Month: September 2019
Has a more beautiful “Progress Studies” book introduction ever been written?
On January 5, 1845, the Prussian cultural minister Karl Friedrich von Eichorn received a request from a group of six young men to form a new Physical Society in Berlin. By the time their statutes were approved in March, they numbered forty-nine and were meeting biweekly to discuss the latest developments in the physical sciences and physiology. They were preparing to write critical reviews for a new journal, Die Fortschritte der Physik (Advances in physics), and from the beginning they set out to define what constituted progress and what did not. Their success in this rather aggressive endeavor has long fascinated historians of science. In fields from thermodynamics, mechanics, and electromagnetism to animal electricity, ophthalmology, and psychophysics, members of this small group established leading positions in what only thirty years later had become a new landscape of physical science populated by large institutes and laboratories of experiment and precision measurement.
How was this possible? How could a bunch of twenty-somethings, without position or recognition, and possessed of little more than their outsized confidence and ambition, succeed in seizing the future? What were their resources?
That is the opening passage from M. Norton Wise, Aesthetics, Industry, and Science: Hermann von Helmholtz and the Berlin Physical Society.
The new generational divide
That is the topic of my latest Bloomberg column, here is one bit:
In a nutshell, younger people today are very comfortable with a small screen and older people are not. Both younger and older people can be found staring at their phones for texts or email or directions, but the big difference comes in cultural consumption. According to one study, the median age of an American television viewer is about 56, whereas for mobile and computer video viewers the median age is 40. Forty percent of those viewers are between 13 and 34…
Just as many older people don’t grasp the import of YouTube, most younger people have a weak sense of the power of cinema on a large screen. It’s not entirely their fault. It’s relatively easy to see older movies on a big screen in London or Paris, and maybe in New York City and Los Angeles (and Silver Spring, Maryland, home to the American Film Institute). In most other places in America, it’s much more difficult.
Sadly, the world is rapidly becoming a place where cinematic history, as it was created for larger screens, no longer exists. Netflix, for all its wonders and diverse contemporary selection, is notoriously bad about making older movies available for streaming, and at any rate the service does not provide a properly large screen for those films.
There is much more at the link, and the economically-minded reader will note this is an application of the Alchian-Allen Theorem.
Saturday assorted links
2. The White Horse of Uffington has been taken care of for 3000 years.
3. Interview with Enrico Moretti.
4. Do people speak faster in less efficient languages?
6. Tejas Subramaniam life update.
7. Ahem, people. Joi Ito is on the board of the NYT.
Maybe pet health care is not seeing as much cost inflation as we thought
Nationwide’s pet health insurance division has partnered with Purdue University researchers to track trends in pet insurance payouts. The researchers track a “basket” of the most commonly-utilized procedures to see how the typical veterinary visit has changed in price over time. According to their research, these ordinary expenses declined by 6 percent from January 2009 to December 2017 after adjusting for inflation.
This decrease is corroborated by less reliable sources, such as the American Pet Products Association (APPA) annual consumer spending surveys. For virtually every year tracked (accessible via web archive), cat and dog owners reported spending less money on average routine and surgical visits. The data is jumpier than the Nationwide and Purdue rigorous analysis of 30 million insurance claims but confirms an interesting – and counterintuitive – trend. In a system where consumers and patients’ “representatives” have enough skin in the game, healthcare prices behave like they would in most other markets.
That is from Ross Marchand, “Why cats pay a lower price for CAT scans.” Here is earlier work by Einav, Finkelstein, and Gupta about pet health care being about as inefficient as human health care. I don’t consider this a settled issue, but it is interesting to hear a revision on what had been the most common take.
Actual progress in exchange rate economics
In this paper, we show that there is substantial comovement between prices of primary commodities such as oil, aluminum, maize, or copper and real exchange rates between developed economies such as Germany, Japan, and the United Kingdom against the US dollar. We therefore explicitly consider the production of commodities in a two-country model of trade with productivity shocks and shocks to the supplies of commodities. We calibrate the model so as to reproduce the volatility and persistence of primary commodity prices and show that it delivers equilibrium real exchange rates that are as volatile and persistent as in the data. The model rationalizes an empirical strategy to identify the fraction of the variance of real exchange rates that can be accounted for by the underlying shocks, even if those are not observable. We use this strategy to argue that shocks that move primary commodity prices account for a large fraction of the volatility of real exchange rates in the data. Our analysis implies that existing models used to analyze real exchange rates between large economies that mostly focus on trade between differentiated final goods could benefit, in terms of matching the behavior of real exchange rates, by also considering trade in primary commodities.
