Month: May 2016
The middle class is shrinking almost everywhere
The decline of the American middle class is “a pervasive local phenomenon,” according to Pew, which analyzed census and American Community Survey data in 229 metros across the country, encompassing about three-quarters of the U.S. population. In 203 of those metros, the share of adults in middle-income households fell from 2000 to 2014.
On the average is over front, there is also this:
In total, 172 of these 229 metros saw a growing share of households in the upper-income tier. About as many — 160 — saw a growing share at the bottom. And 108 experienced both: The middle class shrank as the ranks of both the poor and the rich grew.
Here is more from Wonkblog on the new Pew study. The decline in the middle class is typically strongest in areas where manufacturing used to be strong.
This used to be a debate, but the funny thing is the nomination of Trump has sealed it for the more pessimistic side. That is unfair, actually, though I think the pessimistic side is correct nonetheless.
Jan Morris’s *Conundrum*
This 174-page book, from 1974, is probably the best I have read this year so far. The main tale is the author’s pioneering transgender experiences, but it’s far broader than that, also being an excellent travel book, romance, family story, and tale of ineradicable obsession. Everything is pitch perfect, and you can finish it in a sitting, these are the kinds of books I wish people recommended to me. Here is the end of the story, quite romantic. Here is an interview with Morris.
Wednesday assorted links
1. Will dueling robots be the next major sport?
2. North American political refugee dating markets in everything.
3. New data on the gender wage gap in STEM fields.
4. David Beckworth podcast with Miles Kimball.
5. Do vegans have better personalities than do vegetarians?
The Solow Model and Ideas
The fifth video in the Solow series from our Principles of Macroeconomics course is really the capstone. It explains how ideas drive growth on the cutting edge. A key insight of the model, however–one which many people still don’t really get–is that ideas increase output and by doing so they also drive capital accumulation so both forces are always at play.
*The Nordic Gender Equality Paradox*
That is the new and quite interesting book by Nima Sanandaji. The main point is that there are plenty of Nordic women in politics, or on company boards, but few CEOs or senior managers. In fact the OECD country with the highest share of women as senior managers is the United States, coming in at 43 percent compared to 31 percent in the Nordics. More generally, countries with more equal gender norms do not have a higher share of women in senior management positions. Within Europe, Bulgaria does best and other than Cyprus, Denmark and Sweden do the worst in this regard.
One reason for the poor Nordic performance at higher corporate levels is high taxes, which limits the amount of household services supplied through markets. If it is harder to hire someone to do the chores, that makes it harder for women to invest the time to climb the career ladder. Generous maternity leave policies may encourage women to take off “too much” time, or at least this is suggested by the author. A history of communism is also strongly correlated with women rising to the top in business and management; this may stem from a mix of relatively egalitarian customs and a more general mixing up of status relations in recent times and a turnover of elites.
I don’t find this book to be the final word, and I would have liked a more formal econometric treatment. It is nonetheless a consistently interesting take which revises a lot of the stereotypes many people have about the Nordic countries as being so absolutely wonderful for gender egalitarianism in every regard.
Here is the book’s website, from Timbro (a very good group), I don’t yet see it on Amazon.
What I’ve been reading
1. Jason Brennan, Against Democracy. He is a epistocrat. P.S. voters are ignorant and irrational. Furthermore “Politics is not a Poem.” I agree with most of the debunking arguments in this book, but I am not convinced epistocracy ends up being better; Brennan’s examples of epistocracy include restricted franchise, plural voting, voting by lottery, epistocratic veto (the Senate, but more so), and weighted voting. I see big advantages to a strict normative ideal of legal egalitarianism of civic rights, and I suspect that ends up meaning some form of democracy, albeit constrained by the overlay of a constitutional republic.
2. Ji Xianlin, The Cowshed: Memoirs of the Chinese Cultural Revolution. The classic account of its kind, in this edition brilliantly translated and presented.
And I am happy to praise Frank Dikötter’s The Cultural Revolution: A People’s History 1962-1976, but I did not find it as revelatory as his earlier books on China. Here is a Judith Shapiro NYT review.
3. Aileen M. Kelly, The Discovery of Chance: The Life and Thought of Alexander Herzen. Beautifully written, and full of interesting history, but it never quite convinces the reader that Herzen is an interesting and worthwhile intellect for 2016. Maybe he isn’t — does that make this book better or worse?
David L. Ulin’s Sidewalking: Coming to Terms with Los Angeles is a meditation on to what extent Los Angeles succeeds as a walkable city, or someday might get there.
There is Don Watkins and Yaron Brook, Equal is Unfair: America’s Misguided Fight Against Income Inequality, by no means do I go all the way with them, but still this a useful corrective to some current obsessions.
Don and Alex Tapscott, Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World lists more possible uses for blockchains than you would have thought possible.
James T. Bennett, Subsidizing Culture: Taxpayer Enrichment of the Creative Class, the subtitle says it all.
VPN in China
What is the deal these days? How well are VPNs working, and which do you recommend? Can Apple iPhones and iPads still access the “real web” directly through 4G, as was the case as recently as last year? I thank you in advance for your assistance, it is much appreciated.
