Month: March 2016

What is the point of replication?

No experiment can ever be replicated so each attempted replication must assume that the things which differ don’t matter. The more and the more important the things that we can plausibly assume don’t matter, the stronger is the original study. Chemistry students have done the same experiments for hundreds of years and that’s useful because we can plausibly assume that who and when the experiment is conducted doesn’t matter. The recent brouhaha between Nosek et al. and Gilbert et al. illustrates a weaker case.

In their critique of Nosek et al., Gilbert et al. say that some of their replications failed because things were different.

An original study that asked Israelis to imagine the consequences of military service was replicated by asking Americans to imagine the consequences of a honeymoon

Now that sounds like two very different studies but Nosek provides important context. The original study in question wasn’t about military service or honeymoons it was about the conditions that promote reconciliation between victims and injurers after an injustice has been committed. The original study asked Israelis what they would do and how they would feel about a specific injustice. Namely you and a co-worker have been working on a project for a long-time but just before submission you are called away for reserve duty [male]/maternity leave [female]. Your co-worker takes credit for all the work and gets promoted while you later get demoted. The study then went on to ask questions about the conditions necessary for reconciliation. The reserve duty/maternity leave bit was just the story element needed to explain the situation not the focus of the study.

Nosek et al. tried to replicate the study in the United States where being called up for reserve duty is less common than in Israel and where being demoted for taking maternity leave could raise legal issues so they substituted ‘had to leave for honeymoon’. Everything else was the same. One of the original authors approved the new design.

Nosek et al. were not able to replicate the original findings. Is this because they didn’t replicate the study or because the study failed to replicate? Gilbert et al. say Nosek et al. failed to replicate the study.

In my view, Gilbert et al. are caught on the horns of a dilemma. If the studies don’t replicate they aren’t interesting and if the studies replicate but only under extremely precise conditions they also aren’t interesting. We are interested in general features of the human condition not in descriptions of the choices that 75 female and 19 male Israeli students made at a particular point in time. Moreover, if changes in wording matter then surely so does the fact that the original study was on Israeli’s in 2008 and the replication used Americans in 2013 (a lot has changed over these years!) and so must also a hundred other differences. But if so, what’s the point?

Hat tip: Andrew Gelman who has more to say.

China venture capital fact of the day

China is getting into the venture capital business in a big way. A really, really big way.

The country’s government-backed venture funds raised about 1.5 trillion yuan ($231 billion) in 2015, tripling the amount under management in a single year to 2.2 trillion yuan, according to data compiled by the consultancy Zero2IPO Group. That’s the biggest pot of money for startups in the world and almost five times the sum raised by other venture firms last year globally, according to London-based consultancy Preqin Ltd.

The money’s in what are known as government guidance funds, where local and central agencies play some role. With 780 such funds nationwide and a lot of experimentation, there’s no set model for how they’re managed or funded. The bulk of their capital comes from tax revenue or state-backed loans.

The article is here.  If you are both impressed and worried at the same time, that is the correct reaction.

Why is it so hard to find the cash register?

That is increasingly the case at some upper end stores and boutiques.  Ray A. Smith has a very good WSJ piece on this phenomenon, here is one bit:

More high-end boutiques and department stores are moving the machine out of sight or eliminating it entirely.

Instead, sales associates walk the floors with mobile checkout devices or handle transactions in discreet nooks. Stores aim to make the experience of paying more elegant, akin to private shopping, and to eliminate a pain point that keeps some shoppers from completing a purchase—having to wait in a visible line. Hiding the cash register also forces shoppers to interact with the salespeople and might even encourage them to buy more.


1. Waiting in line is described as “unenlightened.”

2. I enjoyed this remark: “We’re downplaying that last transactional part of the experience…”  And this: “”Researchers have identified a concept known as “the pain of paying,” said Ziv Carmon, a professor of marketing at Insead, a business school with campuses in Europe, Asia and the Middle East. “Doing away with the queue and even with the register makes the upcoming pain of paying less salient,” he said.”

3. When customers are not waiting in line but rather having their purchases processed “privately,” salespeople are encouraged to socialize with them and get to know them better.  And: “Stores say sales associates are expected to sense when a shopper is ready to pay.”


Negative interest rates for non-state borrowers, the economy that is German

A German bank has become the first non-state borrower to issue euro denominated debt at a negative yield, another milestone as the continent’s financial system moves further into the world of sub-zero interest rates.

…Berlin Hyp issued €500m of covered bonds with no coupon and priced to yield minus 0.162 per cent on Tuesday, according to Bloomberg data. That means investors are guaranteed to lose money if they hold the bonds to maturity.

The FT story is here.  Here is some commentary from the story:

“It feels counter-intuitive,” said Joost Beaumont, a strategist at ABN Amro.

Mapping Indian addresses and managing Indian logistics

A startup named Delhivery has hired more than 15,000 staff, from developers to executives poached from Facebook and posh consultancies. Its headquarters in Gurgaon are so packed that engineers spill onto an outdoor porch, tapping their keyboards furiously. Delhivery, which works with a number of e-commerce firms, is using machine learning to subdivide India’s postcodes, the better to map idiosyncratic descriptions. “We’ll know the house with the yellow door next to the temple,” says Sandeep Barasia, the managing director. The company moves goods to 700 or so small distribution centres overnight to avoid congested main roads during business hours. Thousands of delivery boys then dash to and from the distribution centres throughout the day, bearing more than 20 kilos on their bikes.

That is from The Economist, a good article throughout.

