Month: November 2023
Freer Indian reservations prosper more
Several disciplines in social sciences have shown that institutions that promote cooperation facilitate mutually beneficial exchanges and generate prosperity. Drawing on these insights, this paper develops a Reservation Economic Freedom Index that classifies institutions on a sample of Indian reservations concerning whether these intuitions will enhance the prosperity of Indians residing on these reservations. The development of this index is guided by the research of political scientists, economists, other social science disciplines, and research in law. When correlating this index with Indian incomes, the evidence shows a statistically significant positive correlation between reservations with prosperity-enhancing institutions and their economic prosperity.
That is from a recent article by my colleague Thomas Stratmann, recently published in Public Choice. Here is the SSRN version. Here is the index itself. Here is a related Op-Ed.
Sunday assorted links
1. Will Sweden move away from school vouchers?
2. Lagos harbor and various water and real estate projects.
3. How Manuel Blum became such a successful academic advisor.
4. Chinese confrontations with Filipino ships.
5. U.S. approves chikungunya vaccine. As I’ve been telling you, it is all going to work.
6. Claims about fake license plates.
Should I keep an eye on Spain? (from my email)
Keep an eye on Spain. What is happening politically is very serious and the tension is increasing.
Fernando Savater: Spain is formally a democracy, sure, but it is ceasing at a forced march from being a rule of law state.
https://theobjective.com/elsubjetivo/opinion/2023-11-05/resignados-sumisos-luchar-sanchez/
Felix de Azúa: The reactionary left will face the coup right with a predictable result: economic ruin and institutional chaos.
https://theobjective.com/elsubjetivo/opinion/2023-11-11/irse-preparando-sanchez/
…Felipe González is very worried, as well.
That is all from Mario Abbagliati.
Classical liberals are increasingly religious
Not too long ago, I was telling Ezra Klein that I had noticed a relatively new development in classical liberalism. If a meet an intellectual non-Leftist, increasingly they are Nietzschean, compared to days of yore. But if they are classical liberal instead, typically they are religious as well. That could be Catholic or Jewish or LDS or Eastern Orthodox, with some Protestant thrown into the mix, but Protestants coming in last.
The person being religious is now a predictor of that same person having non-crazy political views. Classical liberalism thus, whether you like it or not, has become an essentially religious movement.
Many strands of libertarianism are being left behind, and again this is a positive rather than a normative claim. It is simply how things are.
Aayan Hirsi Ali announces she is now a Christian.
The neo trad movement gets ayaan 🙁 But seriously this seems to be a real trend – lots of otherwise smart, successful, secular people I know have been going religious, but it’s not in the same way people used to go religious. It’s much more *cultural* now, and less about belief
Seconded. You may recall my earlier prophecy that the important thinkers of the future are going to be religious thinkers. I believe that will prove true outside of classical liberalism as well.
Saturday assorted links
1. What drives Russian men to volunteer to fight in Ukraine?
2. More on the economics of OnlyFans.
3. Abstract art comes from figurative art. The Mondrian sequence is my favorite, and it has intrigued me for a long time.
4. The EU seems to be slowing down with its anti-AI regulations. More information here. Good for them.
5. The average age of a Ukrainian soldier is 43.
6. Can a GPT-4 Vision model do your Christmas shopping for you?
Low Income Drivers Gain from Congestion Pricing
….there is disagreement about the distributional effects of highway toll lanes. On one side, policymakers refer to dynamic tolling as “value pricing” and emphasize that it provides choice to drivers (Samdahl et al., 2013). On the other side, opponents are concerned that “Lexus lanes” enrich the wealthy at everyone else’s expense (Astor, 2017; Rosendorf, 2018). Evaluation of these perspectives depends on two empirical objects: the distribution of driver preferences and what we call the “road technology”—the relationship between traffic quantities and travel times. When one lane becomes tolled, drivers substitute from the newly priced lane into the remaining unpriced ones, increasing travel times in the unpriced lanes. High peak-hour prices may also induce drivers to substitute toward driving off-peak (or not at all), which can increase average speeds when the road technology is convex. Finally, since tolling changes the predictability of travel times, having the option to take the priced lanes can serve as insurance against worse-than-expected traffic conditions.