That is from Juan Pablo Nicolini, via Ilya Novak.
Friday assorted links
1. The culture that is Finland.
2. Russian propaganda is not all that effective (consistent with broader research on media and propaganda I might add).
3. Stripe Capital.
4. Quantifying my cognitive decline.
5. “Alaska village gives suspected drug dealer the boot with a one-way plane ticket out of town.”
Alexander Hamilton v. Satoshi Nakamoto Rap Battle
It’s not Hayek v. Keynes but both Hamilton and Satoshi lay down some hard lyric in their rap battle, a project of Reid Hoffman.
Florence fact of the day
One in five properties in the historic centre is advertised as a short-term rental, according to researchers at the University of Siena, a 60 per cent growth since 2015. It is the highest concentration in Italy, more than Rome (12 per cent) and Venice (11.8 per cent).
Here is the full Aleksandra Wisniewska FT piece on how Airbnb is transforming many European cities.
Rebuilding the British right?
For most of the postwar era, the Conservative Party prided itself on its ability to tell an economic story. Tories traditionally explained their right to govern in terms of an overarching economic vision for the country, a vision which was instantiated in policy and which often set the political agenda.
From Macmillan to Thatcher to Cameron, they presented themselves as the party of national prosperity, and of hard-nosed economic realities, and many people voted for them on this basis. But this no longer seems to be the case.
The last few years have witnessed what elsewhere we called the Strange Death of Tory Economic Thinking. In the years following the EU Referendum, Conservatives in Britain largely dropped the economy from the heart of their political story. This is not just a criticism of Mayism, with its Home Office view of the world; many who professed to be market liberals seemed to do so performatively, without serious consideration of what they wanted to deregulate or how.
The recent change of Prime Minister provides an opportunity to put this right. We hope that the new government will turn away from the trajectory of the last three years, and start taking economics seriously again. If it chooses not to, we would urge others on the centre-right to take up the challenge.
This paper is an attempt to sketch out some principles for a centre-right economic outlook, and some specific policies to focus on.
We begin by presenting a few important stylised facts about the contemporary British economy that should frame an economic narrative; we then set out some political principles for how to turn these into economic policy.
Based on these, we set out a set of policies in four areas where we think progress can be made: tax, housing, infrastructure and devolution, and innovation and technology.
Finally, we conclude with some long-term actions that need to be taken to begin rebuilding an economic narrative for the Right.
This website was written by Sam Bowman and Stian Westlake. If you would like to discuss it, they can be contacted via Twitter (@s8mb and @stianwestlake respectively). If you would like a PDF of the whole website, you can find one here.
Here is the link.
The Shrug platform is now open
The Socioeconomic High-resolution Rural-Urban Geographic Platform for India (SHRUG) is a geographic platform that facilitates data sharing between researchers working on India. It is an open access repository currently comprising dozens of datasets covering India’s 500,000 villages and 8000 towns using a set of a common geographic identifiers that span 25 years.
Here is the link, this was a program, with Paul Novosad and Sam Asher, supported by Emergent Ventures.
Thursday assorted links
1. The Danish negative interest rate mortgages are not exactly that. And yes, some Americans are trying to apply for them.
2. What is the best current knowledge on how the pyramids were built?
3. Rob Wiblin interviews Vitalik Buterin. Self-recommending! And some reporting on selected remarks.
5. Paul Romer visits Burning Man (NYT feature article).
Ideological bias and argument from authority among economists
That is the topic of a new paper by Mohsen Javdani and Ha-Joon Chang, here is part of the abstract:
Using an online randomized controlled experiment involving economists in 19 countries, we examine the effect of ideological bias on views among economists. Participants were asked to evaluate statements from prominent economists on different topics, while source attribution for each statement was randomized without participants’ knowledge. For each statement, participants either received a mainstream source, an ideologically different less-/non-mainstream source, or no source. We find that changing source attributions from mainstream to less-/non-mainstream, or removing them, significantly reduces economists’ reported agreement with statements. This contradicts the image economists have of themselves…
And from the paper:
Consistent with our overall findings, we find that for all but three statements, changing source attributions to a less/non-mainstream source significantly reduces the agreement level. The estimated reductions range from around one-tenth of a standard deviation to around half of a standard deviation.
