Month: November 2020
The political economy of Swine flu vaccine allocation
Previous research has isolated the effect of “congressional dominance” in explaining bureaucracy-related outcomes. This analysis extends the concept of congressional dominance to the allocation of H1N1, or swine flu, vaccine doses. States with Democratic United States Representatives on the relevant House oversight committee received roughly 60,000 additional doses per legislator during the initial allocation period, though this political advantage dissipated after the first 3 weeks of vaccine distribution. As a result political factors played a role in determining vaccine allocation only when the vaccine was in particularly short supply. At-risk groups identified by the Centers for Disease Control (CDC), such as younger age groups and first responders, do not receive more vaccine doses, and in fact receive slightly fewer units of vaccine.
That is from an Economic Inquiry paper by Matt E. Ryan. Via Henry Thompson.
“The FDA’s vaccine advisory committee will meet Dec 8-10”
Why not sooner?
Inquiring minds wish to know. Was the meeting hard to schedule?
Mental health and Covid — correction
Earlier I had reported incorrectly that one in five Covid patients developed subsequently mental health problems. Here is the original paper, and a more accurate rendering of the result is this:
“In the period between 14 and 90 days after COVID-19 diagnosis, 5.8% COVID-19 survivors had their first recorded diagnosis of psychiatric illness (F20–F48), compared with 2.5–3.4% of patients in the comparison cohorts. Thus, adults have an approximately doubled risk of being newly diagnosed with a psychiatric disorder after COVID-19 diagnosis.”
That is still a lot of mental health problems, but much smaller than the original claim.
For a pointer on the econometrics I thank Patrick Collison.
And here is a new paper Discussion of Mental Illness and Mental Health by NBA Players on Twitter.
Friday assorted links
Progress against HIV-AIDS hasn’t been reported enough
While an effective vaccine against HIV may still be a long way off, a new HIV prevention technique has proven remarkably effective at protecting women against the virus.
A single injection of a drug called cabotegravir every two months was so successful in preventing HIV in a clinical trial among women in sub-Saharan Africa that the study was wrapped up ahead of schedule.
The study, run by the HIV Prevention Trials Network, was looking at two forms of pre-exposure prophylaxis or (PrEP) aimed at women. PrEP is a technique of administering low doses of anti-AIDS drugs to people who are HIV negative as a way to protect them from infection. The study compared the effectiveness of the new long-acting injectable against the current form of PrEP, a daily pill of Truvada.
The findings were announced by the study’s researchers on Monday.
“This is a major, major advance,” said Dr. Anthony Fauci in a briefing. The director of the National Institute of Allergy and Infectious Diseases, which was involved in the study, Fauci has spent much of his career working on HIV/AIDS.
Here is the full NPR report, here is NYT coverage. Yes, it still needs to be easier to deliver. But how many Americans, right now, could identify what cabotegravir is? As I said earlier this morning, the great stagnation may be ending.
Covid travel markets in everything
EVA Airways, one of the largest carriers in Taiwan, is partnering with travel experience company Mobius on a campaign called “Fly! Love is in the Air.” These are flights for singles on Christmas Day, New Year’s Eve and New Year Day.
“Because of Covid-19, EVA Air has been organizing “faux travel” experiences to fulfill people’s desire for travel. When single men and women travel, apart from enjoying the fun in travel, they may wish to meet someone — like a scene in a romantic movie,” Chiang Tsung-Wei, the spokesperson for You and Me, the speed dating arm of Mobius, tells CNN Travel.
Each of the dating experiences includes a three-hour flight that departs from Taipei’s Taoyuan International Airport and circles the airspace above Taiwan, plus another two hours of a romantic date back on land.
Participants are encouraged to have in-depth conversations with each other on board while sampling meals prepared by Michelin-starred chef Motoke Nakamura. They are also encouraged to keep masks on when they’re not eating or drinking.
Here is the full story, via Air Genius Gary Leff.
Is the Great Stagnation over?
– A working mRNA vaccine (first ever in humans!),
– Apple M1 chip,
– SpaceX rocket launch,
– GPT-3,
– Tons of cool companies IPO’ing and tons more getting started,
– V-shaped recovery
– Electric cars
– Crypto going mainstream
That is from a tweet by Nabeel S.Qureshi. One could add warp speed, affordable solar power, the eggplant, and distanced work to that list, the latter also implying significant rent declines and child care cost declines for many people.
Around the time The Great Stagnation came out in 2011, I predicted that it was most likely to end within the next twenty years. We are not there yet, but that claim is no longer looking so absurd.
Note that the vaccine-driven recovery will measure as a rise in labor inputs, but in reality it will be pure TFP. In 2021 (but which quarter?), true TFP will be remarkably high, maybe the highest ever?
