Category: Data Source
Is music file-swapping down?
Maybe not, according to Business Week, from the issue of 16 January. Some sources will tell you the practice is plummeting:
Two widely cited surveys seemed to show that legal action, which began in September, was chilling file-sharing activity. In December, a phone survey by the Pew Internet Project of 1,358 U.S. Net users found music downloading had dropped by half since May. And in November, comScore Media Metrix, monitoring 120,000 U.S. users, saw big yearly declines at four popular file-sharing services — KaZaA, Grokster, BearShare, and WinMX.
But the reality is more complex:
…those surveys provide a relatively narrow view of the file-swapping universe. BayTSP, a Silicon Valley watchdog that works for three of the major record labels, tracks the number of songs available for download worldwide. It sees just a 10% drop since July and also notes steady migration from older, virus-ridden programs like KaZaA to hipper peer-to-peer networks such as eDonkey and Bit Torrent — which were absent from comScore’s tally.
And Los Angeles-based researcher BigChampagne, which monitors millions of global file swappers, actually sees a 35% increase in illegal traffic from 2002 to 2003. Given BayTSP’s and BigChampagne’s broader sample sizes, says John Palfrey, of Harvard Law School’s Berkman Center for Internet & Society, “They’re going to have more accurate empirical data.”
Note that the Pew study simply calls adults and asks them if they break the law. It underrepresents children and of course the respondent might think he is talking to the RIAA instead of a researcher. And much of the current growth in file-sharing is coming at the international level, not in the United States.
My predictions: Within two years Congress will revisit the 1998 Digital Act and give the music companies some extra legal weapons. It still won’t work, as downloaders will move to anonymous networks, possibly emanating from outside the United States.
How fast did China grow?
From 1978 to 1998 China grew a measured average of 8.0 percent a year, a breathtaking performance. But how fast did the country really grow? And how much did Chinese productivity improve?
Alwyn Young, at the University of Chicago, turned his attention to these questions in his recent “Gold Into Base Medals: Productivity Growth in the People’s Republic of China during the Reform Period,” in the December 2003 Journal of Political Economy. Here is an earlier, on-line version of the paper. Young, who is renowned for his thoroughness and care with data, found the following:
1. Chinese enterprises systematically underreport inflation.
2. In the non-agricultural sector, such underreporting accounts for 2.5 percent growth per year.
3. The main drivers of Chinese growth have been rising economic participation rates, improvements in educational attainment, and the movement of labor out of agriculture.
4. Labor and total factor productivity improvements, in the non-agricultural sector, are 2.6 and 1.4 percent respectively.
The bottom line: The Chinese economy has indeed done well. But once we cut through the mysteries of the numbers, we find an explicable reality. The Chinese growth experience is in reality comprised of “reasonable and comprehensible” numbers, rather than miracles. Young even wonders if the Chinese could not have done better than they did. On one hand, most economies would be delighted with a sustained 2.6 percent rate of labor productivity growth. But on the other hand, China has been moving away from a centrally planned economy. We might have expected even larger productivity boosts, given the incentive benefits of economic freedom. We also can interpret the figures as showing that China has enduring problems, and has not moved as far away from central planning as we might wish.
The return of Horatio Alger
Paul Krugman published a December article in The Nation called “The Death of Horatio Alger.” He argued “America actually is more of a caste society than we like to think. And the caste lines have lately become a lot more rigid.”
Recent research by Kerwin Kofi Charles and Erik Hurst looks at intergenerational mobility in more detail. Here is a brief summary of the article, and here is a pdf of an earlier version of the paper.
The published version, “The Correlation of Wealth Across Generations,” in the December 2003 Journal of Political Economy, tells us the following:
1. “Age-adjusted parental wealth, by itself, explains less than 10 percent of the variation in age-adjusted child wealth.”
2. 20 percent of parents in the lowest quintile of the parent’s wealth distribution have children who end up in the top two quintiles of their generation. One-quarter of the parents in the highest wealth quintile end up with kids in the two lowest quintiles.
3. The age-adjusted intergenerational wealth elasticity is 0.37. What does this mean? If parents have wealth 50 percent over the mean in their generation, the wealth of their children will be 18 percent above the mean in the childrens’ generation.
4. Income levels account for about one-half of the parent-child wealth relationship. In other words, high income parents tend to produce high income children, to some extent. The children earn much of their wealth. Education and financial gifts account for very little of the correlation across parents and children.
5. Parents and children allocate their financial portfolios similarly, whether for reasons of genes or learned behavior. These common patterns of investment and savings are the second biggest factor behind the intergenerational wealth correlations we observe.
