Category: Data Source

This new paper is from Robert J. Gordon and it points to some very important results, rooftop results you might say:

The rise in American inequality has been exaggerated both in magnitude
and timing. Commentators lament the large gap between the growth rates
of real median household income and of private sector productivity.
This paper shows that a conceptually consistent measure of this growth
gap over 1979 to 2007 is only one-tenth of the conventional measure.
Further, the timing of the rise of inequality is often misunderstood.
By some measures inequality stopped growing after 2000 and by others
inequality has not grown since 1993. This cessation of inequality’s
secular rise in 2000 is evident from the growth of Census mean vs.
median income, and in the income share of the top one percent of the
income distribution. The income share of the 91st to 95th percentile
has not increased since 1983, and the income ratio of the 90th to 10th
percentile has barely increased since 1986. Further, despite a
transient decline in labor’s income share in 2000-06, by mid-2009
labor’s share had returned virtually to the same value as in 1983,
1991, and 2001.

Recent
contributions in the inequality literature have raised questions about
previous research on skill-biased technical change and the managerial
power of CEOs. Directly supporting our theme of prior exaggeration of
the rise of inequality is new research showing that price indexes for
the poor rise more slowly than for the rich, causing most empirical
measures of inequality to overstate the growth of real income of the
rich vs. the poor. Further, as much as two-thirds of the post-1980
increase in the college wage premium disappears when allowance is made
for the faster rise in the cost of living in cities where the college
educated congregate and for the lower quality of housing in those
cities. A continuing tendency for life expectancy to increase faster
among the rich than among the poor reflects the joint impact of
education on both economic and health outcomes, some of which are
driven by the behavioral choices of the less educated.

I don't yet see an ungated version.  If you go to pp.8-9, you'll see that since 2000 (not including the financial crisis), it is quite possible that inequality has been decreasing, not increasing.  That's exactly the period of time when complaints about inequality reached new heights.

Chance a U.S. household that owns a Prius also owns an SUV: 1 in 3.

That is from Harper's Index, October issue.

You may recall that some time ago Alan Reynolds (Reynolds responds here) challenged the results of Piketty and Saez on rising income inequality in the United States.  There has now been a systematic look at biases in the data, with the goal being to reconcile data from the Current Population Survey with IRS measurements.  Burkhauser, Feng, Jenkins and Larrimore report their results:

Although the vast majority of US research on trends in the inequality of family income is based on public-use March Current Population Survey (CPS) data, a new wave of research based on Internal Revenue Service (IRS) tax return data reports substantially higher levels of inequality and faster growing trends. We show that these apparently inconsistent estimates can largely be reconciled once one uses internal CPS data (which better captures the top of the income distribution than public-use CPS data) and defines the income distribution in the same way. Using internal CPS data for 1967–2006, we closely match the IRS data-based estimates of top income shares reported by Piketty and Saez (2003), with the exception of the share of the top 1 percent of the distribution during 1993–2000. Our results imply that, if inequality has increased substantially since 1993, the increase is confined to income changes for those in the top 1 percent of the distribution.

An ungated version is here.  As I read this paper, the Piketty and Saez result, with some modifications for 1993-2000, basically holds up.  It's also worth noting that recent increases in inequality do relate mostly to the top one percent.  That's all for pre-crash times, of course.

About 10 percent of infants die in their first year of life in Africa
— still shockingly high, but considerably lower than the European
average less than 100 years ago, let alone 800 years past. And about
two thirds of Africans are literate — a level achieved in Spain only
in the 1920s.

Here is more.  The article makes additional interesting observations.

Large
banks with more than $100 billion in assets are borrowing at interest
rates 0.34 percentage points lower than the rest of the industry. Back
in 2007, that advantage was only 0.08 percentage points, according to
the FDIC. Such differences can cause huge variance in borrowing costs
given the massive amount of money that flows through banks.

Here is the article and I thank Ralph S. for the pointer.

It is almost unheard of for ordinary Chinese citizens to volunteer to donate their organs after death. Only about 130 people have pledged to donate their organs since 2003, the newspaper stated, quoting Chen Zhonghua, a professor at Tongji Hospital’s Institute of Organ Transplantation in Shanghai.

Here is more; the story concerns the Chinese trying to move away from harvesting the organs of deceased prisoners.

Here's a good blog post on a new Chinese leisure activity.

