Let’s have more African immigrants
That is the topic of my latest Bloomberg column, here is one bit:
Or consider Nigerian-Americans, Nigeria being the most populous nation in Africa. Their education levels are among the very highest in the U.S., above those of Asians, with 17 percent of Nigerian migrants having a master’s degree.
And:
Economist Edward Lazear suggests a simple experiment. Consider immigrants to the U.S. from Algeria, Israel and Japan, and rank them in order of most educated to least educated. The correct answer is Algeria, Israel then Japan. Although that’s counterintuitive at first glance, it’s easy enough to see how it works. If you are Algerian and educated, or aspire to be educated, your prospects in Algeria are relatively poor and you may seek to leave. A talented, educated person in Japan or Israel can do just fine by staying at home. These kinds of considerations explain about 73 percent of the variation in the educational outcomes of migrants.
Do read the whole thing.
Friday assorted links
1. Extreme peak-load pricing for London restaurant.
2. History of Henry George, NYC, and the single land tax.
3. Economics lessons from the career of Andre Agassi?
4. If you would like to attend my NYC Conversation with Matt Levine.
5. WSJ review of Hanson and Simler.
6. “Butcher breaks out of own freezer using black pudding.” Beef and lamb prove to be inferior escape tools.
Is lobbying profitable for business?
Maybe not, as I argue in my latest Bloomberg column:
The numbers instead indicate that lobbying hurts the underlying capital values of the corporations. Lobbying doesn’t increase the chance that favored bills are passed by Congress, and it isn’t associated with the company receiving more government contracts.
Those are the key results from a new study by Zhiyan Cao, Guy D. Fernando, Arindam Tripathy and Arun Upadhyay, published in the Journal of Corporate Finance and considering 1,500 S&P companies over the period 1998 to 2016. Neither spending money at all on lobbying nor spending more money on lobbying over those years seem to help companies, and for that matter contributions to political action committees don’t work either.
And:
If corporate lobbying is an unprofitable use of money, why does it happen? One possibility is that corporate leaders are using company resources to indulge their own ideological preferences. Other researchers have found that companies with weaker governance and more entrenched management are those more likely to spend on lobbying. This study finds that lobbying expenditures are higher when the percentage of CEO perks is higher and when the board of the company is larger.
It’s also possible lobbyists are ripping off companies with slick sales pitches, or that incompetent CEOs are spending money on lobbying so they seem to be doing something constructive.
Do read the whole thing, I also consider under what kind of hypothesis the lobbying actually might be paying off.
Is marrying your cousin bad for democracy?
The title of the paper is “The Churches’ Bans on Consanguineous Marriages, Kin-Networks and Democracy” and the author is Jonathan F. Schulz, here is the abstract:
This paper tests the hypothesis that extended kin-groups, as characterized by a high level of cousin marriages, impact the proper functioning of formal institutions. Consistent with this hypothesis I find that countries with high cousin marriage rates exhibit a weak rule of law and are more likely autocratic. Further evidence comes from a quasi-natural experiment. In the early medieval ages the Church started to prohibit kin-marriages. Using the variation in the duration and extent of the Eastern and Western Churches’ bans on consanguineous marriages as instrumental variables, reveals highly significant point estimates of the percentage of cousin marriage on an index of democracy. An additional novel instrument, cousin-terms, strengthens this point: the estimates are very similar and do not rest on the European experience alone. Exploiting within country variation support these results. These findings point to the importance of marriage patterns for the proper functioning of formal institutions and democracy.
I recall reading related ideas in the MR comments section from Steve Sailer and others. For the pointer I thank Alexander B.
“Queen’s bra fitter Rigby & Peller loses royal warrant”
A company which supplied lingerie to the Queen has lost its royal warrant over a book which revealed details of royal bra fittings.
Rigby & Peller, a luxury underwear firm founded in London, had held the royal warrant since 1960.
It was withdrawn after June Kenton, who fitted bras for the Queen, released a book called ‘Storm in a D-Cup’.
Mrs Kenton said there was “nothing” in the book to “be upset about”, adding that it was an “unbelievable” decision.
Buckingham Palace said it did not “comment on individual companies”.
A statement from Rigby & Peller said it was “deeply saddened” by the decision, adding it was “not able to elaborate further on the cancellation out of respect for her Majesty the Queen and the Royal Warrant Holders Association”.
The Royal Warrants Association says 20 to 40 Royal Warrants are cancelled every year – and a similar number granted.
File under “elsewhere in the cosmos.” And for the pointer I thank M.
Is this the market working or the market failing?
A Twitter battle over the size of each “nuclear button” possessed by President Donald Trump and North Korea’s Kim Jong-un has spiked sales of a drug that protects against radiation poisoning.
