Month: January 2011

*FIxing the Sky: The Checkered History of Weather and Climate Control*

For centuries, farmers in Austria shot consecrated guns at storms in attempts to dispel them.  Some guns were loaded with nails, ostensibly to kill the witches riding in the clouds; others were fired with powder alone through open empty barrels to make a great noise — perhaps, some said, to disrupt the electrical balance of the storm.  In 1896, Albert Stiger, a vine rower in southeastern Austria and burgomaster of Windisch-Feistritz, revived the ancient tradition of hagelschiessen (hail shooting)  — basically declaring "war on the clouds" by firing cannon when storms threatened.  Faced with mounting losses from summer hailstorms that threatened his grapes, he attempted to disrupt, with mortar fire, the "calm before the storm," or what he observed as a strange stillness in the air moments before the onset of heavy summer precipitation.

That is from the new and quite good book by James Rodger Fleming.  If you are wondering, Windisch-Feistritz is now in Slovenia and it is known as Slovenska BistricaIt looks like this.

Sex and Statistics or Heteroscedasticity is Hot

Ok Trends has another great post combining statistics, sex and even a little "game theory" (read that in whichever sense you prefer). The statisticians at OK Trends discovered that the number of messages a women receives varies widely even after conditioning on the women's attractiveness rating. Why do some 7's receive far more messages than other 7's? It turns out that it's much better to receive some 10's and some 1's than all 7's. Or as OK Trends beautifully expresses it:

http://cdn.okccdn.com/blog/math_of_beauty/Paradox.png

A lot of this can be explained by a non-linear function of messages to attractiveness; that is if 2 men rate three women, A,B,C, as A:{0,10}, B:{5,5} and C:{10, 0} it's not that surprising that A and C each receive one message and B receives none.

But OK Trends argue that more is going on. In a regression of messages on number of rankings in each category (1 being lowest, 5 being highest) they find, not surprisingly, that more high rankings increase messages but also that more low rankings increase messages. That is they find that a ranking of {0,10} can be better than a ranking of {6,10}.  Ok Trends hypothesize the following explanation:

Suppose you're a man who's really into someone. If you suspect other men are uninterested, it means less competition. You therefore have an added incentive to send a message.

I have my doubts. Rather I think there are certain types of beauty that greatly attract some men but repel others. Analagously, some people will pay hundreds of dollars for an ounce of caviar that other people won't eat for free. The reason some people love caviar, however, is not that other people dislike it. Instead, it just so happens, that the thing that some people love is the very thing that repels others. We see the same phenomena in art, some people love John Cage, other people would rather listen to nothing at all. 😉

Now if we mix in this kind of beauty–beauty over which there are violent disagreements–with the kind that most people do agree upon (think Haagan-Dazs vanilla ice cream) then I suspect that it will appear that lower rankings increase messages. But what is really going on is that high rankings–conditional on their also being many low rankings–actually signal an extra strong attraction. Someone who tells you that John Cage is their favorite composer is telling you more than someone who says Aaron Copland is their favorite composer.

Note that even if rankings were not public this theory would predict that the same women would receive more messages than their (non-public) rankings would suggest. 

Which ever explanation holds, some advice follows: In the marriage market what you want is not so much to increase your attractiveness to the average person but rather to the one person who will  cherish your unique features. Thus–conditional on attracting a decent number of suitors from a reasonable pool etc.–what you want to do is accentuate your unique features even if doing so reduces your average ranking. In short, heteroscedasticity makes you hot.

FYI, OK Trends will analyze women's reactions to men in a future post.

New paper on gene-environment interaction

The authors include Eric Turkheimer and the abstract is here (link to paper requires a university connection I believe):

Recent research in behavioral genetics has found evidence for a Gene × Environment interaction on cognitive ability: Individual differences in cognitive ability among children raised in socioeconomically advantaged homes are primarily due to genes, whereas environmental factors are more influential for children from disadvantaged homes. We investigated the developmental origins of this interaction in a sample of 750 pairs of twins measured on the Bayley Short Form test of infant mental ability, once at age 10 months and again at age 2 years. A Gene × Environment interaction was evident on the longitudinal change in mental ability over the study period. At age 10 months, genes accounted for negligible variation in mental ability across all levels of socioeconomic status (SES). However, genetic influences emerged over the course of development, with larger genetic influences emerging for infants raised in higher-SES homes. At age 2 years, genes accounted for nearly 50% of the variation in mental ability of children raised in high-SES homes, but genes continued to account for negligible variation in mental ability of children raised in low-SES homes.

I found this to be an important paper.  One lesson is further confirmation that environment matters more for people in less fortunate circumstances (oddly, Progressive "dream policies" would bring about a world where genes matter much more at the margin than they do today).  A second lesson is how early "early intervention" has to be for potency, two years and under and that is assuming the procedures work in the first place.  The authors criticize Heckman but they do not follow up with much explanation.

For the pointer to the paper I thank Michelle Dawson.  Via Bryan Caplan, here are other papers by Turkheimer.

Facts about European banks

“A large part of the Greek debt is hidden on the balance sheets of the Greek banks,” said Theodore Pelagidis, an economist at the University of Piraeus and the co-author of “Understanding the Crisis in Greece,” a scathing account of Greece’s economic implosion. “So you cannot just say ‘Let’s restructure.’ It is not so easy.”

Goldman estimates that requiring a lender to give up 40 percent on holdings of Greek sovereign debt would result in a loss of 5.3 billion euros for the National Bank of Greece, the country’s largest bank. While that bank, which is in the process of raising fresh cash, probably has the capital to survive such a loss, Greece’s other banks may not be so lucky.

