Category: Data Source
“The Myth of American Meritocracy: How corrupt are Ivy League admissions?”
There is a new and stimulating piece by Ron Unz, in The American Conservative. The article covers plenty of ground, but I took away two main points. The first is that there is massive and quite unjustified bias against Asian and Asian-American students in the U.S. admissions process. Yes, I already thought that but it turns out it is much worse than I had thought. Yet many people support this aspect of our current admissions systems, either directly or indirectly.
The second point is the claim that Jewish academic achievement in America is collapsing at the top end, in relative terms at least.
For reasons which are possibly irrational on my end, but perhaps not totally irrational, I am not entirely comfortable with the religious and ethnic and racial “counting” methods applied in this piece (blame me for mood affiliation if you wish). Still, it is an interesting read and after some internal debate I thought I would pass it along, albeit with caveats.
In any case, the link to the article is here.
Seasonally adjusted U.S. household median income
The source is here.
Are Prediction Markets Against the Public Interest?
Here is more on the CFTC’s attack on Intrade:
Why doesn’t Intrade just obey the complicated law and become a licensed exchange? They tried, but the CFTC won’t give them a license. When an established, licensed U.S. commodity exchange applied for permission to do what Intrade does, the CFTC turned them down, too.
Most importantly, in rejecting Nadex’s application to trade “political event derivatives contracts” the CFTC said this:
As a result of reviewing the complete record, the CFTC determined that the contracts involve gaming and are contrary to the public interest…
Thus the CFTC’s attack on Intrade is not about following or not following a particular regulation; it goes much deeper, the CFTC is arguing that all such markets are against the public interest.
Addendum: Kenneth J. Arrow, Robert Forsythe, Michael Gorham, Robert Hahn, Robin Hanson,
John O. Ledyard, Saul Levmore, Robert Litan, Paul Milgrom, Forrest D. Nelson,
George R. Neumann, Marco Ottaviani, Thomas C. Schelling, Robert J. Shiller,
Vernon L. Smith, Erik Snowberg, Cass R. Sunstein, Paul C. Tetlock, Philip E. Tetlock,
Hal R. Varian, Justin Wolfers, and Eric Zitzewitz disagree with the CFTC (among others).
CFTC Cracks Down on Intrade
CFTC Press Release: The U.S. Commodity Futures Trading Commission (CFTC) today filed a civil complaint in federal district court in Washington, DC, charging Intrade The Prediction Market Limited (Intrade) and Trade Exchange Network Limited (TEN), Irish companies based in Dublin, Ireland, with offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. customers, all in violation of the CFTC’s ban on off-exchange options trading.
Intrade and TEN jointly operate an online “prediction market” trading website, through which customers buy or sell binary options which allow them to predict (“yes” or “no”) whether a specific future event will occur, according to the CFTC’s complaint.
Specifically, according to the complaint, from September 2007 to June 25, 2012, Intrade and TEN operated an online “prediction market” trading website, which allowed U.S. customers to trade options products prohibited by the CFTC’s ban on off-exchange options trading. Through the website, Intrade and TEN allegedly unlawfully solicited and permitted U.S. customers to buy and sell options predicting whether specific future events would occur, including whether certain U.S. economic numbers or the prices of gold and currencies would reach a certain level by a certain future date, and whether specific acts of war would occur by a certain future date.
…David Meister, the Director of the CFTC’s Division of Enforcement, stated: “It is against the law to solicit U.S. persons to buy and sell commodity options, even if they are called ‘prediction’ contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt. The requirement for on-exchange trading is important for a number of reasons, including that it enables the CFTC to police market activity and protect market integrity. Today’s action should make it clear that we will intervene in the ‘prediction’ markets, wherever they may be based, when their U.S. activities violate the Commodity Exchange Act or the CFTC’s regulations.”
In its continuing litigation the CFTC seeks civil monetary penalties, disgorgement of ill-gotten gains, and permanent injunctions against further violations of federal commodities law, as charged, among other relief.
The CFTC acknowledges the Central Bank of Ireland for its assistance in the CFTC’s investigation of Intrade and TEN.