The new Brookings paper on the productivity slowdown

This piece (pdf) is by David M. Byrne, John G. Fernald, and Marshall B.Reinsdorf.  It argues that the productivity slowdown is real, and not the result of mismeasuring the value of information technology.  Here were some of the newer bits for me:

Adjustments to equipment, software, and intangibles imply faster GDP growth but also faster input growth (since effective capital services are rising more quickly). After adjusting hardware and software, the aggregate TFP slowdown after 2004 is modestly worse. Adding additional intangibles, as in Corradoet al. (2009), works modestly in the other direction, so in our broadest adjustment for investment goods leaves the 1-1/4 percentage point TFP slowdown little changed.

And later they restate the point in more general terms:

…we highlight here the conceptual reason why it is hard for capital mismeasurement to explain the past slowdown in TFP growth: It affect inputs as well as output in largely offsetting ways.

Note that there are some unmeasured productivity gains from fracking:

…fracking allow[s] access to lower “quality” natural resources is imperfectly measured. A back-of-the-envelope calculation suggests that true aggregate labor and TFP growth might be 5 basis points faster since 2004.

Outsourcing however cuts the other way:

…the import-prices declines from offshoring are largely missed. This led to an understatement of true import growth in the late 1990s and early 2000s (the time of China’s WTO accession), and a corresponding overstatement of perhaps 10 bp in growth in output, labor productivity, and TFP.

That makes three very good papers in the last few weeks, by very reputable economists, coming from different directions, but all establishing more or less the same conclusion.  My discussions of the other two papers are here and here.

So will this myth finally die?

Sweden fact of the day

In 2013, six million students across OECD countries graduated from a higher education institution with a bachelor’s degree; 58% of them were women. This percentage ranges from 69% in Sweden [emphasis added] to 45% in Japan. Besides Japan, only Germany, Korea, Switzerland and Turkey still have more male than female graduates.

That is from the OECD, via NinjaEconomics.

Tuesday assorted links

1. Progress in human geography (not from The Onion).

2. “It’s the first time that the burger group will also come out to vote,” quipped politician Sheikh Rasheed Ahmed before the elections in May 2013.   “They’re going to join the chapati-and-salan [curry] folk. They might need to carry their laptops on their heads to protect them from the sun.”

The first, underlined link is from the article itself, the source link is here, sprawling but interesting throughout on Pakistan.

3. Livestream sources for the AI Go match against the human champion.

4. The culture that is Britain: “J.K. Rowling tweeted after her visit: “@OrkneyLibrary I had the best time! Thanks for wonderful chat, cake and, of course, letting me touch The Book.”

A photo attached to the tweet shows the author holding a book about organic gardening by Coronation Street actress Thelma Barlow.”

5. Collective memory in bacteria.

Education sentences to ponder

We identify a number of background characteristics (e.g., undergraduate GPA) as well as screening measures (e.g., applicant performance on a mock teaching lesson) that strongly predict teacher effectiveness. Interestingly, we find that these measures are only weakly, if at all, associated with the likelihood of being hired, suggesting considerable scope for improving teacher quality through the hiring process.

That is from a new study of Washington, D.C. public schools.

Does personality cause politics?

In the first stage of our analysis, we demonstrated that there are several substantively significant relationships between the personality traits and political ideology dimensions. Most notably, P [a complex variable, but derived from “Psychoticism”] is substantially correlated with conservative military and social attitudes, while Social Desirability is related to liberal social attitudes, and Neuroticism is related to liberal economic attitudes [emphasis added by TC]. Our findings at the phenotypic level are highly consistent with similar explorations in an Australian population (Verhulst, Hatemi, and Martin 2010).

The results are generated from twins data.  I found this discussion very interesting, as it shows the standard personality-to-politics chain is only part of a richer story:

These findings directly challenge the causal pathway assumed in the extant literature (e.g., Gerber et al. 2010; Mondak et al. 2010). Rather than personality traits causing people to develop liberal or conservative political attitudes, the current results suggest two alternative relationships. First, the combined Cholesky and DoC analyses suggest that a common set of genes mutually influences personality traits and political attitudes, implying the relationship between personality and politics is a function of an innate common genetic factor rather than a sequential personality to politics model (see the right panel of Figure 1). The results from the DoC analysis also suggest an alternative causal model. That is, the latent set of genes shared between political attitudes and personality traits directly influences attitudes and indirectly influences personality traits. In other words, the genetic component of political attitudes partially mediates the genetic influence on personality traits. This finding is completely opposite from the basic assumption in the most recent literature (e.g., Gerber et al. 2010; Mondak et al. 2010). Thus, it appears the genetic component of political attitudes measured relatively later in an individual’s life contributes to the development of an individual’s personality along the way. In this view, attitudes are more than what is expressed in adulthood, but part of one’s disposition which guides behavior and selection into environments, which later are recognized and measured as attitudes in adulthood. Regardless of whether the final analysis supports a latent genetic source of covariance or a mutual causal structure, both perspectives require a major revision to the prevailing assumptions about political attitudes and personality traits.

That is from Verhulst, Eaves, and Hatemi.

The EU refugee Coasian bargain evolves

Turkey has made a host of last minute funding and political demands that threaten to derail a controversial EU-Turkey deal to dramatically reduce migrant flows to Europe.

Ahead of crunch summit between EU leaders and the Turkish prime minister on Monday, Ankara has called for an increase on the €3bn in aid previously promised by the EU, faster access to Schengen visas for Turkish citizens and accelerated progress in its EU membership bid, write Alex Barker and Duncan Robinson in Brussels.

Although talks remain fluid, the wishlist represents Turkey’s new price for giving the EU’s response to the migration crisis a harder edge by facilitating the systematic return of non-Syrian migrants from Greek islands to Turkey.

I don’t blame Turkey, but this is a good example of what happens when you rely on poorer, lower quality institution countries to solve your problems for you.

The story is hereBy some accounts, the Turks will be getting much of their wish list.  But here is Dani Rodrik’s comment — Schengen may collapse.