Sentences to ponder, the progress of health
Even in health care the big explosion was 1900 to the 1960s, when life expectancy rose from 47 (only modestly above Roman levels), to about 70 (only modestly below current levels.)
That is from Scott Sumner and the post is interesting throughout, also see Scott's additions in the comments. It is odd that many people are citing health improvements as evidence against my arguments for a slowdown in progress for the median individual, when, as Scott's quotation indicates, the opposite is more likely the case. Scott is a very literal reader, in the best sense of that term, and thus he is careful not to confuse my claims with weaker and less defensible versions of related ideas (and there are indeed many of those).
Here is Michael Mandel, arguing that the innovation slowdown starts in 1998-2000, rather than the early to mid 1970s, and attributing it largely on the biosciences.
Assorted links
1. Via Chris F. Masse, is Star Wars a remix?
2. When is death an aphrodisiac?
3. David Henderson on TGS. And more from Michael Mandel. And Bryan Caplan, you can scroll down there for additional posts.
Sentences to ponder Market Watch in Everything
From David Williamson:
Twitter followers have become more valuable in the last 2 years, apparently. Now it starts at $5 for 100 Twitter followers on Yanalo.com, much less than the earlier 4000 for $13 on TweepMe.com. Followers on TweepMe, the original site mentioned on Markets in Everything now go for $0.06 each.
Original MR post: http://www.marginalrevolution.com/marginalrevolution/2009/05/markets-in-everything-2.html
Observations about Chinese (Chinese-American?) mothers
I agree with many of Bryan Caplan's views on parenting, and Yana can attest that I have never attempted a "dragon mother" style. Yet I think that Bryan is overreaching a bit in rejecting virtually all of Amy Chua's claims. The simpler view — which most Americans intuitively grasp — is that some Asian parenting styles do make kids more productive, and better at school, although it is less clear they make the kids happier. It remains the case that most people overrate how much parenting matters in a broader variety of contexts, and in that regard Bryan's work is hardly refuted. Still, I see real evidence for a parenting effect from many (not all) Asian-American and Asian families.
1. James Flynn argues, using evidence from tests, that Chinese families boosted their children's IQs by intensive parental techniques. Based on some very specific research, he claims the parenting was causal and the IQ boost followed. I hardly consider this the final word, but it's more to the point that the adoption studies and the like, which don't try to measure this effect directly and don't have measures of strict Asian parenting.
2. It is obvious that some Asian parenting techniques make the children much more likely to succeed as classical musicians. It's a big marginal effect upon whatever genetic influence there might be (and in this case the genetic influence might well be zero or very small; Chinese hardly seem genetically superior in music.) The only question is how much longer this list can become. What else can the parents make their kids better at, even relative to IQ? Future engineering success? If violin is a slam dunk, I don't see why engineering is a big stretch.
3. I suspect that Bryan and his wife do, correctly, apply the notion of "high expectations" to their children and to the benefit of those kids.
4. Bryan, like Judith Harris, argues that the influence of parents is typically mediated through peers and peer effects. But we should not confuse the partial and general equilibrium mechanisms here. For any single parent, the peers may well carry the chain of influence to their child and a lot of the parenting style applied to that individual kid will appear irrelevant. But for the culture as a whole, the peers can serve this function only because of the general influence of culture and parenting on all of the peers as a whole. In other words, peer quality is endogenous and a single family is free-riding upon the parenting efforts of others. That's a better model than just looking at the partial equilibrium coefficient on the parent effect and concluding that parenting doesn't matter. This is a mistake commonly made by Harris fans.
5. As an aside, I wonder how much there is a common Chinese parenting or mothering style. Chua, of course, is from the Philippines. It is estimated that about 20 percent of the children are China are "abandoned" by their parents — mothers too – typically as the parents move to the cities to take better jobs. When Chua writes, to what extent is she referring to Chinese immigrant parenting styles, uniquely suited to new situations, and derived from Chinese culture but distinct nonetheless.
