Month: June 2016
Ian Bremmer of the Eurasia Group, a political consultancy, has talked of the “J-curve”. His point is that as countries open up they become more volatile before they become more stable. Perhaps Britain’s debate on Brexit reveals a second J-curve towards the top of the development path: where folk feel safe enough to challenge the globalised establishment but not rich enough to be part of it. Hence it is the lower-middle class of wealthy and sophisticated societies, rather than citizens of poorer ones, who seem to be the vanguard of populist politics. It is notable that in Britain, as in other northern European countries, this is storming ahead a few years after the economic crisis, once some growth has returned and unemployment has fallen. It takes a dab of security to rebel against the system.
But, as with developing countries on the J-curve, the country will one day emerge from its limbo. In Mr Bremmer’s scheme, growing openness powers countries through the bend. For this new J-curve it is growing economic and cultural confidence about globalisation among the majority. Increasing numbers of Britain’s young people are going to university. Its immigrant population is growing and integrating successfully. The prevailing conception of nationality is becoming more civic (a function of values, not background) and less nativist. With each generation, the world’s integration is becoming steadily less controversial.
1. Rent control for Silicon Valley? (NYT)
3. “Each guy paid for his date’s dinner or drinks, as guys who go out with women are generally expected to do. Each then used Venmo, the peer-to-peer payment app, to request that his date reimburse her share after the fact.” Link here.
4. Which cruise ships have the best libraries? By the way, bigger ships are often worse.
5. “Homeless people in San Francisco say the sprinklers at Bonhams are turned on at night to soak their belongings and discourage them from staying on the sidewalk” There is also this sentence: “Still, anti-homeless design features are ubiquitous around the city.”
A key theme of the book is how the increased acceptance of gender fluidity and industrialization – which brought men out of the fields and into offices, where they have no inherent strengths compared to women – has destabilized traditional power structures.
[Frank] Browning said the gender revolution can help explain the resurgence of rightwing extremism in Europe and why it is possible for a former reality television show host to become the presumptive Republican nominee for US president – even though he has made racist, sexist and xenophobic comments.
“We’re going to see in a decade what we’ve seen in the last five years, a movement for which Trump happened to be the dandy on hand,” Browning said. “And gender is a big piece of that”. Browning said that today, men hold fewer positions of power and are being demoted in society. Simultaneously, people are exploring gender more openly and have easier access to online forums through which to explore differing types of gender and sexual expression.
The support for Brexit from chefs and curry house owners, predominantly from Bangladesh, has come as a surprise voice in the debate, as the Leave campaign is widely perceived as anti-immigration.
Their argument centers around “freedom of movement,” one of the pillars of the European Union — meaning that citizens from across the community can essentially turn up in the country of their choice and try their luck at finding a job.
“It’s not that we think Europeans shouldn’t have a chance in Britain, it’s just that we feel the country should choose who it needs, what kind of skills they need, so that industries like ours are not short handed,” Khan told CNN.
Freedom of movement has put pressure on Britain’s migrant intake from outside the EU, prompting the government to almost double the minimum salary required for non-EU immigrants, from £18,700 ($26,610) to £35,000 ($50,000).
“This just doesn’t suit the industry. The average salary for a chef in the country is £25,000, so why should we have to pay a junior chef £35,000 to make curry? It’s just not affordable,” Khan said.
Call it the cheap channa argument, though note if this chain of reasoning were better known, it might help the prospects for Remain. The story is here, and here are my previous posts on Brexit (which I nonetheless oppose, cheap channa or not).
For the pointer I thank Brennan McDavid.
1. Further estimates on which are the most “normal” places in the United States. It’s hard to get away from Oklahoma City, I still like my earlier pick of Knoxville, TN.
Wealthier people are healthier and live longer. Why? One popular explanation is summarized in the documentary Unnatural Causes: Is Inequality Making us Sick?
The lives of a CEO, a lab supervisor, a janitor, and an unemployed mother illustrate how class shapes opportunities for good health. Those on the top have the most access to power, resources and opportunity – and thus the best health. Those on the bottom are faced with more stressors – unpaid bills, jobs that don’t pay enough, unsafe living conditions, exposure to environmental hazards, lack of control over work and schedule, worries over children – and the fewest resources available to help them cope.
The net effect is a health-wealth gradient, in which every descending rung of the socioeconomic ladder corresponds to worse health.
If this were true, then increasing the wealth of a poor person would increase their health. That does not appear to be the case. In important new research David Cesarini, Erik Lindqvist, Robert Ostling and Bjorn Wallace look at the health of lottery winners in Sweden (75% of winnings within the range of approximately $20,000 to $800,000) and, importantly, on their children. Most effects on adults are reliably close to zero and in no case can wealth explain a large share of the wealth-health gradient:
In adults, we find no evidence that wealth impacts mortality or health care utilization, with the possible exception of a small reduction in the consumption of mental health drugs. Our estimates allow us to rule out effects on 10-year mortality one sixth as large as the crosssectional wealth-mortality gradient.