Thursday assorted links
1. The only thing worse than a meritocracy…
2. Covid betting markets in everything?
3. Matt Yglesias on what is wrong with the media.
4. A bit slow to start, but this is an excellent piece on how biologists think and why others might be slow to get it.
5. Would you flee the FBI on an underwater sea scooter? (NYT)
Russell Roberts update Israel fact of the day
Excited and humbled to announce that as of March 1, I will be president of Shalem College in Jerusalem moving there in the summer, Covid permitting. I will stay affiliated with Hoover and continue doing EconTalk. More on Shalem here. It’s an amazing place:
Here is the tweet, here is the link to more about Shalem. Congratulations to Russ!
What should I ask Benjamin M. Friedman?
As noted, Ben has a new and very interesting book coming out Religion and the Rise of Capitalism. He is also the author of the superb The Moral Consequences of Economic Growth, and the earlier Day of Reckoning, about the economic policies of the Reagan administration. Ben has been a leading macroeconomist since the 1970s, and he taught me Ph.D. macro at Harvard in 1984, one of my favorite professors I might add. Here is Ben on scholar.google.com.
So what should I ask him?
International Trade in Modern Principles
The Trump tariffs are the biggest change in trade policy since Smoot-Hawley. Whatever the economic merits of the Trump tariffs, they make great material for textbook authors! As we illustrate in the new edition of Modern Principles, drawing on a great paper by Flaaen, Hortaçsu and Tintelnot. The excerpt illustrates our approach throughout our textbook, Modern Principles, modern applications.
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Now that you know how to analyze international trade using demand and supply, let’s see how well the theory holds up by looking at what happened in the market for washing machines after the Trump tariffs were put into place in January of 2018. The tariff came in two parts. The first 1.2 million washing machines were taxed at a rate of 20% and all remaining imports were taxed at a rate of 50%. The tariffs were put in place for three years with slight declines (to 18% and 45% and 16% and 40%) in the 2nd and 3rd year respectively. A 50% tariff on washing machine parts was also included to prevent manufacturers from avoiding the duty by shipping parts to the United States for quick assembly.
Before the tariffs were put into place, about 3.8 million washing machines were imported per year. Once the tariffs began, imports declined by 1.2 million units to approximately 2.6 million washing machines per year. Figure X shows the price index for laundry equipment in the United States. Prices for washer and dryers had been declining since at least 2013, but the moment tariffs were imposed prices jumped dramatically. (Slight declines in prices were also seen in 2019 when the tariff rate decreased modestly).
Economists estimate that the tariff increased the price of washing machines by about 12%. That’s actually a smaller increase in price than one might guess from the size of the tariff but it turns out that dryer prices also increased by about 12%. Dryers were not subject to the tariff. So why did dryer prices increase? Washers and dryers are typically bought together in a package. Manufacturers, therefore, tend to focus on the package price and they “smoothed” out the washer tariff over both washers and dryers. Looking at thousands of goods, economists estimated that the Trump tariffs were on average entirely passed on to consumers, just as the simple supply and demand model predicts.
Another important prediction of the supply and demand model is that the tariff will increase the prices of all washing machines, whether produced domestically or imported. When the tariff is first put into place, domestic producers have lower costs than foreign producers and, as a result, they sell more and increase output. As domestic producers increase their output, however, their costs rise until in equilibrium domestic and foreign producers are, once again, selling for the same price. In fact, this is exactly what happened. Domestic producers like Whirlpool raised their prices at least as much as did foreign producers.
The Trump tariffs did have one unexpected consequence. In the model, it’s natural to think of domestic producers as being domestically owned firms, but that is not necessarily the case. Whirlpool, a domestic producer of washing machines, did produce more because of the tariffs but something else happened. The foreign producers, Samsung and LG, expanded their US factories! That’s good for US workers in the washer and dryer industry. Nevertheless, the expansion of Samsung and LG was probably an unwelcome surprise to Whirlpool, which may have expected that the tariffs would give them more of a competitive advantage in the domestic market than they ended up getting.
The increase in domestic production from both domestically owned and foreign owned firms resulted in about 1800 new jobs in the washer and dryer industry. Remember trade policy does not influence the total number of jobs in an economy. The jobs created in the washer and dryer industry came at the expense of jobs lost in US export industries. The new jobs in the protected industry, however, are visible and they are important politically, because the President can point to them as a benefit of his policies. Thus, it’s an interesting question to ask, how much did consumers pay to create these jobs?
The tariffs increased washer and dryer prices by about 12% or $88 each on combined sales of 17.4 million units. The total cost to consumers, therefore, was approximately $1.56 billion per year. The government took in an extra $82.2 million in tariff revenues, which we count as a plus, so the total cost was about $1.46 billion per year. The cost per job created was therefore a whopping $811,000 per job (1.46 billion/1800). Instead of creating jobs by paying more for washers and dryers, US consumers would have been much better off paying each new worker in the laundry industry $100,000 to enjoy a nice vacation!
Why conspiracy theories are on the rise
There are certain ideas that are highly seductive, so much so that even “WEIRDOS” occasionally dabble in conspiracy theories. So why weren’t conspiracy theories a bigger part of life in the late 20th century? I believe this is because the media was almost completely controlled by WEIRD people. The news desks at ABC/NBC/CBS stuck to the mainstream version of events, unless they had clear evidence that the official were lying (say after the Ellsberg Papers came out.) So there was no major institution to form and disseminate conspiracy theories. These theories did exist back then, but never gained enough traction to have a big impact on society.