This neat chart morphs right in front of your eyes; recommended viewing.

• Contrary to popular belief (e.g. here) there is only weak evidence that the implicit association test has good predictive ability.

• Paul Romer on his five favorite live rock recordings, sample line “In this performance, Hendrix may have been high, but he knew what he was doing.”

• The economics of being a Hefner Girlfriend.  One key sentence “In fact, Girlfriends were not allowed to become Playmates because Hef had found that they tended to flee the Mansion as soon as they collected their $25,000 Playmate cheque.”

Bruce Bartlett sends me a link to this interesting paper:

How large are the economies of scale of living together? And how do partners share their resources? The first question is usually answered by equivalence scales. Traditional estimation and application of equivalence scales assumes equal sharing of income within the household. This paper uses data on financial satisfaction to simultaneously estimate the sharing rule and the economy of scale parameter in a collective household model. The estimates indicate substantial scale economies of living together, especially for couples who have lived together for some time. On average, wives receive almost 50% of household resources, but there is heterogeneity with respect to the wives’ contribution to household income and the duration of the relationship.

The data are from Switzerland, in case you are wondering, not the United States.

The reports have come in:

All but seven of the regions reported GDP growth rates above the
bureau’s first-half figure of 7.1 per cent. At the start of the year,
Beijing set 8 per cent as China’s growth target for the year.

…In recent years, provincial figures have suggested consistently the
world’s third-largest economy is bigger than Beijing’s published
estimate, but the discrepancy appears to have widened this year.

…The Global Times, controlled by the People’s Daily, the Communist party
mouthpiece, reported that the public reacted with “banter and sarcasm”
to NBS figures showing average urban wages in China rose 13 per cent in
the first half to $2,142.

It is noted that the state worked on the gdp numbers for a full fifteen days.  Yet not everyone is happy:

The criticism has prompted the NBS to launch a campaign last week,
entitled “Statistical Feelings: We have walked together – Celebrating
the 60th anniversary of the founding of New China,” to boost confidence
among statisticians.

The campaign has already produced works such
as: “I’m proud to be a brick in the statistical building of the
republic.” In another poem, a contributor writes: “I can rearrange the
stars in the sky because I have statistics.”

Here is a clever new idea from Henderson, Storeygard, and Weil:

GDP growth is often measured poorly for countries and rarely measured at all for cities. We propose a readily available proxy: satellite data on lights at night. Our statistical framework uses light growth to supplement existing income growth measures. The framework is applied to countries with the lowest quality income data, resulting in estimates of growth that differ substantially from established estimates. We then consider a longstanding debate: do increases in local agricultural productivity increase city incomes? For African cities, we find that exogenous agricultural productivity shocks (high rainfall years) have substantial effects on local urban economic activity.

Here is the paper. WSJ blogs added:

They also noted how data from night lights can be focused to provide
data on a local level. In Southern Madagascar large deposits of rubies
and sapphires were discovered in late 1998 near the towns of Ilakaka
and Sakaraha, leading to an economic boom. But the data from the
satellites tell the story of where the benefits were felt most deeply.
“Over the next five years there was a sharp growth in the number of
pixels for which light is visible at all, and in the intensity of light
per pixel,” the economists said. “The other town visible in the figure,
Ihosy, shows no such growth. If anything, Ihosy’s light gets smaller
and weaker, as it suffers in the competition across local cities for
population.”

The household savings rate in South Korea
will have plummeted from a world-beating 25.2 percent in 1988 to a
projected world low of 3.2 percent in 2010, according to the OECD.

Here is much more.  In fact:

South Koreans work more, sleep less and kill themselves at a higher
rate than citizens of any other developed country, according to the
OECD. They rank first in time spent online and second to last in
spending on recreation, and the per capita birthrate scrapes the bottom
of world rankings. By 2050, South Korea will be the most aged society
in the world, narrowly edging out Japan, according to the OECD.

And here's one problem with aggregate savings rates:

…South Korea ranks first in per capita spending on
private education, which includes home tutors, cram sessions and
English-language courses at home and abroad.

An obsessive pursuit of educational achievement, it seems, is one of
the driving forces behind the low savings rate. About 80 percent of all
students from elementary age to high school attend after-school cram
courses. About 6 percent of the country's gross domestic product is
spent on education, more than double the percentage of spending in the
United States, Japan or Britain.