Month: July 2013

Sri Lanka notes

If you go to cross the street, cars actually will stop for you.

It’s a lovely country to visit.  It is exotic, quite safe (these days), and it’s much cleaner than I had been expecting.  Both of my guidebooks claim the food is mediocre, but you can find excellent Sri Lankan dishes by going to small restaurants and paying less than a dollar (the actual restaurant scene does seem underdeveloped, though the places in the Cinnamon Grand are quite good).  Just look for places where everyone is eating with their hands.

Order any vegetarian dish with cashews or a cashew sauce.

The place feels like an odd mix of Thailand and, of all places, Curacao.  The old capital, Kandy, is vaguely reminiscent of Nara, Japan in its overall presentation and its feel of Buddhist classicism.

Interior design seems to be their area of greatest accomplishment.  The relevant sites are numerous but spread out.

The literacy rate is about 92%.  A visit to Sri Lanka will increase your opinion of “water transport” theories of high social indicators.

Here is an update on where ethnic tensions stand.

The Chinese are trying to buy them off with infrastructure, most of all port facilities.

The coconuts are orange.

I thank Yana for useful conversations related to this post.

Why don’t economists study Haiti more?

Tate Watkins, referring to an old Chris Blattman post, asks me such a question.  One might raise a similar query about Sri Lanka.  In both cases there are some obvious answers, having to do with ease of access and languages and also levels of violence (in the past, if not always today).

But I would like to raise a more general issue and I hope the development economists and social scientists reading this can add their expertise in the comments section.  To what extent is the choice of venue for study due to what I will call “social science infrastructure”?

I don’t mean roads and bridges.  I mean having trained armies of local assistants, data gathering and processing facilities, populations which are used to signing informed consent forms, medical clinics which understand how to work with social scientists and register data, and other less visible assets.  I once visited a Poverty Action Lab evaluation in Hyderabad and it struck me immediately just how much local assistance they needed to get their study of micro-credit off the ground.  As far as I could tell, the local assistance seemed really quite able but of course that cannot be taken for granted in all locales.

It has struck me for a while just how many RCT papers appear to be set in a relatively small number of places in Kenya.  Presumably these parts of Kenya have a very good social science infrastructure.

So what is going on here?  Who can shed light on this?  And to what extent does having a good social science infrastructure correlate with other features which will bias the results of these studies?

What is the implied model behind assortative mating?

In a fascinating new paper by Brant, on IQ, I read the following bit:

…we found that higher-IQ parents actually showed less assortative mating: the difference between parental IQ scores was positively correlated with mean parental IQ score.

My questions are numerous but I will start with two.

First, is this the correct metric for “less” assortative mating?

Second, do “straightforward” models predict such a result as a matter of course?  For instance, higher-IQ individuals may have greater scope to choose mates on the basis of complementary skills.  That may imply higher IQ gaps.  Furthermore higher-IQ individuals may marry later in life, put more effort into choosing, and encounter a wider variety of potential partners.  That may also imply wider gaps in IQ across partners, even if assortative mating (as defined in an all things considered way) remains strong.

Very often there is more variability at the tops of distributions rather than at the bottoms or in the middles.  Yet “pull away” forces may continue to operate.

To present a simple analogy, income gaps between marrying couples are probably higher at the upper end of the distribution than at the lower end.  Yet assortative mating with respect to income still may reenforce income inequality.

Does it matter if Muslim representatives are elected in India?

There is a new paper by Sonia R. Bhalotra, Guilhem Cassan, Irma Clots-Figueras,  and Lakshmi Iyer which says yes it does matter:

This paper investigates whether the religious identity of state legislators in India influences development outcomes, both for citizens of their religious group and for the population as a whole. To allow for politician identity to be correlated with constituency level voter preferences or characteristics that make religion salient, we use quasi-random variation in legislator identity generated by close elections between Muslim and non-Muslim candidates. We find that increasing the political representation of Muslims improves health and education outcomes in the district from which the legislator is elected. We find no evidence of religious favoritism: Muslim children do not benefit more from Muslim political representation than children from other religious groups.

The NBER version is here, there is an ungated pdf here.

Assorted links

1. Kenyan reality TV, which involves niceness and telling people how to run their farms.

2. Chinese food density by NYC neighborhood.

3. How men are spending their money these days, back side first.

4. One Indian court rules that if you have casual sex you are married.  And the price of onions is a political issue there and that is up 112% since 2012.

