonder that the preoccupations and character of Ethiopian faith developed on very individual (not to say eccentric) lines.  It was the Ethiopians, for instance, who meditated on various Coptic apocryphal accounts of Pontius Pilate and decided that the Roman governor who presided over Christ's crucivixion should become a Confessor of the Church, to be celebrated in their sacred art and given a feast day in June and a star place in the liturgy at Epiphany, the greatest feast of the year, when the priest intoned a phrase from the Psalms which was also an echo of his words: "I will wash my hands in innocence."  The Copts and Ethiopians did not forget Pilate's complicity in the death of Christ, but in retelling his story they made him realize the full extent of his guilt, and they brought a symmetry to his fate by making him die on a cross…

I can't remember the last time I read a book that was so chockful of information and offered such a steady flow of interesting, substantive points.  Virtually every sentence counts and as a result the book is quite slow to read — in the good sense.  The writing flows very well.

It promises you 1016 pp. of text but in "real terms" you are getting much, much more.  If you are only going to read a few books on European or religious history, this probably should be one of them.  It is broadly in the Paul Johnson mode but better researched, more serious, and less subjective, though it is ultimately subjective nonetheless.  Overall I would describe the author as sympathetic to Christianity and he comes from an Anglican background, although I am not sure how "formal" a Christian or Anglican he is, at least not from the vantage point of p.346.

If there's any danger in buying this one, it's that the book is better than you are.

Nonetheless you can purchase it here.  You can find a good review here.

Do women today have more libertarian freedom than in 1880?

Bryan Caplan set off a debate which has spread to many corners of the blogosphere.  I have no interest in recapping and evaluating the whole thing but I'd like to make a simple but neglected point: negative liberty and positive liberty are not separable.

Here is one simple scenario.  Let's say the government tells me I have to buy and place a five-foot ceramic grizzly bear statue on my front lawn.  How bad an act of coercion is that?  If I have an upper-middle class income, it's an inconvenience and an aesthetic blight but no great tragedy.  If I have a Haitian per capita income, it is a very bad act of coercion and it will impinge on my life prospects severely.  I either give up some food or they send me to jail.

In other words, even theories of negative liberty — purely libertarian theories where only negative liberty seems to matter — require standards for degrees of coercion.  Those standards will very often depend on how much wealth the victims of the coercion have and they will depend on a more general concept of positive liberty.  Negative liberty standards can't help but seep into a concern with consequences.

Fast forward to said debate.  When people are poor, apparently small interventions can be quite crushing and quite coercive.  To cite the "smaller" interventions of 1880 doesn't much convince me.  The real impact of the depredations against women was very, very large, even from some "small interventions" (and I don't think they were all small).

(Also, I would not in this case take the *legal* oppressions to be a stand-alone or exogenous variable, separable from more general societal attitudes.  There were various male desires to oppress women, which took a mix of legal and non-legal forms.  Asking how bad the "government-only" restrictions were is an odd division of the problem, since the governmental and non-governmental restrictions were an integrated package which worked together in non-linear fashion.)

Every negative liberty theorist is a positive liberty theorist in disguise and this comes out once they start citing degress of outrage, degrees of harm, degrees of coercion, and the like.

I suppose my views are close to those of Will.  I also largely agree with Dave Schmidtz and Jason Brennan in their symposium at Cato UnBound.

Who are the best economists without a Nobel Prize?

Bob T., a loyal MR reader, asks:

Who are the best economists who did not win the Nobel Prize since its inception until today, e.g., Alchian, Tullock, Tiebout(?), and Barro?

I'll add Albert Hirschman and Anthony Downs to that list.  Who else?  Kevin Murphy is a tremendous economist, qua economist, although he doesn't fit the traditional Nobel mold.

Why do colleges care about extracurricular activities?

Bryan Caplan asks:

Colleges care about applicants' extracurricular activities.  Employers don't.  What's going on?  I'm tempted to just repeat my adage that, "Non-profits are crazy," but even non-profit employers don't seem very concerned about how you spend your spare time. 


I'll take the bait.  Colleges want to expand the heterogeneity of the selection criteria so they can pick who they want.  If it's a top college or university, mostly this means limiting the number of Asians and maximizing the number of future donors and by the way those two goals tend to move in tandem.  Other than legacy admissions, I wonder what other features of applications predict future donations?  Might extra-curricular activities be one candidate here?

Real theories of the financial crisis

I don't agree with the emphasis on energy bottlenecks (although in the author's defense read this new paper), but there is much of interest in this rumination:

I was working backwards above but the whole crisis makes perfect sense if you start with lack of high ROE investment opportunities in the world as a whole, with local markets struggling to incorporate this information appropriately. To institutional investors, ranging from pension funds to insurance companies, fixed income investments appear disproportionately attractive in this environment, driving long-term interest rates low. Consequently, mortgage rates drop, making equity investment in housing attractive for homeowners. Even in the absence of a well-functional mortgage market (common in other countries that also had a significant housing boom) equity investment in housing appears to have the characteristics of a fixed-income investment, which again appears attractive in the absence of high ROE investments elsewhere. All of this boosts housing prices significantly above cost, which creates apparent arbitrage opportunities for the homebuilding industry and related industries (mortgage, finance, materials, machinery, etc). This temporarily cushions the blow to the economy of not having high ROE investment opportunities, by becoming the high ROE investment opportunity itself. But since the demand for housing is driven by miscalculation to start with (lower long-term interest rates driven by lower expected economic growth should not lead to an increase in real estate prices, except to the extent that the underlying real estate itself represents a bottleneck to growth), those high ROE investment opportunities turn out to have been illusory and cause significant losses for whoever in the supply chain is stuck with the excess inventory. The growth in supply of housing uncovers the illusion and the resulting price volatility causes a credit crisis and a severe economic downturn, as the economy faces both the temporary shock of price volatility and the long term shock of lack of high ROE investment opportunities.

And what explains the lack of high ROE investment opportunities in the first place? There are many places to look, but the biggest is the supply bottleneck in energy. While the growth in information technology has been impressive, as is the consequent potential for increase in productivity, none of this can increase return on capital against the backdrop of energy supply bottleneck. This is hard to explain, though my posts in the following thread effectively discuss the logic behind why energy scarcity will lead to low long term interest rates and low growth, not high energy prices:…regime-397397/

I don't know who wrote that, but I thank a loyal MR reader for pointing it out to me.  Here is related data on MPK.