Category: Data Source
Is the gig economy taking over Washington, D.C.?
No, basically:
We first look at the number of District taxpayers who have paid self-employment taxes. The data show that the total number of people who pay self-employment taxes has increased in the District from 35,000 in 2006 to nearly 49,000 in 2014. This is a very steep increase (36 percent overall and nearly 4.5 percent annualized) even when compared to the relatively rapid increase in the District’s population and tax filers (tax filers grew at about 2 percent per year during the same period). But data show that the rapid increase in the number of filers who paid self-employment taxes occurred before 2010. In fact, since 2010, the share of tax filers who pay self-employment taxes has been stable at about 14 percent.
That is from a longer post, there is more at the link. Here is the broader (and excellent) blog on the law and economics of Washington, D.C., DistrictMeasured.com.
*The Rise and Fall of Violent Crime in America*
That is a forthcoming book by Barry Latzer, it is very clear and well argued and I am happy to recommend it. Here are a few bits from the book:
1. From the 1930s through the 1950s, black cirrhosis death rates were lower than those for whites.
2. For Miami, Haitians were 3.5 percent of the murder suspects when they were 14 percent of the city’s population, from a 1985-1995 study.
3. If you ignore levels, and just look at rates of change, crime rates in Canada track those in the United States to an astonishing degree. How can that be? If demographics or jobs were the main driving force, maybe, but they are not…
4. He criticizes lead-based theories on the grounds that they seem “…unable to explain why the affected populations had relatively high offending rates in the years just prior to the great crime decline.”
You can pre-order it here.
Which Group has Committed the Most Terrorist Acts on US Soil?
The RAND Database of Worldwide Terrorism Incidents (RDWTI) contains data on terrorist incidents worldwide from 1968 through 2009. Terrorism is defined as the deliberate creation and exploitation of fear through violence or the threat of violence in the pursuit of political change.
According to the Rand database, there were 567 terrorist incidents in the United States between 1968 and 2009. The most terrorist incidents, 140 out of 567 or 25% of the total during this period, were due to one group or cause, anti-Castro Cubans. The anti-Castro terrorist groups have killed 6 people, mostly advocates of dialogue with Cuba such as Eulalio Jose Negrin who was gunned down in 1979. Numerous bombings have also been traced to these groups including hotel bombings in Miami, bombings in New York of consulates (also Madison Square Gardens) and near-miss airplane bombings. Connections between anti-Castro groups, the CIA and the Bush dynasty remain controversial.
The group responsible for the second highest number of terrorist incidents on US soil, 62 incidents or 10% of the total (1968-2009), is the Jewish Defense League. Mostly these have been bombings in New York City of places or people attached to the Soviets. Perhaps the best known is the 1986 tear-gassing of the Metropolitan Opera House on the visit of the Moiseyev Dance Company. Rand tallies 2 deaths in total to the JDL.
Although these groups committed many terrorist acts on US soil neither had much interest in terrorizing US citizens per se, perhaps explaining the relatively low body counts in the United States.
Incentives change how we think
That is the paper’s subtitle, the title is “An Offer You Can’t Refuse,” and that is the job market paper (pdf) of Sandro Ambuehl of Stanford University. I found this to be the most interesting job market paper of the year, noting that “most interesting” and “best” are not synonymous, that said I found the quality to be very high too. The main point is that having commercial economic incentives in place causes us to perceive new information in more positive-sum terms than otherwise would be the case, or at least that is how I interpret his results.
Here is the abstract:
Around the world there are laws that severely restrict incentives for many transactions, such as living kidney donation, even though altruistic participation is applauded. Proponents of such legislation fear that undue inducements would be coercive; opponents maintain that it merely prevents mutually beneficial transactions. Despite the substantial economic consequences of such laws, empirical evidence on the proponents’ argument is scarce. I present a simple model of costly information acquisition in which incentives skew information demand and thus expectations about the consequences of participation. In a laboratory experiment, I test whether monetary incentives can alter subjects’ expectations about a highly visceral aversive experience (eating whole insects). Indeed, higher incentives make subjects more willing to participate in this experience at any price. A second experiment explicitly shows in a more stylized setting that incentives cause subjects to perceive the same information differently. They make subjects systematically more optimistic about the consequences of the transaction in a way that is inconsistent with Bayesian rationality. Broadly, I show that important concerns by proponents of the current legislation can be understood using the toolkit of economics, and thus can be included in cost-benefit analysis. My work helps bridge a gap between economists on the one hand, and policy makers and ethicists on the other.