5. Why do the Chinese hate their own soccer team?

London’s mayor praises Berlin’s means-testing for public offenses

…[Boris] Johnson writes somewhat hyperbolically that Berliners “fornicating in their many magnificent parks” is currently the city’s “most serious public order problem.” But even there, Johnson finds reason to love Berlin: The fines for public sex, after all, are means tested, he notes — meaning that those on welfare don’t have to pay as much should they be caught fornicating in the fresh air.

…the fine for public sex is €150 ($198) while the unemployed are faced with a penalty as low as €34 ($45).

See, Anatole France wasn’t right after all.

The full story is here.

Neologisms and new word uses from the eurocrisis

The Portuguese have a new word, “grandolar,” which grew out of the euro crisis and means “to subject a government minister to a singing protest using a revolutionary hymn.” But now, after three years of austerity, even Portuguese children “grandolate” their parents if they do not want to take a bath.

There are further examples at the NYT link.  Here is one more:

If a Portuguese woman wears a short skirt, she might playfully be asked by an admirer if she is in “austerity,” and saving the rest of the cloth.


Wildcatting is a stripper’s guide to boom towns like Williston, North Dakota. It’s insightful on the principal-agent problem, why natural resources aren’t a geographic blessing even when they aren’t a curse, selection effects and immigration (” I never met a boring stripper in Williston.”) and small town life.

I am thinking of asking my IO students to explain why stripper pay structure changed with the boom:

It took a long time for things to quickly change. First, Whispers started booking four dancers. Then a second club, Heartbreakers, opened right next door, and they didn’t even cap the number of dancers that could work. Not only that, they didn’t pay the dancers — and instead charged them a whopping $120 flat stage fee. Whispers upped their game by going to six dancers at some point in 2011. The last time I got a paycheck from them was in February 2012, and then the owner told me they weren’t going to pay dancers at all anymore.

So starting in 2012, instead of getting paid $250–500 a week, depending on the booking, we paid Whispers $120 a night. Instead of keeping $15 from each dance, dancers kept the whole $20.

Strippers are not immune to the great stagnation:

The American worker has never been so efficient in terms of output over hours worked. At the same time, real wages and benefits have plummeted. Prospects are shitty for college graduates and non-graduates alike. Layoffs and cutbacks in previously solid industries protect the profits of an ever-smaller class at the expense of those who produce value. In stripper terms, here’s what that looks like: Lap dances in many places still start at $20, the same price they were in 1990. Customers expect ever-higher levels of contact and performance skill, meaning strippers work harder to earn the $20 or the dollar stage tip that is worth a lot less than it used to be.

…The one big advantage you have if you’re a stripper, though, is the ability to travel to greener pastures. If you would like to have a job in another town, as long as you look good enough for the club’s standards, you’re hired. So those who can, move. When the level of bullshit is too high or the earnings too low, they the hit the road. Same as the men who wind up traveling to work in the oil fields. If you can make $30,000 more a year driving heavy equipment in North Dakota instead of in Louisiana, and you need that money, you go. Is this the logical progression of a service economy? It looks like migrant labor.

…Mobility giveth and mobility taketh away, and while I was grateful to have the freedom to come to the boomtown, I was even more thankful to have the freedom to leave.

The piece is also of interest when read at the meta level.

How Medicare payments are set

It’s never a bad idea to bring this point up yet again:

Reporters Peter Whoriskey and Dan Keating have opened Post readers’ eyes to the fact that Medicare pays for physician services — a $69.6 billion item in 2012 — according to an arcane and little-known price list, over which doctors themselves exercise considerable and less-than-totally-transparent ­influence.

Known as the Relative Value Update, the process consists of a 31-member committee of the American Medical Association (AMA) recommending what Medicare should pay for some 10,000 procedures — with the fees based in part on how long it takes to complete each one. This time-and-motion study often fails to take full account of changing technology and other factors affecting physician productivity, so anomalies result: For example, Medicare pays for a 15-minute colonoscopy as if it took 75 minutes.

Here is a bit more, here is the longer article.

By the way, there is also this new result:

In one of the study’s notable insights, Dr. [Joseph P.] Newhouse said, “we did not find any relation between the quality of care and spending, in either Medicare or the commercial insurance sector.”

That is from a new study of regional variation in Medicare expenditures.  The study itself is here, and it seems to imply that regional discrepancies in Medicare expenditures cannot be easily rectified by rewarding the more cost-efficient regions.  For one thing, cost variation among providers, within a region, is large, which makes it hard to apply incentives on a regional basis.

Did J.K. Rowling use an economist clue for her pseudonym?

