Does common ownership really matter?

We derive a measure that captures the extent to which overlapping ownership structures shift managers’ incentives to internalize externalities. A key feature of the measure is that it allows for the possibility that not all investors are attentive to whether a manager’s actions benefit the investor’s overall portfolio. Empirically, we show that potential drivers of ownership overlap, including mergers in the asset management industry and the growth of indexing, could in fact diminish managerial motives. Our findings illustrate the importance of accounting for investor inattention and cast doubt on the possibility that the growth of common ownership has had a significant impact on managerial incentives.

That is from a new NBER working paper by Erik P. Gilje, Todd Gormley, and Doron Y. Levit.

Opioids and the Labor Market

Do not believe those who tell you the only labor market problems have been demand side!:

This paper studies the relationship between local opioid prescription rates and labor market outcomes. We improve the joint measurement of labor market outcomes and prescription rates in the rural areas where nearly 30 percent of the US population lives. We find that increasing the local prescription rate by 10 percent decreases the prime-age employment rate by 0.50 percentage points for men and 0.17 percentage points for women. This effect is larger for white men with less than a BA (0.70 percentage points) and largest for minority men with less than a BA (1.01 percentage points). Geography is an obstacle to giving a causal interpretation to these results, especially since they were estimated in the midst of a large recession and recovery that generated considerable cross-sectional variation in local economic performance. We show that our results are not sensitive to most approaches to controlling for places experiencing either contemporaneous labor market shocks or persistently weak labor market conditions. We also present evidence on reverse causality, finding that a short-term unemployment shock did not increase the share of people abusing prescription opioids. Our estimates imply that prescription opioids can account for 44 percent of the realized national decrease in men’s labor force participation between 2001 and 2015.

The fact that the demand side blade of the scissors can be powerful does not imply the supply side blade does not matter, no matter how many snide tweets you may read to the contrary.

The paper is by Dionissi Aliprantis, Kyle Fee, and Mark E. Schweitzer at the Cleveland Fed.

Via Ilya Novak.

Solve for the New York equilibrium

Black lawmakers and activists are blocking a push to legalize recreational marijuana in New York, warning that Gov. Andrew M. Cuomo’s proposal could perpetuate the racial inequality that it purports to fight.

The lawmakers — including some of legalization’s most vocal supporters — say that unless people of color are guaranteed a share of the potentially $3 billion industry, in the form of job training, adult education and licenses in the industry itself, there may be no legalization this year.

That is from Vivian Wang and Jeffrey C. Mays in the NYT.

The third cohort of Emergent Ventures recipients

As always, note that the descriptions are mine and reflect my priorities, as the self-descriptions of the applicants may be broader or slightly different.  Here goes:

Jordan Schneider, for newsletter and podcast and writing work “explaining the rise of Chinese tech and its global ramifications.”

Michelle Rorich, for her work in economic development and Africa, to be furthered by a bike trip Cairo to Capetown.

Craig Palsson, Market Power, a new YouTube channel for economics.

Jeffrey C. Huber, to write a book on tech and economic progress from a Christian point of view.

Mayowa Osibodu, building AI programs to preserve endangered languages.

David Forscey, travel grant to look into issues and careers surrounding protection against election fraud.

Jennifer Doleac, Texas A&M, to develop an evidence-based law and economics, crime and punishment podcast.

Fergus McCullough, University of St. Andrews, travel grant to help build a career in law/history/politics/public affairs.

Justin Zheng, a high school student working on biometrics for cryptocurrency.

Matthew Teichman at the University of Chicago, for his work in philosophy podcasting.

Kyle Eschen, comedian and magician and entertainer, to work on an initiative for the concept of “steelmanning” arguments.

Here is the first cohort of winners, and here is the second cohort.  Here is the underlying philosophy behind Emergent Ventures.  Note by the way, if you received an award very recently, you have not been forgotten but rather will show up in the fourth cohort.

Is Germany still a member of the Western alliance?

Germany’s decisions on China’s Huawei, Russia’s Nord Stream 2 & now Iran-backed Hezbollah

That is a tweet from Velina Tchakarova.  Germany will not list Hezbollah as a terrorist group, in case you missed that piece of news.  And the country will not ban Huawei infrastructure as a potential piece of its communications networks.  Furthermore:

The projections peg the [German] military budget to be several billion euros short of the trajectory to meet the government’s goal of reaching 1.5 percent of gross domestic product by 2024. Analysts even see the current spending curve unable to sustain 1.35 percent in the years ahead.

NATO members in 2014 agreed to boost their defense spending to 2 percent of GDP within 10 years.

Italy, by the way, just endorsed China’s One Belt, One Road initiative, the only G7 member to do so.

For all the talk about Brexit, these may end up being the relevant “exits” of our time.  And if anyone is working hard to make Brexit seem like a somewhat less bad idea, I suppose that is Germany and Italy, not anyone in British politics.

*Culture in Nazi Germany*

That is a new and forthcoming book by Michael H. Kater, excerpt:

The book’s first contention is that in order for a new Nazi type of culture to take hold, the preceding forms first had to be wiped out.  This mainly affected the artistic and intellectual achievements most hated by the Nazis, those of the Weimar Republic, whose aesthetic and political hallmark was Modernism.  The police controls Hitler used to carry out purges in political and social contexts were also used against Modernist art forms and their creators…

However, as far as films were concerned, the most acute interest shown by Hitler was in the weekly newsreels.  These embodied for him what film was all about: an ideal instrument for political control.  He regularly commented on newsreels to Goebbels, and had some several cut or modified.  More so than in the case of feature films, Hitler was liable to override any decisions Goebbels had already made on them.  Even long before the war broke out Hitler was adamant that newsreels display the heroic…

Recommended, even if you feel you’ve had your fill of books on Nazi Germany.