The authors also look at the health effects on the children of lottery winners. There is more uncertainty in the health estimates on children but most estimates cluster around zero and developmental effects on things like IQ can be rejected (“In all eight subsamples, we can rule out wealth effects on GPA smaller than 0.01 standard deviations”). Overall for children:
Our results suggest that in a model of child development parameterized to match conditions in Sweden, the effect of permanent income on children’s outcomes is small. With the exception of obesity risk, we estimate precise zero or negative effects in subpopulations for which theories of child development predict larger benefits of wealth. For example, though the mechanism differs, investment models (Becker and Tomes 1979) and parental stress models (Bradley and Corwyn 2002) predict larger positive effects of wealth shocks in families with low incomes. The small impact of wealth on proxies for parenting behavior may explain why the shocks to permanent income appear to have few discernible intergenerational impacts.
One point to note is that they are looking primarily at children born prelottery although they do not find any health effects in infants born postlottery.
As the authors note, Sweden is an affluent society with an extensive social safety net. Nevertheless, there is still a significant health-wealth gradient in Sweden. We might get larger causal estimates of wealth on health elsewhere but the Swedish results bound how far we can reduce the gradient.
The bottom line: Is inequality making us sick? No.
Addendum: The methodological note below was an impressive sign of how research standards at the frontier are changing, expect to see more like this in the future:
To minimize concerns about undisclosed multiple-hypothesis testing, our intergenerational analyses were prespecified in an analysis plan posted in the public domain before running any regressions of child outcomes on the treatment variable (Cesarini et al. 2014).
Addendum 2: See the comments for useful additional information from Erik Lindqvist, one of the authors.
According to a new study, when they know they are being watched it is 57 percent.
When they don’t know they are being watched, it is 22 percent.
What I find shocking is not the difference, which fits readily into the economic way of thinking. It is that direct observation of doctors still does not get the rate above 57 percent.
Pete asked that question, more specifically:
Economics tries to put a price on most everything, even things that are nearly impossible to quantify such as happiness. Where in your opinion does the economic approach currently fail the worst at measurement and quantification?
I believe economics does not measure “culture” very well, including the all-important “corporate culture.” It is hard to think of a good way of encoding companies to reflect how things actually work inside the firm, all the harder for a region or nation. In this context you could define culture as consisting of expectations about the reciprocal behavior of others, across a variety of contexts. We do OK however if it is just a univariate measure of trust, see Knack and Keefer.
It is hard to measure rates of price inflation over longer periods of time. Since 1900, has the American economy had massive inflation or massive deflation? If you are spending fifty cents, it is massive inflation, as today that sum hardly buys you anything, but earlier you could have received a nice white shirt. If you are spending 100k a year, there has been radical deflation.
Those to me are two of the worst failures of quantification in economics. What else?
5. Markets in everything: spy for a day.
…at least one insurer seems to sense an opportunity where others fear to tread. In what appears to be an unprecedented move, a British insurance company has begun offering a special policy designed for autonomous and partly automated vehicles. In theory, you could use this on your Google driverless car or your Tesla that’s equipped with autopilot.
Unfortunately, it’s only available in Britain. But the policy protects against all of the usual things you would find in your typical car insurance — damage, fire, theft. And it also goes further, covering accidents caused by malfunctions in the car’s driverless systems even if the passenger has failed to use a manual override. It covers any havoc that hackers may wreak on a car’s operating system. It applies to cars even if they haven’t been updated to the latest software. And it even covers mishaps that may occur if your car loses satellite or other crucial connectivity.
From Brian Fund here is the full story.
Increasingly, says Professor Crystal, whose books include “Making a Point: The Persnickety Story of English Punctuation,” the period is being deployed as a weapon to show irony, syntactic snark, insincerity, even aggression
If the love of your life just canceled the candlelit, six-course, home-cooked dinner you have prepared, you are best advised to include a period when you respond “Fine.” to show annoyance
“Fine” or “Fine!,” in contrast, could denote acquiescence or blithe acceptance
“The period now has an emotional charge and has become an emoticon of sorts,” Professor Crystal said
Researchers at Binghamton University in New York and Rutgers University in New Jersey have also recently noted the period’s new semantic force
They asked 126 undergraduate students to review 16 exchanges, some in text messages, some in handwritten notes, that had one-word affirmative responses (Okay, Sure, Yeah, Yup) Some had periods, while others did not
Those text message with periods were rated as less sincere, the study found, whereas it made no difference in the notes penned by hand
Here is the full Dan Bilefsky story (NYT).
The Hardwick Gazette sent out a press release Wednesday for an essay contest with a newsworthy prize – The Hardwick Gazette.
It’s real, said Ross Connelly, editor and publisher of the Hardwick, Vermont weekly. He hasn’t gotten any entries yet, of course, since the release just went out, but they’re supposed to come in by mail anyway. “Real mail,” he said.
The cost to enter the contest is $175. The guidelines: 400 words “about the entrant’s skills and vision for owning a paid weekly newspaper in the new millennium.”
Here is the full story, via Peter, a loyal MR reader.
3. High transactions costs couples: restaurants hate first dates.
4. Covered interest parity has been breaking down (for now).
5. The new site Book Marks will aggregate book reviews.