Category: Data Source
Unsung development miracles?
Dani Rodrik writes:
Which are the countries that have improved their human development indicators the most since 1970 relative to their peers? You’d be surprised, as I was, to find that the top 10 is dominated not by East Asian superstars, but by Moslem countries: Oman, Indonesia, Saudi Arabia, Tunisia, Morocco, and Algeria. This year’s Human Development Report is full of neat analysis and results, including this one.
Leaving aside the oil exporting countries, the North African cases are particularly interesting. As Francisco Rodriguez and Emma Samman, two of the report’s authors, note, Tunisia, Morocco, and Algeria have experienced remarkable gains in life expectancy and educational attainment, leaving many Asian superstars in the dust. Only Tunisia among the three is a high growth country, underlining one of the report’s main findings that economic growth and human development often diverge significantly, even over as long a time frame as 40 years.
Walter Isard: Regional Scientist and Economic Geographer
Walter Isard died late last week. Isard was the founder of regional science, the economic approach to geography. His seminal book, Location and Space-Economy, was a hugely ambitious work with the goal of developing a theory of economics and space that would encompass general equilibrium theory and international trade as special cases. He brought the German contributions of von Thunen and others into the English mainstream, further developed the spatial interpretation of monopolistic competition (following Hoteling) and applied Leontief's input-output model to geography among many other contributions. The New Economic Geography, particularly The Spatial Economy, the key volume by Fujita, Krugman and Venables can be seen as a direct descendant of Isard's research program (Fujita was an Isard student).
Isard was a Quaker and he also applied scientific insights to questions of conflict, establishing the Peace Research Society (now the Peace Science Society) in 1963. His son, Peter Isard, is a distinguished economist with many contributions to international economics.
Ireland facts of the day
The increase in spending, which is part of Ireland’s present problem, is quite recent. From 2000 to 2006, the number of people employed in the Irish health sector increased 20 percent, in education by 27 percent, in the justice sector by 22 percent, and in the civil service by 27 percent.
In the past decade, Irish health spending has doubled, in real terms. In 2000, about 22 million items were prescribed; 10 years later, 52 million items were. People aren’t twice as healthy as a result.
As far as taxes on income are concerned, Irish people now pay about half as much as an equivalent family does on the same income in Germany. There is currently no recurring tax on property, no charge for water supplies, and modest fees for a college education. Welfare payments compare favorably with those in Northern Ireland.
Here is more. Currently there is talk of a "buyer's strike" in the market for Irish bonds. When the Irish accept the full extent of the standard of living "reset" implied in all of this, how big a step back will be required? Ten years? More? If you take away pre-war, war, and post-war examples, is there any precedent for such a large reset in the history of wealthy countries? Apart from contemporary Iceland, that is.
What’s in your Wallet? Depends on your Browser.
What's in your wallet? Less if you use Firefox or IE and more if you use Chrome. Here from J-Walk Blog are interest rates for a car loan from Capital One if you use IE.
and here are the rates if you use Chrome:
I found something similar and the Consumerist also reports similar results.
Price discrimination makes sense if Chrome users are better searchers, as seems likely. I suspect, however, that it is price experimentation and the Chrome<IE effect is being reported more often than the reverse. I cleared cookies and tried a couple of times and although rates varied the lowest rate was still with Chrome. I gave up after a few tries, however.
Sentences to ponder
Nearly a quarter of South Korean men over 75 are still in the labor force, as are 14 percent of Japanese men. In the United States, a 10th of such men are working or seeking work, compared with half of 1 percent in France.
Put another way, a Korean man over 75 is more likely to be working than a Frenchman in his early 60s.
There is more here.
$$ Leaving Las Vegas, continued
The meaning of such facts is speculative, but they are fun to ponder:
A 40†² container filled with household goods, shipped from Shanghai to Houston, TX costs $6169.93. Reverse the trip and ship the same container from Houston to Shanghai and the cost is $3631.07. That’s because 60% of containers on ships coming from the US to China are empty, which means Maersk and other shippers are desperate to sell container space.
The full story, which considers the cost of shipping a bottle of Fiii water, is here and I thank Henry at Crooked Timber for the pointer.
Which countries do economists study?
Check out Stefan Dercon's excellent visuals, via Chris Blattman. I wonder sometimes why Latin America is overstudied in development economics and similarly, why World Bank employees are often keen to work in that region. How much is a) absence of jet lag from the U.S., b) relative ease of learning Spanish and Portuguese, and c) lower population densities than Asia, which in some ways make visits more pleasant, or d) income inequality, which means that life is quite good for visitors? Are there other factors?
Prison
This long series of posts by an inmate who just got out of prison after doing two years for armed robbery is riveting. Lots of great material most of which cannot be printed here. Seems real to me but you be the judge. The number of murders he says to have witnessed seems awfully high.
