Month: May 2017
Walking around Mumbai I see many vacant houses and apartments and the statistics verify what I see on the ground, an astounding 15% of Mumbai’s housing stock lies vacant. In Mumbai, the slums are full but thousands of homes lie vacant. The share of vacant housing in Mumbai is only slightly higher than the national average of 12% (In comparison, the United States has a vacant homeowner rate of less than 2%.) Sahil Gandhi and Meenaz Munshi, two of my colleagues at the IDFC Institute, examine the paradox of India’s vacant housing:
Urban India has a severe shortage of housing, yet Indian cities have many vacant houses. According to the census of India 2011, out of the 90 million residential census units, 11 million units are vacant; that is about 12% of the total urban housing stock consists of vacant houses.
Gandhi and Munshi focus on two issues. First, government built housing is shockingly underused. In one centrally sponsored housing project in Delhi, for example, the government built 27,344 units and 26,288 lie vacant! Government housing has often been built far from jobs and public transport and in some cases the houses have been of low quality and lacking basic infrastructure. As the government acknowledged:
“In spite of the continuous efforts by the government, slum dwellers are reluctant to move to the houses built by the government due to lack of proper infrastructure and means of livelihood,” the statement to Parliament said, explaining further that the new houses often lack electricity and water, cheaply available–often through illegal connections–in slums. The new houses are usually not close to workplaces, the ministry acknowledged.
People living in India’s urban slums have often preferred to stay living in the slums rather than move to government built housing–which is really saying something.
Government built housing, however, is only a small part of the housing stock. The bigger problem is that owners of private housing would prefer to see their housing capital lie vacant than to rent.
Renting out a property is a risky affair in India due to perceived (often, correctly) difficulties of evicting tenants, particularly under the onerous regulatory framework of the various rent control laws that are still applicable across states in India.
….These laws fix rent for properties at much below the prevailing market rates and make eviction of tenants difficult. As a result, they increase perception of risk and distort incentives for renting. To get around this, leave and licence agreements are being used as an alternate legal mechanism to rent properties. Despite this, the legacy of rent control and policy uncertainty creates reluctance to rent. To provide an example of policy uncertainty, in 1973 the Maharashtra government brought the then existing leave and licensees contracts under rent control (Gandhi et al 2014). Instances like this have had an adverse impact on the confidence of investors and landlords.
As I pointed out in A Twisted Tale of Rent Control in the Maximum City it can take courts decades to resolve legal disputes, especially those involving land and tenancy so this further disincentives rental housing.
As Gandhi and Munshi note, the problems in the housing market exacerbate probems in the labor market (just as in the United States):
Without a vibrant rental housing market labour markets cannot function efficiently (see Shah 2013). Bringing the private vacant housing stock into the rental market and understanding and resolving the reasons for vacancy in the government provided stock could significantly improve efficiency in utilising available stock of housing.
I will be doing a Conversations with Tyler with him, though podcast only, not a public event. What should I ask him?
I thank you in advance for your suggestions.
The Republican solution to sick people who need health insurance in a post-Obamacare world is increasingly coming to center on three words: high-risk pools.
The White House has reportedly secured the support of Rep. Fred Upton (R-MI), a longtime legislator, by promising an additional $8 billion to fund these programs. That would mean the Republican plan has nearly $115 billion that states could use, if they wanted to, for high-risk pools.
…There were 35 state high-risk pools before the Affordable Care Act passed. To control costs, they would often do things like charge higher premiums than the individual market. Most had waiting periods before they would pay claims on members’ preexisting conditions, meaning a cancer patient would need to pay premiums for six months or a year before the high-risk pool would cover her chemotherapy treatments.
Kliff then notes those pools have proved quite expensive. And:
The Republican bill doesn’t require states to build high-risk pools — it just gives them the option. And it has little to say about how states should build them if they decide to do so. It is possible they would also have lifetime limits and preexisting condition waiting periods. Those details are hugely important, but are unlikely to get sorted out until after the bill passes and the Trump administration begins to write regulations.
I don’t favor ACHA, which I see as bringing no benefit and also as involving a cynical desire to repeal Obamacare simply to fulfill a campaign promise (and it needs a CBO score). Still, I see many people fulminating about this change toward high risk pools, yet without defending their position much beyond a hand wave. Should all requests for emergency medical care receive additional government funding? Obamacare itself does not embody anything remotely like that principle, for instance consider all the medical conditions not covered under the mandate, or covered only imperfectly. Not to mention the rare diseases that receive only limited R&D dollars. And we’re about to run out of yellow fever vaccine — nasty! The list goes on and on. How are those pandemic preparations coming?