Tuesday assorted links
1. Maybe America isn’t an oligarchy after all. A very good post on this topic.
2. School districts, test scores, and socioeconomic status. Ditto.
3. Do the Chinese welcome Trump? And Peter Thiel is likely to be a delegate for Donald Trump.
4. “We find that the effect of GED certification on either employment or earnings is not statistically significant.” (pdf, I believe a version of this is forthcoming in the JPE).
I, medical device robotic pancreas
Third-grader Andrew Calabrese carries his backpack everywhere he goes at his San Diego-area school. His backpack isn’t just filled with books, it is carrying his robotic pancreas.
The device, long considered the Holy Grail of Type 1 diabetes technology, wasn’t constructed by a medical-device company. It hasn’t been approved by regulators.
It was put together by his father.
Jason Calabrese, a software engineer, followed instructions that had been shared online to hack an old insulin pump so it could automatically dose the hormone in response to his son’s blood-sugar levels. Mr. Calabrese got the approval of Andrew’s doctor for his son to take the home-built device to school.
The Calabreses aren’t alone. More than 50 people have soldered, tinkered and written software to make such devices for themselves or their children. The systems—known in the industry as artificial pancreases or closed loop systems—have been studied for decades, but improvements to sensor technology for real-time glucose monitoring have made them possible.
The Food and Drug Administration has made approving such devices a priority and several companies are working on them. But the yearslong process of commercial development and regulatory approval is longer than many patients want, and some are technologically savvy enough to do it on their own.
Here is the Kate Linebaugh story, interesting throughout, via Adam Thierer and Eli Dourado.
Life Expectancy is Increasing and Health Inequality is Down
We have heard a great deal about increases in mortality among white, non-hispanic, middle-aged Americans (especially women) but to state the case is also to note that this is one group among many. In an excellent new paper, Currie and Schwandt discuss the good news overall–life expectancy is up and health inequality is down, in some cases dramatically. Here, for example, is life expectancy at birth by gender and year.
Even more impressive is that life expectancy has increased significantly across all poverty groups (as measured by county poverty levels). In the graph below, for example, the blue triangles indicate life expectancy in 1990 (men on the left, women on the right). Note that as the poverty level of the county increases along the horizontal axis life expectancy falls. The green dots are life expectancy in 2010. Once again, as poverty increases, life expectancy falls. What’s remarkable, however, is how much life expectancy increased between 1990 and 2010 in counties of all poverty levels.
The news is good and may get better. Between 1990 and 2010 mortality rates for children ages 0-4 fell especially dramatically and especially so in poor counties. Moreover, since mortality at older ages is often baked in 
by poor health at younger ages there is significant opportunity for these gains to persist over time.
The New York Times also reported yesterday on inequality in life expectancy across race. It’s down.
Infant mortality is down by more than a fifth among blacks since the late 1990s, double the decline for whites. Births to teenage mothers, which tend to have higher infant mortality rates, have dropped by 64 percent among blacks since 1995, faster than for whites.
Blacks are still at a major health disadvantage compared with whites. But evidence of black gains has been building and has helped push up the ultimate measure — life expectancy. The gap between blacks and whites was seven years in 1990. By 2014, the most recent year on record, it had shrunk to 3.4 years, the smallest in history, with life expectancy at 75.6 years for blacks and 79 years for whites.
Part of the reason has been bad news for whites, namely the opioid crisis. The crisis, which has dominated headlines — some say unfairly, given racial disparities — has hit harder in white communities, bringing down white life expectancy and narrowing the gap.
But there also has been real progress for blacks. The rate of deaths by homicide for blacks decreased by 40 percent from 1995 to 2013, according to Andrew Fenelon, a researcher with the National Center for Health Statistics, compared with a 28 percent drop for whites. The death rate from cancer fell by 29 percent for blacks over that period, compared with 20 percent for whites.
The Currie and Schwandt paper is also very good on describing how these estimates are produced and some of the data issues with making these estimates. It’s a must read for those interested in these issues.
Does Facebook suppress conservative news and views?
That’s the hullaballoo of the day (NYT here):
Facebook workers routinely suppressed news stories of interest to conservative readers from the social network’s influential “trending” news section, according to a former journalist who worked on the project. This individual says that workers prevented stories about the right-wing CPAC gathering, Mitt Romney, Rand Paul, and other conservative topics from appearing in the highly-influential section, even though they were organically trending among the site’s users.
That’s not exactly what I would have suppressed, but I can’t say I am broken up about this. Most media bias in journalism is demand-driven, and I suspect this feature of the article selection and elevation “algorithm” is perceived by Facebook as demand-driven as well. Overall I think of Twitter as radicalizing, and Facebook as calming and connecting. The “censored” right wing sources don’t fit the chummy, nostalgic socializing mood so well, and therefore Facebook wanted to keep them away. A clear minority is sufficiently interested in those stories to get them trending initially, but that’s not the overall image Facebook wants to present to either its marginal or median user.
