Category: Data Source
Missing markets in everything?
Or do the offer curves simply not intersect?:
Just over half of Americans between the ages of 18 and 34 — 51 percent of them — said they do not have a steady romantic partner, according to data from the General Social Survey released this week. That 2018 figure is up significantly from 33 percent in 2004 — the lowest figure since the question was first asked in 1986 — and up slightly from 45 percent in 2016.
Here is the story, via the excellent Kevin Lewis.
The Hayek auction results are very impressive
You will find them here, for instance Hayek’s copy of Wealth of Nations went for almost 200k, it was estimated in the 4k to 6k range.
“Desktop ephemera and personal effects” were estimated at 200-300 British pounds, went for 87,500 British pounds. Crazy! Many of the items went for 10x or 20x their original estimates.
Perhaps Hayek is back in fashion again, if only with the wealthy.
For the pointer I thank Lotta Moberg.
Addendum: Here is BC from the comments section:
So, the central planners couldn’t accurately estimate the values of Hayek’s personal effects because the necessary information was distributed among all the auction participants?
The case for real estate as investment
That is the topic of my latest Bloomberg column, here is one bit:
The authors of the aforementioned study — Òscar Jordà, Moritz Schularick and Alan M. Taylor — have constructed a new database for the U.S. and 15 other advanced economies, ranging from 1870 through the present. Their striking finding is that housing returns are about equal to equity returns, and furthermore housing as an investment is significantly less risky than equities.
In their full sample, equities average a 6.7 percent return per annum, and housing 6.9 percent. For the U.S. alone, equities return 8.5 percent and housing 6.1 percent, the latter figure being lower but still quite respectable. The standard deviation of housing returns, one measure of risk, is less than half of that for equities, whether for the cross-country data or for the U.S. alone. Another measure of risk, the covariance of housing returns with private consumption levels, also shows real estate to be a safer investment than equities, again on average.
One obvious implication is that many people should consider investing more in housing. The authors show that the transaction costs of dealing in real estate probably do not erase the gains to be made from investing in real estate, at least for the typical homebuyer.
Furthermore, due to globalization, returns on equities are increasingly correlated across countries, which makes diversification harder to achieve. That is less true with real estate markets, which depend more on local conditions.
Do read the whole piece.
Sentences to ponder
Female economists are at some notable points less convinced of market solutions and have more trust in the government in serving the public interest.
Here is the full research, by Hendrik P. van Dalen, mostly focusing on other features of economist opinion, with respect to the Netherlands. Via Robin Hanson.
Who is most receptive to pseudo-profound bullshit?
This research systematically mapped the relationship between political ideology and receptivity to pseudo-profound bullshit—that is, obscure sentences constructed to impress others rather than convey truth. Among Swedish adults (N = 985), bullshit receptivity was (a) robustly positively associated with socially conservative (vs. liberal) self-placement, resistance to change, and particularly binding moral intuitions (loyalty, authority, purity); (b) associated with centrism on preference for equality and even leftism (when controlling for other aspects of ideology) on economic ideology self-placement; and (c) lowest among right-of-center social liberal voters and highest among left-wing green voters [emphasis added]. Most of the results held up when we controlled for the perceived profundity of genuine aphorisms, cognitive reflection, numeracy, information processing bias, gender, age, education, religiosity, and spirituality. The results are supportive of theoretical accounts that posit ideological asymmetries in cognitive orientation, while also pointing to the existence of bullshit receptivity among both right- and left-wingers.
Here is the piece, byArtur Nilsson, Arvid Erlandsson, and Daniel Västfjäll. Via the excellent Kevin Lewis.
Has the Labor Share Declined? Maybe, maybe not.
In a 2017 post Asher Schechter correctly noted:
Of the various ills that currently plague the American economy, one that has economists particularly worried is the decline in the labor share—that is, the part of national income that’s allocated to wages.
Lots of theories have been proposed to explain the decline in labor share including automation, globalization and increased markups. In a big if true paper, Koh, Santaeulalia-Llopis and Zheng argue that all of these theories are wrong because there has been no decline in labor share once we take into account that the BEA changed how intellectual property was treated in the national accounts.
The lack of attention to measurement can severely misguide economic theory. We demonstrated that the change in the accounting treatment of IPP—from expensed to capitalized—gradually implemented by the BEA since 1999 is the sole driver of the decline of the accounting LS. Furthermore, our examination of the accounting assumptions behind the capitalization of IPP—mainly that all IPP investment rents are attributed to capital—indicates that less arbitrary and extreme assumptions on the factor distribution of IPP rents yield a trendless accounting LS. In other words, the LS decline is an artifact of the change in the accounting treatment of IPP in national accounts, and this is at odds with current macroeconomic theory that considers the accounting decline as an economic phenomenon at face value.
