Category: Data Source

The Black Swine

by  Alex Tabarrok in

High-tech models developed by quants have, once again, greatly underestimated risk.  What will be the consequences?

In the waning days of April, as federal officials were declaring a public health emergency and the world seemed gripped by swine flu panic, two rival supercomputer teams made projections about the epidemic that were surprisingly similar – and surprisingly reassuring. By the end of May, they said, there would be only 2,000 to 2,500 cases in the United States.

May’s over. They were a bit off.

On May 15, the Centers for Disease Control and Prevention estimated that there were “upwards of 100,000” cases in the country,..

Divorce and Crime Victimization

by  Alex Tabarrok in

While paging through the statistical tables of Criminal Victimization in the United States I found some interesting data on victimization, marriage and divorce.  The rate of victimization for violent crimes (per 1,000 persons aged 12 and over) for never married and married males is as follows:

  • Never Married Males: 45.0
  • Married Males: 12.3
Clearly, married males are older and they have settled down, usually in places away from crime hot spots.  Thus the fact that the rate of victimization for married males is much lower than for never married males is no surprise.  What did surprise me is that divorced males have rates of victimization about as high as for never married males:
  • Divorced or Separated Males: 44.2
The same pattern is even stronger for females:
  • Never Married Females: 38.4
  • Married Females: 10.3
  • Divorced or Separated Females: 49.4

The patterns are suggestive of how large a difference one’s choices can make for criminal victimization.  That is, one hypothesis to explain the data is that singles congregate in urban, high crime areas and they go out at night to bars and other high crime locations.  Married individuals move to low crime suburbs and stay home with popcorn and Netflix.  The divorced, however, move back to the cities where the singles are and they head out at night to try to mate again.

An alternative hypothesis is that the individuals who tend to get divorced have personalities or behaviors which make them more likely to get divorced and more likely to be victims of crime: a drug user, for example, is likely to have a higher probability of divorce and a higher probability of being a victim of crime than a non drug-user.

How many other hypotheses can you think of to explain the data?  What tests would you suggest to distinguish hypotheses?

Paraguay fact of the day

by  Tyler Cowen in

This was from an English-language version of El Pais, tucked into my IHT; I don´t see the story on-line:

Official estimates state that seven out of 10 children in Paraguay are only registered with their mother´s last name — in Mexico the rate is one out of six.

A bit of googling turns up a second and related estimate, namely that in Paraguay 6.5 children out of ten are not registered to receive social services.

Hennessey on CAFE

by  Alex Tabarrok in

Excellent post, filled with detail, by Keith Hennessey on CAFE.  Some highlights:

The NHTSA analyses look at a range of benefits to society, including economic and national security benefits from using less oil, health and environmental benefits from less pollution, and environmental benefits from fewer greeenhouse gas emissions (this is new).  They also consider the costs, primarily from requiring more fuel-saving technologies to be included by manufacturers….

Rather than maximizing net societal benefits, [the Obama] proposal raises the standard until (total societal benefits = total societal costs), meaning the net benefits to society are roughly zero…

The Obama plan will increase costs enough to further suppress demand for new cars and trucks. This will cause significant job loss, and probably in the 150K 50K range over 5-ish years, with a fairly wide error band….[updated to reflect an error in calculation, AT]

The Obama option would reduce the global temperature by seven thousandths of a degree Celsius by the end of this century….[and] would reduce the sea-level rise by six hundredths of a centimeter.  That’s 0.6 millimeters.

Note that these points are all drawn from NHTSA work (see Hennessey's post for details) not from a "think tank" study.  Finally, Hennessey is concerned about the future:

…As early as this fall, greenhouse gases could become “regulated pollutants” under the Clean Air Act. Once something becomes a “regulated pollutant,” a whole bunch of other parts of the Clean Air Act kick in, and EPA is off to the races in regulating greenhouse gases from a much (much) wider range of sources, including power plants, hospitals, schools, manufacturers, and big stores.

