Month: August 2020

History-bound reelections

We introduce history-bound reelections. In their simple form, they consist in a “score-replication rule.” Under such a rule, an incumbent has to match the highest vote share he or she has obtained in any previous election in order to be reelected. We develop a simple three-period model to examine score-replication rules. We show that suitable variants of such rules can improve welfare, as they reduce the tendency of reelected incumbents to indulge in their own preferences, and they ensure that able officeholders are reelected. Candidates might offer their own score-replication rule in campaigns. We outline how political competition may be affected by such new forms of elections.

That is from a new paper by Hans Gersbach, in American Economic Journal: Microeconomics.  At some margins, we might use this procedure for scientific refereeing as well.  You would have to receive superior referee reports, relative to the weighted average of your last set of publications, for instance.  What about people who continually raise the bar on what they expect from their friends?  Petulant, immature demanders, or do you bring out the best in people, otherwise serving as an optimal recycler/changer of the human experience?

The generalizability crisis

Most theories and hypotheses in psychology are verbal in nature, yet their evaluation overwhelmingly relies on inferential statistical procedures. The validity of the move from qualitative to quantitative analysis depends on the verbal and statistical expressions of a hypothesis being closely aligned—that is,that the two must refer to roughly the same set of hypothetical observations. Here I argue that most inferential statistical tests in psychology fail to meet this basic condition. I demonstrate how foundational assumptions of the “random effects” model used pervasively in psychology impose far stronger constraints on the generalizability of results than most researchers appreciate. Ignoring these constraints dramatically inflates false positive rates and routinely leads researchers to draw sweeping verbal generalizations that lack any meaningful connection to the statistical quantities they are putatively based on. I argue that failure to consider generalizability from a statistical perspective lies at the root of many of psychology’s ongoing problems (e.g.,the replication crisis), and conclude with a discussion of several potential avenues for improvement.

That is from a recent paper by Tal Yarkoni.

Thursday assorted links

1. Comedy outside in the park (NYT).  And comics cannot tell what is funny without an audience (WSJ).  So what exactly is the best way of describing their quite unique skill?

2. Profound TikTok video on Pythagoras.

3. Are we all suffering from acedia right now?

4. Defining the 1990s musical canon.  Not impressive to this listener, but I will give thumbs up to MJ’s “Black or White.”

5. How to smile with your eyes when you are wearing a mask (WSJ).  They call it smizing, and “It involves bringing life to your eyes while keeping the rest of the face neutral.”

6. Further evidence that the virus did indeed mutate into a more contagious form.

Why China prospered with corruption

In her new book China’s Gilded Age: The Paradox of Economic Boom and Vast Corruption, Yuen Yuen Ang presents four reasons:

1. Access money dominates.

More concretely, politicians prosper by getting things built, not by preventing things from getting built.

2. China’s political system operates on a profit-sharing model.

3. Capacity-building reforms have curtailed damaging forms of corruption.

4. Regional competition checks predatory corruption, spurs on developmental efforts, and ratchets up deals.

The book in fact presents serious data and argumentation in favor of those propositions, and thus it is significantly more useful than most of the China books you will read.

Individualism during crises

To be clear, this paper is quite one-sided, since it does not recognize that the more individualistic cultures are also the leaders in science.  Nonetheless there is an important lesson in this recent work from Bo Bian, Jingjing Li, Ting Xu, and Natasha Foutz:

Individualism has long been linked to economic growth. Using the COVID-19 pandemic, we show that such a culture can hamper the economy’s response to crises, a period with heightened coordination frictions. Exploiting U.S. counties’ frontier experience during the 1790-1890 period as exogenous variation in individualism, we show that more individualist counties engage less in social distancing and charitable transfers, two important collective actions during the pandemic. An interquartile increase in individualism offsets 41% of the effect of state lockdowns on social distancing and dampens COVID-related donations by 48%. We confirm the social distancing results at the individual level using de-identified cellular location data and exploiting migrants for identification. The effects of individualism are stronger in counties where social distancing has higher externality (i.e., higher population density and more seniors). Our results replicate at the country level and are not driven by political beliefs or social capital. Overall, this paper suggests that individualism can amplify economic downturns by exacerbating collective action problems precisely when such actions are most valuable.

Via the excellent Kevin Lewis.  Under my perspective, of course, it is the individualistic cultures that are supplying the international public goods.

The quality-adjusted rate of price inflation is much higher than measured

Higher ed on Zoom, fear of going to the hospital, and long lines at the DMV bring us to one part of my latest Bloomberg column:

Education, health care and government are pretty big parts of our economy. If you add on the lower quality of restaurant visits, reduced sports performances (your ESPN cable package is worth less), and an inability to take preferred vacations and trips, you have many more negative quality adjustments that don’t show up in measured rates of inflation.


The Bureau of Labor Statistics, the Bureau of Economic Analysis, the Fed and other institutions have declined to make formal adjustments for these changes in the real standard of living. That is the politically practical way to proceed, if not the technically correct decision.