Labor share appears to have declined globally. Have most countries changed their accounting practices? Quite possibly, but more investigation is needed. Many of the theories are also quite plausible which perhaps explains the reluctance of theorists to give up on the “fact”. The Koh et al. paper has been circulating for a few years but most seem to brush it off. Autor, Dorn, Katz, Patterson and Van Reenen, for example, say:
Although there is controversy over the degree to which the fall in the labor share of GDP is due to measurement issues such as the treatment of capital depreciation (Bridgman, 2014), housing (Rognlie, 2015), self-employment and proprietor’s income (Elsby, Hobjin, and Sahin, 2013; Gollin, 2002) and intangible capital (Koh, Santaeulalia-Lopis and Zheng, 2016), there is a general consensus that the fall is real and significant.
Wait and see is probably rational at this stage. If the paper makes it through peer-review at the JPE, it will be more difficult to ignore.
It is arresting how many facts are in fact open to question. Maybe.
Hat tip: David Andalfatto somewhere on twitter.
Women’s employment has shaped the course of recent business cycles
This paper studies the impact of changing trends in female labor supply on productivity, TFP growth and aggregate business cycles. We find that the growth in women’s labor supply and relative productivity added substantially to TFP growth from the early 1980s, even if it depressed average labor productivity growth, contributing to the 1970s productivity slowdown. We also show that the lower cyclicality of female hours and their growing share can account for a large fraction of the reduced cyclicality of aggregate hours during the great moderation, as well as the decline in the correlation between average labor productivity and hours. Finally, we show that the discontinued growth in female labor supply starting in the 1990s played a substantial role in the jobless recoveries following the 1990-1991, 2001 and 2007-2009 recessions. Moreover, it depressed aggregate hours, output growth and male wages during the late 1990s and mid 2000s expansions. These results suggest that continued growth in female employment since the early 1990s would have significantly improved economic performance in the United States.
That is the abstract of a new NBER working paper by Stefania Albanesi.
The great retrogression average is over
White, non-college-educated Americans born in the 1960s face shorter life expectancies, higher medical expenses, and lower wages per unit of human capital compared with those born in the 1940s, and men’s wages declined more than women’s. After documenting these changes, we use a life-cycle model of couples and singles to evaluate their effects. The drop in wages depressed the labor supply of men and increased that of women, especially in married couples. Their shorter life expectancy reduced their retirement savings but the increase in out-of-pocket medical expenses increased them by more. Welfare losses, measured a one-time asset compensation are 12.5%, 8%, and 7.2% of the present discounted value of earnings for single men, couples, and single women, respectively. Lower wages explain 47-58% of these losses, shorter life expectancies 25-34%, and higher medical expenses account for the rest.
That is from a new NBER working paper by Margherita Borella, Mariacristina De Nardi, and Fang Yang.
Women in the economics profession
Nearly 100 female economists say a peer or a colleague has sexually assaulted them. Nearly 200 say they were the victim of an attempted assault. And hundreds say they were stalked or touched inappropriately, according to a far-reaching survey of the field.
The results, compiled by the American Economic Association, also reveal deep evidence of gender and racial discrimination within the field. Half of the women who responded to the survey said they had been treated unfairly because of their sex, compared with 3 percent of men. Nearly half of women said they had avoided speaking at a conference or a seminar to guard against possible harassment or “disrespectful treatment.” Seven in 10 women said they felt their colleagues’ work was taken more seriously than their own.
The rise of the temporary scientist
Here is a new and important piece on the economics of science, from , , and
Contemporary science has been characterized by an exponential growth in publications and a rise of team science. At the same time, there has been an increase in the number of awarded PhD degrees, which has not been accompanied by a similar expansion in the number of academic positions. In such a competitive environment, an important measure of academic success is the ability to maintain a long active career in science. In this paper, we study workforce trends in three scientific disciplines over half a century. We find dramatic shortening of careers of scientists across all three disciplines. The time over which half of the cohort has left the field has shortened from 35 y in the 1960s to only 5 y in the 2010s. In addition, we find a rapid rise (from 25 to 60% since the 1960s) of a group of scientists who spend their entire career only as supporting authors without having led a publication. Altogether, the fraction of entering researchers who achieve full careers has diminished, while the class of temporary scientists has escalated. We provide an interpretation of our empirical results in terms of a survival model from which we infer potential factors of success in scientific career survivability. Cohort attrition can be successfully modeled by a relatively simple hazard probability function. Although we find statistically significant trends between survivability and an author’s early productivity, neither productivity nor the citation impact of early work or the level of initial collaboration can serve as a reliable predictor of ultimate survivability.