One of the scariest elements of this is called the “Prevention of Significant Deterioration” permitting system. In effect, EPA could insert itself (or your State environmental agency) into most local planning and zoning processes. I will write more about this in the future. It terrifies me.

My Markey-Waxman query repeated: what are the climate benefits of the bill?

by  Tyler Cowen in

Barkley Rosser, who is not held in the thrall of the Cato Institute, posts in the comments:

Sorry, you are going to be disappointed. So, I just googled "Markey-Waxman bill benefits" and, big surprise, got a big fat zero. I do not think anybody has made any estimate of benefits, high, low, or medium. If they have, they are buried pretty deeply somewhere, not easily accessible. And, I do not have the time to go cook up some numbers myself (don't even try to ask). So, anyone out there who wants to either cook up some numbers themselves or go digging more deeply, good luck. But, I doubt that the question will be satisfactorily answered…Oh, I should not say I got a "big fat zero." I got lots of hits saying lots of things. But none with any estimated benefits numbers that I could see, even half-baked ones.

Maybe it's still early but this apparent gap in the literature is not encouraging.  I'll repeat my query.  What would be the climate benefits of this bill?  If you want to cite an estimate involving strategic interdependencies with China and India, fine.  But please cite something that puts forward and defends a particular estimate.

Is there a better case for this bill than: "it will raise government revenue, which I favor anyway, and raise the costs of unsavory corporations, which doesn't strike me as so terribly unjust anyway, and on the estimate of climate benefits I will just fudge it and hope for the best and claim we must do something?"  David Frum comments.

Matt Yglesias has a different argument: better to start now than never. 
I would phrase a related point more technically: acting now may be
keeping open a valuable option on doing more later.  Still, I wish to
know what that option is worth, noting that if major action is impossible today it may be impossible tomorrow as well.

In the comments section of this post I'm not interested in being lectured about CO2 in the time of the trilobites, corrupt scientific groupthink, hearing that geo-engineering would be cheaper, or reading that various wimps won't face up to the need for nuclear power.  I'm also not interested in hearing whether the costs of shifting to greener energy are high or low, at least not today.  I just want to see the benefit estimates on this particular policy and if you put any serious estimate forward in due time I will assess it and report back to you.

Yes it is hard to model international interdependencies and option value — two of the major potential benefits — but we try to model such complexities for other policies all the time.  Surely it's worth some group doing a 50-100 page study of what we can hope to achieve.  Then we could see how plausible is the case for the bill.

If there is such a study, I promise I won't complain about the discount rate, I won't pretend that uncertainty militates in favor of inaction, and I won't dismiss it by saying a carbon tax would be better and then refusing to judge cap and trade vs. nothing.  I want to see whether you need crazy or sensible judgments to get large aggregate benefits from proceeding.

Comments, of course, are open but subject to the above caveats.  No trilobites!

TED Talks: Search, Translate, Subtitle

by  Alex Tabarrok in

TED has developed a cool new technology that makes it possible to search, caption and translate TED talks.  Each talk will now come with an transcript.  What's cool is that you can click on any phrase in the transcript and you will jump to that point in the video.  If you go to my talk, for example, and click on "open interactive transcript" you can see this in action.  What this means is that videos will now be Google searchable.

In addition, by linking a translation to the English transcript it's possible to have talks searchable in multiple languages.  Thus, TED is now seeking volunteer translators to convert TED talks into some 40 other languages.  Here, for example, is Bonnie Bassler's great talk on quorum sensing in bacteria (how bacteria talk to one another)  which is translated into Swedish and Spanish.  My talk is still in English only but if anyone translates it they will get a shout out from me!  With a click, translations and transcripts can be shown as subtitles so not only will TED talks be available in other languages they will also be available to the hearing impaired.