Intrade announces:
We are sorry to announce that due to legal and regulatory pressures, Intrade can no longer allow US residents to participate in our real-money prediction markets.
Unfortunately this means that all US residents must begin the process of closing down their Intrade accounts. We strongly urge you to begin this process immediately:
What is it that Springsteen says, “Well the cops finally busted Madame Marie for tellin’ fortunes better than they do.”
Big Bird
From Wired Science which notes why man has succeeded in breeding big turkeys when evolution failed–it’s not as complicated as you might think:
…the key technical advance was artificial insemination, which came into widespread use in the 1960s, right around the time that turkey size starts to skyrocket. The reason is that turkeys over 30 pounds are “inefficient” breeders: It’s difficult for them to actually perform the natural mating act. With artificial insemination, the largest birds can still be used as sires, even if they have a hard time walking, let alone engaging in sexual reproduction.
Hat tip: @m_sendhil.
Ghana “fact” of the day
Two years ago Ghana’s statistical service announced it was revising its GDP estimates upwards by over 60%, suggesting that in the previous estimates about US$13bn worth’s of economic activity had been missed. As a result, Ghana was suddenly upgraded from a low to lower-middle-income country. In response, Todd Moss, the development scholar and blogger at the Center of Global Development in Washington DC, exclaimed: “Boy, we really don’t know anything!”
Here is more, by Morten Jerven. Here is another good paragraph from that article:
Let us be conservative and assume that the GDP in Nigeria merely doubles following the revision. This alone will mean that the GDP for the whole region increases by more than 15%. The value of the increase amounts to nothing less than 40 economies roughly the size of Malawi’s. The knowledge that currently there are 40 “Malawis” unaccounted for in the Nigerian economy should raise a few eyebrows.
I have just pre-ordered his forthcoming book Poor Numbers: How We Are Misled by African Development Statistics and What to Do about It.
The Great Stagnation in the UK seems to start at around 2000
Here are other indicators of ongoing economic stagnation in the UK, and you can download the full report here. Wages for much of the developed world perform quite poorly after 2000 or so.
For the pointer I thank Alex.
Women, education, and earnings
From the job market paper of Miriam Gensowski, from University of Chicago:
Yet for education levels beyond the bachelor’s, higher education is associated with slightly lower earnings through marriage. The more highly educated women are less likely to be married, and thus lose the opportunity to bolster their own earnings with their husband’s. In the case of women with a Masters degree, the negative effect is clearly related to lower probability of being married – as Fig. 8 shows. A woman’s propensity to be married is much lower for women with a master’s as opposed to a bachelor’s degree or high school diploma. Most interestingly, the exceptional women who obtained a Doctorate degree did not suffer significantly in the marriage market, as one might have anticipated. Even though they were significantly less likely to be married, when they were married their husbands had higher-than-average earnings, so overall the impact of their high education on the returns to marriage are not statistically different from zero.
Of course there is a tricky causal issue. If you truly feel like getting a Masters degree, that may be enough to indicate your marriage prospects are lower and refraining from the Masters may not much help. We don’t know.
The paper is interesting throughout. For instance it finds a high return to education even after adjusting for IQ and personality traits. It ascertains which male personality types benefit the most from education. It also finds that the personality trait of neuroticism increases male earnings if correlated with a Masters or Ph.d but not otherwise.
Do Women Avoid Salary Negotiations?
The subtitle of the paper is Evidence from a Large Scale Natural Field Experiment and the authors are Andreas Leibbrandt and John List. Here is the abstract:
One explanation advanced for the persistent gender pay differences in labor markets is that women avoid salary negotiations. By using a natural field experiment that randomizes nearly 2,500 job-seekers into jobs that vary important details of the labor contract, we are able to observe both the nature of sorting and the extent of salary negotiations. We observe interesting data patterns. For example, we find that when there is no explicit statement that wages are negotiable, men are more likely to negotiate than women. However, when we explicitly mention the possibility that wages are negotiable, this difference disappears, and even tends to reverse. In terms of sorting, we find that men in contrast to women prefer job environments where the ‘rules of wage determination’ are ambiguous. This leads to the gender gap being much more pronounced in jobs that leave negotiation of wage ambiguous.
