Month: December 2015

Zuist arbitrage culture that is Iceland and Sumerian too

Icelanders opposed to the state funding of religion have flocked to register as Zuists, a movement that worships ancient Sumerian gods and – perhaps more importantly – promises its followers a tax rebate.

More than 3,100 people – almost 1% of Iceland’s population – have joined the Zuist movement in the past two weeks in protest at paying part of their taxes to the state church and other religious bodies. Followers of Zuism will be refunded the tax element earmarked for religion.

Icelanders are required to register their religion with the state, with almost three-quarters of the population affiliated to the established Evangelical Lutheran Church of Iceland. There are more than 40 other registered religious bodies that qualify for “parish fees” paid through the taxation system. The amount set in next year’s budget is the equivalent of about $80 (£53) per taxpayer over a year.

“There is no opt-out. Those who are unaffiliated or belong to unregistered religions effectively just pay higher taxes,” said Sveinn Thorhallsson, a Zuist spokesperson. An opinion poll published in September showed 55% of respondents want an end to the system.

According to the article, some of the participants are starting to show interest in the religion.  Hmm…

What is the main question in American monetary policy today?

It is not “given that U.S. inflation is so low, how can anyone sane oppose further monetary expansion?”

It is instead a blurred mix of “is Hélène Rey right about the global reach of the Fed?“, “would further U.S. monetary expansion make that global reach better or worse?”, “are the rate hike fears in the corporate bond market a reason to continue or postpone rate hikes?“, and “how strong will the dollar get, and how much of a problem will that be, if the U.S. and EU continue to diverge in their recoveries and monetary policies?“.

If you consider those issues, all of a sudden we have a fruitful debate, and I would say a debate with few clear answers.

The ECB, I agree, should simply be pushing for a looser monetary policy.  How can anyone sane oppose monetary expansion there?

My apologies that many of those above links are FT or NYT-gated, but those are often the best sources…

Tuesday assorted links

Why medical progress is difficult

Here is part of the abstract of a new NBER paper from Gisela Hostenkamp and Frank R. Lichtenberg:

We use Danish diabetes registry and health insurance data to analyze the extent, consequences, and determinants of under-use and overuse of oral anti-diabetic drugs.

Less than half of patients consume the appropriate amount of medication–between 90% and 110% of the amount prescribed by their doctors.

The life expectancy of patients consuming the appropriate amount is 2.5 years greater than that of patients consuming less than 70% of the prescribed amount, and 3.2 years greater than that of patients consuming more than 130% of the prescribed amount, controlling for time since diagnosis, insulin dependence, comorbidities, age, gender and education. Patients consuming the appropriate amount are also less likely to be hospitalized than under- or over-users.

And of course that is from Denmark, which is supposed to be a culture with relatively strong norms of conscientiousness.

What makes geeks tick? A study of Stack Overflow careers

That is the job market paper from Lei Xu, at McGill University, co-authored with Nian and Cabral at NYU’s Stern School.  Here is the abstract:

Many online platforms such as Yahoo! Answers and GitHub rely on users to voluntarily provide content. What motivates users to contribute content for free however is not well understood. In this paper, we use a revealed preference approach to show that career concerns play an important role in user contributions to Stack Overflow, the largest online Q&A community. We investigate how activities that can enhance a user’s reputation vary before and after the user finds a new job. We contrast this with activities that do not help in enhancing a user’s reputation. After finding a new job, users contribute 25% less in reputation-generating activity on Stack Overflow. By contrast, they reduce their non-reputation-generating activity by only 8% after finding a new job. These findings suggest that users contribute to Stack Overflow in part because they perceive this as a way to improve future employment prospects. We provide direct evidence against alternative explanations such as integer constraints, skills mismatch, and dynamic selection effects. The results also suggest that, beyond altruism, career concerns play an important role in explaining voluntary contributions on Stack Overflow.

I think of this as yet another paper on how reputation can (sometimes, not always) enable the private production of public goods.

