The wonders of money
…lifting children out of poverty can diminish some psychiatric symptoms…A study published in last week’s issue of The Journal of the American Medical Association looked at children before and after their families rose above the poverty level. Rates of deviant and aggressive behaviors, the study noted, declined as incomes rose.
“This comes closer to pointing to a causal relationship than we can usually get,” said Dr. E. Jane Costello, a psychiatric epidemiologist at Duke who was the lead author.
The study tracked 1420 children, many of whom lived on an Indian reservation. A local casino opening lifted many out of poverty, and also improved their mental health:
…the rate of psychiatric symptoms among the children who had risen from poverty was dropping. As time went on, the children were less inclined to stubbornness, temper tantrums, stealing, bullying and vandalism – all symptoms of conduct and oppositional defiant disorders.
After four years, the rate of such behaviors had dropped to the same levels found among children whose families had never been poor. Children whose families broke the poverty threshold had a 40 percent decrease in behavioral symptoms. But the payments had no effect on children whose families had been unable to rise from poverty or on the children whose families had not been poor to begin with.
Even I, author of a book called In Praise of Commercial Culture (see to the right), am surprised by this result. Supposedly the wealthier parents were now able to spend more time with their children, thus improving their mental health. I wonder whether the key factor instead might have been improved behavior on the part of the parents.
Here is the abstract, plus you can buy a copy of the original research for $12.
Addendum: David Levy, citing Adam Smith, wonders if it isn’t the growth rate of income that makes people better off, rather than the level.
Why not?
Here is a new way of earning seigniorage revenue, after all we offer vanity license plates:
..vanity stamps already exist in Canada and Australia…In the land down under, your picture goes next to the stamp, while our neighbors to the north put your picture in the middle of a border…The price in OZ is about a 100 percent premium (for example, one hundred 40-cent stamps for $87), while in Canada the price is $24.95 for one sheet of twenty-five domestic stamps.
From Why Not?, by Barry Nalebuff and Ian Ayres. My previous blog post on this book also brings you to their web site, full of other ideas of this ilk.
It is not just prescription drugs
You may have spent $100 for your textbook, or made your class cough up this money. That same text might have been sold overseas for half of the price or less. Today’s New York Times offers the full account.
And yes, arbitrage has begun:
At one prestigious university, a sophomore imported 30 biology books from England this fall and sold them outside his classroom for less than the campus-bookstore price, netting a $1,200 profit. Next semester, if all goes well, he plans to expand the operation.
How about this:
The differences are often significant: “Lehninger Principles of Biochemistry, Third Edition,” for example, lists for $146.15 on the American Amazon site, but can be had for $63.48, plus $8.05 shipping, from the British one. And “Linear System Theory and Design, Third Edition” is $110 in the United States, but $41.76, or $49.81 with shipping, in Britain.
Many college bookstores, meanwhile, have taken matters into their own hands, arranging their own overseas purchases.
And it is now a business. BookCentral.com will get you the text from overseas at the lower price, of course you pay them a commission.
The legal status of these reimportations remains an open question. Some publishers are placing stickers on their books, forbidding reimportation, but the Times article suggests that such reimportation is not obviously against the law.
How much is height worth?
Judge’s study, which controlled for gender, weight and age, found that mere inches cost thousands of dollars. Each inch in height amounted to about $789 more a year in pay, the study found. So someone who is 7 inches taller – say 6 feet versus 5 feet 5 inches – would be expected to earn $5,525 more annually, he said.
Read here for the full story. The commentary of Randall Parker argues that international competition, most of all with the Chinese, will force Americans to embrace genetic engineering for superior intelligence.
Not as bad as it sounds
The U.N. convention on cultural diversity, championed by Canada and
France, would take cultural goods such as films, plays and music out of
the realm of trade negotiations. It would exempt them from free-trade
rules, allow governments to protect and support their cultural industries,
and enshrine the “cultural exception” that European nations have defended
in international law.
It amazes me how many “free speech advocates” have no qualms about restricting consumer choice in the cultural marketplace, which of course is another forum for speech and ideas.