Inflation measures work best when the consumption bundle is roughly stable over short periods of time, and that just hasn’t been the case this year. Because so many government payments depends on rates of indexation, debating “the true degree of inflation” this year would become an unending political football, with all the major institutions involved, including the Fed, losing credibility. (Just exactly how much worse is that Zoom lecture?) Besides, implicit price inflation from restricted opportunities probably should, for purposes of policy and benefits indexation, be treated differently than price inflation resulting from more expensive food and rent.

One implication is that, at least for the time being, price inflation rules just aren’t that meaningful any more:

…price rules and other forms of inflation rules don’t really work in times of pandemic. The very measurement of price inflation becomes arbitrary, and dependent on inertial measurement conventions from normal times, so the numbers don’t have enough actual economic meaning to guide policy.

There is more at the link.

Wednesday assorted links

1. Vomit fraud in Uber.

2. Wikipedia on monoclonal antibodies.  And in the Covid-19 context.

3. Semi-herd immunity has come to Manaus without a lockdown (to be clear, I am not recommending this approach!  But you should use this data to recalibrate your mental models).

4. Finis Welch has passed away.

5. “We find no consistent relationship between gender [of leadership] and pandemic outcomes.”

My Conversation with Jason Furman

Yes, the Jason Furman, here is the audio and transcript, please note this was recorded in January.  Here is part of the summary:

Jason joined Tyler for a wide-ranging conversation on how monopolies affect investment patterns, his top three recommendations to improve American productivity, why he’s skeptical of place-based development policies, what some pro-immigration arguments get wrong, why he’s more concerned about companies like Facebook and Google than he is Walmart and Amazon, the merits of a human rights approach to privacy, whether the EU treats tech companies fairly, having Matt Damon as a college roommate, the future of fintech, his highest objective when teaching economics, what he learned from coauthoring a paper with someone who disagrees with him, why he’s a prolific Goodreads reviewer, and more.

And here is one excerpt:

COWEN: The US is losing some of its manufacturing capacity, and certainly a lot of its manufacturing workforce. Are there external benefits to keeping those activities more in the US? Significant benefits?

FURMAN: I don’t think that manufacturing itself should be an important objective of US policy. It’s one type of job. It’s been a good type of job, but there’s other good types of jobs as well. I wouldn’t focus on where physical things are being made as opposed to where services are being made. In fact, if anything, I think the error in policy is probably a little bit too much emphasis on manufacturing and a little bit less on services.

COWEN: What do you think of the national security argument? That, say, when building a ship, we might be dependent on South Korean components. If there were a war in Asia, those might be, for some reason, unreliable. We depend on China for rare earths. We depend on Taiwan, to some extent, for high-quality chips, even though we make our own. Is the supply chain extended too long, and it was a kind of economic fantasy, and it doesn’t make national security sense?

FURMAN: I don’t consider myself an expert in any of those national security questions, so I would be open to thinking about the national security concerns associated with the supply chain. I have an awful lot in specific cases — both when I was in government and just in the world more generally — heard people make national security arguments that I found tendentious and pretty unpersuasive.

There may be some that are persuasive and that are true. There’s an awful lot that aren’t. Our administration, towards the end, worried a bit about semiconductors. When I’ve looked at that, there’s enough of a diversified world supply, enough of an ability to scale up if necessary in the United States, that I don’t think on semiconductors — there, it was protectionism under the guise of national security.

So I think we should accept the possibility of national security, take it seriously, but be really, really wary that a lot of protectionist arguments use that trappings.

Economics throughout, with a touch of Dickens.  Recommended.

Swiss Chinese markets in everything

Swiss authorities want to renew a discreet agreement with China, signed in 2015, which allows officials from Beijing to enter the country and question Chinese citizens residing here illegally…

The agreement allows Chinese officials to enter Switzerland for a period of two weeks – without official status – in order to investigate Chinese citizens found to be staying illegally in the Alpine Nation. Once identified, these people can be deported in collaboration with SEM.

Individuals affected by the agreement include rejected asylum seekers, illegal travellers, and those without identity papers.

And what exactly do the Swiss get in return?  Here is the full story, via Fergus McCullough.

Differential occupational mortality in Sweden from Covid-19

We use data the Swedish authorities organized as an early release of all recorded COVID-19 deaths in Sweden up to May 7, 2020, which we link to administrative registers and occupational measures of exposure. Taxi and bus drivers had a higher risk of dying from COVID-19 than other workers, as did older individuals living with service workers. Our findings suggest however that these frontline workers and older individuals they live with are not at higher risk of dying from COVID-19 when adjusting the relationship for other individual characteristics. We also did not find evidence that being a frontline worker in terms of occupational exposure was linked to higher COVID-19 mortality. Our findings indicate no strong inequalities according to these occupational differences in Sweden and potentially other contexts that use a similar approach to managing COVID-19.

