Month: March 2021

The Marginal Revolution NFT!

Tyler and I are pleased to announce our first NFT on the blockchain. Now you can own a screenshot of the very first Marginal Revolution post!

Marginal Revolution is one of the world’s most popular blogs. Written by the economists Tyler Cowen and Alex Tabarrok it has been in continuous operation since August 21, 2003. This is a screenshot of the very first post, a book review of Jenny Uglow’s The Lunar Men. Any media library or museum will want to have this amazing historical record as part of their collection!

The auction (natch) is here and is open for 6 days. Hurry! This is limited time offer for a unique item.

Pandemic sentences to ponder

Of course, there are national health systems in Canada, Mexico, England, and France, among many others, and the uniformity of failure across this heterodox group suggests that structure may have made less of a difference than culture.

“One of the common features is that we are a medical-centric group of countries,” says Michael Mina, a Harvard epidemiologist who has spent the pandemic advocating for mass rollout of rapid testing on the pregnancy-kit model — only to meet resistance at every turn by those who insisted on a higher, clinical standard for tests. “We have an enormous focus on medicine and individual biology and individual health. We have very little focus as a group of nations on prioritizing the public good. We just don’t. It’s almost taboo — I mean, it is taboo. We have physicians running the show — that’s a consistent thing, medical doctors across the western European countries, driving the decision-making.” The result, he says, has been short-sighted calculations that prioritize absolute knowledge about everything before advising or designing policy about anything.

…in East Asia, countries didn’t wait for the WHO’s guidance to change on aerosols or asymptomatic transmission before masking up, social-distancing, and quarantining. “They acted fast. They acted decisively,” says Mina. “They made early moves. They didn’t sit and ponder: ‘What should we do? Do we have all of the data before we make a single decision?’ And I think that is a common theme that we’ve seen across all the Western countries—a reluctance to even admit that it was a big problem and then to really act without all of the information available. To this day, people are still not acting.” Instead, he says, “decision-makers have been paralyzed. They would rather just not act and let the pandemic move forward than act aggressively, but potentially be wrong.”

This, he says, reflects a culture of medicine in which the case of the individual patient is paramount.

Here is more from David Wallace-Wells, interesting throughout and with a cameo from yours truly.

Have the Danes rendered families less important?

Many American policy analysts point to Denmark as a model welfare state with low levels of income inequality and high levels of income mobility across generations. It has in place many social policies now advocated for adoption in the U.S. Despite generous Danish social policies, family influence on important child outcomes in Denmark is about as strong as it is in the United States. More advantaged families are better able to access, utilize, and influence universally available programs. Purposive sorting by levels of family advantage create neighborhood effects. Powerful forces not easily mitigated by Danish-style welfare state programs operate in both countries.

Here is the full paper by James J. Heckman and Rasmus Landersø.

Monday assorted links

1. The uses of “deepfake” videos are not always what you think.  More here from the NYT.

2. Does spending money on your pets promote your happiness?  Their happiness?

3. A guide to NFTs.

4. The European Union just doesn’t love privacy as much as it claims to.

5. A soul’s view of the optimal population problem.

6. “In what we call the Big Push region, the impact of idiosyncratic distortions is over three times larger than in models without such complementarity. This amplification enables our model to nearly fully account for the income gap between India and the US without coordination failures playing a role.”  Link here.

CEO Stress, Aging, and Death

We estimate the long-term effects of experiencing high levels of job demands on the mortality and aging of CEOs. The estimation exploits variation in takeover protection and industry crises. First, using hand-collected data on the dates of birth and death for 1,605 CEOs of large, publicly-listed U.S. firms, we estimate the resulting changes in mortality. The hazard estimates indicate that CEOs’ lifespan increases by two years when insulated from market discipline via anti-takeover laws, and decreases by 1.5 years in response to an industry-wide downturn. Second, we apply neural-network based machine-learning techniques to assess visible signs of aging in pictures of CEOs. We estimate that exposure to a distress shock during the Great Recession increases CEOs’ apparent age by one year over the next decade. Our findings imply significant health costs of managerial stress, also relative to known health risks.

That is from a new NBER working paper by Mark Borgschulte, Marius Guenzel, Canyao Liu, and Ulrike Malmendier.

Model this NBA coaches and Adam Smith

Of all the head coaches in the NBA in either 2019-20 or 2020-21, there was a combined one All-Star appearance as a player, by Doc Rivers. At the league’s high point of former players as coaches, in 2001-02, there were 13 different former All-Stars walking the sidelines who had combined for 60 appearances.

Here is more from Kevin Pelton at ESPN.  Is it that data analytics matter so much more?  A general increase in the division of labor?  Or are today’s stars so prominent, perhaps because of social media, that a team does not need recognizable coaches to bring in the fans?

The Pelton posts considers further issues in mechanism design, such as whether a single free throw should be used to determine both points late in NBA games.  I would think that leads to an overinvestment in fouling from teams that are behind?

When do liquidity premia exceed carrying costs?

A “lunar ark” hidden inside the moon’s lava tubes could preserve the sperm, eggs and seeds of millions of Earth’s species, a group of scientists has proposed.

The ark, or gene bank, would be safely hidden in these hollowed-out tunnels and caves sculpted by lava more than 3 billion years ago and would be powered by solar panels above. It would hold the cryogenically preserved genetic material of all 6.7 million known species of plants, animals and fungi on Earth, which would require at least 250 rocket launches to transport to the moon, according to the researchers.

Here is the full story.  Here is further discussion.

“You have to order all at once”

I’ve now been to two different Miami restaurants that have told me the same thing.  They will take your food order only once, and you cannot decide later that you would like additional items, though you can ask for more water (and presumably other drinks?).