So I just got out of prison
…and fuck it if I've forgotten how to work a mouse and hit the submit button too soon.
Shit [sic] has changed. So many boards now. I don't know what the fuck is going on. Where do I start? Two years inside and it's like the whole world has changed. Just wanted a board where things stayed the same….who the fuck if Justin Bieber?
Is. Is Justin Bieber. Lost my ability to spell….My cable got cancelled while I was away so I can't even find out. Thank fuck for wireless internet, I swear to God it's faster now too. Seriously, it's like I've traveled through time. Fucking iPads look like shit out the future. Feel like I've missed a decade…
—
I joked to my cell mate on the first day that at least the GFC [Global Financial Crisis, AT] couldn't fuck us inside. He'd been done for assaulting a cop when his house got taken by the bank. But within months 'GFC___' became the standard reply to any query as to how black market prices were suddenly going through the roof. The price of a deck of smokes tripled. There was an actual economic reason about this. I went away in Michigan, where a lot of people lost their houses, mostly poor people already. When they had to move away from the prison, it meant they couldn't bring their loved ones as much contraband group, which meant the price of what there was sky rocketed….Bet you didn't read about that one in the Wall Street Journal.
—-
My first time in solitary was during a mass transfer, which is when our pen would be filled with extra inmates from another pen over night before being moved on. I was there for three days. The first day wasn't so bad. In the beginning, I thought 'this is interesting' at least. And I kind of enjoyed being alone. I jacked off a lot. The second day, I read the bible. Which is the only book allowed in ad seg. The third day… I began to imagine I'd been forgotten about, and I started to panic. Like Mau-dib says "Fear is the Mind Killer". Once you start down the road, there is no going back. You think you can handle it, like being alone isn't so bad, like it's almost a relief… But they make the room just the slight little bit too small. You lose track of time. You can't see the light or figure out what day it is. You resort to counting out loud the seconds. You can't distract yourself anymore and you start pacing but there isn't enough room to pace and it just makes it worse. I'd never had a panic attack before, so I didn't know what to expect. My heart just started pounding out of my chest and I felt like I was going to faint. I wanted to faint, so I could at least sleep and waste some time. But I couldn't. I ended up by stay in ad seg screaming for help, until they came in and tasered me. I woke up back in my old cell.
The next morning, they pulled me out of bed, and said because I fucked up in ad seg… I'd be put back in ad seg. For a week. I screamed and tried to get away on my way back so they put leg cuffs on me and didn't take them off. I got tasered again. This just made it worse.
That was when I decided to get some dope as soon as I was out.
On the plus side, I now have scary accurate recall of obscure biblical passages.
China projection of the day
From Ted Fishman, the demographic turning point is coming sooner than I had thought:
In 2015, China’s working population below the age of 65 will begin to shrink. Meanwhile, the number of people over 65 will be rising to 300 million by 2050, a threefold increase.
Gdp growth rates in the dollar currency area
2006: 2.8%, 2007: 4.2%, 2008: 4.7%, 2009: 2.5%, 2010: -2.3% (estimated)
2006: 6.4%, 2007: 8.1%, 2008: 11.2%, 2009: 9.2%, 2010: 2.4% (estimated)
Ecuador: 2006: 4.7%, 2008: 2.0%, 2009: 6.5%, 2010: -1.0%
Those countries, of course, all use the U.S. dollar. Does that look more like how a real shock is transmitted or an AD shock?
I don't think there is a simple answer to that question. U.S. data are here and the large plunge is from January 2008 to January 2009, with the Latin slowdowns in the dollar area coming later.
In 2009 the El Salvador inflation rate ran over seven percent. In Panama it ran over four percent in 2008 and almost nine percent in 2009. Ecuador has 2.3 and 8.3 inflation for those two years.
In those countries one can see a lot of expansionary nominal demand, followed by a major slowdown, most of which is probably fallout from the broader U.S. and global crisis, with some lag. That fits the real shock story. To defend the nominal story, start by noting how little those countries share a common inflation rate, either with the U.S. or with each other. (But that may itself stem from real factors driving the production of inside money and the Fed not mattering so much.) Maybe they never received the U.S. negative nominal shock to such a strong degree or maybe the U.S. negative nominal shock came more from the wealth side than from the monetary policy side.
Still I am drawn back to the question: if it was the Fed which screwed up, why is there such a lag across the currency zone but not across the U.S. states?
Gay Sex Statistics
OKTrends has another great post, gay sex v. straight sex, analyzing data on millions of customers who use the dating site OKCupid. Here is one piece of the long post that I found surprising.
Another common myth about gay people is that they sleep around, but the statistical reality is that gay people as a group aren't any more slutty than straights.