The economics of research, looking forward

Chris Blattman writes:

I joke with my graduate students they need to get as many technical skills as possible as PhD students because the moment they graduate it’s a slow decline into obsolescence. And of course by “joke” I mean “cry on the inside because it’s true”.

Take experiments. Every year the technical bar gets raised. Some days my field feels like an arms race to make each experiment more thorough and technically impressive, with more and more attention to formal theories, structural models, pre-analysis plans, and (most recently) multiple hypothesis testing. The list goes on. In part we push because want to do better work. Plus, how else to get published in the best places and earn the respect of your peers?

It seems to me that all of this is pushing social scientists to produce better quality experiments and more accurate answers. But it’s also raising the size and cost and time of any one experiment.

This should lead to fewer, better experiments. Good, right? I’m not sure. Fewer studies is a problem if you think that the generalizabilty of any one experiment is very small. What you want is many experiments in many places and people, which help triangulate an answer.

The entire post is of interest, and that of course is also probably the biggest problem with RCTs as they are practiced in economics, namely they lead to a greater centralization of knowledge generation and validation.  Chris also cites this new and very important piece by Alwyn Young (pdf).  You can’t always believe what you read, as my grandmother used to say.

China fact (estimate) of the day

The China Medical Doctors’ Association recently found that 13 per cent of doctors surveyed had been physically attacked in the past year.

The FT article by Andrew Ward and Patti Waldmeir is interesting throughout, here is another bit:

Doctors are paid on average one-fifth the amount received by their counterparts in Europe and are required to see up to 150 patients a day.

Overall the Chinese health care system is considered to be extremely corrupt.

What I’ve been reading, and not reading

1. Michael Denning, Noise Uprising: The Audiopolitics of a World Musical Revolution.  How recording began to revolutionize “world music” in the 1920s, a bit scattershot but still an interesting conceptual book about the history of music.

2. Mary Beard, SPQR: A History of Ancient Rome.  I have only browsed this one, but it does appear to be one of the best and most readable overall histories of Rome.  I’m keeping it in the basement and someday I’ll go back to it.

3. Peter Turchin, Ultra Society: how 10,000 years of war made humans the greatest cooperators on earth: “The central idea of this book is that it was competition between groups, usually taking the form of warfare, that transformed humanity from small-scale foraging bands and farming villages into huge societies with elaborate governance institutions and complex and highly productive economic life.”  Basically true, in my view,and this book argues for that position persuasively.

4. Karthik Ramanna, Political Standards: Corporate Interest, Ideology, and Leadership in the Shaping of Accounting Rules for the Market Economy.  Here is one opening summary bit: “With the financialization of the U.S. economy, particularly since the 1990s, we see a growing impact of investment banks and asset-management firms in accounting rule-making.  These groups are more likely to propose rules that accelerate financial-statement recognition of anticipated economic gains — that is, fair-value accounting rules.  Under certain circumstances, this can result in higher compensation to executives in these firms.”  Most generally, the amount of lobbying over accounting rules seems to be increasing.  Here is an NYT Op-Ed by Ramanna.  Underdiscussed topics, I have only pawed through this one but it appears to be wel-informed.

Claire Adida, David Laitin, and Marie-Anne Valfort respond to my review

This is in the comments section at MR, in my view an authorial response to a negative review should not be buried, so here it is:

Dear Tyler,

Thank you for taking the time to read our book and blog about it. We take your review and critique seriously, and understand that our title – which generalizes beyond France to “Christian-heritage societies” – might appear to some as a bit of a reach.

Nonetheless, we have two responses to your review. First, any frank discussion of external validity should, in our mind, address the reasons why the scope might be limited. As we explain in Parts I and II of our book, our challenge was to identify whether we could say anything at all about Muslim integration. Our belief is that work to date cannot, because it confounds discrimination due to religion with discrimination due to region-of-origin. Our book’s primary contribution is to isolate the religious factor. To do so, we had to study a specific group of immigrants who hail from the same country, who migrated at the same time and in the same way, and who differ only in their religious membership. None of the examples you cite – Pakistanis or Bosnians in America – offer such a counterfactual. We therefore cannot evaluate how well those groups have integrated due to, or in spite of, their religious membership.

