Category: Data Source

The value of Facebook?

Facebook, the online social network, has more than 2 billion global users. Because those users do not pay for the service, its benefits are hard to measure. We report the results of a series of three non-hypothetical auction experiments where winners are paid to deactivate their Facebook accounts for up to one year. Though the populations sampled and the auction design differ across the experiments, we consistently find the average Facebook user would require more than $1000 to deactivate their account for one year. While the measurable impact Facebook and other free online services have on the economy may be small, our results show that the benefits these services provide for their users are large.

Here is the paper, by Jay R. Corrigan et.al., via Jake Seliger, and here is Jake’s take on the recent Facebook disputes.

Does school spending matter for child outcomes?

It seems it does, here is an excerpt from the conclusion of a new C. Kirabo Jackson paper on this question:

The recent quasi-experimental literature that relates school spending to student outcomes overwhelmingly support a causal relationship between increased school spending and student outcomes. All but one of the several multi-state studies find a strong link between spending and outcomes – indicating that money matters on average. Importantly, this is true across studies that use different data-sets, examine different time periods, rely on different sources of variation, and employ different statistical techniques. While one can poke holes in each individual study, the robustness of the patterns across a variety of settings is compelling evidence of a real positive causal relationship between increased school spending and student outcomes on average. However, an examination of single-state studies suggests that, on average, money matters, but that this is not always so in all settings or in all contexts.

And this:

To better understand why some studies find positive impacts while others do not, an examination of the few studies that are not positive is instructive. Three out of the seven papers that are not significant involve Title I spending, and three out of the seven involve capital spending. Given that 6 out of 7 of the studies that find no significant impact (86%) involve particular spending types may suggest that while overall budget increases may improve outcomes, increased funding tied to particular uses may not. In particular, the evidence is consistent with capital spending and Title I spending being less predictably effective than spending in general.

Here is an earlier and related paper on whether school spending cuts matter.

Stunning Figures on Energy Efficiency

Over the past 60 years, the energy efficiency of ever-less expensive logic engines has improved by over one billion fold. No other machine of any kind has come remotely close to matching that throughout history.

Consider the implications even from 1980, the Apple II era. A single iPhone at 1980 energy-efficiency would require as much power as a Manhattan office building. Similarly, a single data center at circa 1980 efficiency would require as much power as the entire U.S. grid. But because of efficiency gains, the world today has billions of smartphones and thousands of datacenters.

From Mark Mills at Real Clear Energy.

Measures of cultural distance

A new paper with many authors — most prominently Joseph Henrich — tries to measure the cultural gaps between different countries.  I am reproducing a few of their results (see pp.36-37 for more), noting that higher numbers represent higher gaps:

Distance from the U.S.

Algeria: 0.15

Australia: 0.03

Brazil: 0.07

Canada: 0.02

China: 0.17

Ecuador: 0.12

Egypt: 0.24

Ethiopia: 0.14

Georgia [the country]: 0.15

Hong Kong: 0.09

Indonesia: 0.19

Japan: 0.11

Malaysia: 0.12

Nigeria: 0.15

Switzerland: 0.06

Egypt is the most distant, then Yemen, with Canada as the closest.

As for cultural distance from China, we have:

Great Britain: 0.20

Hong Kong: 0.09

Japan: 0.14

Russia: 0.09 (not *so* far away)

Taiwan: 0.10

Vietnam: 0.06

Overall the numbers show much greater cultural distance of other nations from China than from the United States, a significant and under-discussed problem for China.  For instance, the United States is about as culturally close to Hong Kong as China is.

Cohort effects and life expectancy and many other facts about the history of American medicine

The cohort reaching age 55 around 1982 (born around 1927) has significantly higher mortality than the cohort 10 years younger. That higher mortality continues through the cohort passing through that age range in the mid-1990s, roughly, when the cohort born in 1933 reaches age 65. That same cohort also has higher mortality when they are 65-74 and 75-84. The story is not one of selection – a handful of less healthy people who die and leave behind healthier stock. Rather, it seems that an entire generation was rendered vulnerable by being born during and just before the Great Depression (Lleras-Muney and Moreau, 2018).

That is from a new NBER history of health care paper by Maryaline Catillon, David Cutler, and Thomas Getzen.  This piece is interesting on virtually every page.  For instance, on the rise of American science:

Of the 18 Nobel Prizes in Physiology or Medicine awarded 1901-1920, none went to US researchers. Over the next two decades, four out of twenty-four did, then for the rest of the century, more than half.

Then:

…our analysis of Massachusetts data does not support a large impact of medical care supply on mortality in the pre-antibiotic era.

Using the best data I’ve seen to date, apart from RCTs, the authors conclude from their statistical work:

…there is little evidence that access to medical care plays a role in mortality over the entire 1965-2015 period, but it appears to have had an effect during recent years.