As Raghuveer Parthasarathy argues in his excellent blog post: “…small groups may be innovative, but they are the hardest to sustain given the randomness of scientific funding.”
For the pointer I thank Raghuveer Parthasarathy.
The competence downshift by white liberals
Most Whites, particularly sociopolitical liberals, now endorse racial equality. Archival and experimental research reveals a subtle but persistent ironic consequence: White liberals self-present less competence to minorities than to other Whites—that is, they patronize minorities stereotyped as lower status and less competent. In an initial archival demonstration of the competence downshift, Study 1 examined the content of White Republican and Democratic presidential candidates’ campaign speeches. Although Republican candidates did not significantly shift language based on audience racial composition, Democratic candidates used less competence-related language to minority audiences than to White audiences. Across 5 experiments (total N = 2,157), White participants responded to a Black or White hypothetical (Studies 2, 3, 4, S1) or ostensibly real (Study 5) interaction partner. Three indicators of self-presentation converged: competence-signaling of vocabulary selected for an assignment, competence-related traits selected for an introduction, and competence-related content of brief, open-ended introductions. Conservatism indicators included self-reported political affiliation (liberal-conservative), Right-Wing Authoritarianism (values-based conservatism), and Social Dominance Orientation (hierarchy-based conservatism). Internal meta-analyses revealed that liberals—but not conservatives—presented less competence to Black interaction partners than to White ones. The simple effect was small but significant across studies, and most reliable for the self-reported measure of conservatism. This possibly unintentional but ultimately patronizing competence-downshift suggests that well-intentioned liberal Whites may draw on low-status/competence stereotypes to affiliate with minorities.
Here is the paper by Dupree, C. H., & Fiske, S. T., yes there is a replication crisis in social psychology, nonetheless I thought this was worth passing along.
For the pointer I thank a loyal MR reader.
Do female board members matter?
Maybe less than you might think, at least once you adjust for geographic distance:
Recent literature has shown that gender diversity in the boardroom seems to influence key monitoring decisions of boards. In this paper, we examine whether the observed relation between gender diversity and board decisions is due to a confounding factor, namely, directors’ geographic distance from headquarters. Using data on residential addresses for over 4,000 directors of S&P 1500 firms, we document that female directors cluster in large metropolitan areas and tend to live much farther away from headquarters compared to their male counterparts. We also reexamine prior findings in the literature on how boardroom gender diversity affects key board decisions. We use data on direct airline flights between U.S. locations to carry out an instrumental variables approach that exploits plausibly exogenous variation in both gender diversity and geographic distance. The results show that the effects of boardroom gender diversity on CEO compensation and CEO dismissal decisions found in the prior literature largely disappear when we account for geographic distance. Overall, our results support the view that gender-diverse boards are “tougher monitors” not because of gender differences per se, but rather because they are more geographically remote from headquarters and hence more reliant on hard information such as stock prices. The findings thus suggest that board gender policies, such as quotas, could have unintended consequences for some firms.
Here is the paper by Zinat S. Alam, Mark A. Chen, Conrad S. Ciccotello, and Harley E. Ryan. Via the excellent Kevin Lewis.
Does a Carbon Tax Reduce CO 2 Emissions? Evidence From British Columbia
Using difference-in-differences and a novel break-detection approach I show that the introduction of a carbon tax has not ‘yet’ led to a significant reduction in aggregate CO2 emissions in British Columbia, Canada. Despite the lack of detectable aggregate effect, there are heterogeneous emission reductions across sectors: the tax led to a reduction in emissions from transportation incl. personal vehicles (-5%), buildings (-5%), waste processing (-3%), and light manufacturing, construction and forestry (-11%). Introducing a new method to assess policy based on breaks in difference-in-differences fixed effect panel models, I demonstrate that neither the carbon tax, nor the carbon price and emissions trading schemes introduced in other Canadian provinces are detected as significant interventions in aggregate emissions. The absence of significant aggregate reductions in emissions is consistent with existing evidence that current carbon taxes (and prices) are too low to be effective.
Since current carbon taxes are already not so popular, I don’t take this as especially good news. For the pointer I thank Warren Smith.
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.
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.