Category: Data Source

Child street vendors in India

by  Tyler Cowen in

Street vending is an important source of self-employment for the urban poor. I use primary observation, survey, and experimental data from Delhi to study this market. Partnering with street vendors to randomize both prices and the passersby they solicit to try to make sales, I find that even with identical goods, child vendors are 97% more likely to make a sale and earn more than twice that of adult vendors. Despite no differences in valuation for the goods, couples, and female customers are 90% and 27% more likely to buy than male customers. Females and couples are 50% more likely to be targeted by vendors than males and are charged higher prices on average (1.15-2 times) than males. I show that these findings are consistent with a model that incorporates altruism and a cost of refusal in the buyer’s decision-making. I find that passersby are more altruistic towards children than adults in an incentivized dictator game. Additionally, requesting passersby to buy, increases the purchasing probability twofold for adult vendors and fourfold for child vendors. Survey data confirms that vendors target females or couples, over males, because they consider who would find it harder to refuse. The paper demonstrates that sellers leverage insights into consumer social preferences to inform their selling strategies, which can be effective in markets with personal selling. 

That is from the job market paper of Ronak Jain, job market candidate from Harvard, updated draft to be uploaded by mid-November.

Occupational dynasties

by  Tyler Cowen in

Children often follow their parents in the same occupation. The literature has previously documented occupational persistence, but whether it has economic implications remains an open question. Using administrative data from the Netherlands and a unique policy experiment, this paper documents the prevalence of occupational transmission and estimates its effects and selection for medical doctors. I find that children are twice as likely to enter a parent’s field, with this rate substantially increasing for those above the top quartile of the parental income distribution. In addition, OLS estimated returns to occupational persistence are 2.5%. I focus on the medical profession to decompose these “naive” returns into a treatment and a selection effect of occupational transmission. I find that ’dynastic’ doctors experience a 24% income boost relative to their ’non-dynastic’ counterparts, corresponding to 58% higher returns from the medical profession. Furthermore, I identify a substantial negative selection bias in the OLS estimates, explaining why naive returns considerably underestimate the effects of occupational persistence. The large treatment effect together with the unequal incidence along the income distribution highlights the critical role of occupational transmission in exacerbating inequalities.

That is from Maria Ventura, a job market candidate from LSE.

Income security for American workers has been rising

by  Tyler Cowen in

American workers are doing relatively well, but there is still a lot of anxiety about their plight. To many commentators, the US worker is suffering: Whether the culprit is outsourcing, trade with China, or the sheer daily turbulence of capitalism, that worker faces increasingly volatile income prospects. One political scientist even wrote a whole book about this worry.

Fortunately, the reality is much brighter. One study of this question, performed by a group of economists from Wharton, Stanford, the University of Minnesota and Brookings, suggests that income volatility has mostly been declining for the last seven decades — and especially for the last four. Whatever volatility risks remain, they used to be much worse.

One striking feature of these results, posted last week and based on data from the US Census Bureau and the Social Security Administration, is how widespread are the gains in job security. They are not going to just a scant few workers. They are long-running for both women (dating to the 1950s) and men (dating to the 1980s). They hold across most demographic groups and by gender, age, earnings level and cohort.

Here is the rest of my latest Bloomberg column.

Behavioral Economics and GPT-4: From William Shakespeare to Elena Ferrante

by  Tyler Cowen in

There is a new paper on LLMs by Gabriel Abrams, here is the abstract:

We prompted GPT-4 (a large language model) to play the Dictator game, a classic behavioral economics experiment, as 148 literary fictional characters from the 17th century to the 21st century. 

Of literary interest, this paper analyzed character selfishness by century, the relative frequency of literary character personality traits, and the average valence of these traits. The paper also analyzed character gender differences in selfishness.

From an economics/AI perspective, this paper generates specific and quantifiable Turing tests which the model passed for zero price effect, lack of spitefulness and altruism, and failed for human sensitivity to relative ordinal position and price elasticity (elasticity is significantly lower than humans). Model updates from March to August 2023 had relatively minor impacts on Turing test outcomes.

