Month: March 2020

A simple proposal for boosting health care workers

One recent report suggests that 10% of the doctors in northern Italy are infected with coronavirus.  No matter what the exact figure, that is clearly a problem.  In response, Italy is opting for at least two reforms.  First, health care workers who are retired are being lured back to work:

Italy on Saturday began recruiting retired doctors as part of urgent efforts to bolster the healthcare system with 20,000 additional staff to fight the escalating viral epidemic.

Second, the government is giving accelerated treatment to those studying for health care jobs:

In addition, nursing students who were due to take their final exams next month are now expected to graduate in the coming days so they can be immediately put to work

The United States should consider measures in the same direction.

Will the coronavirus and the poor response doom Trump’s reelection chances?

Ross Douthat wonders maybe so (NYT), Arnold Kling says probably not:

Closing the border is his signature issue, and the Democrats have staked out a position as the “resistance” to that. I know that they think they can benefit from this crisis, but I would be surprised if they do.

My earlier Feb.3rd Bloomberg column suggested it would help Trump.  I won’t repeat the core claims of my column (some summarized here), but I am still sticking with that earlier call for a few reasons:

1. Few Americans will know/understand that some foreign governments did a better job than we did, and indeed that is already the case in many other policy areas.  “Foreign country did this better than us” is never an argument that works in American politics.

2. The literature on political business cycles suggests that absolute performance is not what matters, but rather whether the economy is gaining momentum.  So if the coronavirus situation is improving in the months leading up to November, Trump will receive some credit for that, no matter how poor the initial response.  And I think that plausibly will be the case.  Even if you believe in a second winter wave, it may take longer to materialize.

3. The literature on disaster spending suggests politicians are rewarded electorally for their response to disasters, not for preparation.  Enough of the American public still is oblivious to this issue that a major Trump action still could be marketed as timely and indeed pro-active.

4. For my hypothesis to be true, Trump at some point needs to make a “big push” kind of response, but I consider that highly likely, even if the push is ill-considered in its details.

Sunday assorted links

1. Stuart Whatley reviews Stubborn Attachments.

2. Ungated version of my growth-raters vs. base-raters column.

3. The economics of buffets.

4. 2009 study: “”Do voters effectively hold elected officials accountable for policy decisions? Using data on natural disasters, government spending, and election returns, we show that voters reward the incumbent presidential party for delivering disaster relief spending, but not for investing in disaster preparedness spending.”

5. Chinese birth rates coming in lower than expected.

6. How to get money to people fast (it isn’t the bridges).

My avian flu blog days

Circa 2004 or so, it seemed to me that America was grossly underprepared for a possible pandemic.  I started reading up on the topic, and I produced a very basic, simple Mercatus policy paper on avian flu.  For obvious reasons, much of it is out of date and some of the recommendations have been adopted, but here is the first part of the Executive Summary:

1. The single most important thing we can do for a pandemic—whether avian flu or not—is to have well-prepared local health care systems. We should prepare for pandemics in ways that are politically sustainable and remain useful even if an avian flu pandemic does not occur.

2. Prepare social norms and emergency procedures which would limit or delay the spread of a pandemic. Regular hand washing, and other beneficial public customs, may save more lives than a Tamiflu stockpile.

3. Decentralize our supplies of anti-virals and treat timely distribution as more important than simply creating a stockpile.

4. Institute prizes for effective vaccines and relax liability laws for vaccine makers. Our government has been discouraging what it should be encouraging.

5. Respect intellectual property by buying the relevant drugs and vaccines at fair prices. Confiscating property rights would reduce the incentive for innovation the next time around.

6. Make economic preparations to ensure the continuity of food and power supplies. The relevant “choke points” may include the check clearing system and the use of mass transit to deliver food supply workers to their jobs.

7. Realize that the federal government will be largely powerless in the worst stages of a pandemic and make appropriate local plans.

