Year: 2016
Does Europe really have a better drinking culture for young people?
German Lopez at Vox reports:
If you look at the data, there’s no evidence to support the idea that Europe, in general, has a safer drinking culture than the US.
According to international data from the World Health Organization, European teens ages 15 to 19 tend to report greater levels of binge drinking than American teens.
This continues into adulthood. Total alcohol consumption per person is much higher in most of Europe. Drinkers in several European countries — including the UK, France, Belgium, Denmark, Sweden, and Iceland — are also more likely to report binge drinking than their US counterparts.
Younger teens in Europe appear to drink more, as well. David Jernigan, an alcohol policy expert at Johns Hopkins University, studied survey data, finding that 15- and 16-year-old Americans are less likely to report drinking and getting drunk in the past month than their counterparts in most European countries.
File under Wisdom of the Mormons.
IMPACT is Working
In Launching the Innovation Renaissance I wrote:
…teacher pay in the United States seems more like something from Soviet-era Russia than 21st century America. Wages for teachers are low, egalitarian and not based on performance. We pay phys ed teachers about the same as math teachers despite the fact that math teachers have greater opportunities elsewhere in the economy. As a result, we have lots of excellent phys ed teachers but not nearly enough excellent math teachers….
Soviet style pay practices helped to eventually collapse the Soviet system and the same thing is happening in American education. Michelle Rhee is no longer the DC Chancellor but IMPACT, the teacher evaluation system developed under her tenure, is in place. IMPACT uses student scores to evaluate teachers but also five yearly in-class evaluations, three from the school administrator and two from master educators from outside the school. Evaluations are meant not only to reward but also to discover and spread best teaching practices.
The results from IMPACT are starting to come in and they indicate that pay for performance is encouraging low quality teachers to leave, good quality teachers to get better, and high quality teachers to continue teaching and improve even further.
Perhaps not surprisingly the schools with the poorest students see the most teachers leave and they also see the largest gains in student performance as average teacher quality rises. From a new NBER paper by Adnot et al.:
More than 90 percent of the turnover of low-performing teachers occurs in high-poverty schools, where the proportion of exiting teachers who are low-performers is twice as high as in low-poverty schools.
…Our estimates indicate that there are consistently large gains from the exit of low-performing teachers in high-poverty schools. In math, teacher quality improves by 1.3 standard deviations and student achievement by 20 percent of a standard deviation; in reading these figures are 1 standard deviation of teacher quality and 14 percent of standard deviation of student achievement.
These are big effects especially when multiplied over many generations of students.
Hat tip: Eric Crampton at Offsetting Behaviour.
Larry Summers sounds pretty pessimistic here
…whoever you think the four most likely Americans to be the next president of the United States—who are probably Ted Cruz, Donald Trump, Bernie Sanders, and Hillary Clinton—none of them are in favor of TPP. That has to say something about the political—the political environment.
And this:
The Economist had a remarkable statistic. The IMF makes forecasts for every country every April. There have been 220 instances across several decades and some number of countries where growth was positive in year T and negative in year T+1. Of those 220 instances, the IMF predicted it in April in precisely zero of those 220 instances. So the fact that there’s a sense of complacency and relative comfort should give very little comfort.
The dialogue, with Richard N. Haass, is interesting throughout. Haass seems to be too negative about India and Pakistan.
Autor, Dorn, and Hanson, on what we know about China
They have a new and excellent summary paper (pdf), and that is Gordon not Robin Hanson:
China’s emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, are key items on the research agenda for trade and lab or economists.
This is some of the most important work done by economists in the last twenty years.
“Hillary, can you excite us?”
I found the article and its photos interesting throughout. Here is commentary from Robin Hanson.
I was too early in 2006
I wrote:
The yuan should not, as matters stand, float freely with free capital movements. Large quantities of Chinese savings, currently restricted to the domestic currency, would probably flee the country, worsening the serious solvency problems at Chinese banks. The Chinese must first clean up their banking system before they can have free capital markets. Contrary to the conventional wisdom, a market-determined value for the yuan might well be lower than today’s exchange rate, not higher.
Here is the rest of my 2006 column on China.
Tuesday assorted links
1. Shypmate, a new African venture to carry your packages.
2. The problem with cash transfers: the people who don’t get them grow angry.
3. Unprovoked yoghurt attacks the culture that is Dorset.
4. North Korea exports epic art (NYT).
5. Media Metrics, interesting throughout.
*Capitalism: Competition, Conflict, Crises*, by Anwar Shaikh
Oxford University Press, 1024 pp., New School lineage, endorsements from the big “heterodox” names, this may be another one of the big economics books this year.
I’ll keep you posted. Here is the Amazon link.
For the pointer I thank the excellent David Gordon.
Facts about business travel
More populous countries have more business travel in both directions, but the volume is less than proportional to their population: a country with 100% more population than another has only about 70% more business travel. This suggests that there are economies of scale in running businesses that favor large countries.
By contrast, a country with a per capita income that is 100% higher than another receives 130% more business travelers and sends 170% more people abroad. This means that business travel tends to grow more than proportionally with the level of development.