Troy Jones, who runs the website www.nukepills.com, said demand for potassium iodide soared last week, after Trump tweeted that he had a “much bigger & more powerful” button than Kim — a statement that raised new fears about an escalating threat of nuclear war.
“On Jan. 2, I basically got in a month’s supply of potassium iodide and I sold out in 48 hours,” said Jones, 53, who is a top distributor of the drug in the United States. His Mooresville, N.C., firm sells all three types of the product approved by the Food and Drug Administration. No prescription is required.
Here is the full piece, via the excellent Mark Thorson.
*Elephant in the Brain* — what is really going on in this book?
Not long ago, over lunch, I asked Robin who he wanted to see rise and fall in status, as a result of his book with Kevin Simler. As for who should rise, he cited the book’s epigram to me:
To the little guys, often grumbling in a corner, who’ve said this sort of thing for ages: you were right more than you knew. —Robin
So yes the little guys, but I also stress the cynics as well, or maybe it is the gentle cynics who go through life with a smile.
And who should decline in status? Robin’s lunch answer was again to the point: policy analysts. Policy analysis, while it often incorporates behavioral considerations, when studying say health care, education, and political economy, very much neglects the fact that often both the producers and consumers in these areas have hypocritical motives. For that reason, what appears to be a social benefit is often merely a private benefit in disguise, and sometimes it is not even a private benefit. Things that feel good aren’t always good for you, or for the broader world. Here is Robin’s take on that:
Our new book, The Elephant in the Brain, can be seen as taking one side in a disagreement between disciplines. On one side are psychologists (among others) who say of course people try to spin their motives as being higher than they are, especially in public forums. People on this side find our basic book thesis, and our many specific examples, so plausible that they fear our book may be too derivative and unoriginal.
On the other side, however, are most experts in concrete policy analysis. They spend their time studying ways that schools could help people to learn more material, hospitals could help people get healthier, charities could better assist people in need, and so on. They thus implicitly accept the usual claims people make about what they are trying to achieve via schools, hospitals, charities, etc. And so the practice of policy experts disagrees a lot with our claims that people actually care more about other ends, and that this is why most people show so little interest in reforms proposed by policy experts. (The world shows great interest in new kinds of physical devices and software, but far less interest in most proposed social reforms.)
In ignoring hypocrisy, policy analysts are themselves hypocritical, and thus Robin wishes to downgrade their status, perhaps doubly so. Sorry people!
I find these status questions to be a useful means of thinking about many non-fiction books, sometimes fiction too. I would note it is sometimes hard to market books with the “group X ignores well-known truth from field Y” spin, but perhaps that also means there are intellectual arbitrage gains to be had from studying such works.
Thursday assorted links
1. Macron challenges farm subsidies.
2. Bitcoin conference stops accepting Bitcoin.
3. Bloomberg reports on five papers from the AEA meetings. And Tankersley and Scheiber cover bias against women in the economics profession (NYT).
4. Gourmet chocolate becomes economic lifeline in Venezuela crisis.
Wednesday assorted links
1. Markets in everything: Sol LeWitt sports bra. And there is no great stagnation.
2. Canadian documentary about Jordan Peterson. Covers gnosticism, the Heideggerian side, Jung, etc. Not so much about the anti-PC stuff or the personality psychology.
4. Chetty’s on-line Stanford class.
5. The drone wars heat up, this time in Syria and against Russia.
6. Dylan Matthews on Auten and Splinter and inequality debates.
In praise of earmarks
That is the topic of my latest Bloomberg column, here is one excerpt:
In essence, earmarks give congressional leaders more control over individual members. Recalcitrant representatives can be swayed by the promise of a perk for their district. That eases gridlock and gives extreme members of Congress something to pursue other than just ideology.
But is more legislation always a good result? Advocates of smaller government should keep in mind that reforming spending and regulation requires some activism from Congress. Gridlock today is not the friend of fiscal responsibility, coherent policy, or a free, well-functioning capitalist economy.
But what if you’re a Democrat? In these days of Republican rule, you might have discovered a newfound love for stasis. Still, earmarks make it harder for, say, far-right party members to hold legislation hostage to their demands. In other words, party leadership can put up a more centrist bill and then buy off the extremists with local benefits rather than policy concessions.
There is much more at the link. Addendum: I thank Garett Jones for spurring my interest in this topic.
Why does home solar energy cost so much in the United States?
Here in the land of technology leadership and free-market enterprise, American regulation has more than doubled the cost of solar.
The regulation comes in three un-American guises: permitting, code and tariffs — and together they are killing the U.S. residential market. Modernizing these regulations, primarily at the local and state level, is the greatest opportunity for U.S. solar policy in 2018.
To highlight the opportunity, let’s look at Australia, where nearly 2 million solar systems have been successfully and safely installed.