If the federal government is asked to pick up the tab for high-risk pools or some rough equivalent, it probably visualizes the cost in terms of either additional borrowing or as a common pool problem. It is close to a free lunch in political terms, arguably even a political benefit, now that Obamacare is more popular.
If balanced-budget state governments are asked to pick up the tab, they will wonder whether that money should better be spent on schools, roads, and prisons. Many of them will be reluctant. Maybe that is right or wrong, but is “let’s have a democratically elected state government decide how much to subsidize medical care for those with preexisting conditions” such a morally outrageous view? I guess it is these days. The simple but underemphasized truth is that under the new bill state governments can spend as much as they want on high-risk pools.
(Is it not sobering to think that if the high-risk patients are put into a separate pool, and have to ask for state-level but taxpayer-sourced money in a direct and transparent manner, the political support for that funding is not so strong? That is perhaps the real lesson here. In this debate, both sides are the enemies of transparency.)
Which is the better perspective? Federal or local? The answer is obvious if you believe all requests for emergency medical care should receive additional government funding. But, as I’ve mentioned, no one believes that. I do see people who cite that principle when it is convenient in one part of a debate, and who forget about the same principle for other policy choices.
And please, don’t compare these marginal health care expenditures to “tax cuts for the rich” — instead advocate for where you most want to see the money spent! Don’t let the silly Republicans bail out your analytical apparatus once again; any program is easy to justify in your own mind if you put it up against what you consider to be a very weak alternative use of the funds. It is fine to say “bigger subsidies for high-risk pools are better than tax cuts for the rich, but they are still only my 17th most preferred use for the funds.”
Along related lines, while I favor taking in many more refugees, I also understand that any feasible migration policy involves leaving many refugees and potential migrants to their possible deaths, and with a relatively high probability in some cases. So if your moral argument is “we should let in person x, or person x will die,” you need to provide a limiting principle once again.
Most generally, beware of moral arguments that a) lower the status of some other group of people, and b) do not state and justify their limiting principles. They are ways of substituting in pleasurable moralizing in lieu of dealing with the really tough questions.
Addendum: Here are some new and relevant results cited by David Leonhardt, I haven’t had time yet to read through them.
They are usually reserved for impatient drivers in built-up, urban areas.
But a picturesque beauty spot in eastern China has nicked a trick from road safety campaigners worldwide – by installing speed bumps for pedestrians.
Local officials in the town of Taierzhuang have installed 50 so-called ‘calming devices’ to slow human traffic at one particular point.
…It’s believed the speed bumps, which are located at the historic site’s pedestrian entrance, are designed to encourage greater appreciation of its beauty and heritage.
Previously, there were concerns that increased footfall was becoming too frenetic – and thus compromising the experience.
Here is the story, via the excellent Mark Thorson.
1. Heartlessness as a female intellectual strategy? (The article seems like odd framing to me, still the content is interesting.)
That is a new series on Bloomberg View, here are the beginnings of the symposium. Here is Clive Crook on productivity as a moral imperative. Here is Noah Smith on the easy ways to boost productivity. Here is my piece on the human constraints behind the productivity problem, here is one excerpt:
The logic of the usefulness of face-to-face contact also shapes the geographic distribution of economic activity…
Given all this, at least three answers to the productivity problem suggest themselves. First, we can make online communities more vivid. E-sports, a diverse set of online competitions, have hundreds of millions of viewers. Through the development of internet fandoms and communities, many people now find these activities more exciting to watch than the World Series. Even chess on the internet has proved popular, as commentary and chat rooms make it more exciting for the viewers. The community-building tactics used by e-sports could be applied elsewhere.
Second, we can make face-to-face communities more effective. I am struck by the occasional scorn shown to ex-President Barack Obama for his past as a community organizer. Yet building communities is a critical skill for boosting business productivity in a service economy.
Third, individuals should read and cultivate Stoic philosophy in themselves, whether explicitly or as they might pick up from a best-seller. More self-reliance and less dependence on social cues for doing the right thing will increase economic performance.
There are more installments coming in the series.
Americans with degrees have been getting steadily less optimistic since mid-2015…
Americans without degrees are as optimistic now as they’ve ever been since the survey began nearly four decades ago. Only the peak of the tech bubble compares. By contrast, Americans with degrees are about as confident in the future as they were in September 2007, when the credit crisis had already begun…
Since the start of 2015, the outlook among the young has deteriorated sharply, albeit from a high base. Meanwhile, the expectations of Americans ages 55 and older have soared in the wake of the election to their highest level in more than fifteen years…
And this in sum:
The groups responsible for the aggregate change in sentiment are the least likely to experience big real wage increases and therefore the least likely to boost their spending. Moreover, they appear unwilling to translate their vague optimism about the future into specific expectations about behaviour.