8. Encourage the formation of prediction markets in an avian flu pandemic. This will give us a better idea of the probability of widespread human-to-human transmission.

9. Provide incentives for Asian countries to improve their surveillance. Tie foreign aid to the receipt of useful information about the progress of avian flu.

10. Reform the World Health Organization and give it greater autonomy from its government funders.

And also from later on:

4. We should not expect to choke off a pandemic in its country of origin. Once a pandemic has started abroad, we should shut schools and many public places immediately.

5. We should not obsess over avian flu at the expense of other medical issues. The next pandemic or public health crisis could come from any number of sources. By focusing on local preparedness and decentralized responses, this plan is robust to surprise and will also prove useful for responding to terrorism or natural catastrophes.

Still relevant today.  For a while I also wrote an avian flu blog with Silviu Dochia, archived here.

What Worked in 1918-1919?

The influenza pandemic of 1918 was the most contagious calamity in human history. Approximately 40 million individuals died worldwide, including 550 000 individuals in the United States...[C]an lessons from the 1918-1919 pandemic be applied to contemporary pandemic planning efforts to maximize public health benefit while minimizing the disruptive social consequences of the pandemic as well as those accompanying public health response measures?

That’s the question Markel et al. analyzed in 2007 by gathering historical data on outcomes and what 43 US cities, covering about 20% of the US population, did to combat influenza in 1918-1919.

Nonpharmaceutical interventions were considered either activated (“on”) or deactivated (“off”), according to data culled from the historical record and daily newspaper accounts. Specifically, these nonpharmaceutical interventions were legally enforced and affected large segments of the city’s population. [1] Isolation of ill persons and quarantine of those suspected of having contact with ill persons refers only to mandatory orders as opposed to voluntary quarantines being discussed in our present era. [2] School closure was considered activated when the city officials closed public schools (grade school through high school); in most, but not all cases, private and parochial schools followed suit. [3] Public gathering bans typically meant the closure of saloons, public entertainment venues, sporting events, and indoor gatherings were banned or moved outdoors; outdoor gatherings were not always canceled during this period (eg, Liberty bond parades); there were no recorded bans on shopping in grocery and drug stores.

The authors define “public health response time” as the number of days from the day the excess death rate was double baseline to the day that at least one of their three key public health measures was implemented. Cities that responded very early have a negative public health response time. The basic result is shown in the figure below. The longer the public health response time the greater the total excess deaths (the arrow is my least squares eyeball).

Moreover, although it’s difficult to control for other factors, cities that combined school closures, isolation and quarantining, and public gathering bans tended to do better. Some cities let up on their public health interventions and these cities seem to correlate well with bi-modal distributions in excess death rates, i.e. the death rate increased. Denver was an example where the public gathering ban was dropped and the school ban was lifted temporarily and the excess death rate rose after having fallen.

The authors conclude:

…the US urban experience with nonpharmaceutical interventions during the 1918-1919 pandemic constitutes one of the largest data sets of its kind ever assembled in the modern, post germ theory era.

…Although these urban communities had neither effective vaccines nor antivirals, cities that were able to organize and execute a suite of classic public health interventions before the pandemic swept fully through the city appeared to have an associated mitigated epidemic experience. Our study suggests that nonpharmaceutical interventions can play a critical role in mitigating the consequences of future severe influenza pandemics (category 4 and 5) and should be considered for inclusion in contemporary planning efforts as companion measures to developing effective vaccines and medications for prophylaxis and treatment. The history of US epidemics also cautions that the public’s acceptance of these health measures is enhanced when guided by ethical and humane principles.

Addendum: Another way of putting this is that China has largely followed the US model. Can the US do the same?