There is a general and mainly monotonic decrease in selfish behavior over time in literary characters. 50% of the decisions of characters from the 17th century are selfish compared to just 19% of the decisions of characters from the 21st century. Overall, humans exhibited much more selfish behavior than AI characters, with 51% of human decisions being selfish compared to 32% of decisions made by AI characters.

Historical literary characters have a surprisingly strong net positive valence across 2,785 personality traits generated by GPT-4 (3.2X more positive than negative). However, valence varied significantly across centuries. The most positive century, in terms of personality traits, was the 21st — over 10X the ratio of positive to negative traits. The least positive century was the 17th at just 1.8X. “Empathetic,” “fair” and “selfless,” were the most overweight traits in the 20th century. Conversely, “manipulative,” “ambitious” and “ruthless” were the most overweight traits in the 17th century.

Male characters were more selfish than female characters: 35% of male decisions were selfish compared to just 24% for female characters. The skew was highest in the 17th century where selfish decisions for male and female were 62% and 20% respectively.

This analysis offers a specific and quantifiable partial Turing test. In a few ways, the model is remarkably human-like; The key human-like characteristics are the zero price effect, lack of spitefulness and altruism. However, in other ways, GPT-4 reflects unusual or inhuman preferences. The model does not appear to have human sensitivity to relative ordinal position and has significantly lower price elasticity than humans.

Model updates in GPT-4 have made it slightly more sensitive to ordinal value, but not more selfish. The model shows preference consistency across model runs for each character with respect to selfishness.

To which journal might you advise him to send this paper?

What predicts anti-Semitism?

by  Tyler Cowen in

Two cross-sectional studies were carried out in order to identify predictors of antisemitism, measured using the Generalised Antisemitism or GeAs scale. In the first, which used a self-selecting sample of UK-resident adults (n = 809), age, gender, ethnicity, and educational level as well as a wide range of ideological predictors were analysed as bivariate predictors of antisemitism. In the second, which used a representative sample of UK-resident adults (n = 1853), the same demographic predictors plus the non-demographic predictors found to have the strongest bivariate relationships with Generalised Antisemitism in the previous study were used to construct a linear model with multiple predictors. Ethnicity, support for totalitarian government, belief in malevolent global conspiracies, and anti-hierarchical aggression were identified as the strongest predictors of Generalised Antisemitism. However, support for totalitarian government was only found to predict ‘old’ antisemitic attitudes (measured using the Judeophobic Antisemitism or JpAs subscale) and not ‘new’ antisemitic attitudes (measured using the Antizionist Antisemitism or AzAs subscale), whereas ethnicity, anti-hierarchical aggression, and belief in malevolent global conspiracies were found to predict both ‘old’ and ‘new’ antisemitic attitudes. This finding adds nuance to ongoing debates about whether antisemitism is more prevalent on the political right or left, by suggesting that (at least in the UK) it is instead associated with a conspiracist view of the world, a desire to overturn the social order, and a preference for authoritarian forms of government—all of which may exist on the right, the left, and elsewhere.

That is from a recent paper by Daniel Allington, David Hirsh, and Louise Katz.  Via Jay Van Bavel.

Covid vaccines and mortality

by  Tyler Cowen in

The global COVID-19 vaccination campaign is the largest public health campaign in history, with over 2 billion people fully vaccinated within the first 8 months. Nevertheless, the impact of this campaign on all-cause mortality is not well understood. Leveraging the staggered rollout of vaccines, we find that the vaccination campaign across 141 countries averted 2.4 million excess deaths, valued at $6.5 trillion. We also find that an equitable counterfactual distribution of vaccines, with vaccination in each country proportional to its population, would have saved roughly 670,000 more lives. However, this distribution approach would have reduced the total value of averted deaths by $1.8 trillion due to redistribution of vaccines from high-income to low-income countries.

That is from a new NBER working paper by Virat Agrawal, Neeraj Sood, and Christopher M. Whaley.