In this paper, we study the aggregate and distributional impacts of dynamic tolling. To do this, we bring together data on toll transactions, historical traffic conditions, and driver characteristics from the I-405 Express Toll Lanes in Washington State. We begin by presenting two sets of descriptive facts: first, aggregate speed and throughput increased after the introduction of tolling on this highway, and second, low-income drivers face advantageous trade-offs between price and travel time savings in the toll lanes. Next, to quantify the equilibrium effects of tolling, we build and estimate a model of driver demand, the road technology, and the pricing algorithm. In particular, the demand model incorporates the features of dynamic tolling highlighted above: choices of where and when to drive, as well as uncertainty about prices and travel times. Using the estimated model, we find that low-income drivers in fact gain the most from status-quo tolling, and we explore how equilibrium outcomes would change under counterfactual pricing policies.
Pearl Li from Stanford is on the job market.
The Latin American option
Estimates for the number of Palestinians, Syrians, and Lebanese in Brazil range from 10 to 12 million, with a reasonable degree of uncertainty. Most of them came over before those were distinct countries, for one thing. Other Latin American countries also have migrants from that region, Panama in particular, and as you may know Bukele of El Salvador is of Palestinian origin.
I don’t know of any formal statistics, but by repute those individuals have done quite well in Latin America. And it is hard to argue they have increased rates of violence or political disorder.
I would gladly see Brazil and other Latin polities open their immigration to current Palestinians in the Middle East.
The major Latin economies have very low fertility rates, about 1.55 for Brazil. They will need more people, and more young people, in any case. Now seems like a good time to act.
The U.S. should care about Europe too
That is the message of my latest Bloomberg column, yes Europe is falling behind but we should worry rather than gloat. Here is one excerpt:
A deeper truth is that Europe still has unparalleled cultural and political capital, often along dimensions that the US cannot match. Europe was the center of the world for a long time, even if it no longer is, and has a detailed and emotionally vivid understanding of how distinct traditions and histories can coexist. Of course they often don’t, and that too is part of Europe’s lesson for the world.
On a more practical level, the US and other nations need a Europe that can defuse its populist right pressures, handle external migration from the Middle East and Africa, and provide a partial defense against Russian expansion in Ukraine and other parts of far eastern Europe. A Europe that is declining in relative economic importance is unlikely to be able to perform those roles well.
All of which is to say, a Europe striving to regain its place atop the global economy is a welcome development not just for Europeans but for small-d democrats everywhere. If only it would go about the task with a greater sense of urgency.
Empfehlenswert.
That was then, this is now
…the first German pogroms of the modern age, the so-called Hep-Hep riots, took place in 1819. Jews were attacked on the streets and Jewish stores were ransacked. It was a new and as yet unknown phenomenon in the German-speaking lands. The riots were led by students, ostensibly the anti-absolutist and progressive force in German society.
That is from Shlomo Avineri’s Herzl’s Vision: Theodor Herzl and the Foundation of the Jewish State. Here is a new bulletin from MIT.
The early days
I made a GPT to teach me anything as efficiently as possible.
As it teaches, it will recursively test my understanding of key concepts, and recursively fill in any gaps it finds until I understand the whole of it.
Try it out – I think it's pretty good:https://t.co/GAUvBAfO9h
— Siqi Chen (@blader) November 10, 2023
Friday assorted links
1. “His job market paper, “Inflation, Risk Premia, and the Business Cycle”, proposes a novel macro-finance model to rationalize the risk price puzzle — the previously undocumented empirical disconnect between inflation and risk premium shocks.” J.R. Scott of MIT Sloan.
2. Oregon no longer requires a bar exam to practice law.
3. Ten minute video from hu.ma.ne. The new AI pin, some call it. Here is NYT coverage. And an NYT review. What do you all think?