6. There is a significant literature on Chinese immigrant parenting styles, based on lots of empirical evidence, but I don't see anyone giving it much of a close look. Here is a simple and well-known piece, not about Asians per se, arguing that "authoritative parenting" leads to superior performance in school. There is also evidence that the effects accumulate rather than disappear over time. There is a lot of research here, often quite disaggregated in its questions, and it goes well beyond the twin studies and it does not by any means always yield the same answers.
7. I expect great things from Scott Sumner's children.
Why didn’t economists predict the crisis?
Raghu Rajan nails it:
I would argue that three factors largely explain our collective failure: specialization, the difficulty of forecasting, and the disengagement of much of the profession from the real world.
Read the whole thing, hat tip to Mark Thoma.
How much is a planet worth?
Greg Laughlin, via Kottke, interviewed by Lee Billings, tells us that there is a new equation:
This equation's initial purpose, he wrote, was to put meaningful prices on the terrestrial exoplanets that Kepler was bound to discover. But he soon found it could be used equally well to place any planet-even our own-in a context that was simultaneously cosmic and commercial. In essence, you feed Laughlin's equation some key parameters — a planet's mass, its estimated temperature, and the age, type, and apparent brightness of its star — and out pops a number that should, Laughlin says, equate to cold, hard cash.
At the time, the exoplanet Gliese 581 c was thought to be the most Earth-like world known beyond our solar system. The equation said it was worth a measly $160. Mars fared better, priced at $14,000. And Earth? Our planet's value emerged as nearly 5 quadrillion dollars. That's about 100 times Earth's yearly GDP, and perhaps, Laughlin thought, not a bad ballpark estimate for the total economic value of our world and the technological civilization it supports.
If you tweak the reflectivity of Venus a bit, you can get it up over a quadrillion dollars. Sell short, I say, and buy some Mars. The equation itself is at the third link, and it does not seem to be based on the idea of arbitrage.
Let’s empty out Belarus
Employers in many sectors of the German economy are facing labor shortages, under the dual pressures of an aging population and inflation-fighting measures that have kept wages low in comparison with its neighbors.
The problem was thrown into sharp relief on Tuesday with the release of official figures showing that Germany’s unemployment rate was the lowest in 18 years. While a jobless rate in single digits would be cause for celebration in many countries, in Germany it is the sign of a critical lack of workers.
Here is more.
Assorted links
1. Via Chris F. Masse, the forthcoming tunnel between Germany and Denmark. Is anyone else excited?
2. Behavioral economics reading list.
3. When is ptarmigan running more efficient than ptarmigan walking? (via Michelle Dawson, and gated paper here)
4. Prophets of the Marginal Revolution.
Let us Now Praise Non-Famous Men
Charles H. Kaman, an innovator in the development and manufacture of helicopter technology and, following a wholly different passion, the inventor of one of the first electrically amplified acoustic guitars, died on Monday in Bloomfield, Conn. He was 91.
Here is more. This bit is neat:
Mr. Kaman, a guitar enthusiast, also invented the Ovation guitar, effectively reversing the vibration-reducing technology of helicopters to create a generously vibrating instrument that incorporated aerospace materials into its rounded back. In the mid-1960s he created Ovation Instruments, a division of his [aerospace] company, to manufacture it.
And this:
With his second wife, Roberta Hallock Kaman, Mr. Kaman founded the Fidelco Guide Dog Foundation, which trains German shepherds as guide dogs for the blind and the police. Since 1981, Fidelco has placed 1,300 guide dogs in 35 states and four Canadian provinces, said Eliot D. Russman, the foundation’s executive director.
“It came down to the helicopters, guitars and dogs,” Mr. Kaman’s eldest son, C. William Kaman II, said in a telephone interview.
It is a well-written obituary.