That is from p.33

Death rates from influenza/pneumonia and cancer seem most responsive to access to medical care.  And I had not known this:

The period from 1935 to 1950 saw the most…decline in infant and child mortality of any time period since 1900.  It is unclear how much of this change would have happened without antibiotics, but blood banking and advances in surgical techniques were among the host of distinct and incremental improvements that added to life expectancy while the health share of GDP increased only slightly.

Recommended.

Increases in Inequality Have Been Overestimated

Stephen Rose of the Urban Institute (not exactly a right-wing or libertarian think tank) compares recent studies measuring changes in inequality and finds that although inequality has increased the Piketty and Saez (2003) results, which generated a tremendous amount of discussion and research, are very likely over-stated.

The results from at least four studies were compared for three measures of income change: change in median incomes, share of growth captured by the top 10 percent, and the changing income share of  the top 1 percent. In all cases, Piketty and Saez (2003) were the outlier, showing the most increased inequality. And in all three measures of income change , Piketty, Saez, and Zucman (2018) found much less growth in income inequality than Piketty and Saez (2003).

This brief does a meta-analysis of different findings to estimate a “consensus” level of change…I find that instead of stagnating, real median incomes grew by just over 40 percent (1 percent a year) from  1979 to 2014;  the top 10 percent of the income ladder captured 45 percent of income growth from 1979 to  2014; and the share of the top 1 percent grew 3.5 percentage points.

All studies find that income inequality rose after 1979, but common perceptions that all income gain went to the top 10 percent and middle class incomes stagnated (or even declined) are wrong.

Russ Roberts also has several good videos showing how the numbers can be cut in various ways.

Race discrimination in the NBA, alas I have long suspected this

Here is part of the abstract:

Weighted quantile regressions show evidence of consumer discrimination in that black players with high audience visibility (role and star players) experience a larger racial wage gap. The size of the share of the white population is shown to be positively correlated with the racial wage gap. No employee nor employer discrimination is found.

And:

Black players receive on average 20.5% less than their counterparts, all else equal.

Here is the paper by Candon Johnson and Eduardo Munici, via the excellent Kevin Lewis.

Fading Legacies: Human Capital in the Aftermath of the Partitions of Poland

This paper studies the longevity of historical legacies in human capital. The Partitions of Poland (1772-1918) represent a natural experiment that instilled Poland with three different legacies of education, resulting in sharp differences in human capital among the Polish population. I construct a large, unique dataset that reflects the state of schooling and human capital in the partition territories from 1911 to 1961. Using a spatial regression discontinuity design, I find that primary school enrollment differs by as much as 80 percentage points between the partitions before WWI. However, this legacy disappears within the following two decades of Polish independence, as all former partitions achieve universal enrollment. Differences in educational infrastructure and gender access to schooling simultaneously disappear after WWI. The level of literacy converges likewise across the former partitions, driven by a high intergenerational mobility in education. After WWII, the former partitions are not distinguishable from each other anymore.

That is from Andreas Backhaus, a job market candidate from University of Munich.

Why do so many academics dislike the market?

It seems Nozick was right after all, here is Raul Magni-Berton and Diego Rios:

In this article, the authors explore why academics tend to oppose the market. To this intent the article uses normative political theory as an explanatory mechanism, starting with a conjecture originally suggested by Robert Nozick. Academics are over-represented amongst the best students of their cohort. School achievement engenders high expectations about future economic prospects. Yet markets are only contingently sensitive to school achievement. This misalignment between schools and markets is perceived by academics – and arguably by intellectuals in general – as morally unacceptable. To test this explanation, the article uses an online questionnaire with close to 1500 French academic respondents. The data resulting from this investigation lend support to Nozick’s hypothesis.

Via Rolf Degen.

Facts about lotteries

The $29.8 billion Americans spent on the lottery in 1995 worked out to about $112 per capita. Today, per capita spending is up to $225 dollars a year. Again, part of that is the result of more states jumping on the lotto bandwagon.

These are per capita figures, accounting for every man, woman and child in the country. The average lottery player spends quite a bit more than that: If we subtract the 73 million people under age 18, and divide the remaining 250 million in half (since only 49 percent buy a lotto ticket in a given year), it works out to $600 a year in expenses for the average lotto player. Some survey data show that a disproportionate share of regular lottery players fall into low-income brackets.

…Massachusetts leads the nation with an astonishing $767 in annual per capita lotto spending. It’s followed by West Virginia ($594), Rhode Island ($513), Delaware ($421) and New York ($421).

Here is the story by Christopher Ingraham.