Note that the figures above do not include income from bequests. In this regard they underestimate some of the intergenerational correlation. On the other hand, large numbers of individuals do not receive bequests until they are at least in the 50s, so the figures measure the opportunities open to them in the earlier stages of their lives. And note that the data are recent, the wealth of the children is measured in 1999.
So what is the bottom line? Yes, there is some correlation in wealth across the generations. But most of that correlation (almost seventy percent) comes from continued hard work and savings. The authors do not examine Krugman’s claim that mobility once was greater, but it seems premature to suggest that the American dream is gone.
Addendum: Cardinalcollective.com offers some useful discussion and links, here is Daniel Drezner’s treatment, again replete with links.
What does the American public believe?
Many things that ain’t so, according to our colleague Bryan Caplan. They believe that protectionism creates jobs, and they think that big corporations, rather than supply and demand, set the price of gasoline. See the link for a longer discussion and some citations of specific questionnaire evidence.
Here is my favorite bit:
The only category of spending that the public invariably wants to cut is foreign aid–which amounts to about 1% of the federal budget!
Believe it or not, it is not unusual for a member of the general public to think that foreign aid consists of forty percent of the United States government budget. Of all the biases we observe in voters, “suspicion of foreigners” appears to be the most pronounced. Bryan, who has done the relevant work here, is writing a book on how and why democracy can go astray through irrational voters, I await its release eagerly.
Here are some broader polls on NAFTA and free trade, compiled by AEI. Even the people who favor free trade, presumably for its benefits to consumers, think it costs us jobs. Given how the public feels, I am always surprised that we have as much free trade as we do.
The Commanding Heights
PBS has put the entire Commanding Heights television series on the net. Wisely, in addition to longer sections, they have broken the series down in a variety of ways so that you can find short clips on people, countries or ideas. Here is a quicktime video about the the day the tide turned.
Two things that you don’t want to see made
Hint: both contain a lot of pork. Senator John McCain has a list (link via Bruce Bartlett’s Talking Points.)
Here are a few of my favourites from recent legislation:
$1.5 million for the University of Nevada-Las Vegas to conduct safety and risk analysis. (I did some risk analysis in Las Vegas once, but not on taxpayer money).
$278,000 for asparagus technology and production (WA)
$2,000,000 for exotic pet diseases (CA)
$300,000 for future foods (IL)
Not less than $2,300,000 for the International Fertilizer Development Center. (Hmmm…Nahh, too easy.)
$1,000,000 for the Amanut Society.
Bear in mind that these projects have not been through any sort of peer-review process – these are pet projects of particular members of Congress that are inserted into larger bills.
Everything you always wanted to know about currency boards…
Here is an extensive web site on currency boards and dollarization, maintained by Kurt Schuler (conflict of interest notification: he is a former student of mine).
If you doubt Kurt’s thoroughness, follow the link to a piece on currency boards in St. Helena, yes that’s right the place where Napoleon went. The site also offers an extensive discussion of what went wrong in Argentina, again all links run through the main page. Thanks to the Mises blog for the pointer.
Which states donate the most money?
Here is the list, done in per capita terms.
Mississippi, the poorest state in the nation, is number one. Then comes Arkansas, South Dakota, Oklahoma, and Alabama, all relatively poor states. The richer states, Connecticut, New Jersey, and Massachusetts, all lie near the bottom.
Andrew Sullivan tells us that the giving states are those that tend to support Bush and the Republicans, suggesting that Republicans are more generous. Well, sort of, church giving is driving these results. Here is the distribution of giving for 2000, churches get 36.5% of all American donations, the single largest category. Art and culture get 11.4%. No doubt, religious states both give more and support Bush more.
What do Scandinavians export?
It is commonly known that Sweden and Norway stand among the top five nations for foreign aid per capita.
It is less commonly known that, in per capita terms, they are among the top five arms exporters in the world. Here is the whole list, along with a color-coded map.
And who is number one on the list? Macedonia. The U.S. is number ten, France number seven.
From Nationmaster.com, a valuable data source, growing by the day.
Do you want to know cinema attendance per capita? The U.S. is number two, just behind Iceland. Georgia is number six, and Lebanon is number ten.
Business Regulation
Andrei Shleifer and colleagues have engaged in a massive collection of data on legal regimes around the world. The World Bank has now released a major report written by the same group called Doing Business 2004 (summary here). In addition, the data from their project is available on the World Bank website Doing Business. This is a major resource for economists.
Here’s a nice graph from the report (click to expand).