As of early December, installed costs in the main Australian markets were at $1.34 per watt, compared to $3.25 per watt in the U.S. What does that difference stem from?
In Australia, there is no permitting process. You simply lodge your request for interconnection online and go install it. The figure below highlights the relative mass of valueless work required to satisfy current city-level bureaucracy in the U.S., which adds between two and six months to delivery time and 47 cents per watt of cost directly to the installed system. That’s more than the cost of the panels themselves!
…the U.S. National Electrical Code dictates a best practice that more than doubles the installation time relative to Australia, and adds incremental hardware expense — together adding 49 cents per watt to the cost of solar. There is no discernable difference in the quality and safety of solar installations overseas relative to the U.S.
…There are no tariffs on imported hardware in Australia because it’s obvious to all that the jobs in solar are in sales and installation, not in manufacturing. That’s another 21 cents per watt in the Australians’ pocket — and a thousand dollars back into the economy per system sold.
And because solar is so much cheaper, as well as faster and easier to buy, it’s also much cheaper, faster and easier to sell. Acquisition costs in Australia average $400 per installed customer, compared to $2,500 in the U.S.
At lower cost and without the two- to six-month wait time and all of the permitting complexity, cancellation rates are minimal, compared to an average of about 30 percent for reputable U.S. companies. How many other electronics purchases do you know of that take up to half a year to be installed? That’s another 42 cents per watt of lower solar costs.
From Andrew Birch, there is much more at the link, read it and weep. Via Felix Yates.
What Chinese viewers think of *The Last Jedi*
For China’s small but enthusiastic subculture of Star Wars fans, the latest film was a visual feast hampered by a protracted plot and uninspired characters. On popular review website Douban, the new film is rated a fairly weak 7.3, based on over 43,000 reviews. The most upvoted review complains that “the whole film really insults the IQ of its audience,” and demands to know how the universe could possibly be ruled by such an incompetent Galactic Empire. “In Star Wars, it seems only Darth Vader had a brain — it’s such a shame he’s already dead,” the reviewer concludes.
And:
Other factors, according to Chen, include Chinese audiences’ preference for physically attractive protagonists and stories rooted in reality. He points out that, for example, superhero films from Marvel — a Disney cash cow that has enjoyed great success in China — feature recognizable settings, such as New York and even China, and are filled with larger-than-life leads who meet the public’s aesthetic standards. The Star Wars characters, meanwhile, look ordinary by comparison.
“These actors aren’t very beautiful, which may deter a lot of Chinese from seeing the recent films,” said Chen. “We fans often joke that if Finn were played by Will Smith, Chinese people might be more inclined to watch it — because he’s very handsome.”
Here is more from Sixth Tone.
The future of blockchains?
I also think it is noteworthy that actual cryptocurrency exchanges exist to get around the limitations of blockchain-based settlement. It’s hard to short bitcoins or buy bitcoins on margin, which is why exchanges exist and use off-blockchain methods (lending you money, keeping custody of your bitcoins, etc.) to allow you to do those things. (Sometimes that’s a mess!) It’s not like you’re using the blockchain to buy bitcoins with dollars on a cryptocurrency exchange; you’re using your credit card. If you want to rebuild the regular financial system along blockchain principles, you have to wrestle with the fact that even the bitcoin financial system doesn’t really operate on blockchain principles.
That is from Matt Levine.
Tuesday assorted links
1. Learning to love Lagos. And new copies of the Gospels from the Ethiopian desert.
2. I am pleased to have recently met Melissa Kearney. And an intervention to increase the number of women in economics. AEA acts on transparency and gender issues.
4. Do black politicians matter?
5. Jason Furman on tax reform. And: “The question I first posed was what to make of a president who is rhetorically unfit yet mainstream in policy.” — from Martin Gurri. And a superb David Brooks column.
6. Review of Tesla Model 3. And Christina Cacioppo reviews various books.
It seems like there won’t be another Mickey Mouse copyright extension act
…advocates of a new copyright term extension bill wouldn’t be able to steamroll opponents the way they did 20 years ago. Any term extension proposal would face a well-organized and well-funded opposition with significant grassroots support.
“After the SOPA fight, Hollywood likely knows that the public would fight back,” wrote Daniel Nazer, an attorney at the Electronic Frontier Foundation, in an email to Ars. “I suspect that Big Content knows it would lose the battle and is smart enough not to fight.”
“I haven’t seen any evidence that Big Content companies plan to push for another term extension,” Nazer added. “This is an election year, so if they wanted to get a big ticket like that through Congress, you would expect to see them laying the groundwork with lobbying and op-eds.”
Of course, copyright interests might try to slip a copyright term extension into a must-pass bill in hopes opponents wouldn’t notice until it was too late. But Rose doesn’t think that would work.
Here is the full piece, via someone in my Twitter feed sorry I forget.