Month: February 2019

Facts about UBI

A UBI would direct much larger shares of transfers to childless, non-elderly, non-disabled households than existing programs, and much more to middle-income rather than poor households. A UBI large enough to increase transfers to low-income families would be enormously expensive. We review the labor supply literature for evidence on the likely impacts of a UBI. We argue that the ongoing UBI pilot studies will do little to resolve the major outstanding questions.

That is from a new NBER working paper by Hilary W. Hoynes and Jesse Rothstein.

Monday assorted links

1. “…the relatively recent increasing gender parity in association presidents of ASA and PAA but not AEA.”  and “…socialization at home can explain a non-trivial part of the observed gender disparities in mathematics performance…

2. Scott Sumner thinks about economic growth.

3. Cities reading list.

4. “Mr. [Robert] Ryman was perhaps peculiarly American in being an autodidact who never took a single art course. His art education consisted of seven years as a guard at the Museum of Modern Art in New York.” (NYT, and RIP)

5. Alzheimer’s and portfolio decisions.

6. Intergenerational mobility in Africa.

Strict ID Laws Don’t Stop Voters: Evidence from a U.S. Nationwide Panel

U.S. states increasingly require identification to vote – an ostensive attempt to deter fraud that prompts complaints of selective disenfranchisement. Using a difference-in-differences design on a 1.3-billion-observations panel, we find the laws have no negative effect on registration or turnout, overall or for any group defined by race, gender, age, or party affiliation. These results hold through a large number of specifications and cannot be attributed to mobilization against the laws, measured by campaign contributions and self-reported political engagement. ID requirements have no effect on fraud either – actual or perceived. Overall, our results suggest that efforts to reform voter ID laws may not have much impact on elections.

By Enrico Cantoni and Vincent Pons.  Rooftops, shout, mood affiliation, etc.

Nigeria fact of the day

Last year more people were killed in clashes over land between farmers and cattle-herders than were slain by Boko Haram.

By the way:

On February 16th Nigerians will go to the polls in the largest democratic event in African history.


In total Mr Buhari has delivered on just seven of the 222 pledges he made as a candidate, according to the Centre for Democracy and Development, a Nigerian think-tank.

Here is The Economist article.

The wisdom of Ramez Naam, on climate change

From his tweetstorm here are a few bits:

Our biggest climate problems – the sectors that are both large and that lack obvious solutions, are: a) Agriculture and land use changes (AFOLU in the graphic) and b) Manufacturing / Industry. Together, these are 45% of global emissions. And solutions are scarce. 11/

I’m not saying that clean electricity or transport are solved. They’re not. But in electricity, we have solar, wind, batteries growing & getting cheaper & on path for 70-80% decarbonization *at least*. Same with electric cars and trucks. We have momentum in those sectors. 12/

We do NOT have momentum in reducing carbon emissions of agriculture or manufacturing. In agriculture, livestock methane emissions + deforestation to graze livestock are biggest problems. And meat consumption is doubling in next 40 yrs. This should scare you more than coal. 13/

In industry, despite progress in recycling steel, *primary* steel production is still incredibly carbon intensive. As is cement. As is much of manufacturing. We haven’t reached the “solar cheaper than coal” or “EVs cheaper than gasoline” tipping points there. We need to. 14/

If the US is serious about climate policy, it ought to focus on these two sectors – agriculture and industry – that are soon to be the two largest emissions sources, and lack solutions. We should press to invent solutions, drive them down in price, and spread them globally. 16/

Do read the whole thing.

Biblical Adverse Selection

And Jesus said, Behold, two men went forth each to buy a new car.

And the car of the first man was good and served its owner well; but the second man’s was like unto a lemon, and worked not.

But in time both men grew tired of their cars, and wished to be rid of them. Thus the two men went down unto the market, to sell their cars.

The first spoke to the crowd that had gathered there, saying honestly, My car is good, and you should pay well for it;

But the second man went alongside him, and bearing false witness, said also, My car is good, and you should pay well for it.

Then the crowd looked between the cars, and said unto them, How can we know which of ye telleth the truth, and which wisheth falsely to pass on his lemon?

And they resolved themselves not to pay for either car as if it were good, but to pay a little less than this price.

Now the man with a good car, hearing this, took his car away from the market, saying to the crowd, If ye will not pay full price for my good car, then I wish not to sell it to you;

But the man with a bad car said, I will sell you my car for this price; for he knew that his car was bad and was worth less than this price.

But as the first man left, the crowd returned to the second man and said, If thy car is good, why then dost thou not leave to keep the car, when we will pay less than it is worth? Thy car must be a lemon, and we will pay only the price of a lemon.