Of course it also can be said that incentives make individuals less Bayesian in their orientation. I say who needs Bayesians anyway? Society is built on a certain faith we all have in the benefits from cooperating with others. When you know you might be paid to eat an insect, you sample more “yum-pro-insect” propaganda, and you interpret it more favorably. Furthermore subjects do not in advance predict these self-persuasion effects. So “bait and switch” marketing techniques may succeed in warming individuals up to ideas, even if the promised prize is eventually yanked.
In any case, how can you not love a paper which has, on p.4, the following sentence: “In the first experiment I use cash to induce subjects to eat whole insects, including silkworm pupae, mealworms, and various species of crickets.”
With or without chili sauce? The future of commercial society may depend on it.
I enjoyed this sentence too, from p.18:
Participants cannot be forced to ingest insects.
Here is Sandro writing with Muriel Niederle and Al Roth in the AER on the moral plausibility of strong incentives.
The effects of the medical marijuana market on substance abuse
Rosanna Smart, a job market candidate from UCLA, has a very interesting job market paper (pdf) on this question. Here is the abstract:
Almost half of the US states have adopted \medical marijuana” laws (MMLs),and 58% of Americans now favor marijuana legalization. Despite public support, federal law continues to prohibit the use and sale of marijuana due to public health concerns of increased abuse, drugged driving, and youth access. Using evidence from MMLs, this is the first paper to study whether growth in the size of legal marijuana markets affects illegal use and its associated health consequences. By collecting new data on per capita registered medical marijuana patient rates, I investigate how state supply regulations and changes in federal enforcement affect the size of this legal market. I then study how illegal marijuana use and other health outcomes respond to changes in legal availability. I find that growth in the legal medical marijuana market significantly increases recreational use among all age groups. Increased consumption among older adults has positive consequences in the form of an 11% reduction in alcohol- and opioid-poisoning deaths. However, increased consumption among youths leads to negative externalities. Raising the share of adults registered as medical marijuana patients by one percentage point increases the prevalence of recent marijuana use among adolescents and young adults by 5-6% and generates negative externalities in the form of increased traffic fatalities (7%) and alcohol poisoning deaths (4%).
Those results are consistent with my intuitions. When it comes to “those who already are screwed up,” namely the older generation, it is best to shunt them off into pot, compared to the relevant alternatives. But when it comes to the younger generation, the new norm that “pot is OK” may in fact not be best in the longer run. So in sum,while I (TC, not the author necessarily) favor marijuana decriminalization, we should hold mixed moods towards its practical effects.
Do we need a better educated army?
Is it clever or stupid of us to be avoiding the problem of “overeducation” in our Army officer corps?
As shown previously, the higher an officer’s cognitive ability, the lower that officer’s chance at early promotion and battalion command selection. As a curious anecdote, the promotion rate to colonel for officers with PhDs was lower than the Army average from 2011 to 2013. Surprisingly, the Army does not actively invest in advanced civilian education for its personnel managers or OES instructors. In the 1980’s, the Army sent as many of 7,000 officers per year to graduate school. The Army reduced that to 415 in the 1990s. Currently, the Army sends 600- 700. A not-so-long ago discussion at the joint flag officer orientation course, typically referred to as “Capstone,” revolved around how much education “was too much” for senior officers. The quorum of newly selected flag officers from all services concluded that a public school or distance learning masters was fine, but certainly not a PhD or Ivy League masters.
That is from Spain, Mohundro, and Banks (pdf), via Paul Musgrave.
Opioids for the masses?
This has long seemed to me an understudied topic, so I was interested to read the job market paper of Angela E. Kilby, who is on the market this year from MIT. And she does what I like to see in a paper, namely try to figure out whether some practice or institution is actually worth it.
The background is this: “…In the face of concerns that undertreatment of pain was a “serious public health issue,” medically indicated use of these drugs over the past 15 years has increased dramatically, and attitudes have liberalized towards the use of opioids for chronic non-cancer pain.”
When it comes to the increased use of opioids, she finds the following trade-offs:
1. Since 1999, there has been a fourfold increase in drug overdose deaths linked to opiod pain relievers. In 2013, the number of opiate-linked overdose deaths was 25,117, a higher number than I was expecting. (But note that most of these can no longer be reduced by the feasible interventions under consideration.)
2. The increased use of opioids seems to pass a cost-benefit test, compared to the passage of a tougher Prescription Monitoring Plan. With a host of caveats and qualifiers, she measures the pain reduction and other benefits from looser regulation at $12.1 billion a year and the costs of higher addiction rates, again from looser regulation, at $7.3 billion per year.