The man who catalogues the Royal Family

Long before there was such a thing as “Big Data,” there was Tim O’Donovan, a retired insurance broker who has meticulously tabulated the British royal family’s engagements with pencil and paper every day for 40 years.

In a row of old-fashioned leather-bound ledgers, in a wisteria-fringed house in the village of Datchet, just west of London, he has amassed an extraordinary collection of raw data. The Autumn Dinner of the Fishmongers’ Company, convened in October by Princess Anne? It’s in there. The opening of the Pattern Weaving Shed in Peebles, Scotland? Of the Dumfries House Maze? Of a window at the Church of St. Martin in the Bull Ring? Noted.

Mr. O’Donovan, 87, is not part of the hurly-burly of royal commentary. Not only is he not active on social media, he claims never to have seen it. (“I am glad to say I don’t have anything to do with it,” he said, a bit starchily. “Everything I’ve heard about it is negative.”)

Every year, Mr. O’Donovan releases a comparative table listing the number of engagements attended by the highest-ranking royals, setting off a flurry of barbed commentary in the British news media. The feeding frenzy comes because Mr. O’Donovan, intentionally or not, has effectively invented a metric of how much the members of the royal family work.

He does it for fun, as his hobby:

Born into a family of avid collectors, he hungered in his 40s to undertake a statistical project; he had been impressed by a man who used public records to tabulate the waxing and waning popularity of baby names, publishing his findings once a year in a letter to the editor of The Times of London. He found his fodder in the Court Circular, an account of the royals’ engagements that appears in The Times of London. He decided to clip each one, paste it in a ledger and run the numbers, releasing his first results at the end of 1979.

Here is more from Ellen Barry (NYT).  Here is an article on digital hoarders.

Damien Hirst markets in everything

The Palms Casino Resort in Las Vegas is taking the concept of luxe travel to a whole different level. Its new Damien-Hirst-designed Empathy Suite costs $100,000 a night.

The room is the most expensive in America, beating out one at The Mark hotel, which previously held the accolade at $75,000 a night. And Empathy is also one of the world’s most expensive hotel accommodations, according to The Palms. (In fact, it’s potentially the most expensive: The Royal Penthouse Suite at the President Wilson Hotel in Geneva — at about $80,000 a night — was the world’s most expensive suite in 2018, according to Lonely Planet.)

…The room was designed by world-renowned artist Hirst and showcases a number of his well-known original pieces, like the iconic “Winner/Loser,” with two bull sharks suspended in formaldehyde.

Hirst — who is known for controversial pieces — also created a 13-seat curved bar filled with medical waste, and hanging above the bar is Hirst’s “Here for a Good Time, Not a Long Time,” which features a marlin skeleton and taxidermy marlin.

Here is more text and photos, noting that perhaps the high price is in part “advertising” so that major gamblers feel good when the room is comped to them?

Via the excellent Samir Varma.

Those new service sector jobs is this one in fact torture?

Imagine: For the rest of your life, you are assigned no tasks at work. You can watch movies, read books, work on creative projects or just sleep. In fact, the only thing that you have to do is clock in and out every day. Since the position is permanent, you’ll never need to worry about getting another job again.

Starting in 2026, this will be one lucky (or extremely bored) worker’s everyday reality, thanks to a government-funded conceptual art project in Gothenburg, Sweden. The employee in question will report to Korsvägen, a train station under construction in the city, and will receive a salary of about $2,320 a month in U.S. dollars, plus annual wage increases, vacation time off and a pension for retirement. While the artists behind the project won’t be taking applications until 2025, when the station will be closer to opening, a draft of the help-wanted ad is already available online, as Atlas Obscura reported on Monday.

The job’s requirements couldn’t be simpler: An employee shows up to the train station each morning and punches the time clock. That, in turn, illuminates an extra bank of fluorescent lights over the platform, letting travelers and commuters know that the otherwise functionless employee is on the job. At the end of the day, the worker returns to clock out, and the lights go off. In between, they can do whatever they want, aside from work at another paying job.

That is by Antonia Noori Farzan at WaPo.  The project is called “Eternal Employment.”

For the pointer I thank Peter Sperry.

China non-fact of the day

China’s economy is about 12 per cent smaller than official figures indicate, and its real growth has been overstated by about 2 percentage points annually in recent years, according to research. The findings in the paper published on Thursday by the Brookings Institution, a Washington think-tank, reinforced longstanding scepticism about Chinese official statistics.  They also add to concerns that China’s slowdown is more severe than the government has acknowledged. Even based on official data, China’s economy grew at its slowest pace since 1990 last year at 6.6 per cent.

That is from Gabriel Wildau of the FT — adjust your debt to gdp ratios accordingly.

The Brother Earnings Penalty

This paper examines the impact of sibling gender on adolescent experiences and adult labor market outcomes for a recent cohort of U.S. women. We document an earnings penalty from the presence of a younger brother (relative to a younger sister), finding that a next-youngest brother reduces adult earnings by about 7 percent. Using rich data on parent-child interactions, parents’ expectations, disruptive behaviors, and adult outcomes, we provide a first step at examining the mechanisms behind this result. We find that brothers reduce parents’ expectations and school monitoring of female children while also increasing females’ propensity to engage in more traditionally feminine tasks. These factors help explain a portion of the labor market penalty from brothers.

That is by Angela Cooks and Eleonora Patacchin in Labour Economics.  Once again, family niche effects seem to matter.  Via the excellent Kevin Lewis.