Paris fact of the day
The number of people living in the Paris departement, or administrative area, dropped by an average of 11,900 people a year between 2011 and 2016, the most recent figures available, according to the national statistics agency. Paris’s urbanism institute, Apur, forecasts that the decline of the inner city population will continue for about another six years.
It is a sharp contrast with the urban renaissance that has taken place in many of the world’s major cities over the past 20 years, but Paris is not alone.
New York City shed a net 39,500 people in 2018 and 37,700 the year before, reversing the previous upward trend.
In London, the population is still growing, bolstered by births and international immigration; but when it comes to internal migration, the net movement of people out of the UK city totalled more than 100,000 in the year to June 2018.
Tattoos and time preferences
Survey and experimental evidence documents discrimination against tattooed individuals in the labor market and in commercial transactions. Thus, individuals’ decision to get tattooed may reflect short-sighted time preferences. We show that, according to numerous measures, those with tattoos, especially visible ones, are more short-sighted and impulsive than the non-tattooed. Almost nothing mitigates these results, neither the motive for the tattoo, the time contemplated before getting tattooed nor the time elapsed since the last tattoo. Even the expressed intention to get a(nother) tattoo predicts increased short-sightedness and helps establish the direction of causality between tattoos and short-sightedness.
That is from a new paper by Bradley J. Ruffle and Anne E. Wilson, via the excellent Kevin Lewis.
*Good Economics for Hard Times*
Yes, that is the new and forthcoming book by Abhijit Banerjee and Esther Duflo, and it tells you what they really think about everything. Everything in mainstream economic policy debate, at least.
So far I have read only the first chapter, on migration, but I found it informative, highly readable, and (unlike many other popular books) subtle. I am excited to read the rest of the book, in the meantime here is one short excerpt:
Mahesh found these would-be [Nepali] migrants were in fact somewhat overoptimistic about their earnings prospects. Specifically, they overestimated their earning potential by around 25 percent, which could be for any number of reasons, including the possibility the recruiters who go to them with job offers lie to them. But the really big mistake they made was that they vastly overestimated the chance of dying while they were abroad. A typical candidate for migration thought that out of a thousand migrants, over a two-year stint, about ten would come back in a box. The reality is just 1.3.
Here is the table of contents:
1. MEGA: Make Economics Great Again
2. From the Mouth of the Shark
3. The Pains from Trade
4. Likes, Wants and Needs
5. The End of Growth?
6. In Hot Water
7. Player Piano
8. Legit.gov
9. Cash and Care
Due out November 12, you can pre-order here.
Climate change sentences to ponder
But shame is the wrong emotion. “The more we try to change other people’s behavior — especially by making them feel bad — the less likely we will be to succeed,” Edward Maibach of the Center for Climate Change Communication at George Mason University told me.
That is from Seth Kugel at the NYT.
Sunday assorted links
Treasury rates and global PMI
*Fully Grown: Why a Stagnant Economy is a Sign of Success*
That is the new book by Dietrich Vollrath, strongly recommended, it is a primer on the current state of knowledge about economic growth. Tightly argued, and a remarkable amount is covered in 216 pp. of regular text. Here is one excerpt:
Although there were plenty of changes in the individual markups firms charge, many of them actually fell over the last twenty years. What explained the overall rise in markups from 1.18 to 1.67 was that spending shifted away from firms with low markups and toward firms with high markups. Which high markup firms did we shift our spending to? Well, a lot of service firms, including those involved in communications, technology, health care, and education. In short, the rise in economic profits and markups we see at the aggregate level is part of the overall shift toward services we discussed a few chapters ago.
Here is where things get a little weirder. Baqaee and Farhi show that the shift toward high-markup firms was good for productivity growth. Whatever the source of a high markup, it indicates a product that is very valuable relative to its marginal cost. If we take the inputs required to produce a low-markup product and use them to instead produce a high-markup product, then we have raised the value of what we produce. As this increase in value came from reallocating our existing inputs toward a different use, rather than from accumulating new physical or human capital, the shift in spending toward high-markup firms shows up as an increase in productivity growth.
More books should be like this, it actually tries to teach the reader something! And succeeds. Definitely recommended. Due out in January, you can pre-order here.
Saturday assorted links
Median income data overstate progress in some ways
Those numbers are not age-adjusted:
Has the median man made progress economically since 1980? Not really. While male median income rose (in 2017 $) from $35,589 to $40,396, or 13.5 percent, this modest increase masks the fact that the share of men in their peak earnings years has increased, and that earnings at the median within peak earnings years categories have decreased.
Note that population share for 35-64, prime earnings years, rose from 1980 to 2017; earnings fell for every population group between 25 and 54. The median 30 year old is making less than their counterpart from 27 years earlier, as is the median 40 year old, as is the median 50 year old.
Had income within each age category remained constant at 1980 levels, current median income for men could be $40,306, or almost exactly where it us now.
Here is the full Richard Green post, with a useful chart, via Mark Thoma.
*The Economist’s Hour: False Prophets, Free Markets, and the Fracture of Society*
That is the new and forthcoming book by New York Times writer Binyamin Appelbaum. I did not agree with all of the perspectives in the book, but enjoyed reading it, and found no errors of fact in it (rare for a book on free market economics!). I was happy to give it this blurb:
“I very much enjoyed reading The Economists’ Hour, an entertaining and well-written look at how market-oriented ideas rose from the academy and transformed nations. I do not agree with each and every perspective, but found this a valuable and highly recommendable book, which I devoured in a single sitting.”
