Month: July 2016
3. What people collect (NYT).
4. “There is no comprehensive data on U.S. Olympic athlete pay, but information collected by a nonprofit last year from 150 track and field athletes ranked in the top 10 in the country in their events found an average income of $16,553.” Link here. The coaches and bureaucrats typically make much more.
5. Is the “better camera” the main reason why we are all so worried? Not my view, but always happy to put contrasting opinions before you.
6. What a “left wing” British debate looks like. Don’t even click on or read that highly intelligent yet train wreck of a link, just return to my earlier claim “…the important European thinkers of the next generation will be religious, not left-wing and secular.”
Professor Fair has been tracking and predicting elections in real time since 1978 with a good deal of success, using an approach that continues to be provocative. He ruthlessly excludes nearly all the details that are the basic diet of conventional political analysts — items like the burning issues of the day, the identities, personalities and speeches of the candidates and the strength of their campaign organizations. In fact, his model pays no attention whatsoever to the day-to-day fireworks of the political campaigns.
Instead, he considers only economics, finding that economic factors usually correlate well with political outcomes…
In November 2014, he did his first projection for the 2016 election and found that the odds favored the Republican candidate — whoever that may be. The Republican side has been leading consistently ever since, and the margin has increased as he has fed in new data.
Here is Reihan Salam on Trump and pessimism.
Charlotte: He’s writing a graphic novel that has superheroes in it. We have the same favorite superhero. I like Batman because his only power is being super rich. That’s more realistic than the others. And he agreed with me.
Don: She was a little less adventurous than I was when it came to food.
Charlotte: He said he was from Vienna and I was like, Austria? I had to dial that back a second to not sound completely stupid. That’s the type of thing that only a diplomat brat would accidentally say. I don’t have a car, and I don’t go to Virginia very much for anything, really. So it seems very far.
That is from Washington Post Date Lab, an object lesson in both behavioral economics and the limitations of the Coase theorem.
The young are more hostile to refugees than their parents: over 80% of Poles aged 18-34 oppose taking them in, compared with 52% of those over 65. They are also more in favour of border controls within the EU. Many of the teenage pilgrims in Krakow say they fear a wave of “Islamisation” or “secularisation” from western Europe. (Oddly, they sometimes conflate the two.) The Pope is “great on faith but not on politics”, says a young street sweeper from Nowa Huta, an industrial area of Krakow.
That is from The Economist, the article is interesting more generally. I’ve said it before, I’ll say it again: the important European thinkers of the next generation will be religious, not left-wing and secular.
5. Cynthia Ozick’s poem about the marketplace, a response to a critic of her volume.
6. A short Japanese baseball meditation on status in America; “…what I’ve noticed is that in America, when people feel like a person is below them, not just in numbers but in general, they will kind of talk you up. But then when you get up to the same level or maybe even higher, they get in attack mode; they are maybe not as supportive.”
The first home pregnancy tests were controversial because it was believed that women could not be trusted to do the tests correctly or to use the results appropriately:
NYTimes: When a mail-order New York firm tried to sell Organon test kits to American consumers in 1971, it faced opposition from the United States Public Health Service. In 1973, a New Jersey drugstore bought kits made by the drug company Roche and offered fast and private tests to their customers, and though the technology was similar to that available in medical clinics, the state medical examiner questioned the legality of the service.
Why so much opposition? Some regulators worried that “frightened 13-year-olds” would be the main users of the test kits. But after the product did become available in the United States in 1977, it appealed instead to college-age and married women — many of whom desperately hoped for children.
Even so, the Texas Medical Association warned that women who used a home test might neglect prenatal care. An article in this newspaper in 1978 quoted a doctor who said customers “have a hard time following even relatively simple instructions,” and questioned their ability to accurately administer home tests. The next year, an article in The Indiana Evening Gazette in Pennsylvania made almost the same claim: Women use the products “in a state of emotional anxiety” that prevents them from following “the simplest instructions.”
The tale of the home pregnancy test is not unique. Breakthroughs that give patients control over their bodies are often resisted. Again and again, the same questions come up: Are patients smart enough? Can they handle bad news? And do they have the right to private information about their bodies?
I wrote about these issues in Our DNA, Our Selves which discussed the FDA’s unconstitutional over-regulation of DNA tests. The legal questions in that case are yet to be fully resolved but the technology is pushing towards the freedom to know our own bodies.
Over the past two years, 18 cities have reported how many bookstores they have, and 20 have reported on their public libraries.
Hong Kong leads the pack with 21 bookshops per 100,000 people, though last time Buenos Aires sent in its count, in 2013, it was the leader, with 25. New York does OK, with around 840 bookstores for 8.4 million people, but London, whose population is only slightly bigger than New York, counts only 360 stores.
Taipei and Madrid do well too. In terms of what you actually get, I think of Buenos Aires and Madrid as standing at the top. My casual impression is that a lot of the Asian bookstores are more vocational than useful to a reader such as myself or Michael Orthofer.
For libraries Edinburgh is #1 by more than a factor of five.
Recent research emphasizes the pressure technological change exerts on middle-wage occupations by automating routine tasks. I argue that technology only partially automates these tasks, which often still require labor. Rather, technology reduces task complexity enabling a less skilled worker to do the same job. The costs of automation, then, are not only the costs of the technology itself but also of low-wage workers to use it. By raising the cost of low-wage labor, the minimum wage reduces the profitability of adopting automating technologies. I test this prediction with state variation in the minimum wage and industry variation in complementarity between low-wage workers and technology. I show that accounting for state price differences induces new and useful minimum wage variation, derive new measures of complementarity from the Dictionary of Occupational Titles and the CPS Computer Use Supplement, and build a measure of technology based on IT employment, the largest component of IT spending. My results imply a $1 decrease in the minimum wage raises the average industry’s technology use by 30% and decreases the routine share of the wage bill by 1 percentage point (3.3%), both relative to a counterfactual without complementarity. Routine-intensive industries often exhibit high complementarity, making the minimum wage an important policy lever to influence the pace of routine-biased technical change.
