Month: November 2012

Sentences to ponder

Fewer children in the United States grow up with both biological parents than in any other affluent country for which data are available.

Here is another bit:

Genuine progress probably hinges on poor or less-educated women delaying childbirth. Eventually, this will happen; the teen birthrate has already been dropping for nearly two decades, albeit slowly. For its part, Washington (or any other government) has only limited tools to speed it up.

That is from Lane Kenworthy, from his article on why opportunity has slowed down in the United States, hat tip Brad DeLong.

Worthy of further investigation — what were tax rates in the 1960s?

From Christopher Balding:

The data itself tells an entirely different story from the idealized 91% tax rate.  According to Internal Revenue Service data, presented below on a graph, from 1966 to 1970 the effective tax rate of an average tax payer in the top 1% was 30.85%.  Throughout the time period in question, the effective tax rate of the average top 1% never exceeded 35%.

You will note that is “tax rate,” not “marginal tax rate.”  There is income shifting, and also deductions, but also important is the sheer fact of greater income equality.  Most income was not in the highest of tax brackets, nor was there — even for most of the relatively wealthy — a plausible way of getting very high up into those brackets.  (I thank Balding for some useful discussion over email, without holding him to any particular version of this interpretation.)  Here is an early MR post about how sometimes average tax rates matter more than (reported) marginal rates.

For later periods of time, here are some good tax visuals from the NYT.

The truly important news

Forget post-election dissection and the fiscal cliff, here is the stunner:

The U.S. birthrate plunged last year to a record low, with the decline being led by immigrant women hit hard by the recession, according to a study released Thursday by the Pew Research Center.

The overall birthrate decreased by 8 percent between 2007 and 2010, with a much bigger drop of 14 percent among foreign-born women. The overall birthrate is at its lowest since 1920, the earliest year with reliable records. The 2011 figures don’t have breakdowns for immigrants yet, but the preliminary findings indicate that they will follow the same trend.

That’s the real fiscal cliff.  Yet The Washington Post reports that its most popular article today is “Starbucks’ new $7 coffee is its priciest ever.

*Bad Pharma*, by Ben Goldacre

Here is a simple sentence from Frank Lichtenberg, an economist who studies pharmaceuticals and a highly reputable researcher in the area:

This implies that the incremental cost-effectiveness ratio (cost per life-year gained) of pharmaceutical innovation was about $12,900.

Read the whole paper, and if you wish to go further, you can peruse his entire body of work.

I am thus a little nervous when Ben Goldacre entitles his recent book Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients.  (I have a UK copy, and it is due out in the U.S. this February.)  I do in fact agree with Goldacre’s portrait of a sector wracked with massive corruption and shoddy scientific standards.  And I see many aspects of this book as deserving an “A” or “A+” rating, which I would not hand out lightly.  But I won’t continue down that track, because I suspect the book will receive many very positive reviews, as indeed it did in the UK.

Could he not have called the book Not Nearly as Good as it Could be Pharma: How Corruption is Diminishing One of Our Great Benefactors?  Admittedly that does not roll off the tongue as nicely.

Or how about Slow Pharma: How to Get the New Drug Pipeline Up and Running Again?

Goldacre’s policy recommendations would in general raise the costs of research and development, although they would  likely improve the accuracy of research results and reduce over-prescription and overuse of drugs.  It is quite possible they would lower the rate of return to pharmaceutical innovation, likely I would say.  These trade-offs are neglected, and, much as I admire many features of this book, I cannot help but, alas with trepidation, call some of its central features “Bad Science.”  Bad Economic Science.  The morality of the narrative and the Platonism of his vision distracts him from presenting the policy trade-offs clearly.

Lichtenberg’s name does not appear in Goldacre’s index.  Nor does the word “innovation.”

Recommended, with or without prescription, but use with extreme caution.  And you should “compound” this with other books.

Addendum: I bought this book myself, which included Amazon shipping charges from the UK, and was not sent a free sample or visited by an attractive sales representative.

Second Addendum: There is some back and forth between Goldacre and me in the comments section.

The Autism Advantage

That is a new and excellent feature story by Gareth Cook.  Much of the article concerns Specialisterne, a Danish company which specializes in hiring autistic individuals to perform technical tasks.  Here is the part concerning my work:

Tyler Cowen, an economist at George Mason University (and a regular contributor to The Times), published a much-discussed paper last year that addressed the ways that autistic workers are being drawn into the modern economy. The autistic worker, Cowen wrote, has an unusually wide variation in his or her skills, with higher highs and lower lows. Yet today, he argued, it is increasingly a worker’s greatest skill, not his average skill level, that matters. As capitalism has grown more adept at disaggregating tasks, workers can focus on what they do best, and managers are challenged to make room for brilliant, if difficult, outliers. This march toward greater specialization, combined with the pressing need for expertise in science, technology, engineering and mathematics, so-called STEM workers, suggests that the prospects for autistic workers will be on the rise in the coming decades. If the market can forgive people’s weaknesses, then they will rise to the level of their natural gifts.

The link to my paper is here.

The Washington Wizards are the deflationary sector

“It’s very driven by who the visiting team is,” he said. “For example, tonight, you can get into the [Wizards/Blazers] game for $1.69, but to get into the Heat game on Dec. 4 is $26, so it’s definitely matchup driven. When you have teams that are poor — and I am certain that the Wizards qualify — you see the bottom drop out.”