So even if those expectations were reliable guides to the actual choices people make — something strongly debated among forecasters — there is little reason to believe the “Trump bump” in consumer sentiment is a harbinger for sharply rising real spending.
That is all from Matthew C. Klein. I would stress the broader point that in a polarized time such survey results may not be very reliable at all, and perhaps we should dismiss the pessimistic responses of the young as well.
A number of people have climbed onto Twitter and outlined (correctly) how increased uncertainty about the impact of climate change increases the value of doing something about it. There is downside risk, and of course we wish to buy insurance against that in the form of a more active climate change policy. Still, that is not looking deeply enough. I see some of the relevant uncertainties as embodied in the following scenario, which is more about policy means than climate change science:
Following a Trump debacle, finally the Democrats win all branches of government and pass a climate change bill. There is a carbon tax, and further anti-coal measures, but it isn’t enough to shift energy regimes in a transformational sense (besides, truly transformational technologies require luck and “the right time” far more than price incentives). Instead the United States becomes more like Western Europe, with higher levels of conservation but no ground-breaking new energy source. Solar goes up by ten percentage points, and wind by two or three, given NIMBY opposition. Fracking becomes more efficient yet, which nudges fossil fuels back a bit onto center stage. Nuclear is closed down altogether, and hydroelectric also goes in reverse or stagnates. China is as China does, and they slowly move away from their installed coal base, in the meantime taking steps to control their particulate matter but not so much their carbon, copying America in this regard. India starts a shift from coal to natural gas but still has rising carbon emissions. Africa and Vietnam exceed growth expectations, with a lot of solar power to be sure, but not enough to counteract their growing industrialization. The carbon tax causes a mild recession in America, and environmentalism becomes less popular. The global boost in temperature continues, unchecked. The people who die each year from regular air pollution — six to seven million at last count — diminish in number with economic growth, but we react largely with indifference to that problem, because it doesn’t fit into domestic political struggles very neatly.
Now, to me something like that is the single most likely scenario, albeit with a lot of uncertainty. I am still happy to try remedial policy measures, and to try them now, if only out of non-complacency or perhaps just desperation. But come on, let’s be honest. If all you are doing is trying to combat uncertainty about the science, you are unwilling to look the actual problem square in the eye, just like the climate deniers, the very people you so much decry.
The shrinking of the middle is largely due to a recent rise in the share of women (who also represent a majority of college students) who identify as either liberal or far left. The share of female respondents, but not male respondents, who describe their political views this way was at an all-time high (41.1 percent for women, 28.9 percent for men). Left-wing views peaked for men way back in 1971, at 43.6 percent.
That is from the always interesting Catherine Rampell. The “political gender gap” across men and women, in these numbers, never has been higher, see the link for a picture and details but by one measure it is 12.2 percentage points.
Given the distribution of the “political correctness movement” across majors, how much it is simply the result of the increased feminization of education itself?
That is a new project by Jonathan Haidt and the Heterodox Academy, here is a partial summary:
Heterodox Academy announces a simpler, easier, and cheaper alternative: The Viewpoint Diversity Experience. It is a resource created by the members of Heterodox Academy that takes students on a six-step journey, at the end of which they will be better able to live alongside—and learn from—fellow students who do not share their politics.
It’s a very flexible resource that can be completed by individuals before they arrive on campus, presented in an orientation-week workshop, or expanded into a full semester course that students can take during their first year. (It could also be helpful in high schools, companies, religious congregations, and any other organizations that are experiencing sharp political divisions and conflicts.)
…The site is still under development: we welcome feedback and criticism. We particularly seek out professors, high school teachers, and diversity trainers who will partner with us to develop detailed teaching plans and activities. We will have a larger public launch of the project in August, complete with assessment materials that will allow you to measure whether the curriculum actually increased political knowledge and cross-partisan understanding.
Do click on the site itself for a fuller explanation, and please help out if you can.
2. There is no great stagnation: “McDonald’s Invents a ‘Frork’ Utensil Made of French Fries“. Furthermore:
A limited supply of Frorks will be available with the purchase of a Signature Crafted Recipes sandwich on May 5 at participating restaurants. These sandwiches sell for between $4.99 and $5.19.
In true infomercial style, the ad features a toll-free number that gives callers a chance to get a free Frork or a coupon for a free Signature Crafted Recipes sandwich.