Racial stereotypes and death statistics
Andrew Noymer, Andrew Penner, and Allya Saperstein report:
Recent research suggests racial classification is responsive to social stereotypes, but how this affects racial classification in national vital statistics is unknown. This study examines whether cause of death influences racial classification on death certificates. We analyze the racial classifications from a nationally representative sample of death certificates and subsequent interviews with the decedents' next of kin and find notable discrepancies between the two racial classifications by cause of death. Cirrhosis decedents are more likely to be recorded as American Indian on their death certificates, and homicide victims are more likely to be recorded as Black; these results remain net of controls for followback survey racial classification, indicating that the relationship we reveal is not simply a restatement of the fact that these causes of death are more prevalent among certain groups. Our findings suggest that seemingly non-racial characteristics, such as cause of death, affect how people are racially perceived by others and thus shape U.S. official statistics.
Iceland fact of the day
The total literature of Iceland is under 50,000 books, which is easily scannable in 2 years by 12 people using the scribe scanners of the Internet Archive.
Indeed they might put it all on-line. Hat tip goes to Annie Lowrey.
Assorted links
3. Why Norway deported the Norwegian of the Year.
4. How flu spreads among schoolchildren.
6. Leonhardt on Cowen vs. Meyerson; I view inequality as a residual of processes in the real economy. Some common factors are causing both inequality and stagnation (e.g, lack of major broad-based innovations, problems with the financial sector, aging), and to some extent inequality and stagnation have different causes. As Scott Sumner says: "do not reason from a price change," I say: "do not reason from a distribution change." Changes in distribution are not autonomous causes of stagnation.
Household size and stagnant median income
One loyal MR reader writes to me:
However, census Bureau data show that the size of the average US household decreased from 3.1 to 2.6 from 1970 to 2007…
The underlying question is whether figures for the median household are underrating the true growth in average living standards. A few points are in order.
1. Here is one passage from The Great Stagnation: "Since 1989, the size-adjusted and size – unadjusted measures have been rising at roughly the same rate, and post-1979 the difference between the size-adjusted and the size-unadjusted median income measures is never more than 0.3 percent." For more on this, see Lawrence Mishel, Jared Bernstein, and Heidi Shierholz, The State of Working America 2008/2009, chapter one.
2. David Leonhardt writes: "In fact, households were shrinking more quickly in the 1960s, ’70s and ’80s than they are now – and incomes were growing." Read the rest of this post as well.
3. That households are smaller decreases the aid and assistance available to those living in them.
4. There are an increasing number of women in the labor force, and that factor biases the household number to be higher than true productivity growth alone would dictate. Unmeasured household production is a mix of "lower than it would have been" or more harried than it would have been. I suspect this is a large effect, not a small effect.
5. On the issue of students and retirees, see the adjustments performed by Lane Kenworthy, pp.37-38.
Overall I do not see that changing household size allows one to dismiss the notion of relatively stagnant median income.
Hernando de Soto on Egypt
†¢ Egypt's underground economy was the nation's biggest employer. The legal private sector employed 6.8 million people and the public sector employed 5.9 million, while 9.6 million people worked in the extralegal sector.
†¢ As far as real estate is concerned, 92% of Egyptians hold their property without normal legal title.
†¢ We estimated the value of all these extralegal businesses and property, rural as well as urban, to be $248 billion–30 times greater than the market value of the companies registered on the Cairo Stock Exchange and 55 times greater than the value of foreign direct investment in Egypt since Napoleon invaded–including the financing of the Suez Canal and the Aswan Dam. (Those same extralegal assets would be worth more than $400 billion in today's dollars.)
My video dialogue with Nick Schulz
Find it here, and Nick's summary is very good:
In my conversation with Tyler about his new and much-debated book, The Great Stagnation, I was particularly struck by his explanation (at around 21:30) for how he came to embrace the idea that we are experiencing an innovation slowdown. His remarks about Julian Simon are also very noteworthy.
It would be an innovation for this blog if I could embed, but alas it is not to be…