Where did all the Paraguayans go?

by  Tyler Cowen in

And when Paraguay’s National Statistical Institute released preliminary data on August 31st, they pointed to a surprising conclusion. Unusually for a fast-growing, emerging economy, the population appeared to have drastically shrunk. The last census, in 2012, found that Paraguayans numbered nearly 6.5m. Official projections held that the population would grow to almost 7.5m by now. Instead, the new survey points to a figure of barely 6.1m. Many reacted with derision. “We will basically have to plan for a new Paraguay,” a nonplussed Carlos Valdovinos, the economy minister, told reporters. Even the director of the INE, Iván Ojeda, admitted to having initial doubts about the results.

But the mystery can be explained, says Norma Medina, an official. Nearly half a million of her compatriots have migrated since the turn of the millennium, including many young women taking up jobs as nurses and nannies in Spain and Argentina. Whereas Paraguayan families once reliably produced 3.5 children on average, that figure has fallen sharply over the past 20 years, to 2.3. Life expectancy has risen, but the pandemic kept it in the low 70s.

More to the point, the 2012 census was botched…

Here is more from The Economist.

New data on founder personalities and firm success

by  Tyler Cowen in

Here, we show that founder personality traits are a significant feature of a firm’s ultimate success. We draw upon detailed data about the success of a large-scale global sample of startups (n = 21,187). We find that the Big Five personality traits of startup founders across 30 dimensions significantly differ from that of the population at large. Key personality facets that distinguish successful entrepreneurs include a preference for variety, novelty and starting new things (openness to adventure), like being the centre of attention (lower levels of modesty) and being exuberant (higher activity levels). We do not find one ’Founder-type’ personality; instead, six different personality types appear. Our results also demonstrate the benefits of larger, personality-diverse teams in startups, which show an increased likelihood of success. The findings emphasise the role of the diversity of personality types as a novel dimension of team diversity that influences performance and success.

That is from a new paper by Paul X. McCarthy, et.al..

Via Nabeel.

“Does Paid Sick Leave Facilitate Reproductive Choice?”

by  Tyler Cowen in

I might give the paper a slightly different title, but:

Unlike most advanced countries, the U.S. does not have a federal paid sick leave (PSL) policy; however, multiple states have adopted PSL mandates. PSL can facilitate healthcare use among women of child−bearing ages, including use of family planning services such as contraception, in−vitro fertilization, or abortion services. Use of these services, in turn, can increase or decrease birth rates. We combine administrative and survey data with difference-in-differences methods to shed light on these possibilities. Our findings indicate that state PSL mandates reduce birth rates, potentially through increased use of contraception but not changes in abortion services. We offer suggestive evidence of heterogeneity in birth rate effects by age, education, and race. Our findings imply that PSL policies may help women balance family and work responsibilities, and facilitate their reproductive choices.

That is a new NBER working paper by Johanna Catherine, Maclean, Ioana Popovici, and Christopher J. Ruhm.

The Effects of Adverse Childhood Experiences on Adults’ Subjective Wellbeing

by  Tyler Cowen in

Using four cross-sectional data files for the United States and Europe we show that Adverse Childhood Experiences (ACE) have a significant impact on subjective wellbeing (SWB) in adulthood. Death of a parent, parental separation or divorce, financial difficulties, the prolonged absence of a parent, quarreling between parents, parental unemployment, sexual assault, experiencing long-term health problems, being bullied at school and being beaten or punched as a child all have long-term impacts on wellbeing. These experiences impact a wide range of wellbeing measures in adulthood including satisfaction with many aspects of everyday life, happiness and life satisfaction, self-assessed health, and are positively linked to measures of negative affect including the GHQ6. The evidence linking ACEs to lower SWB in adulthood is consistent across fifty different measures including sixteen positive affect and twenty-six negative affect measures relating to assessments of one’s one life, and eight variables capturing how the individual feels about the area she lives in, including unemployment, drugs, violence and vandalism plus democracy in their country. Trauma in childhood is long lasting.

That is from a new paper by David G. Blanchflower and Alex Bryson.  Via the excellent Kevin Lewis.  Perhaps those are not surprising results, but these are some of the most important questions for human welfare.