The text even covers Walter Oi, who is arguably the most accomplished blind economist to have lived. Lots more on Laffer, Friedman, Alfred Kahn, Aaron Director, Thomas Schelling, the Chile episode, and more.
First world problems
Soon there may be non-stop 19 hour flights from New York to Sydney, Australia:
On long-haul flights, cabin lights are typically dimmed about two hours after take-off and turned back up about two hours before landing, said Sveta Postnova, a senior lecturer in neurophysics and brain dynamics at the University of Sydney. Depending on the destination, that practice can make jet lag worse, she noted.
One of the test [19 hour] flights from New York will follow the normal pattern. But on the other flight, lights will stay on for about six or seven hours after departure. Researchers will compare passenger data from the two flights to determine whether the lighting change affected jet lag. Meal service will be aligned with the lighting, Ms. Postnova said.
Light plays a key role in regulating sleep, but “recently we are learning that meals, exercise and other environmental factors also affect our body clock,” Ms. Postnova said. A big unknown for air travel is how to schedule lighting, meals and exercise to minimize jet lag.
Here is the WSJ article. My preference is for them to keep the lights on, and the windows open, for much longer than is currently the case. Eyemasks are cheap and underused.
Also, it may be my imagination, but anecdotally I observe that screen viewing has (additionally) replaced reading to an extraordinary extent even in just the last five years. True?
Friday assorted links
1. A pianist’s tips on how to practice (“avoid flow.”)
2. New results on the sheepskin effect.
3. “Federal fraud indictment: KU professor secretly worked for Chinese university.”
4. “Fidel Castro’s crocodile bites man at aquarium party.”
5. On turning 40 with an ancient heart.
6. Eric Weinstein podcast with Timur Kuran.
Latitude
Are there systematic trends around the world in levels of creativity, aggressiveness, life satisfaction, individualism, trust, and suicidality? This article suggests a new field, latitudinal psychology, that delineates differences in such culturally shared features along northern and southern rather than eastern and western locations. In addition to geographical, ecological, and other explanations, we offer three metric foundations of latitudinal variations: replicability (latitudinal gradient repeatability across hemispheres), reversibility (north-south gradient reversal near the equator), and gradient strength (degree of replicability and reversibility). We show that aggressiveness decreases whereas creativity, life satisfaction, and individualism increase as one moves closer to either the North or South Pole. We also discuss the replicability, reversibility, and gradient strength of (a) temperatures and rainfall as remote predictors and (b) pathogen prevalence, national wealth, population density, and income inequality as more proximate predictors of latitudinal gradients in human functioning. Preliminary analyses suggest that cultural and psychological diversity often need to be partially understood in terms of latitudinal variations in integrated exposure to climate-induced demands and wealth-based resources. We conclude with broader implications, emphasizing the importance of north-south replications in samples that are not from Western, educated, industrialized, rich, and democratic (WEIRD) societies.
Here is the article, via several MR readers.
Starbucks monetary policy
Starbucks has around $1.6 billion in stored value card liabilities outstanding. This represents the sum of all physical gift cards held in customer’s wallets as well as the digital value of electronic balances held in the Starbucks Mobile App.* It amounts to ~6% of all of the company’s liabilities.
This is a pretty incredible number. Stored value card liabilities are the money that you, oh loyal Starbucks customer, use to buy coffee. What you might not realize is that these balances simultaneously function as a loan to Starbucks. Starbucks doesn’t pay any interest on balances held in the Starbucks app or gift cards. You, the loyal customer, are providing the company with free debt.
Starbucks isn’t the only firm to get free lending from its customers. So does PayPal. That’s right, customers who hold PayPal balances are effectively acting as PayPal’s creditors. Customer loans to PayPal currently amount to over $20 billion. Like Starbucks, PayPal doesn’t pay its customers a shred of interest. But Starbucks’s gig is way better than PayPal’s. PayPal is required to store customer’s funds in a segregated account at a bank, or invest them in government bonds (see tweet below). So unfortunately for PayPal, it earns a paltry amount of interest on the funds that customers have lent it.
Here is more from JP Koning.
Those new (old) service sector jobs: personal book curator
From the unusual products flogged on health and wellbeing site Goop to her one-of-a-kind beauty habits, Gwyneth Paltrow never fails to surprise us. Case in point: she once hired a ‘personal book curator’.
Back in 2001, the former actress decided to redesign her Los Angeles home and realised that to complete the gram-worthy look, she needed a good five to six hundred books to fill the empty shelves.
So what does a Hollywood star do when their personal novel collection doesn’t quite make the necessary requirements? They call in a celebrity-approved book curator of course.
The 46-year-old asked longtime friend, Thatcher Wine, a long-time book collector and the founder of Juniper Books, to complete the task. But with A-list clientele including the likes of Laura Dern and Shonda Rhimes, he was certainly no stranger to the job in hand.
And this is indeed an art:
Over in the dining room, Wine made sure to organise the books in a more minimal fashion in keeping with a “rigid colour palette of black, white, and grey since it was less of a space where one might hang out and read”.
Upon closer inspection, heavyweight coffee table books take price of place with shelves dedicated to artists including Frida Kahlo, Salvador Dali and Leonardo Da Vinci.
Here is the full story, here is the interview with Thatcher Wine. Via Ted Gioia.