The best results on assortative mating and inequality I have seen

This paper studies the evolution of assortative mating in the permanent wage (the individual-specific component of wage) in the U.S., its role in the increase in family wage inequality, and the factors behind this evolution. I first document a substantial trend in assortative mating, as measured by the permanent wage correlation of couples, from 0.3 for families formed in the late 1960s to 0.52 for families formed in the late 1980s. I show that this trend accounts for more than one-third of the increase in family wage inequality across these cohorts of families. I then argue that the increase in marriage age across these cohorts contributed to the assortative mating and thus to the rising inequality. Individuals face a large degree of uncertainty about their permanent wages early in their careers. If they marry early, as most individuals in the late 1960s did, this uncertainty leads to weak marital sorting along permanent wage. But when marriage is delayed, as in the late 1980s, the sorting becomes stronger due to the quick resolution of this uncertainty with work experience. After providing reduced-form evidence on the impact of marriage age, I build and estimate a marriage model with wage uncertainty and show that the increase in marriage age can explain almost 80% of the increase in assortative mating.

That is from the job market paper of Alparslan Tuncay, from the University of Chicago.

The surprising (?) formula for becoming an art star

From Kelly Crow at the WSJ:

New artists who show their work early in a relatively small network of 400 venues—like Gagosian Gallery or the Guggenheim Museum—are all but guaranteed a successful art career, the study said. By contrast, artists who exhibit mainly in lower-level galleries and midtier institutions are likely to remain stuck in that orbit.

“There’s this invisible network of trust that exists in the art world, but the group that decides who matters in art was considerably smaller and more powerful than we expected,” said Albert-László Barabási, a data scientist who studies networks at Northeastern and led the study along with several colleagues including a data scientist now at the World Bank, Samuel Fraiberger. Their findings also show up in Dr. Barabási’s book published earlier this week, “The Formula: The Universal Laws of Success.”

His findings undermine a popular art-world notion that a prodigy could create in obscurity and get discovered years later. Instead, the research suggests that artists who start out seeking connections with powerful curators, dealers and collectors within the nerve center of the art world are far more likely to hit the big time…

“If one of your first five shows as an artist is held at a gallery in the heart of this network, the chances of your ending your career on the fringes is 0.2%,” Dr. Barabási said. “The network itself will protect you because people talk to each other and trade each other’s shows.”

…“The art world prides itself on being so open and inclusive, but the truth is the opposite,” Mr. Resch said.

The same is true for academia, I might add.  And most other things.

China five surveys of the day

Chinese leaders often invoke the feelings of the Chinese people in denouncing foreign actions in international confrontations. But most survey research on Chinese public opinion on international affairs has looked at measures of nationalist identity rather than beliefs about foreign policy and evaluations of the government’s performance. Five surveys of Chinese citizens, netizens, and elites help illuminate the public attitudes that the Chinese government grapples with in managing international security policy. The results show that Chinese attitudes are more hawkish than dovish and that younger Chinese, while perhaps not more nationalist in identity, may be more hawkish in their foreign policy beliefs than older generations. Netizens and elites are even more inclined to call on the Chinese government to invest and rely more on military strength.

That is by Jessica Chen Weiss, via the excellent Kevin Lewis.

Saving regret

We define saving regret as the wish in hindsight to have saved more earlier in life. We measured saving regret and possible determinants in a survey of a probability sample of those aged 60-79. We investigate two main causes of saving regret: procrastination along with other psychological traits, and the role of shocks, both positive and negative. We find high levels of saving regret but relatively little of the variation is explained by procrastination and psychological factors. Shocks such as unemployment, health and divorce explain much more of the variation. The results have important implications for retirement saving policies.

That is from Axel H. Börsch-Supan, Tabea Bucher-Koenen, Michael D. Hurd, and Susann Rohwedder, in the NBER working paper series.

Teacher expectations matter

From Nicholas W. Papageorge, Seth Gershenson, and Kyung Min Kang:

We develop and estimate a joint model of the education and teacher-expectation production functions that identifies both the distribution of biases in teacher expectations and the impact of those biases on student outcomes via self-fulfilling prophecies. Our approach leverages a unique feature of a nationally representative dataset: two teachers provided their educational expectations for each student. Identification of causal effects exploits teacher disagreements about the same student, an idea we formalize using lessons from the measurement error literature. We provide novel, arguably causal evidence that teacher expectations affect students’ educational attainment: Estimates suggest an elasticity of college completion with respect to teachers’ expectations of about 0.12. On average, teachers are overly optimistic about students’ ability to complete a four-year college degree. However, the degree of over-optimism of white teachers is significantly larger for white students than for black students. This highlights a nuance that is frequently overlooked in discussions of biased beliefs: less biased (i.e., more accurate) beliefs can be counterproductive if there are positive returns to optimism or if there are socio-demographic gaps in the degree of teachers’ optimism; we find evidence of both.

This is the most important thing I will have to tell you today.  Here is commentary from Vera.