There is much more to it than what I am reporting, and in general I believe economists do not devote enough attention to studying the topic of pain.
How do students feel about older faculty members?
With the elimination of mandatory retirement, the average age of college and university faculty members has increased. While this has raised some concerns, relatively little research has tried to measure the impact of this aging on productivity inside the classroom. Using data from the RateMyProfessors.com website for a large sample of instructors in a broad cross-section of colleges and universities, we find that age does affect teaching effectiveness, at least as perceived by students. Age has a negative impact on student ratings of faculty members that is robust across genders, groups of academic disciplines and types of institutions. However, the effect does not begin until faculty members reach their mid-forties and does not seem to increase even when they reach the former retirement ages of 65 or 70. Moreover, the quantitative impact of age on student ratings is small and can be offset by other factors, especially the physical appearance of professors and how easy students consider them to be. When we restrict our sample to those professors deemed hot by student raters, the effect of age disappears completely. We conclude that ending mandatory retirement has had little impact on student perceptions of faculty quality.
That is from a new paper by Rovbert J. Stonebreaker and Gary S. Stone, via Kevin Lewis.
Can this be true?
Between 1989 and 2010, U.S. attorneys seized an estimated $12.6 billion in asset forfeiture cases. The growth rate during that time averaged +19.4% annually. In 2010 alone, the value of assets seized grew by +52.8% from 2009 and was six times greater than the total for 1989. Then by 2014, that number had ballooned to roughly $4.5 billion for the year, making this 35% of the entire number of assets collected from 1989 to 2010 in a single year. According to the FBI, the total amount of goods stolen by criminals in 2014 burglary offenses suffered an estimated $3.9 billion in property losses. This means that the police are now taking more assets than the criminals [emphasis added].
That is from Martin Armstrong, via Noah Smith and Michael Hendrix. While private sector robberies are underreported by a considerable amount, this is nonetheless a startling contrast.
Can this be true?
Leadership sentences to ponder
This sounds like a combination of a David Brooks column and a Robin Hanson blog post, and what could be better than that?:
Surprisingly, the most effective leaders did not have the highest level of self-awareness. Indeed, the more they underrated themselves, the more highly they were perceived as leaders. We assume this is caused by a combination of humility, high personal standards, and a continual striving to be better.
That is from Jack Zenger and Joseph Folkman, via the excellent Samir Varma.
How much is unified control of a state government worth?
That is the subject of a new paper by Devin Caughey, Christopher Warshaw, and Yiqing Xu (pdf). It turns out that before the 1980s it hardly mattered at all which party controlled a state government. These days it matters much more, but how much?
Even today, for example, electing a Democratic rather than Republican governor should be expected to increase monthly welfare payments by only $1-2 per recipient, and to increase by just half a percentage point the proportion of policies on which a state has the liberal policy option. These eff ects are small relative to policy diff erences across states. They are also small relative to the partisan divergence in legislative voting records. These results thus partially assuage the normative concern that partisan polarization has led to extreme policy swings, degrading the congruence between policy outcomes and citizens’ preferences.
OK, you can all go home and relax now…and just to be clear, these estimates are adjusting for what is already the ideology of the state.
Some other things to note from this paper:
1. The effect of having a Democratic governor seems to be rising.
2. Whatever Democratic governors accomplish, they accomplish in their first two years in office. Policy effects do not seem to cumulate over time.
3. “The estimated policy effect of a switch in unified party control is one-twentieth the size of the typical difference between states…”
The bottom line? Worry about the culture people, not about the election.
Identifying barriers to Muslim integration in France
From an email from the Harvard Kennedy School:
“Identifying Barriers to Muslim Integration in France”
Adida, Claire L.; Laitin, David D.; Valfort, Marie-Anne. Proceedings of National Academy of Sciences (PNAS), 2010, Vol. 107, No. 52, doi: 10.1073/pnas.1015550107.Abstract: “Is there a Muslim disadvantage in economic integration for second-generation immigrants to Europe? Previous research has failed to isolate the effect that religion may have on an immigrant family’s labor market opportunities because other factors, such as country of origin or race, confound the result. This paper uses a correspondence test in the French labor market to identify and measure this religious effect. The results confirm that in the French labor market, anti-Muslim discrimination exists: a Muslim candidate is 2.5 times less likely to receive a job interview callback than is his or her Christian counterpart. A high-n survey reveals, consistent with expectations from the correspondence test, that second-generation Muslim households in France have lower income compared with matched Christian households. The paper thereby contributes to both substantive debates on the Muslim experience in Europe and methodological debates on how to measure discrimination. Following the National Academy of Sciences’ 2001 recommendations on combining a variety of methodologies and applying them to real-world situations, this research identifies, measures, and infers consequences of discrimination based on religious affiliation, controlling for potentially confounding factors, such as race and country of origin.”