Saturday assorted links

Facts about Starbucks against free bathrooms charge them all

In May 2018, in response to protests, Starbucks changed its policies nationwide to allow anybody to sit in their stores and use the bathroom without making a purchase. Using a large panel of anonymized cellphone location data, we estimate that the policy led to a 7.3% decline in store attendance at Starbucks locations relative to other nearby coffee shops and restaurants. This decline cannot be calculated from Starbucks’ public disclosures, which lack the comparison group of other coffee shops. The decline in visits is around 84% larger for stores located near homeless shelters. The policy also affected the intensive margin of demand: remaining customers spent 4.1% less time in Starbucks relative to nearby coffee shops after the policy enactment. Wealthier customers reduced their visits more, but black and white customers were equally deterred. The policy led to fewer citations for public urination near Starbucks locations, but had no effect on other similar public order crimes. These results show the difficulties of companies attempting to provide public goods, as potential customers are crowded out by non-paying members of the public.

That is from a new paper by Umit Gurun, Jordan Nickerson, and David H. Solomon.  Can there be any doubt about the excellence of Kevin Lewis?

Tim Ferriss did a podcast with me

Mostly he interviews me, the final segment is me interviewing him, the best part in my view. And they sent me this:

*The Origins of You: How Childhood Shapes Later Life*

That is the new forthcoming book by Jay Belsky, Avshalom Caspi, Terrie E. Moffitt, and Richie Poulton, which will prove one of the best and most important works of the last few years.  Imagine following one thousand or so Dunedin New Zealanders for decades of their lives, up through age 38, and recording extensive data, and then doing the same for one thousand or so British twins through age 20, and 1500 American children, in fifteen different locales, up through age 15.  Just imagine what you would learn!

You merely have to buy this book.  In the meantime, let me give you just a few of the results.

The traits of being “undercontrolled” or “inhibited,” as a toddler are the traits most likely to persist up through age eighteen.  The undercontrolled tend to end up as danger-seeking or impulsive.  Those same individuals were most likely to have gambling disorders at age 32.  Girls with an undercontrolled temperament, however, ran into much less later danger than did the boys, including for gambling.

“Social and economic wealth accumulated by the fourth decade of life also proved to be related to childhood self-control.”  And yes that is with controls, including for childhood social class.

Being formally diagnosed with ADHD in childhood was statistically unrelated to being so diagnosed later in adult life.  It did, however, predict elevated levels of “hyperactivity, inattentiveness, and impulsivity” later in adulthoood.  I suspect that all reflects more poorly on the diagnoses than on the concept.  By the way, decades later three-quarters of parents did not even remember their children receiving ADHD diagnoses, or exhibiting symptoms of ADHD (!).

Parenting styles are intergenerationally transmitted for mothers but not for fathers.

For one case the authors were able to measure for DNA and still they found that parenting styles affected the development of the children (p.104).

As for the effects of day care, it seems what matters for the mother-child relationship is the quantity of time spent by the mother taking care of the child, not the quality (p.166).  For the intellectual development of the child, however, quality time matters not the quantity.  By age four and a half, however, the children who spent more time in day care were more disobedient and aggressive.  At least on average, those problems persist through the teen years.  The good news is that quality of family environment growing up still matters more than day care.

But yet there is so much more!  I have only scratched the surface of this fascinating book.  I will not here betray the results on the effects of neighborhoods on children, for instance, among numerous other topics and questions.  Or how about bullying?  Early and persistent marijuana use?  (Uh-oh)  And what do we know about polygenic scores and career success?  What can we learn about epigenetics by considering differential victimization of twins?  What in youth predicts later telomere erosion?

I would describe the writing style as “clear and factual, but not entertaining.”

You can pre-order it here, one of the books of the year and maybe more, recommended of course.