4. Sent to jail by a software program? (NYT)
5. The Chinese factory workers who write poems on their phones. Recommended.
Here is one reason:
We find that Amazon saves between $0.17 and $0.47 for every 100 mile reduction in the distance of shipping goods worth $30. In the context of its distribution network expansion, this estimate implies that Amazon has reduced its total shipping cost by over 50% and increased its profit margin by between 5 and 14% since 2006. Separately, we demonstrate that prices on Amazon have fallen by approximately 40% over the same period, suggesting that a significant share of the cost savings have been passed on to consumers.
The author is Rob Sheffield and the subtitle is The Love Story of One Band and the Whole World. So far this year this is my favorite book, in part because it stretches genres in a creative way. In addition to being a study of fandom, celebrity, 1960s history, “how boys think about girls,” and of course the music itself, it is most of all a splendid take on small group cooperation, management, and the dynamic between John and Paul. I enjoyed every page of this book, and learned a great deal, despite having read many other books on the Beatles. Here is a typical passage”
The Beatles invented most of what rock stars do…They invented breaking up. They invented drugs. They invented long hair, going to India, having a guru, round glasses, solo careers, beards, press conferences, divisive girlfriends, writing your own songs, funny drummers. They invented the idea of assembling a global mass audience and then challenging, disappointing, confusing this audience. As far as the rest of the planet is concerned, they invented England.
A few of the more specific things I learned were:
1. For a while Stanley Kubrick was planning on making a movie version of Lord of the Rings with Paul as Frodo, Ringo as Sam, and John as Gollum. George was to be Gandalf.
2. When the cops raided Keith Richards’s mansion in 1967 and found cocaine, they threw it away because they had never seen it before and didn’t know what it was.
3. When Paul McCartney played an acetate of “Tomorrow Never Knows” for Bob Dylan, Dylan’s response was “Oh, I get it. You don’t want to be cute anymore.”
4. The French title for “A Hard Day’s Night” was Quatre Garcons Dans Le Vent, which translates roughly as “Four Boys in the Wind.”
The book is funny too:
I always loved this sentence in Our Bodies, Ourselves, the Eighties edition I had in college: “The previous edition of Our Bodies, Ourselves included a brief section on astrological birth control, which just doesn’t work.” So much going on in that sentence, dispatched with no drama. Maybe a shade of irony, but no hand-wringing — just a change of mind announced as efficiently and discreetly and decisively as possible.
Paul has a compulsive need to feed his enemies all the ammunition they could want. The software of “don’t take the bait” was never installed in his system. No celebrity has ever been easier to goad into gaffes. I love that.
As Lennon snapped in 1980, after getting asked one too many times if they [he and Paul] still spoke, “He’s got 25 kids and about 20,000,000 records out. How can he spend time talking? He’s always working.”
On the revisionist upswing in this book are Rubber Soul, “I’m so Tired,” “It Won’t Be Long,” and John Lennon’s “God.” On the revisionist downswing is Let It Be and Paul McCartney’s “My Love.”
Not for the unconverted, but I’m glad to see people writing books with me as the intended audience. Here is a quite insightful review, in which Chris Taylor writes: “…it may be the first book to encompass the entire Beatlegeist. If aliens land tomorrow, and demand to know why we keep on pumping this particular brand of music into space, this is the first book you would hand them.”
Loving winning and hating losing are two fairly distinct motivations. For instance, a fairly joyless person may nonetheless be motivated by the humiliation of a loss, or a non-envious, non-spiteful type could receive great pleasure from being number one, while not minding if someone later climbs higher yet.
If you both love winning and hate losing that is especially useful in one-on-one, zero-sum competitions, such as chess and tennis, and also in most team sports and perhaps securities trading as well. Such people are more motivated, and motivated from more sides of their being, and if one of the emotions flags a bit the other is there to step in and maintain the pace and focus.
In venture capital, I suspect that hatred of losing may be a disadvantage. No matter how successful you may be, most of your individual investments will lose money and hatred of losing may make you too risk-averse. It might be better to have the ability to simply forget your losses and put them behind you.
For academics, it is more important to love gains than to hate losses. Provided they don’t embarrass you, your forgotten articles just aren’t that big a deal and everybody has them, including Nobel Laureates. A single key piece can make your career, however.
Is hatred of loss also unnecessary for book authors and music stars? Ideally, you would think they should take lots of chances, but the exact tracking of sales makes them more risk-averse and thus boosts the relative status of the loss haters. If they release a clinker book or album, the intermediaries are less keen to promote them next time around. To the extent intermediaries become more important, that boosts the loss-hating performers, because intermediaries themselves are somewhat loss-hating.
What is the correct mix of gain-loving and loss-hating for a Navy Seal? For a journalist? A lawyer, programmer, or engineer?
In a job interview, what question should you ask to discern if someone is a gain lover or a loss hater or both? Or neither!