The second man was upset that his deception had been uncovered; but he could not gainsay the conclusion of the market, and so he sold his car for just the price of a lemon.

And the crowd reasoned, If any man cometh now to sell his car unto us, that car must be a lemon; since we will pay only the price of a lemon.

And Lo, the market reached its Nash equilibrium.

From username42 on Reddit. Hat tip: Michael Lane.

Your challenge: Explain an economics principle the King James Way.

The meaning of death, from an economist’s point of view

A few days ago Garett Jones came to my office door and asked “what do we really know about labor supply?”  I said we might as well extend the query to labor demand.  In any case, here was part of my answer, paraphrased of course:

I’ve been much influenced by having kept a dining guide blog/website for almost thirty years, and seeing so many places come and go.  On one hand, I see the stickiness of plans.  A restaurant opens up, and the proprietor has the intent to be a certain thing.  They’re not going to take the pupusas off the menu, just because the price of corn has gone up.  Similarly, increases in the minimum wage might not much alter the hiring plans of the restaurant.  The very act of starting a business selects, to some extent, for people who stick to their plans.  The dishes still need to be washed, and many owners are not at the margins of considering serious automation.

That said, sooner or later these restaurants pass from the scene.  And when the El Salvadoran place closes, there is a real competition across competing food visions.  Will it be pupusas, roast chicken, or kebab?  Once again, relative prices will exert their influence, on both the supply and demand sides of the market.  In fact, pupusa places are slightly in retreat, as they cannot always bid for their higher area rents — it is hard to sell a pupusa for more than a few dollars and at the same time the requisite labor is harder not easier to come by and demand seems stagnant at best.

Similarly, if the minimum wage is high, the new restaurant, if indeed it is even a restaurant, will economize on the number of laborers required to make the food.  The plan for a true Bengali sweets shop will not get off the ground.  You might see storage space or a less labor intensive means of food preparation.

We thus come to a truth that is both happy and sad: death and turnover are how relative prices imprint their impact on the world.

And that, to an economist, is the meaning of death.

What I’ve been reading

The Story of Silver, by um…William Silber, probably is the best book on silver, as I suppose it should be.  How many other books have this same property of coincidence of name and topic?  Did James Igel ever write a book on hedgehogs?

Adrian Tinniswood, The Royal Society & the Invention of Modern Science is the best short introduction to its stated topic.

Linn Ullmann, Unquiet: A Novel.  A novel, yes, but also a not so thinly veiled memoir of life with her two very famous parents Ingmar Bergman and Liv Ullmann.  Fantastic if you already know the back story, but at the very least readable if you don’t.

Kenneth M. Pollack, Armies of Sand: The Past, Present, and Future of Arab Military Effectiveness.  Pollack takes a look at the systematic dysfunctionalities behind Arab militaries, arguing most of them have been worse than the North Korean or Somalian fighting forces.  Jordan in 1948, Hizbullah, and early ISIS are the main exceptions here, British training in the former case being a factor and morale a factor in the latter two cases.

Andrew S. Curran, Diderot and the Art of Thinking Freely.  A good filling-in of what were to me many blanks in the life of Diderot, a figure whom I never can decide whether he is underrated or overrated.

Do land use restrictions increase restaurant quality and diversity?

Daniel Shoag and Stan Veuger say yes, but I am not so convinced.

It turns out that metrics of land use restrictions are correlated with restaurant quality, across cities.  To cut to the chase, Los Angeles ranks number one on this index, and I can agree with that assessment in terms of food quality and also diversity.  (Other good food cities, such as Miami, also rank high on the index.)  Yet for the metropolitan area near L.A., food is generally best where the land use restrictions are least binding.  Beverly Hills and Santa Monica have some decent fancy restaurants, but the real gems are to be found elsewhere, in fringes such as northeast Hollywood, Silverlake (gentrifying a bit too much these days, however), north Orange County, Monterey Park, and so on.  Pasadena has hardly anywhere excellent to eat.

I would suggest an alternative channel of influence: urban areas with high inequality have both better food (see An Economist Gets Lunch, but basically imagine the wealthier people generating demand and the poorer people supplying cheap labor) and more building restrictions.  The wealthier people decide to do something to keep the poorer people out of their neighborhoods.

I hate to say “correlation does not prove causation,” but…correlation does not prove causation.

Via the excellent Kevin Lewis.

What should I ask Emily R. Wilson?

I will be doing a Conversation with her, no associated public event.  She is the translator of a splendid and highly readable Homer’s Odyssey, which I named as the very best book of the year for last year.  She is also a professor at the University of Pennsylvania, a classicist, a Seneca scholar, and an all-around very smart person.  Here is her Wikipedia page.

So what should I ask her?