That being said, this news is probably not as bad as it sounds. First, American cultural presence is losing ground when it comes to both television and movies, the two most sensitive cases. Most people want to see locally produced TV programs, which reflect their language and culture. American shows dominate the television market only in parts of the English-speaking world, such as Canada. In cinema, France has shown some ability to capture more than half of its home market, thanks to films such as Amelie. Even Quebec, a very small region, has produced some box-office winners (“The Barbarian Invasions”) as of late.
Quite simply, most of the rest of the world is becoming more entrepreneurial in its cultural production. New technologies, such as digital moviemaking and editing, will only accelerate this trend. So putting in quotas is addressing a dilemma that the marketplace is already solving.
Second, the importance of the quotas is often more symbolic than anything else. France, for instance, does not strictly enforce its quotas against foreign films in French theaters. Anyone who has visited Paris knows it is a wonderful place to see foreign movies of all kinds. The French, for all their noises about the cultural exception, are remarkably open to outside cultures; the musics of Algeria and Zaire have been centered in Paris for some time now. In part, granting the French a symbolic victory on trade policy makes it easier for them to be more open in the long run, and this is what I predict from the U.N. convention. What the French, and many others want, is the ability to win a symbolic victory, and then the ability to choose what they want in the marketplace.
Here is full link, and thanks to Eric Crampton and Michael Giesbrecht for the pointer.
Our stalled energy bill
Remember all that hubbub about the new energy bill, following the Great Blackout? What ever happened? Lynne Kiesling offers a useful update on where things are at.
Here is part of her overview:
There’s a lot of stuff in those measures that is economically unsound and may even increase net energy use, such as increased ethanol use. But my political science friends tell me that as long as Denny Hastert is speaker of the House and the Iowa caucuses have the power they do in the Presidential election, corn farmers will be able to sock it to us, good and hard…ethanol’s nose gets in the tent through a renewable fuels mandate, not through the federal fuel oxygenate requirement. Ethanol a renewable fuel? Stop for a second to think about how ethanol is made: till soil, fertilize, plant corn, harvest, process it using lots of fossil fuel energy and creating air, water and soil emissions in the process, transport it in trucks, trains and barges to its consumption location. So there are a few parts in the production process that require fossil fuel use, and consequently result in emissions.
In other words, special interests and political rent-seeking are preventing us from adopting a sounder energy policy. Will things ever change? Stay tuned to Lynne’s blog for periodic updates.
More on Canadian medicine
Median waiting time for radiation treatment for breast cancer in province of Ontario: 8 weeks
Median waiting time for angioplasty in the province of British Columbia: 12 weeks
Median waiting time for radiation treatment for prostate cancer in province of Quebec: 12 weeks
Median waiting time for cataract removal in the province of Ontario: 20 weeks.
Median waiting time for cataract removal in the province of Saskatchewan: 52 weeks.
Median waiting time for a tonsillectomy in the province of Saskatchewan: 80 weeks.
For the full story, replete with additional statistics, and also some graphs, click here.
Parapundit now offers an update on the sorry state of Canadian medicine.
Is health care good for you?
Robin Hanson frequently tries to convince me that more health care, at the margin, doesn’t make us any healthier. A well-known Rand study found that 30 percent increases in health care consumption did not make people healthier. Nor does the international cross-sectional evidence drive the point home. Once you adjust for income, greater health care spending does not appear to make people healthier.
Robin now sends me this study, which shows that greater Medicare spending doesn’t make people any healthier. Areas with high Medicare spending don’t produce extra health, and yes, this result does adjust for the relevant variables. This, of course, would make Medicare reform a good deal easier, you cut cut spending without fearing catastrophe.
Why, then, do we spend so much on health care? Robin claims we do it to “show that we care” for our relatives. I’ve suggested we
do it simply to avoid the feeling of regret, should one of our loved ones die, and we then feel we “didn’t do enough.”
By the way, here is one of Robin’s essays, “Buy Health, Not Health Care,” he suggests that your doctor should lose a lot of money when you die.