Cultures of sleep, and which is the “most awake” nation?

by  Tyler Cowen in

There is plenty of talk in the blogosphere on who spends the most time eating, but other takes on the new OECD leisure time study focus on who spends the most time sleeping:

France is the industrialized country where people spend the longest
periods sleeping, according to a series of surveys on social habits
conducted by the Paris-based Organization for Economic Cooperation
& Development.

The French sleep a daily average of 530 minutes, compared with 518
for Americans and 469 for Koreans — the OECD's "most awake" nation,
according to the study.

The most sociable OECD nation is considered to be Turkey.  Some of the New Zealand stereotypes are wrong (they don't play so much sport) and:

Young British girls drink the most for their age. Austrian teens smoke the most.

Look under "Risky Behavior" for information on teenage drunkenness but for teenage boys the U.S. has the lowest rate.  Here is a brief summary with a link to the main study.

Chavez and the Power of the State

by  Alex Tabarrok in

Between 2002 and 2004 millions of Venezuelans signed petitions calling for a vote to remove Hugo Chavez from office.  Signatories were not anonymous and during the petition campaign Chavez supporters hinted darkly that there would be retaliation.  Chavez was in fact forced into a recall election, but unfortunately he won (not one of democracy's better moments).  After the election, the list of signatories was distributed to government agencies in an easy-to-use database.  The database included the names and addresses of all registered voters and whether they had signed an anti-Chavez petition.  Technology thus provided Chavez supporters the information they needed to retaliate.

Technology cuts both ways, however, and in a truly remarkable paper, Hsieh, Miguel, Ortega and Rodriguez match information in the petition database to another database on wages, employment and income.  What the authors find is shocking, albeit not surprising.  Before the recall election, petition signatories and non-signatories look alike.  After the election, the employment and wages of signatories drop considerably, about a 10% drop in wages relative to non-signatories.  Survey evidence conducted by the authors is consistent with retaliation by Chavez supporters especially in the form of job losses in the public sector.  The authors estimate that the retaliation was so widespread, many workers were pushed into informal employment, that the Venezuelan economy was significantly damaged.

This is original, important and actionable research.  Bravo to the authors, especially to Ortega who–as of this posting–has a job in Venezuela.

China fact of the day

by  Tyler Cowen in

Via Yves Smith:

Power generation in China dropped again in April, indicating that the
macroeconomic rebound the market has expected is yet to appear.

According
to the State Grid’s latest statistics, April’s national power
generation totaled 274.763 billion kwh, a fall of 3.55%, year on year,
and a decline of over 3% from the previous month.

Without a healthy Chinese economy I for one do not see the "green shoots" but of course time will tell.

Modern Principles: Macroeconomics, Economic Growth

by  Alex Tabarrok in
In the United States, diarrhea is a pain, an annoyance, and of
course an embarrassment. In much of the developing world, diarrhea
is a killer, especially of children. Every year 1.8 million
children die from diarrhea. Ending the premature deaths of these
children does not require any scientific breakthroughs, nor does it
require new drugs or fancy medical devices. Preventing these deaths requires
only one thing: economic growth.

That’s the opening paragraph of The Wealth of Nations and Economic Growth, Chapter 6 in Modern Principles: Macroeconomics.  Does the opening make you a little bit squeamish?  We hope so–we wanted an opening that would jar students out of complacency and remind them how vital economic growth is to human life.  

Due to its importance, we have more material on growth and development than any other principles text.  In Chapter 6 we lay out the key facts and the basic framework for understanding economic growth.  I think we do an especially good job explaining that the proximate causes of growth, increases in capital, labor, and technology must themselves be explained.  Why do people save?  Why do people invest?  Why do people research and develop new ideas?  It’s these questions which connect macroeconomics to microeconomics and point to the fundamental importance of incentives and institutions.  These questions also foreshadow future chapters on savings, investment, financial intermediation and the economics of ideas. 

For a limited time, you can read Chapter 6 at the link above (and do enjoy the pretty color pictures before you print!).  Tyler and I will be writing more about Modern Principles: Macroeconomics this week; you can also find more information at www.SeeTheInvisibleHand.com.