Second, your critique of our efforts at generalizability ignores our analysis of the European Social Survey, a representative sample of respondents in 17 Western European countries; this analysis corroborates our claim that there is a Muslim disadvantage to integration in Christian-heritage societies. Finally, your focus on a single indicator in the Detroit Arab-American Study – “Proud to be an American” – ignores the relevant point we have tried to make, which is that on a number of different measures and in a number of different contexts, the pattern consistently points toward the same direction: that Muslim immigrants, relative to comparable Christian immigrants, integrate less, and that this situation does not improve over time. It is this pattern, not any single difference on any single indicator, that we find disconcerting.

Thank you, again, for your thoughts and consideration. Best, Claire Adida, David Laitin and Marie-Anne Valfort

My initial review of their book on Muslim integration in Christian heritage societies was here.

How did China’s Cultural Revolution affect adolescent outcomes for the rusticated?

Yes, I thought this year it was time to search the job market candidates at National University of Singapore.  I ran across some fascinating work by Huihua Xie:

Does a difficult environment in early life shape people’s core beliefs and values? We examine the long-term impact of the send-down movement during China’s Cultural Revolution, when urban educated youths were forced out of cities to work and live in undesirable rural areas. The mandatory policy applied to urban youth who graduated from junior or senior high school between 1966 and 1976. We identify the send-down effect by regression discontinuity, comparing individuals who graduated just before and just after the implementation of the policy. Using individual-level survey data, we find that rusticated individuals value family and relationships more highly, are less likely to believe in luck as the most important factor for success, and support social equality more strongly.

The paper, with Jie Gong and Yi Lu, is here, under resubmission at the JPE.  She also has an interesting paper on how being rusticated during the Cultural Revolution led to later problems with chronic illness and mental health.  Yet another paper considers whether and how the education of your sibling can make you better off or worse off, using regression discontinuity methods.

Europe pollution fact of the day

Europe’s air is less corrosive than it once was, and much less foul than China’s or India’s. Industrial decline and clean-air policies since the 1950s have brought levels of many pollutants, such as sulphur dioxide, fine particulate matter (a dust that can irritate lungs), and nitrogen oxides down over the past few decades. Yet more than 400,000 Europeans still die prematurely each year because of air pollution, according to the European Environmental Agency. In 2010 the health-related costs were thought to be between €330 billion ($437 billion) and €940 billion, or 3%-7% of GDP.

Nine out of ten European city-dwellers are exposed to pollution in excess of guidelines produced by the World Health Organisation (WHO). Some of the highest levels of nitrogen dioxide are found in London; several cities in Turkey are choked with high levels of PM10 (particulate matter of at most 10-micron diameter). But some of the worst pollution is in Eastern Europe (see map). Coal-fired power stations are still common there, and some pollutants blow in from the rest of Europe. The commission is prosecuting 18 governments for infringing pollution limits.

Researchers at King’s College London have found that a child born in London in 2010 can expect to have his life cut short by nine months as a result of breathing its high levels of PM2.5—the very finest particulate matter—if pollution levels do not change.

That article excerpt is from The Economist.

A guaranteed annual income for Finland?

The Finnish government is currently drawing up plans to introduce a national basic income. A final proposal won’t be presented until November 2016, but if all goes to schedule, Finland will scrap all existing benefits and instead hand out 800 euros per month—to everyone.

It sounds far-fetched, but it’s looking likely that Finland will carry through with the idea. Whereas several Dutch cities will introduce basic income next year and Switzerland is holding a referendum on the subject, there is strongest political and public support for the idea in Finland.

A poll commissioned by the government agency planning the proposal, the Finnish Social Insurance Institution or KELA, showed that 69% support (link in Finnish) a basic income plan. Prime minister Juha Sipilä is in favor of the idea and he’s backed by most of the major political parties.

There is more here, by Olivia Goldhill, via Matt Yglesias.