My take: I never manage to win this debate with Robin. I don’t have much evidence to cite in favor of health care spending (email me if you know some). But I am suspicious when I hear the claim that health care does not matter at the margin. Which margin? The last unit you bought? The next unit you might buy? And how big a unit? No one wants to give up penicillin. And exactly which margin are these studies measuring?
On one hand, the economist in me would be happier if I had some evidence that all the extra American health care spending was bringing a concrete return. On the other hand, I hate going to the doctor, in fact I never go. If I could tell my wife that this was rational, well, that would be better than making the economist in me happy.
Behavioral economics
Michael, at www.2blowhards.com offers a useful post on behavioral economics, replete with useful links. For instance, this interview with Gary Becker offers Becker’s criticisms of this movement, scroll toward the end, if you don’t read the whole thing. You also can read about how Becker came upon the economics of crime and punishment while looking for a parking spot: “I started thinking about my chances of getting caught…”
Ghettos on the move
Median inner-city household incomes grew by 20% between 1990 and 2000, to a surprising $35,000 per year…while the national median gained only 14%, to about $57,000.
From Business Week, Oct.27 issue, the link requires a subscription.
The population of inner cities is growing as well, 24% over the 1990s, as compared to 13% for the nation as a whole.
How did Hitler entertain guests?
Rooms were equipped with vegetarian food, beer and wine, French pornography, and a copy of Mein Kampf. Read here, thanks to www.aldaily.com.
Siberian facts
1. Oil and gas account for about a quarter of Russian gdp, about half of the export earnings, and about a third of government revenues.
2. Much of the Russian energy supply goes toward heating very cold places.
3. Almost 40 million Russians work and live in cities where the average January temperatures range from minus 15 Centigrade to minus 45 Centigrade.
4. Costs of living in Siberia are about four times higher than in the rest of Russia.
5. The average wage in Siberia is about 1/12 that of Moscow, and most Siberians cannot pay their energy bills.
6. There are restrictions on settlement in Moscow, and a general difficulty of finding jobs.
7. Many of the Siberian cities would never have been developed, had it not been for communist planning.
From today’s Financial Times.
Apparently this is why Russia cannot so easily deregulate its energy market and allow prices to rise to world market levels. Siberia would move further into bankruptcy.
The doctor drain from Canada
Unlike most libertarian-oriented economists, I find persuasive the left-wing arguments that individuals have a positive right to medical care. The problem is, most governmental systems are proving unsustainable in the long run. They are affordable only by rationing, which frustrates doctors and patients alike. The Canadian system is (barely) tolerable, only because so many Canadians come to this country for their care.
Read this article from The New York Times.
Here is one money quote:
Forced to compete for operating room time with other surgeons, he said that he and his colleague could complete only one or two operations on some days, meaning that patients whose cases were not emergencies could go months or even years before completing necessary treatment.
“Scarce resources are simply not being spent properly,” Dr. Sriharan concluded, citing a shortage of nurses and anesthesiologists in the hospital where the single microscope available is old and breaking down.
The two surgeons are sharply critical of Canada’s health care system, which is driven by government-financed insurance for all but increasingly rations service because of various technological and personnel shortages. Both doctors said they were fed up with a two-tier medical system in which those with connections go to the head of the line for surgery.
Here is another:
There was a net migration of 49 neurosurgeons from Canada from 1996 to 2002, according to the Canadian Institute for Health Information, a large loss given that there are only 241 neurosurgeons in the country.
My take: It is only going to get worse.
Tightening the border?
Barriers to entering Mexicans simply encourage them to stay in this country longer, and make them less likely to return home for long visits. On net, the number of illegal immigrants appears to go up. For more, read the always stimulating Virginia Postrel.
My take: I know some of these people (the Mexican immigrants), and I can tell you, this is absolutely true. Given border crackdowns, they make a conscious calculation to stay longer in the United States, rather than migrating seasonally.
The new tallest building in the world
It is in Taiwan, click here for an image and story. The post immediately below, about boys and girls in Taiwan, suggests that the building will be the site of intense sexual competition, and perhaps helps explain the “more-phallic-than-usual” architecture.