An ungated copy I do not see, does anyone?
A Bet is a Tax on Bullshit
Nate Silver, whose models give Obama a high probability of winning reelection, has offered one of his critics a bet. “Putting your money where your mouth is,” is a time-honored principle of integrity in my view but the NYTimes Public Editor is very upset. Margaret Sullivan, however, never offers an argument against betting instead treating it as unseemly.
[Betting is] inappropriate for a Times journalist, which is how Mr. Silver is seen by the public even though he’s not a regular staff member.
“I wouldn’t want to see it become newsroom practice,” said the associate managing editor for standards, Philip B. Corbett. He described Mr. Silver’s status as a blogger — something like a columnist — as a mitigating factor…
…When he came to work at The Times, Mr. Silver gained a lot more visibility and the credibility associated with a prominent institution. But he lost something, too: the right to act like a free agent with responsibilities to nobody’s standards but his own.
The closest to an argument against betting is this:
…whatever the motivation behind it, the wager offer is a bad idea – giving ammunition to the critics who want to paint Mr. Silver as a partisan who is trying to sway the outcome.
My best parse of the argument is that by betting Silver has given himself an interest in the election and this hurts his credibility. Nothing, however, could be further from the truth.
A properly structured bet is the most credible guarantor of rigorous disinterest. In order to prove his point, Silver is not required to take the Obama side of the bet! At the odds implied by his model (currently between 3 and 4 to 1) Silver should be willing to take either side of a modest bet. Indeed, we could hold a coin toss, heads Silver takes the Obama side, tails he takes Romney.
In fact, the NYTimes should require that Silver, and other pundits, bet their beliefs. Furthermore, to remove any possibility of manipulation, the NYTimes should escrow a portion of Silver’s salary in a blind trust bet. In other words, the NYTimes should bet a portion of Silver’s salary, at the odds implied by Silver’s model, randomly choosing which side of the bet to take, only revealing to Silver the bet and its outcome after the election is over. A blind trust bet creates incentives for Silver to be disinterested in the outcome but very interested in the accuracy of the forecast.
Overall, I am for betting because I am against bullshit. Bullshit is polluting our discourse and drowning the facts. A bet costs the bullshitter more than the non-bullshitter so the willingness to bet signals honest belief. A bet is a tax on bullshit; and it is a just tax, tribute paid by the bullshitters to those with genuine knowledge.
Visualization data for world development
From Damian Clarke:
I am a PhD student in economics at the University of Oxford, and a fan of your blog. Much of my work focuses on the microeconomics of development (principally fertility and education), however I am also working on the use of open data in economic development – quite an exciting area. I write you with regards to this open data work. Recently I have written a module for Stata which allows anyone to automatically import any of the over 5000 indicators maintained by the World Bank, and produces both a geographic and time series representation of the data (I provide a png attachment of this graph here if you are interested in seeing it)…
Whilst this program may be useful for researchers, I think its prinicipal benefit is in pedagogy – perhaps even users of MRUniversity would be interested in visualising for example fertility, GDP, current account balances, etc in a simple command. The syntax really is very easy: “worldstat Africa, stat(GDP)”.
I provide at the end of this email a brief description, and more details are available on my site: https://sites.google.com/site/damiancclarke/computation#TOC-worldstat
…worldstat is a module which allows for the current state of world development to be visualised in a computationally simple way. worldstat presents both the geographic and temporal variation in a wide range of statistics which represent the state of national development. While worldstat includes a number of “in-built” statistics such as GDP, maternal mortality and years of schooling, it is extremely flexible, and can (thanks to the World Bank’s module wbopendata) easily incorporate over 5,000 other indicators housed in World Bank Open Databases.
…it is automatically available from Stata’s command line by typing: “ssc install worldstat”
Nominal wage changes in the eurozone
Intrade Manipulation Fail
Brad Plumer at the Wonkblog discusses a recent attempt to manipulate Intrade.