I owe this link to someone other than myself, but can no longer remember who that is…sorry!
5. New John Cochrane paper “Macro-Finance” (pdf).
From Frank Dikötter’s short note at History Today:
In the People’s Republic of China, archives do not belong to the people, they belong to the Communist Party. They are often housed in a special building on the local party committee premises, which are generally set among lush and lovingly manicured grounds guarded by military personnel. Access would have been unthinkable until a decade or so ago, but over the past few years a quiet revolution has been taking place, as increasing quantities of documents older than 30 years have become available for consultation to professional historians armed with a letter of recommendation. The extent and quality of the material varies from place to place, but there is enough to transform our understanding of the Maoist era.
…What comes out of this massive and detailed dossier is a tale of horror in which Mao emerges as one of the greatest mass murderers in history, responsible for the deaths of at least 45 million people between 1958 and 1962. It is not merely the extent of the catastrophe that dwarfs earlier estimates, but also the manner in which many people died: between two and three million victims were tortured to death or summarily killed, often for the slightest infraction. When a boy stole a handful of grain in a Hunan village, local boss Xiong Dechang forced his father to bury him alive. The father died of grief a few days later. The case of Wang Ziyou was reported to the central leadership: one of his ears was chopped off, his legs were tied with iron wire, a ten kilogram stone was dropped on his back and then he was branded with a sizzling tool – punishment for digging up a potato.
…Fresh evidence is also being unearthed on the land reform that transformed the countryside in the early 1950s. In many villages there were no ‘landlords’ set against ‘poor peasants’ but, rather, closely knit communities that jealously protected their land from the prying eyes of outsiders – the state in particular. By implicating everybody in ‘accusation meetings’ – during which village leaders were humiliated, tortured and executed while their land and other assets were redistributed to party activists recruited from local thugs and paupers – the communists turned the power structure upside down. Liu Shaoqi, the party’s second-in-command, had a hard time reining in the violence, as a missive from the Hebei archives shows: ‘When it comes to the ways in which people are killed, some are buried alive, some are executed, some are cut to pieces, and among those who are strangled or mangled to death, some of the bodies are hung from trees or doors.’
Consider my previous hypothesis that so many yields have gone negative because of the insurance value of those relatively safe assets. If that were true (true to some extent, I am not claiming that is the only factor behind the supply and demand curves), could a problem be solved by issuing more safe assets? That could be done through more government spending or big tax cuts, either creating more government borrowing and thus more safe assets.
I often see it taken for granted that “selling more insurance” into the face of market demand would be a good thing. And maybe so. But it doesn’t follow in any simple way from theory, as is sometimes implied. For one thing, this isn’t a straightforward market setting but rather there is a monopoly supplier that is not selling market outputs, and furthermore the private and social returns to either insurance or risk-taking are not in general equal.
So ask yourself which has a higher social rate of return?
1. How the government would spend marginal funds, plus relatively wealthy people buying more insurance
2. How private consumers would spend a tax cut, plus relatively wealthy people buying more insurance
3. Relatively wealthy people allocating more funds to riskier investments, and not getting that additional insurance
There is no way to tell, not from theory or for that matter from any kind of simple, straightforward empirics. And from a social point of view, we therefore do not know if more safe assets should be put on the market. There is of course a fourth possibility:
4. Because private investors enjoy more safe assets, they end up taking greater risks and the whole PPF shifts out
Again maybe, maybe not. If it is true, a variety of subsidies to insurance markets, implicit or explicit, could improve welfare. That is in contrast to Kenneth Arrow’s older argument that it is the risky investments that need to be subsidized and subsidized directly. I say there is only so much “crowding in” to be had, especially during a time of near-full employment.
Another argument might be:
5. Selling more safe assets would raise nominal yields and make monetary policy potent again
I don’t want to go through all of that again, but suffice to say it had a better chance of being true in 2010 than today. Here is John Cochrane on related issues.
Inside, two stocky men could be heard debating the merits of the different ambassadorships they hoped to earn under Mrs. Clinton. Even a low-ranking posting meant having “ambassador” on a child’s wedding invitation, the two agreed, and would be helpful in wrangling invitations to sit on corporate boards.
Gautam Gowrisankaran, Stanley S. Reynolds, and Mario Samano have a new JPE paper on this very important question, here is their abstract:
A key problem with solar energy is intermittency: solar generators produce only when the sun is shining, adding to social costs and requiring electricity system operators to reoptimize key decisions. We develop a method to quantify the economic value of large-scale renewable energy. We estimate the model for southeastern Arizona. Not accounting for offset carbon dioxide, we find social costs of $138.40 per megawatt hour for 20 percent solar generation, of which unforecastable intermittency accounts for $6.10 and intermittency overall for $46.00. With solar installation costs of $1.52 per watt and carbon dioxide social costs of $39.00 per ton, 20 percent solar would be welfare neutral.
20 percent solar for Arizona as the social welfare break-even point does not strike me as especially impressive, but of course the infrastructure integration technologies may yet advance. In gross terms, intermittency costs exceed carbon costs. Note also that forecastable intermittency accounts for most of the costs, and so with perfect storage solar would be a much more efficient technology.
Here are ungated versions of the paper.