4. The economics of visa-free travel to Kenya?
5. A 1599 view on how the moderns were outdoing the ancients.
6. Don’t waste your time reading this stuff. Because, of all pieces, it comes closest to what I hear from insiders.
Unraveling the female thinness premium
That is a paper by Shasha Wang, who is on the job market from the University of Pennsylvania. Here is the abstract:
This paper studies two mechanisms that jointly contribute to thinness premium in the marriage market: the economic mechanism and the non-economic mechanism. My empirical findings from the Panel Study of Income Dynamics (PSID) reveal that all else being equal, thinner females are more likely to marry richer males. A one-unit increase in BMI (Body Mass Index), roughly equivalent to a six-pound increase for a 5’6″ figure, is associated with a 3.9% decrease in the husband’s annual labor income for noncollege wives and a 4.3% decrease for college-educated wives. Using the Simulated Method of Moments to estimate a two-stage static matching equilibrium model, this paper determines whether the observed preference for thinner female partners in the marriage market is a result of assortative mating due to the thinness premium in the labor market or is driven by non-economic factors such as a preference for smaller body sizes or other traits associated with smaller body sizes, such as self-discipline, active social interactions, and positive social image. The estimation results indicate that the positive correlation between a husband’s income and his wife’s thinness is primarily attributed to a male preference for thinner spouses. Women with a BMI below 25 only earn 4% more income than those with a BMI above 25 (assuming all other factors are equal), but having a wife with a BMI below 25 significantly enhances a husband’s utility, akin to a 1.15 times increase in his consumption.
Please note that is not her job market paper. Her main paper is a very interesting piece on when/where STEM gaps arise across men and women.
Claims about extinction and evolution
Advances in evolutionary theories (the Extended Synthesis) demonstrate that organisms systematically modify environments in ways that influence their own and other species’ evolution. This paper utilizes these theories to examine the economic consequences of human dispersal from Africa. Evidence shows that early humans’ dispersal affected the adaptability of animal species to human environments and, through this, the extinction of large mammals during Homo sapiens’ out-of-Africa migration. Empirical analyses explore the variation in extinction rates as a source of exogenous pressure for cooperation and innovation among hunter–gatherers and examine the impact of extinction on long-run development. The results indicate that extinction affects economic performance by driving continental differences in biogeography, disease environments, and institutions. Eurasia’s location along the out-of-Africa migratory path provided human and animal populations with coevolutionary foundations for domestication and agriculture, which gave Eurasians technological and institutional advantages in comparative development.
That is from a recent paper by Ideen A. Riahi, published in The Economic Journal. Via the excellent Kevin Lewis.
Returns to Education for Women in the Mid-20th Century: Evidence from Compulsory Schooling Laws
Abstract: Women had a similar level of schooling to men during the mid-twentieth century United States, but research on the returns to education for women is scarce. Using compulsory schooling laws as instrumental variables, this paper examines the causal effect of education on women’s labor market and marriage market outcomes. I examine both outcomes because women frequently traded off employment and marriage due to marriage bars and gender norms against married women working. I show that an additional year of schooling increases women’s probability of gainful employment by 7.9 pp. and women’s wage earnings by 15 percent, which can be explained by women’s entry into skilled occupations. Given the large returns on earnings, education surprisingly does not increase women’s probability of never marrying, but it does increase the probability of divorce and separation. In addition, women’s education positively affects the husband’s and the household’s labor supply and earnings, conditional on marriage formation and the husband’s education.
That is from Sophie Li, who is on the job market from Boston University. Her actual job market paper is: “The Effect of a Woman-Friendly Occupation on Employment: U.S. Postmasters Before WWII .” Some of you will wince to hear me say this, but many of the most interesting job market papers this year are on the economics of gender.
Thursday assorted links
1. “Let’s start with strawberries. I have a trio of questions on strawberries. Is it feminine to eat strawberries? Why do we eat strawberries with cream? And do you think the British consider strawberries a very British fruit and maybe the most British fruit we have?” Here is the rest of the podcast, with transcript.
2. FT interview with Claudia Sahm.
3. University of Austin now accepting undergraduate applications, with some fellowships too.
4. Dan Klein on the history of the word “liberalism.”
5. New Iceland puffin documentary (New Yorker).