On Monday night, after the debate, Barack Obama was leading Romney on Intrade by around 60 percent to 40 percent. But at around 10:00 a.m. on Tuesday morning, Romney surged to 48 percent. Was this evidence that the conventional wisdom was wrong? Had Romney actually won the debate handily? Or, alternatively, was the nosedive in the stock markets putting a dent in Obama’s re-election chances?
Neither. As economist Justin Wolfers pointed out on Twitter, the huge swing toward Romney appears to have been driven by a single trader who spent about $17,800 buying up Romney shares and pushing the Republican candidate’s chances on Intrade up to 48 percent. But the surge only lasted a few minutes before other traders whittled the price back down to what they saw as a more accurate valuation. Romney’s odds of winning are currently back at around 41 percent.
…As Wolfers pointed out, this mysterious trader ended up overpaying by about $1,250 for shares that quickly collapsed in value. Was this just someone who made a bad trade? Or was somebody trying to influence Intrade odds in order to sway perceptions of the race? And if so, was it worth $1,250 to jolt the markets for less than 10 minutes?
Plumer quotes me from 2008 discussing an earlier attempted manipulation:
This supports Robin Hanson’s and Ryan Oprea’s finding that manipulation can improve (!) prediction markets – the reason is that manipulation offers informed investors a free lunch. In a stock market, for example, when you buy (thinking the price will rise) someone else is selling (presumably thinking the price will fall) so if you do not have inside information you should not expect an above normal profit from your trade. But a manipulator sells and buys based on reasons other than expectations and so offers other investors a greater than normal return. The more manipulation, therefore, the greater the expected profit from betting according to rational expectations.
Addendum: Justin Wolfers offers more comment.
Publishing pays in economics
Here is a new paper by Suzanne O’Keefe and Ta-Chen Wang:
We study salaries of economics faculty at the University of California to determine how publications affect salary. We find that each publication in a top 10 journal has a positive and significant effect on annual base salary of 1.5%, or $2,053. Unlike previous research, our analysis specifies the impact of publications in specific journals. Publications in American Economic Review, Econometrica, and Review of Economics and Statistics have an independent positive effect on salary. Compensation is also affected by faculty rank, seniority, university of employment, and teaching awards. Base salary does not significantly differ by gender, however, gross salary is about 9% lower for women. After controlling for migration and faculty rank, seniority has a negative impact on salary.
Here is a sentence of interest:
Full-time tenure-track economics faculty members in the UC system have gross salaries ranging from about $70,000 to $378,000.
Against my expectations, UCLA economics professors are paid more than 13k more, on average, than UC Berkeley economics professors. The pay gap for women is larger in economics than in these universities as a whole.
The possibly gated article is here, and for the pointer I thank Michelle Dawson.
Can you raise your kid as a conservative or liberal?
Here is a new study (caveat emptor all the way):
This new study, by a team led by psychologist R. Chris Fraley of the University of Illinois at Urbana-Champaign, begins with new mothers describing their intentions and approach in 1991, and ends with a survey of their children 18 years later. In between, it features an assessment of the child’s temperament at age 4.
…“Parents who endorsed more authoritarian parenting attitudes when their children were one month old were more likely to have children who were conservative in their ideologies at age 18,” the researchers report. “Parents who endorsed more egalitarian parenting attitudes were more likely to have children who were liberal.”
Obviously genes are an alternative channel of influence. And this is a stunner:
Also, the Illinois researchers did not gauge the parents’ political beliefs.
So I don’t believe the interpretations at all. Still, it is interesting to see the extent of attitudinal persistence, and furthermore “…our results also showed that early childhood temperament predicted variation in conservative versus liberal ideologies.” I suspect, however, that politics would turn out to be less susceptible to parental shaping than, say, religion or general temperamental approach to religion.
I consider this study radically incomplete, but still it is interesting to see the question tackled with a twenty-year time window and some ex ante planning.
For the pointer I thank www.artsjournal.com.