The internet changed everything. More specifically, it democratized information sharing all over the world. There are no more “gatekeepers”. Because less that 10% of the world’s population is truly WEIRD, the internet has made conspiracy theories the dominant epistemic style of the 21st century. Just as the 21st century will be a low interest rate/high asset price century (as I predicted years ago), it will also be a century of widespread conspiracy theories. I doubt whether I’ll live along enough to see another president who is generally accepted as legitimate.
That is from Scott Sumner, there is more at the link.
David Splinter responds to Saez and Zucman
When estimating income inequality with tax data, accounting for missing income presents many challenges. Researchers have adopted different approaches to address these challenges. Saez and Zucman (2020) discuss differences between the national income distributions of Piketty, Saez, and Zucman (PSZ, 2018) and Auten and Splinter (AS, 2019a). Saez and Zucman also make updates to their estimates for retirement income, partially responding to one of the concerns raised in AS. In this reply, I explain that SZ only partly correct this problem and do not address other issues raised by AS. For the allocation of underreported income—the most consequential difference between AS and PSZ—I show that the AS approach conforms with special audit studies in five ways, while the PSZ approach is inconsistent with them. I also provide historical background on the two projects, respond to technical points raised, and discuss estimates of tax progressivity.
Here is the link to the paper.
Wednesday assorted links
2. Nakamura’s life and income.
3. Where are the Covid deaths in Europe? Some people had been wondering. And cross-immunities from Asian history? And using wearables to detect pre-symptomatic Covid? And Dolly Parton Fast Grants. And more on Dolly. And “Hospitalizations are rising faster in Sweden than any other European country…”
4. Why do Chinese liberals support Washington conservatives? (NYT, excellent piece once you inject the Straussian reading; note the fear that liberalism will be redefined in the direction of Hayek).
5. FDA authorizes 30-minute at-home Covid test, supposedly to sell for $50, crazy though to still require a prescription (NYT).
My Conversation with Jimmy Wales
It was excellent throughout, here is the audio, video, and transcript, here is part of the summary:
Jimmy joined Tyler to discuss what happens when content moderation goes wrong, why certain articles are inherently biased, the threat that repealing section 230 poses to Wikipedia, whether he believes in Conquest’s Law, the difference between “paid editing” and “paid advocacy editing,” how Wikipedia handles alternative accounts, the right to be forgotten, his unusual education in Huntsville, Alabama, why Ayn Rand is under- and over-rated, the continual struggle to balance good rules and procedures against impenetrable bureaucracy, how Wikipedia is responding to mobile use, his attempt to build a non-toxic social media platform, and more.
Here is an excerpt:
COWEN: I’m the rare person who actually has no sock puppets. Why not allow sock puppets? What exactly is wrong with them? So what if a person has more than one identity out there, as long as you can monitor the identity that is operating on Wikipedia?
WALES: That’s a great question. In fact, we do try to make a distinction between a sock puppet and a legitimate alternate account. We actually have procedures whereby you can declare a legitimate alternate account to the arbitration committee so that you’re insulated from any bad harms if it’s found out. Some of the keys are that we rely on trust.
One of the things that is really important to us — we do a lot of what we call “not voting.” It’s voting, but it’s really a straw poll. The votes — typically, they’re not the final word, and if somebody comes into a discussion and pretends to be five different people, arguing that something should be deleted, and there are two actual different people arguing that it should be kept, that’s deceptive. It kind of skews the balance.
People who are reviewing that say, “Well, I think we should keep it, but I see there are five people here with a different opinion, so maybe I’m wrong.” That bulking up your impact by double-voting on something, by pretending to be different people, is super problematic.
The other problematic sock puppeting is a sock puppet to conceal your conflict of interest. I remember we had one notorious case of a PR firm that had engaged in quite a lot of problematic editing.
One of their accounts — it made a lot of edits and pretended to be a retired fellow who was a car collector. There were all these pictures of old cars and so on. They had a whole persona created that seemed like a lovely chap who just liked to edit Wikipedia, but in fact, it was just somebody at the PR firm who was giving a cover, and I think that kind of deception is problematic.
The good examples of multiple accounts would be someone who wants to edit in a controversial area. As an example, let’s say you’re a well-known person, and suppose you took an interest in our entries on pedophilia, not because of any prurient interests but simply because you think this is actually an important topic of social impact.
Well, you probably wouldn’t necessarily want to be known at your university as the guy who edits the pedophilia articles on Wikipedia. That’s just not easy for people to be open about, even if you’re doing all the right things. So you might say, “Yes, I actually want to edit in some areas of World War II history under this identity, but I’m going to do some work over here, and I really prefer it not to be tied back to my real-life identity.” And that’s kind of okay, as long as you’re not voting in elections with two accounts and things like that.
Definitely recommended.