As for Portugal, its domestic debt burden is divided more proportionally among foreign and domestic banks, compared with Greece. Still, two out of the three largest holders of its debt are Portuguese, Caixa Geral de DepĂłsitos and Banco BPI, with 11 billion euros combined.

The No. 2 holder, behind Caixa Geral de DepĂłsitos, is the Spanish giant, Santander, according to Goldman, with 4.9 billion euros.

The article is here.  The problem, of course, is this: if the government stops payment on some of the debt, they then will have to bail out their domestic banks.

Economics and Michel Foucault

Joshua Miller, a loyal MR reader, asks:

Another cut on local knowledge: what is economics' relationship to Michel Foucault? Often I see folks like you and Hanson making points that the rest of the social sciences and humanities would call Foucauldian, about the role of disciplinary power in knowledge-production, but you don't seem to ever reference or perhaps even read him. Perhaps he is simply not considered very interesting? Given the fact that there is some history of economics in his "Les Mots and les choses," I'd think there'd be more of an attempt to discredit or claim him.

Foucault is interesting, but use him with caution.  Most of his books have not held up very well as history, even if he succeeded in drawing people's attention to some neglected factors.  On top of that, his theoretical framework is incoherent.  Try reading The Archaeology of Knowledge.  I find The Order of Things to be an insightful but skewed account of the seventeenth century; detailed objections aside, it goes astray by assuming, implicitly, explicitly or otherwise, that structural categories somehow interact with each other in the world of ideas.  It's much more micro and disaggregated than he lets on, but still I am glad I read the book.  This volume is a good, readable introduction to his work.

Perhaps Foucault is best on prisons and hospitals, though again caveat emptor on the history.  His most valuable insight, both theoretically and historically, is that what appears to be "enlightenment" (or for that matter "Enlightenment") is often anything but.

Foucault is important, and he deserves to be read, but I am not sure he will be much read fifty years from now.  I also view "engaging with him" as a much overdone and much overrated exercise, carried in large part by the less salubrious tendencies in Continental and U.S. humanities scholarly discourse.  It is better to simply work on the topics he cared about, using his books as a reminder to consider some different angles.

Did you know that Foucault — at least the late Foucault — appreciated Mises, Hayek, and Friedman?

*Progress for the Poor*

That is the new, "Kindle singles-length" book by Lane Kenworthy, who writes the blog Consider the Evidence.  It is about how the poor are making, or not making, progress, and also how the poor could make better progress.  I especially liked the chapter on how the quality of government expenditure can help alleviate the consequences of poverty.  It is due out in 2011, from Oxford University Press, so why are there still no links for the book, Amazon or otherwise?  In any case, recommended.

Here is a related paper.  Here is Kenworthy on Bill Simmons.

The 19th century was truly bad for Mexico and for Mexicans

From an international perspective, Mexicans' height in the mid-eighteenth century was "not too short"…The declining trend over the second half of the eighteenth century was nothin exceptional in international perspective either.  The early nineteenth century, however, was a watershed as the trends diverged: height recovered or stagnated in France, Spain, and other countries, but it continued to decline in Mexico: by the 1830s, Mexicans had finally become "too short."  …I have proposed that population growth, and more frequent El Niño events, and real grain prices reduced the availability of food and had a likely detrimental effect on living standards.

That is from an essay by Amílcar ChallĂș, from the new and excellent book Living Standards in Latin American History: Height, Welfare, and Development, 1750-2000, edited by Ricardo D. Salvadore, John H. Coatsworth, and Amílcar ChallĂș.

An Economist among the Bounty Hunters

Andrew Luster had it all: a multimillion-dollar trust fund, good looks, and a bachelor pad just off the beach in Mussel Shoals, California. Luster, the great-grandson of cosmetics legend Max Factor, spent his days surfing and his nights cruising the clubs. His life would have been sad but unremarkable if he had not had a fetish for sex with unconscious women. When one woman alleged rape, Luster claimed mutual consent, but the videotapes the police discovered when they searched his home told a different story. Eventually, more than 10 women came forward, and he was convicted of 20 counts of rape and sentenced to 124 years in prison. There was only one problem. Luster could not be found….

That is the opening to my piece, The Bounty Hunter's Pursuit of Justice, in the latest issue of The Wilson Quarterly. I discuss bounty hunters, the bail bond industry and my own adventures bounty hunting in Baltimore.

The minimum wage in China

Minimum Wage Impacts in China: Estimates from a Prespecified Research Design, 2000-2007

Jing Wang & Morley Gunderson
Contemporary Economic Policy, forthcoming

Abstract:
We use a prespecified research design to estimate the employment effect of minimum wages in China over the period 2000 to 2007. Our results are consistent with theoretical expectations and institutional realities of Chinese labor markets. These include: negative employment effects in slower growing regions; larger negative effects in non-state-owned organizations that tend to be more responsive to market pressures; much larger lagged effects reflecting the time needed for adjustments to occur; no adverse employment effects in the prosperous and growing Eastern region; and a positive employment effect in state-owned enterprises in the East – consistent with monopsonistic behavior.

That is from National Affairs.

The Doctor Might See You Now

That's the title of a new paper by Craig Garthwaite of Northwestern.  The abstract is this:

In the United States, public health insurance programs cover over 90 million individuals. Changes in the scope of these programs potentially can have large effects on physician behavior. This study finds that following the implementation of the State Children’s Health Insurance program, physicians decreased the number of hours spent with patients, but increased participation in the expanded program. Suggestive evidence is found that this decrease in hours was achieved through shorter office visits. These results are consistent with the predictions from a mixed economy model and provide evidence of the potential effects of recently passed public insurance expansions.

In other words, whether you favor ACA or not, the supply side constraints are starting to bite.