Overall I am quite surprised how large is the bus and taxi driver effect (even after adjusting for demographics), and how small are the other professional effects.  Here is the paper, by Sunnee Billingsley,, via Daniel B. Klein.

The Black Lives Matter Plaza, WDC

Just north of the White House, I visited Sunday for the first time.  I am very much a fan of the “Black Lives Matter” block print letters as an artwork, and I wished to take in the broader social scene.  On the plaza I saw fully boarded up buildings for the Ronald Reagan Presidential Foundation and Institute, the AFL-CIO, and the Motion Picture Association of America, suitable victims it would seem.

On the Reagan building the sign reads “Fire Command Center.”

Downtown Washington D.C. will not be returning to its prior nature for some time to come.

The new marginal revolution

Sarah H., a 31-year-old woman in Philadelphia, feels that locking lips is the big risk, so “if you’re going to kiss someone, you might as well sleep with them.”

Here is the full article by Lisa Bonos, I had been wondering when a piece of this nature would appear.  This bit is also interesting:

Forman finds that the pre-date interrogation that happens in the era of covid-19 dating ratchets up all kinds of intimacy quickly. “Once the kiss happens … because you already went through all these other layers [of questions], you almost get to a fourth date know-how on a first date,” he says. “Even if it wasn’t going to turn into a girlfriend situation, we both just needed spontaneity that we hadn’t really had for months.”

Here is another sentence of interest and perhaps disputation:

He’s been careful during the past few months, but he’s still having casual sex when he feels comfortable.

I don’t expect we’ll ever have good data on the safety or danger of those practices.

Tuesday assorted links

1. 538 on why NBA scoring has been so high.

2. “Overall, information sharing among expert evaluators can lead to more conservative allocation decisions that favors protecting against failure than maximizing success.

3. Derek Lowe on convalescent plasma.

4. “Most of the time, most people do not know (precisely) what they are talking about.

5. “Associations between subjective mobility perceptions and health outcomes are intriguingly independent of objective social mobility trajectories.

6. Valuable perspective on Covid-19 reinfection, not yet the worry it might seem to be.  This associated, linked Science piece is excellent not only for its content, but also for showing how reasoning ought to be done.

7. Update on the FDA and test regulations, recommended for those who care.

How bad was the Spanish Flu pandemic of 1918?

Yes it was a terrible tragedy, but many locales had much worse events fairly recently:

Between 1917 and 1918 New York City’s crude mortality rate increased by 3.173 deaths per 1000 persons.  While tragic, the hollow circles in Figure 1 depict 12 other years where the year-over-year increase in mortality exceeded the magnitude of the 1917 to 1918 change.  During the cholera epidemics of 1832, 1834, 1849, and 1854 the year-over-year increase in mortality was 3 to 5 times larger in magnitude than what occurred in 1918. As another comparison, the mortality rate in New York City was higher in nearly every year between 1800 and 1905 than the mortality rate in 1918.

The same is true for many other American cities, but here is a picture for NYC:

And this:

During the first half of the 20th century, Black Americans in urban areas died from infectious disease at a rate that was greater than what urban whites experienced during the 1918 flu pandemic every single year.

On a different but related topic:

…the evidence suggests that the 1918 pandemic was not a major determinant of U.S. stock market volatility.

That is all from the new and very interesting NBER paper by Brian Beach, Karen Clay, and Martin H. Saavedra, “The 1918 Influenza Pandemic and its Lessons for Covid-19.”

Mental Health and the Reluctance to Use Talk Therapy

I know very little about this area, but found these results of interest and worthy of further investigation:

Mounting evidence across disciplines shows that psychotherapy is more curative than antidepressants for mild-to-moderate depression and anxiety. Yet, few patients use it. This paper develops and estimates a structural model of dynamic decision-making to analyze mental health treatment choices in the context of depression and anxiety. The model incorporates myriad costs suggested in previous work as critical impediments to psychotherapy use. We also integrate links between mental health and labor outcomes to more fully capture the benefits of mental health improvements and the costs of psychotherapy. Finally, the model addresses measurement error in widely-used mental health variables. Using the estimated model, we find that mental health improvements are valuable, both directly through increased utility and indirectly through earnings. We also show that even though psychotherapy improves mental health, counterfactual policy changes, e.g., lowering the price or removing other costs, do very little to increase uptake. We highlight two conclusions. As patient reluctance to use psychotherapy is nearly impervious to a host of a priori reasonable policies, we need to look elsewhere to understand it (e.g., biases in beliefs about treatment effects, stigma, or other factors that are as yet unknown). More broadly, large benefits of psychotherapy estimated in randomized trials tell only half the story. If patients do not use the treatment outside of an experimental setting—and we fail to understand why or how to get them to—estimated treatment effects cannot be leveraged to improve population mental health or social welfare.

That is from a new NBER working paper by Christopher J. Cronin, Matthew P. Forsstrom, and Nicholas W. Papageorge.