Language Log said yes.  The false name attached to the new book is Robert Galbraith, and here is the cited reason why:

The clue was in the collocations of the surname. The most famous Galbraith in the whole of Rowling’s lifetime, without any reasonable doubt, was John Kenneth Galbraith, the Canadian liberal economist, US diplomat under Kennedy, and professor of economics at Harvard. Initials: J. K. Now that I’ve pointed it out, how could you have missed it? Kick yourself.

Here is more.  But Rowling herself explains it differently:

The name she chose, Ms. Rowling explained, is a mash-up of that of one of her heroes, Robert F. Kennedy, and Ella Galbraith, a fantasy name she chose for herself as a girl.

Ms. Rowling wrote the book under a man’s name, she said, to take her writing persona “as far away as possible” from herself. She said she remembered too late that the American economist John Kenneth Galbraith, who died in 2006, shared her first two initials, and feared that might be a clue to her identity.

Yet it wasn’t.  I was able to pick up one of the last remaining copies of this book in Scotland, last week, as the volume was sitting sadly alone in a corner of an Edinburgh airport bookstore.

For-profit education is better than we thought

From today’s Inside Higher Ed, there is now a revised version (pdf) of the Kevin Lang and Russell Weinstein paper which was very critical of the returns from for-profit education.  The new results are more like this:

The two economists, who were not available for comment, apparently tweaked their methodology and came to a different conclusion about the relative value of credentials earned at for-profits.

“We find no statistically significant differential return to certificates or associates degrees between for-profits and not-for-profits,” they wrote in the paper, which was released last month.

Certificate holders from for-profits tended to fare slightly worse in the job market, according to the study, while associate degrees from for-profits were worth slightly more than those from nonprofit institutions. Hence no clear winner emerged.

The revised paper still included some worrisome findings about for-profits. Those colleges are typically more expensive than their nonprofit counterparts, particularly community colleges. For-profits charged an average of $6,300 more in annual tuition for certificate programs, according to the study’s sample, and $6,900 more per year for associate degrees.

“The return on investment is undoubtedly lower at for-profits,” the paper said.

At least this time around, the real world falls in line (somewhat) with the theory.

Deflation risk

There is a new paper by Matthias Fleckenstein, Francis A. Longstaff, and Hanno Lustig which serves up some very useful data, here is the abstract:

We study the nature of deflation risk by extracting the objective distribution of inflation from the market prices of inflation swaps and options. We find that the market expects inflation to average about 2.5 percent over the next 30 years. Despite this, the market places substantial probability weight on deflation scenarios in which prices decline by more than 10 to 20 percent over extended horizons. We find that the market prices the economic tail risk of deflation very similarly to other types of tail risks such as catastrophic insurance losses. In contrast, inflation tail risk has only a relatively small premium. Deflation risk is also significantly linked to measures of financial tail risk such as swap spreads, corporate credit spreads, and the pricing of super senior tranches. These results indicate that systemic financial risk and deflation risk are closely related.

The NBER link is here.  An ungated SSRN version is here.  Here is a Krugman post on high inflation becoming increasingly rare.

My favorite things Sri Lanka

This is a tough one, and I admit failure in advance, and yes I will call upon the diaspora in this case.  But even that doesn’t much help me.  Here goes:

1. Popular music: M.I.A., with Arular and then Kala being my favorite works by her.

2. Science fiction writer, lived in: Arthur C. Clarke lived there for over fifty years.

3. Author: Michael Ondaatje was born in Sri Lanka, I like but do not love his work.  Two quite recent Sri Lankan novels are Michelle de Kretser, Questions of Travel, and Ru Freeman, On Sal Mal Lane, both noteworthy.

4. Movie, set in: I can’t think of one.  Bridge on the River Kwai was filmed here.

5. Architect: Geoffrey Bawa, some images are here.

Is Lal Jayawardena the most famous Sri Lankan economist?  And I have had excellent Sri Lankan food in Germany, most of all in Berlin.  There is a takeaways Sri Lankan place in Derwood, Maryland, Spice Lanka, which I have yet to try.  When I was much younger, the Sri Lankan chess player Sunil Weeramantry was always very cordial to me.  And my grandmother had a Sri Lankan friend who, when I was a small boy, used to bring us cashews.  I liked him.  I think of the music — perhaps unfairly — as falling into the “raucous, influenced by cinema, good jolly fun but I’m not going to buy it” category, but I would gladly receive your better-informed recommendations in the comments.

Sorry people, I’ll try harder next time.  I don’t follow cricket and I know virtually nothing about cinema here, I hope to learn more.