While businesspeople travel in order to trade or invest, more than half of international business travel seems to be related to the management of foreign subsidiaries. The global economy is increasingly characterized by global firms, which need to deploy their know-how to their different locations around the world. The data show that there is almost twice the amount of travel from headquarters to subsidiaries as there is in the opposite direction. Exporters also travel twice as much as importers.
That is from Ricardo Hausmann, with further interesting points.
*The Age of Em*, by Robin Hanson
That is the title of the new and forthcoming Robin Hanson book, due out in May. I was asked to supply a blurb, and offered two possibilities. One was:
“Robin Hanson is one of our most original and important thinkers. This is his book.”
The ostensible premise of the book is that people have become computer uploads, and we have an entirely new society to think about: how it works, what problems it has, and how it evolves. One key point about this new world is individuals can be copied. But this is more than just a nerdy tech book, it is also:
- Straussian commentary on the world we actually live in. We are already something-or-other, uploaded into humans,and very often Robin is describing our world in cloaked fashion, albeit with some slight tweaks to parameters for the purpose of moral illumination.
- A reminder of how strange everything is, and how we use self-deception to come to terms with that strangeness. It’s a mock of all those who believe in individual free will.
- An attempt to construct a fully rational theology, proving by various deductions that God is not fully benevolent in the traditional sense.
- An extended essay on the impossibility of avoiding theology, given the imposition of competitive constraints on a world where production and copying are possible. And ultimately it is a theodicy, though it will not feel that way to Westerners, Jews, Christians, or Muslims. It hearkens back to medieval theology, Descartes, and the idea of living in God’s possibly terrifying simulation.
- A satire on the rest of social science, and how we try to explain and predict the future.
- A meta-level growth model in which energy alone matters and the “fixed factor” assumptions of other models are relativized. Copying is taken seriously, besides how special are you anyway? In the meantime, we learn just how much of the world we know depends upon the presence of various fixed factors. But surely that is temporary!
- A challenge to our notions of wherein the true value of a life resides.
I hope enough readers pick up on some of this. And yes, there is a chapter on sex, love, and affairs.
It is hard to excerpt from this book, but here is one short bit:
Compared with humans, ems fear much less the death of the particular copy that they now are. Ems instead fear “mind theft,” that is, the theft of a copy of their mental state. Such a theft is both a threat to the economic order, and a plausible route to personal destitution or torture. While a few ems offer themselves as open source and free to copy, most ems work hard to prevent mind theft. Most long-distance physical travel is “beam me up” electronic travel, but done carefully to prevent mind theft.
I am wildly enthusiastic about everything the Robin upload does, and some of his copies are better yet. Here is the book’s home page.
Addendum: Here is Robin Hanson’s response.
George Borjas is restarting his blog
Conversation with Kareem tomorrow is relocated
Robert Parrish could not much push him away from his preferred spots on the floor, but due to snow we are altering the venue:
New venue:
Westin Arlington Gateway, F. Scott Fitzgerald Ballroom (2nd floor), 801 North Glebe Road Arlington, VA
Tuesday, January 26, 2016, 3:30 p.m. – 5:00 p.m.
At the event, you can participate in the conversation by tweeting your questions and comments using the hashtag #CowenKareem.
You can watch the event online at mercatus.org/live
Arrived in my pile
1. Rowena Olegario, The Engine of Enterprise: Credit in America.
2. Jürgen Kocka, Capitalism: A Short History.
3. Michel De Vroey, A History of Macroeconomics: from Keynes to Lucas and Beyond.
4. Despina Stratigakos, Where are the Women Architects?
5. Heather Boushey, Finding Time: The Economics of Work-Life Conflict.
Democracy is an acquired taste
Democracies depend on the support of the general population, but little is known about the determinants of this support. This paper analyzes whether support for democracy increases with the length of time spent under the system, and whether preferences are thus affected by the political system. Relying on 380,000 individual-level observations from 104 countries over the years 1994 to 2013, and exploiting individual-level variation within a country and a given year in the length of time spent under democracy, we find evidence that political preferences are endogenous. For new democracies, our findings imply that popular support needs time to develop. To illustrate: the effect of around 8.5 more years of democratic experience corresponds to the difference in support for democracy between primary and secondary education.
That is from Nicola Fuchs-Schündeln and Matthias Schündeln (pdf), two underrated but very much on the rise economists. Here is the home page of Nicola, here is the home page of Matthias. Here is Nicola’s paper, with Paolo Macella, on the persistent effects of socialist education (pdf).
Monday assorted links
1. Detroit still has higher levels of lead poisoning than does Flint.
2. Whale dialects and whale tribes and whale culture.
3. “The elfin Ms. Kondo, perhaps the world’s only decluttering celebrity…Now 31, KonMari, as she’s known, exhorts you to ask yourself, “Do your things spark joy?” If not, you must thank them for their service, and send them packing.” NYT link here. Here is a behavioral economics analysis of Kondo. I liked this NYT sentence: “It’s a liberating manifesto, though in practice it can take months.”
4. “I, ball point pen [China]” And Michael Pettis is right about China: “Repaying debt simply means allocating debt-servicing costs, either directly or indirectly, to specific sectors within the economy.”