Revisiting Latino economic assimilation

Here is a new paper by Giovanni Peri and Zachariah Rutledge

Using data from the United States spanning the period between 1970 and 2017, we analyze the economic assimilation of subsequent arrival cohorts of Mexican and Central American immigrants, the more economically disadvantaged group of immigrants. We compare their wage and employment probability to that of similarly aged and educated natives across various cohorts of entry. We find that all cohorts started with a disadvantage of 40-45 percent relative to the average US native, and eliminated about half of it in the 20 years after entry. They also started with no employment probability disadvantage at arrival and they overtook natives in employment rates so that they were 5-10 percent more likely to be employed 20 years after arrival. We also find that recent cohorts, arriving after 1995, did better than earlier cohorts both in initial gap and convergence. We show that Mexicans and Central Americans working in the construction sector and in urban areas did better in terms of gap and convergence than others. Finally, also for other immigrant groups, such as Chinese and Indians, recent cohorts did better than previous ones.

Via the excellent Kevin Lewis.

Friday assorted links

Women in Economics: Janet Yellen

Here’s a great new video on Janet Yellen from our team at MRU. In addition to Yellen, the video features Ben Bernanke and Christina Romer, who is tremendous. Other videos in the series are on Anna Schwartz and Elinor Ostrom with more on the way. The video is excellent but my favorite MRU video with Yellen has her in superhero mode.

Instructors, feel free to use these videos in any of your classes. Of course, you can also find these videos integrated with our textbook.

By the way, here is Adams and Yellen’s classic paper on bundling (ungated) and you can find an introduction to bundling in this video.

Transcript of my Stanford talk on *Stubborn Attachments*

You will find it here, along with the video link, previously covered on MR without the transcript.  Recommended, this was an almost entirely fresh talk.  Here is my beginning paragraph:

I’d like to do something a little different in this talk from what is usually done. Typically, someone comes and they present their book. My book here, Stubborn Attachments. But rather than present it or argue for it, I’d like to try to give you all of the arguments against my thesis. I want to invite you into my internal monologue of how I think about what are the problems. It’s an unusual talk. I mean, I think talks are quite inefficient. Most of them I go to, I’m bored. Why are you all here? I wonder. I feel we should experiment more with how talks are presented, and this is one of my attempts to do that.

In the Q&A I also discuss how to eat well in the Bay Area.

Further results on social security wealth and inequality

From a recent paper by John Sabelhaus and Alice Henriques Volz:

…the present value of Social Security benefits for everyone who has paid anything into the system was $73.3 trillion in 2019. Thus, the present value of Social Security benefits is estimated to be roughly double all other household-sector pension and retirement account assets combined, and approximately three-fourths the size of all conventionally measured household net worth. Social Security is also an important retirement wealth equalizer, as employer-sponsored pension and retirement accounts accrue disproportionately to high wealth families.

…the bottom 50 percent of persons aged 35 to 44 in 2016 had average Bulletin net worth of only $13,500. However, the same group had average expected SSW of nearly $40,000, the difference between a PDV of benefits around $125,000 and a PDV of taxes around $85,000. Again, this is unsurprising given that low wealth individuals have much lower lifetime incomes, and the Social Security tax and benefit formulas are inherently progressive, even though differential mortality offsets some of that redistribution….although incorporating SSW into household wealth has a substantial impact on wealth inequality levels, it does not change overall trends in top wealth shares. While the top ten percent share of SCF Bulletin wealth (within age-sorted and person-weighted) increased from 58 percent to 66 percent between 1995 and 2016, the expanded wealth share that includes both DB wealth and SSW increased from 40 percent to 47 percent.

That is via the excellent David Splinter, one of the most important economists working today, and here is his new paper Presence and Persistence of Poverty in U.S. Tax Data.  And here is the previous MR post on wealth inequality and social security.

From a scientist, coronavirus pictures to ponder

Figure legend
– Plotted in log scale!
– US cases based on deaths: estimated number of real cases using SK‘s current death rate of 0.6%
– US prediction 1a: predicted lower lower bound trajectory based on SK and China (assumes containment and large amount of testing )
– US 2a: upper bound, same assumptions as 1a
– US prediction 1b: no serious containment, trajectory similar to flu, lower bound
– 2b: Higher bound for flu-like trajectory

As I read this picture, it seems to suggest that the returns to properly done containment can be high.  What do you all think?