- straight men: 6
- gay men: 6
- straight women: 6
- gay women: 6
Here's how the distribution curves compare:
- 45% of gay people have had 5 or fewer partners (vs. 44% for straights)
- 98% of gay people have had 20 or fewer partners (vs. 99% for straights)
It turns out that a tiny fraction of gays have single-handedly two-handedly created the public image of gay sexual recklessness–in fact we found that just 2% of gay people have had 23% of the total reported gay sex, which is pretty crazy.
Evaluating the Millennium Villages
Michael Clemens writes:
Here I discuss a new research paper that I wrote with Gabriel Demombynes of the World Bank. We ask when it’s important to take great care in measuring a project’s impacts, and we illustrate one concrete case: the Millennium Village Project. We show how easy it can be to get the wrong idea about the project’s impacts when careful, scientific impact evaluation methods are not used. And we detail how the impact evaluation could be done better, at low cost.
There are some good graphs at the first link and here is the associated podcast.
Google is constructing a price index
Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics.
Google has not yet decided whether it will publish its index, but "Mr Varian said that the GPI shows a “very clear deflationary trend” for web-traded goods in the US since Christmas."
The full article is here, including the story of Hal Varian's pepper grinder and for the pointer I thank Brent Depperschmidt.
Economic Misconceptions
Students typically come to an economics class with many misconceptions, not just random errors but systematic biases (see especially Caplan 2002).
Bill Goffe recently (2009) surveyed one of his macro principles classes and found, for example, that the median student believes that 35% of workers earn the minimum wage and a substantial fraction think that a majority of workers earn the minimum wage (Actual rate in 2007: 2.3% of hourly-paid workers and a smaller share of all workers earn the minimum wage, rates are probably somewhat higher today since the min. wage has risen and wages have not).
When asked about profits as a percentage of sales the median student guessed 30% (actual rate, closer to 4%).
When asked about the inflation rate over the last year (survey was in 2009) the median student guessed 11%. Actual rate: much closer to 0%. Note, how important such misconceptions could be to policy.
When asked by how much has income per person in the United States changed since 1950 (after adjusting for inflation) the median student said an increase of 25%. Actual rate an increase of about 248%, thus the median student was off by a factor of 10.
I would add that there are also theoretical misconceptions that are probably even more important than factual misconceptions. For example, I think it would be useful to ask questions such as:
1. A number of new furniture manufacturers open in North Carolina, since the new competition forced existing manufacturers to reduce prices the effect of this additional competition was to reduce wages for workers in the furniture industry.
Rate this argument on a 1 to 10 scale from least to most plausible or likely.
2. Competition from Korean automobile manufacturers caused US manufacturers to cut quality in order to reduce their costs. Rate this argument on a 1 to 10 scale from least to most plausible or likely.
3. A law that prevents supermarkets from advertising the prices of their products will reduce the supermarket costs and in turn this will reduce prices to consumers. Rate this argument on a 1 to 10 scale from least to most plausible or likely.
Note that the point here is not to say that an answer is wrong but to understand the implicit models that students are using. It can help a teacher to know what these conceptions and misconceptions are in advance so that they can be addressed.
To further this research, Bill Goffe is putting together a colloborative database on economic misconceptions that teachers are welcome to contribute towards. See also Bill's page on the large literature on teaching in physics much of which is also relevant to economics.
Leaving Las Vegas (if they can)
In 2005 I presented figures on U-Haul pricing (via Andy Roth) between Los Angeles and Las Vegas. At that time it was much more expensive to rent a truck to go from Los Angeles to Las Vegas than from Las Vegas to Los Angeles.
| One-Way Trip (August 2005) | Price |
| Los Angeles to Las Vegas | $454.00 |
| Las Vegas to Los Angeles | $119.00 |
Since the distance is the same the difference is price was likely due to the fact that more people wanted to escape LA than leave Las Vegas. The key idea is to recognize that as an ideal U-Haul wants the number of trucks at each one of its locations to be the same every day. Thus, U-Haul must choose prices on all of its links so that at the end of the day the same number of trucks come into Los Angeles as leave. One way of doing this is reducing the price on Las Vegas to Los Angeles trips.
Ok, so what are prices today?
| One-Way Trip (October 2010) | Price |
| Los Angeles to Las Vegas | $223.00 |
| Las Vegas to Los Angeles | $234.00 |
Prices have halved on the LA to Las Vegas trip and doubled on Las Vegas to LA. Yup, the Las Vegas boom is over.
As I said in my earlier post, U-Haul pricing is an interesting way of talking about "demand and supply, the difficulties of identifying price discrimination, and why it's efficient to have "women enter free" nights at clubs." I leave the latter as an exercise.
Here is Tyler on Not Leaving Las Vegas.