The largest agreement reduction is for this sentence:
“Economic discourse of any sort — verbal, mathematical, econometric — is rhetoric; that is, an effort to persuade.”
You also can test which kinds of authority reassignation alter the level of agreement. And thus:
We find that the estimated ideological bias among female economists is around 40 percent less than their male counterparts.
The countries where economists exhibit the highest ideological bias are Ireland, Japan, Australia, and Scandinavia, where for Austria, Brazil, and Italy the ideological bias is smallest. South Africa, France, and Italy are most conformist to mainstream opinion.
It is a wordy and poorly written paper, and they don’t consider the possibility that deference to authority perhaps is the rational Bayesian move, not the contrary. Still, it has numerous results of interest. Here is the authors’ blog post on the paper.
Emergent Ventures winners, fifth cohort
16-year-old programmer from Northern England, grant for career development and his interest in income-sharing agreements. Here is James on Twitter.
Incoming Harvard Ph.D student in economics, for work on “What happens to the ability of firms to write contracts when courts are dysfunctional? [in India]” and related ideas. Twitter here.
17-year-old from Chennai, Twitter here.
San Francisco, to support his project to reexamine and fundamentally improve the book as a method for learning and absorbing ideas, Twitter here. Here is his essay on why books do not work.
Nicholas Donahue and Austin Kahn
Has a start-up, open source VR headset focused towards makers and web developers, based on the notion that the web is the proper platform for VR.
Clementine Jacoby and Recidiviz
To start a non-profit to collect and spread data on recidivism and penal reform for state-level policy, Fast Company article on Recidiviz here.
GMU, Schar School, “How can we explain a specific AI outcome? What if the law mandates it?”, with an eye toward an eventual start-up.
Washington, D.C., for career development and to explore the marketing of neoliberal ideas through social media.
Shruti Rajagopalan, for Indian political economy and improving Indian economic policy, in residence at Mercatus. Twitter here.
20-year-old infovore, career development grant, Twitter here.
A non-profit working with survivors of sexual abuse in the Catholic Church, article here about their work.
If you have received an award lately, but are not listed, don’t worry — you’ll be in the sixth cohort. Here are the earlier cohorts of winners.
Economist podcast on Progress Studies
The segment with Patrick Collison starts within minute eight, the rest is interesting too. And here is our original Atlantic piece on Progress Studies.
When is it too dangerous to travel to a particular place?
That is the topic of my latest Bloomberg column, here is one excerpt:
As I’ve grown older, I have become more cautious. That has meant more time walking, especially in cities, and less time in moving vehicles. This has allowed me to continue my travels to countries that are considered relatively dangerous. In the next year or two, I hope to make my sixth trip to Port-Au-Prince, Haiti, and I’ll probably stay in the city confines.
As I write this, I am sitting in the Grand Canyon Lodge at the northern rim of the Canyon. The surroundings are idyllic, but it took me a five-hour drive to get here. I’m still wondering if this was a reckless trip.
Over the last few decades, initially as part of my research for a book, I have made 20 or so visits to rural Guerrero, in Mexico, near drug gang territory, and they have all passed without incident. Still, I get very nervous when I am in a “collectivo” on a mountain road and the driver appears to be no more than 15 years old and is fond of loud music and beer.
And there is always this:
Which leads me to my final point — and maybe you won’t find my wording reassuring: Most incidents don’t kill you or cripple you.
Recommended. One point I did not have space for is that often you should avoid water contact. During my first Ethiopia trip, the scariest moment came, on the shore of a lake in central Ethiopia, when I was asked: “Would you like to go out in our small boat and see the hippopotamus?”