Perhaps this is part of a desire to economize on labor costs, so you do not need more staff to run around the room and ask diners if “they are OK”?  Is it so bad to be forced to know what you want in the first place?  And might it induce risk-averse customers to over-order a bit, thereby boosting restaurant profits?  Should your enjoyment of the meal really depend so much on the third derivative of the utility function?

Do any of you know of other instances of this policy, or data on its effectiveness?

Is the policy actually time consistent, namely what if you insisted you wished to spend another $100 on the food there?  Would they tell you no and bring you the check?

Both places, Boia De and Lung Yai Thai Tapas, were excellent, get the Kow Soi at the latter and then walk up the street to the anti-communist memorials on 14th St. for one of Miami’s most interesting and unusual cultural highlights.

Sobering Up After the Seventh Inning

Drunk people commit more crime. Not surprising but here’s a clever identification strategy from Klick and MacDonald. Baseball stadiums stop serving alcohol at the bottom of the 7th but the time from bottom of the 7th to the end of the game varies so sometimes people have sobered up by the end of the game and sometimes they haven’t. So what happens when the game runs long or short?

This study examines the impact of alcohol consumption in a Major League Baseball (MLB) stadium on area level counts of crime. The modal practice at MLB stadiums is to stop selling alcoholic beverages after the seventh inning. Baseball is not a timed game, so the duration between the last call for alcohol at the end of the seventh inning and the end of the game varies considerably, providing a unique natural experiment to estimate the relationship between alcohol consumption and crime near a stadium on game days.

Crime data were obtained from Philadelphia for the period 2006–2015 and geocoded to the area around the MLB stadium as well as popular sports bars. We rely on difference-in-differences regression models to estimate the change in crime on home game days around the stadium as the game time extends into extra innings to other areas of the city and around sports bars in Philadelphia relative to days when the baseball team plays away from home.

When there are extra innings and more game-time after the seventh inning alcohol sales stoppage crime declines significantly around the stadium. The crime reduction benefit of the last call alcohol policy is undone when a complex of sports bars opens in the stadium parking lot in 2012. The results suggest that alcohol consumption during baseball games is a contributor to crime.

Those new Filipino service sector jobs

In the Philippines, one popular blockchain-based game is even providing pathways out of poverty and helping spread the word about novel technology. Created by Sky Mavis, a Vietnamese startup, Axie Infinity is a decentralized application (dapp) on the Ethereum blockchain where players breed, raise, battle and trade adorable digital critters called Axies.

Ijon Inton, an Axie player from Cabanatuan City, which is about 68 miles north of Manila in the province of Nueva Ecija, first learned about it in February of this year when his friend stumbled across an explainer video on YouTube. Intrigued by the “Play to Earn” element of the game, he decided to give it a go.

“At first I just want to try its legitimacy, and after a week of playing I was amazed with my first income,” said Inton, who is currently earning around 10,000 PHP ($206) per week from playing the game around the clock.

Inton soon invited his family to play, too, and after a few weeks, he also started telling his neighbors. A crypto trader since 2016, Inton helped his friends set up a account so they could buy their first ETH and get started. Now, there are more than 100 people in his local community playing to earn on Axie, including a 66-year-old grandmother.

Here is the full story, via Nicanor Angle.  How would you have responded to these sentences a decade ago?:

“We definitely want to get people who are outside of Ethereum, outside of the dapp space, outside of NFTs, into Axie,” Jiho said. He has observed other Axie play-to-earn community clusters in Indonesia and Venezuela, but thinks this might be the first evidence of a multi-generational household of dApp users.

What lies next in store for us?

The Chinese vaccine passport uses relative prices

China raised the stakes in the international vaccine competition on Saturday, saying that foreigners wishing to enter the Chinese mainland from Hong Kong will face fewer paperwork requirements if they are inoculated with Chinese-made coronavirus vaccines.

The policy announcement, which covers foreigners applying for visas in the Chinese territory, comes a day after the United States, India, Japan and Australia announced plans to provide vaccines more widely to other countries.

Here is more from Keith Bradsher (NYT).

British Vaccine Efficiency

The British vaccination plan has been run very well. As this audience knows, the British delayed the second dose in order to get out more first doses quickly. A life-saving move. The British have also been targeting age and riskier workers very well. The excellent Witold Więcek (an Emergent Ventures prize recipient) has done a back of the envelope calculation which indicates how well the British are targeting.

Since the vaccines have been prioritised for the elderly, the infection fatality risk (IFR) for a typical vaccinated patient is higher than the average IFR in the population. However, we have to account for the fact that many of the early doses are given to health care workers and some of the other key workers. By late February 2021, in the UK around 55% of the vaccines went to people over 70 and over 95% of that age group has been vaccinated. In the US, however, while 55% of vaccines went to people over 65, close to 30% went to people younger than 50. We calculated IFR as an approximate weighted mean of age-specific infection mortality risks, using a meta-analysis estimate in Manheim et al., 2021.

Applying this IFR approach to real-world distributions of vaccine distribution, for UK we obtained 4.7% and for the US 3.2%, a remarkable difference. In other words, despite delivering twice the number of doses (and “running out” of highest risk individuals to vaccinate), a single dose of vaccine in the UK was still used 50% more effectively than in the US. (It should be noted, however, that the UK has a slightly older population than the US.)

Given less centralized health information, it’s hard to see how the US could target much better while also maintaining speed which is why, after the first round of vaccinating the nursing homes and the very elderly, I have leaned towards opening up more vaccination sites and prioritizing speed. So read this as a credit to the British rather than a demerit to the US. Other European countries, however, also have more centralized medical systems and yet have been far behind the British. It has struck me during this crisis how little these kind of system-wide policy variable seem to explain in the efficiency of the pandemic response overall.