Yet, while the Wizards’ thrifty prices may not be uncommon, how fast they became so thrifty is.

“What’s rarer about this instance that it’s happening 12 games into the season,” Lehrman said. “Normally, you see this level of apathy take place in the middle of the season when you’re 40 games in and there’s not gonna be a playoff chase. You don’t normally see the fans quit on their team so quickly.

The story is here, and the Wizards were 0-12 to start the year.  Here is further information about their quality.

They won their first game last night, which perhaps will bring the expectation of higher prices and thus stimulate demand.

Sentences about wine and petrol

…the enjoyment of petrol notes is becoming more mainstream. But since it’s still off-putting to novice drinkers, many winemakers have moved to downplay the word petrol. You rarely see it on labels, for instance. The German Wine Institute has omitted mention of petrol in its German-language version of the official Wine Aroma Wheel.

Some winemakers, in some cases, have even declared petrol a defect. Famed winemakers like Olivier Humbrecht, of Zind-Humbrect in Alsace, and Michel Chapoutier (the famed Rhone producer who now makes wine in Alsace) have declared within the past couple years that young rieslings should never smell of petrol.

Here is more, and the article discusses other tastes too, courtesy of The Browser.  What again is that famous quotation from Apocalypse Now?  Which wines did the guy drink?

New York City fact of the day

New York City passed a day without a single report of a person being shot, stabbed or subject to other sorts of violent crime for the first time in recent memory, police said today.

The rare day occurred on Monday, near the end of a year when the city’s murder rate is on target to hit its lowest point since 1960, according to New York Police Department chief spokesman Paul Browne.

Mr Browne said it was “first time in memory” the city’s police force had experienced such a peaceful day.

While crime is up 3 per cent overall, including a 9 per cent surge in grand larceny police attribute to a rash of smart phone thefts, murder is down 23 percent over last year, the NYPD said.

The story is here.

What the Swiss will do with garage-like boxes

 Zurich council has approved a plan to build the boxes, which will, it hopes, provide a discreet location for prostitutes and their clients to conduct business when they open in August next year.

Located in an industrial area of the city, the row of garage-like boxes will have roofs and walls for privacy, and easy access for cars. The council estimates that around 30 prostitutes will meet clients at the site of the boxes, and use the drive-in slots on a first-come-first-served basis.

“The big difference is that until now prostitution has been in the public space,” Michael Herzig, from Zurich’s social welfare department, told Swiss Radio. “Now we are going to change this, move it from the street to a private space in an old industrial area, which belongs to the city. This gives us the possibility to define the rules of prostitution in this area.”

The opening of the sex boxes will coincide with a major reform of prostitution laws in the Swiss city. Prostitution will be outlawed in certain areas of Zurich where it has taken grip, and led to local complaints about women being harassed on the streets and the activities of pimps.

The prostitutes who use the sex boxes will also have to take out medical insurance and buy a £26 licence in order to ply their trade. On top of that they will also have to feed five Swiss francs, about £3.30, into a roadside ticket machine each night when they clock on.

The story is here, and I thank a loyal MR reader for the pointer.

The North Korean productivity miracle

…brewing remains just about the only useful activity at which North Korea beats the South. The North’s Taedonggang Beer, made with equipment imported from Britain, tastes surprisingly good.

That is from The Economist, I cannot confirm this judgment.  Furthermore there is no North Korean great stagnation:

Talking to CNN, a South Korea government official showed the apparently innocent objects that the killer was planning to use to kill Park Sang-hak on the streets of Seoul. Two of them were pens, which apparently are standard issue among North Korean secret agents. The first kills on contact, injecting quickly a poison that paralyzes the victim and kills it within seconds. The second one fires one single bullet, a tiny projectile which is also filled with a killing venom.

But those two were well known by the South Korean’s intelligence agency. The third weapon, however, is completely new to them: a flashlight that has three holes. Each hole is actually gun barrel, which gets activated with the push of a button. One click and boom, you are dead.

The article, with photos, is here. And North Korea may soon be launching long-range missiles.

For the pointer on the first item I thank Nick Slepko.

Assorted links

1. The net price myth will not save the sustainability of higher education.

2. Purely defensive technological innovation, for cows.

3. Chris Blattman’s African development exam.

4. Will the “buy a home, get a visa” idea spread?

5. Mistakes people make in buying Christmas gifts, by Cass Sunstein.  And good summary of what the Greek deal consists of.

6. Fun but somewhat off story on Krugman and Germany, too many overgeneralizations about German psychology, caveat emptor.

“The Myth of American Meritocracy: How corrupt are Ivy League admissions?”

There is a new and stimulating piece by Ron Unz, in The American Conservative.  The article covers plenty of ground, but I took away two main points.  The first is that there is massive and quite unjustified bias against Asian and Asian-American students in the U.S. admissions process.  Yes, I already thought that but it turns out it is much worse than I had thought.  Yet many people support this aspect of our current admissions systems, either directly or indirectly.

The second point is the claim that Jewish academic achievement in America is collapsing at the top end, in relative terms at least.

For reasons which are possibly irrational on my end, but perhaps not totally irrational, I am not entirely comfortable with the religious and ethnic and racial “counting” methods applied in this piece (blame me for mood affiliation if you wish).  Still, it is an interesting read and after some internal debate I thought I would pass it along, albeit with caveats.

In any case, the link to the article is here.