There are other interesting papers at the top link, many of them topical with regard to recent events. This article, by the way, argues that 9-11 decreases the rate of Muslim assimilation in the United States.
Can we determine how honesty varies across countries?
The paper is by David Hugh-Jones, and this is from the research summary:
The study examined whether people from different countries were more or less honest and how this related to a country’s economic development. More than 1500 participants from 15 countries took part in an online survey involving two incentivised experiments, designed to measure honest behaviour.
Firstly, they were asked to flip a coin and state whether it landed on ‘heads’ or ‘tails’. They knew if they reported that it landed on heads, they would be rewarded with $3 or $5. If the proportion reporting heads was more than 50 per cent in a given country, this indicated that people were being dishonest…
The countries studied – Brazil, China, Greece, Japan, Russia, Switzerland, Turkey, the United States, Argentina, Denmark, the United Kingdom, India, Portugal, South Africa, and South Korea – were chosen to provide a mix of regions, levels of development and levels of social trust.
The study’s author Dr David Hugh-Jones, of UEA’s School of Economics, found evidence for dishonesty in all the countries, but that levels varied significantly across them. For example, estimated dishonesty in the coin flip ranged from 3.4 per cent in the UK to 70 per cent in China. In the quiz, respondents in Japan were the most honest, followed by the UK, while those in Turkey were the least truthful. Participants were also asked to predict the average honesty of those from other countries by guessing how many respondents out of 100 from a particular country would report heads in the coin flip test. However, participants’ beliefs about other countries’ honesty did not reflect reality.
This is interesting:
“Differences in honesty were found between countries, but this did not necessarily correspond to what people expected,” he said. “Beliefs about honesty seem to be driven by psychological features, such as self-projection. Surprisingly, people were more pessimistic about the honesty of people in their own country than of people in other countries.
And consider this from Hugh Jones:
“I suggest that the relationship between honesty and economic growth has been weaker over the past 60 years and there is little evidence for a link between current growth and honesty,” said Dr Hugh-Jones. “One explanation is that when institutions and technology are underdeveloped, honesty is important as a substitute for formal contract enforcement. Countries that develop cultures putting a high value on honesty are able to reap economic gains. Later, this economic growth itself improves institutions and technology, making contracts easier to monitor and enforce, so that a culture of honesty is no longer necessary for further growth.”
The research paper is here, and for the pointers I thank Charles Klingman and Samir Varma.
Jones, by the way, makes it clear there are a variety of kinds of honesty, and inferences from any single test should be limited. For Japan in particular the measured level of honesty depends critically on which test is applied. The real lesson of the study may simply be that most groups are dishonest, and people are not even honest with themselves about their views of the dishonesty of others. Honesty depends a good deal on context too. On some of these questions, see some skeptical comments from Kevin Drum.
If you are looking for simple correlations: “…at individual level, there is no evidence that religious adherence is associated with honesty.” How about having a Ph.d.?
Syria fact (estimate) of the day
U.S. counterterrorism officials reported in February that more than 20,000 foreign fighters have joined the fray in Syria to fight with the rebels, with most going to help the Islamic State. Of these, 150 or so are from the United States and over 3,000 are from the West.
According to British scholar Peter Neumann, the Syria conflict has generated more foreign fighters than Afghanistan, post-2003 Iraq, Somalia, Mali and other fields of jihad combined.
That is from Daniel Byman at Monkey Cage, with other points at the link.
Bad news on the private return to college
Sang Yoon Lee, Yongseok Shin, and Donghoon Lee have a new NBER paper:
Going to college is a risky investment in human capital. However, we highlight two options inherently embedded in college education that mitigate this risk: (i) college students can quit without completing four-year degrees after learning about their post-graduation wages and (ii) college graduates can take jobs that do not require four-year degrees (i.e., underemployment). These options reduce the chances of falling in the lower end of the wage distribution as a college graduate, rendering standard mean-variance calculations misleading. We show that the interaction between these options and the rising wage dispersion, especially among college graduates, is key to understanding the muted response of college enrollment and graduation rates to the substantial increase in the college wage premium in the United States since 1980. Furthermore, we find that subsidies inducing marginal students to attend colleges will have a negligible net benefit: Such students are far more likely to drop out of college or become underemployed even with a four-year degree, implying only small wage gains from college education.
This is a very important result…Bryan Caplan, telephone!
Ungated versions of the paper are here.