Maybe such algorithms mean that social ideas are too slow to change, because user demand depends in part on what Facebook pushes. Right now I’m more worried about American ideas getting worse than American ideas getting better, so a status quo, don’t offend anybody bias I can live with. And frankly, a lot of right-wing news sources just aren’t very good — I suppress them myself, without any aid from Facebook.
There is also this:
“People stopped caring about Syria,” one former curator said. “[And] if it wasn’t trending on Facebook, it would make Facebook look bad.” That same curator said the Black Lives Matter movement was also injected into Facebook’s trending news module. “Facebook got a lot of pressure about not having a trending topic for Black Lives Matter,” the individual said. “They realized it was a problem, and they boosted it in the ordering. They gave it preference over other topics. When we injected it, everyone started saying, ‘Yeah, now I’m seeing it as number one’.” This particular injection is especially noteworthy because the #BlackLivesMatter movement originated on Facebook, and the ensuing media coverage of the movement often noted its powerful social media presence.
In those two cases I see the change in coverage as bringing net content gain rather than loss. The cynical underlying reality is that Facebook does not wish to appear heartless, but does not (yet) have the more subtle manipulative institutions that newspapers and TV stations have developed over decades or even centuries. They clumsily act in a politically correct manner, without proper institutional camouflage, and now they are being called on it. They will refine their bias, and make it subtler and harder to criticize, thereby becoming more like most other media outlets. Ultimately this is more of a social conformity story than a monopoly power dilemma. I am more worried about pervasive ennui and complacency than the political bias per se.
Demand curves slope downward, opiod edition
Deaths from opioid pain reliever overdose in the United States quadrupled between 1999 and 2013, concurrent with an increase in the use of the drugs. We used data from the Medical Expenditure Panel Survey to examine trends in opioid pain reliever expenditures, financing by various payers, and use from 1999 to 2012. We found major shifts in expenditures by payer type for these drugs, with private and public insurers paying a much larger share than patients in recent years. Consumer out-of-pocket spending on opioids per 100 morphine milligram equivalents (a standard reference measure of strength for various opioids) declined from $4.40 to $0.90 between 2001 and 2012. Since the implementation of Medicare Part D in 2006, Medicare has been the largest payer for opioid pain relievers, covering about 20–30 percent of the cost. Medicare spends considerably more on these drugs for enrollees younger than age sixty-five than it does for any other age group or than Medicaid or private insurance does for any age group. Further research is needed to evaluate whether payer strategies to address the overuse of opioids could reduce avoidable opioid-related mortality.
That is from Zhou, Florence, and Dowell, via the excellent Kevin Lewis.
Monday assorted links
1. In a major study, greater price transparency did not reduce health care spending.
2. From the world of OKCupid: “…we examined the relationship between Zodiac sign and every other variable. We found very scant evidence of any influence…”
3. “There’s no point in writing it all down if nobody ever reads it.”
4. Beer markets in everything belly button yeast.
5. Timothy Lee on the end of economic growth.
6. How many top Republicans will be willing to work for Trump?
The Solow Model Animated!
Modern Principles of Economics was the first principles textbook to make the Solow model of economic growth easily accessible to undergraduates. By focusing on simple mathematics that the students already know, like the square root function, we made the Solow model easy to understand without losing the power of the model to explain the world.
Modern Principles is the only textbook with the Super Simple Solow model! And now we’ve brought the model to life with a series of fun videos in our Principles of Macroeconomics class at MRUniversity. You’ve never seen the Solow model taught like this!
Introduction to the Solow Model introduces the questions and the “characters” that drive the story. Physical capital and diminishing returns explains the idea of a production function and diminishing returns. We then introduce capital depreciation and focus in on the most important idea for understanding the Solow model, the steady state:
I’ll cover some more videos in the Solow series later this week.
Your TA Will Be Jill Watson
WSJ: One day in January, Eric Wilson dashed off a message to the teaching assistants for an online course at the Georgia Institute of Technology.
“I really feel like I missed the mark in giving the correct amount of feedback,” he wrote, pleading to revise an assignment.
Thirteen minutes later, the TA responded. “Unfortunately, there is not a way to edit submitted feedback,” wrote Jill Watson, one of nine assistants for the 300-plus students.
Last week, Mr. Wilson found out he had been seeking guidance from a computer.
…Last year, a team of Georgia Tech researchers began creating Ms. Watson by poring through nearly 40,000 postings on a discussion forum known as “Piazza” and training her to answer related questions based on prior responses. By late March, she began posting responses live.
Don’t confuse Ms. Watson with the customer-service chatbots used online by airlines and other industries. Mr. Goel boasts that she answers only if she has a confidence rate of at least 97%.
“Most chatbots operate at the level of a novice,” Mr. Goel said. “Jill operates at the level of an expert.”
In our paper on online education Tyler and I wrote about AI Tutors:
Feedback from interactive systems will be more immediate and more informative (Skinner 1958). Adaptive tutoring systems are already nearly as effective as human tutors in many circumstances and much cheaper to scale (VanLehn 2011).