Category: Data Source

The effects of fluoride in drinking water

by  Tyler Cowen in

Water fluoridation is a common but debated public policy. In this paper, we use Swedish registry data to study the causal effects of fluoride in drinking water. We exploit exogenous variation in natural fluoride stemming from variation in geological characteristics at water sources to identify its effects. First, we reconfirm the long-established positive effect of fluoride on dental health. Second, we estimate a zero effect on cognitive ability in contrast to several recent debated epidemiological studies. Third, fluoride is furthermore found to increase labor income. This effect is foremost driven by individuals from a lower socioeconomic background.

That is from a forthcoming JPE paper by Linuz Aggeborn and Mattias Öhman.

Gender and the dynamics of economics seminars

by  Tyler Cowen in

This paper reports the results of the first systematic attempt at quantitatively measuring the seminar culture within economics and testing whether it is gender neutral. We collected data on every interaction between presenters and their audience in hundreds of research seminars and job market talks across most leading economics departments, as well as during summer conferences. We find that women presenters are treated differently than their male counterparts. Women are asked more questions during a seminar and the questions asked of women presenters are more likely to be patronizing or hostile. These effects are not due to women presenting in different fields, different seminar series, or different topics, as our analysis controls for the institution, seminar series, and JEL codes associated with each presentation. Moreover, it appears that there are important differences by field and that these differences are not uniformly mitigated by more rigid seminar formats. Our findings add to an emerging literature documenting ways in which women economists are treated differently than men, and suggest yet another potential explanation for their under-representation at senior levels within the economics profession.

That is from a new paper by Pascaline Dupas, Alicia Sasser Modestino, Muriel Niederle, Justin Wolfers,
and the Seminar Dynamics Collective.  Via Kris Gulati.

Why Does Teacher Quality Matter?

by  Tyler Cowen in

From Mike Insler, Alexander F. McQuoid, Ahmed Rahman, and Katherine A. Smith, here is an apparently major result:

This work disentangles aspects of teacher quality that impact student learning and performance. We exploit detailed data from post-secondary education that links students from randomly assigned instructors in introductory-level courses to the students’ performances in follow-on courses for a wide variety of subjects. For a range of first-semester courses, we have both an objective score (based on common exams graded by committee) and a subjective grade provided by the instructor. We find that instructors who help boost the common final exam scores of their students also boost their performance in the follow-on course. Instructors who tend to give out easier subjective grades however dramatically hurt subsequent student performance. Exploring a variety of mechanisms, we suggest that instructors harm students not by “teaching to the test,” but rather by producing misleading signals regarding the difficulty of the subject and the “soft skills” needed for college success. This effect is stronger in non-STEM fields, among female students, and among extroverted students. Faculty that are well-liked by students—and thus likely prized by university administrators—and considered to be easy have particularly pernicious effects on subsequent student performance.

Via the excellent Kevin Lewis.

Short selling and the price discovery process

by  Tyler Cowen in

We show that stock prices are more accurate when short sellers are more active. First, in a large panel of NYSE-listed stocks, intraday informational efficiency of prices improves with greater shorting flow. Second, at monthly and annual horizons, more shorting flow accelerates the incorporation of public information into prices. Third, greater shorting flow reduces post-earnings-announcement drift for negative earnings surprises. Fourth, short sellers change their trading around extreme return events in a way that aids price discovery and reduces divergence from fundamental values. These results are robust to various econometric specifications, and their magnitude is economically meaningful.

That is from 2013 research by Boehmer and Wu.  Next, beware of any paper doing cross-sectional comparisons across 111 countries, but here is how the resulting correlations go (link):

We find that when short-selling is possible, aggregate stock returns are less volatile and there is greater liquidity. When countries start to permit short-selling, aggregate stock price increases, implying lower a cost of capital. There is no evidence that short-sale restrictions affect either the level of skewness of returns or the probability of a market crash. Collectively, our empirical evidence suggests that allowing short-selling enhances market quality.

While I would not draw very firm conclusions from that, it is not going to help the case against short-selling.  Here is a general literature survey from 2020.  Lots is murky, but again the evidence is not supporting the often rather polemic critics.  A very general point is that short selling is less different from “plain selling” than you might think, all the more so if you consider dynamic portfolio strategies (which can replicate just about any underlying desired net position).

Furthermore, these days there is more choice than ever before.  If the asset you have in mind is somehow too fragile to withstand short-selling pressure, but is valuable nonetheless, staying private never has been easier and with some degree of liquidity to boot.

Why U.S. Immigration Barriers Matter for the Global Advancement of Science

by  Tyler Cowen in

From Ruchir Agarwal, Ina Ganguli, Patrick Gaule, and Geoff Smith:

This paper studies the impact of U.S. immigration barriers on global knowledge production. We present four key findings. First, among Nobel Prize winners and Fields Medalists, migrants to the U.S. play a central role in the global knowledge network— representing 20-33% of the frontier knowledge producers. Second, using novel survey data and hand-curated life-histories of International Math Olympiad (IMO) medalists, we show that migrants to the U.S. are up to six times more productive than migrants to other countries—even after accounting for talent during one’s teenage years. Third, financing costs are a key factor preventing foreign talent from migrating abroad to pursue their dream careers, particularly talent from developing countries. Fourth, certain ‘push’ incentives that reduce immigration barriers – by addressing financing constraints for top foreign talent – could increase the global scientific output of future cohorts by 42% percent. We conclude by discussing policy options for the U.S. and the global scientific community.

Via the excellent Kevin Lewis.

Money is good, at more margins than you might have thought

by  Tyler Cowen in

Past research has found that experienced well-being does not increase above incomes of $75,000/y. This finding has been the focus of substantial attention from researchers and the general public, yet is based on a dataset with a measure of experienced well-being that may or may not be indicative of actual emotional experience (retrospective, dichotomous reports). Here, over one million real-time reports of experienced well-being from a large US sample show evidence that experienced well-being rises linearly with log income, with an equally steep slope above $80,000 as below it. This suggests that higher incomes may still have potential to improve people’s day-to-day well-being, rather than having already reached a plateau for many people in wealthy countries.

That is from a new paper by Matthew A. Killingsworth.  Via the excellent Kevin Lewis.

U.S.A. fact of the day

by  Tyler Cowen in

The U.S. also experienced its most violent year in decades with an unprecedented rise in homicides. The Gun Violence Archive reported that more than 19,000 people died in shootings or firearm-related incidents in 2020, the highest figure in over two decades.

New Orleans-based crime analyst Jeff Asher took a closer look at the number of murders in 57 major American cities and he found that the number of offenses grew in 51 of them. He only focused on agencies where data was available and most of them had figures through November or December of 2020. Growth in violent crime varied by city with Seattle seeing a 74 percent spike in homicides between 2019 and 2020 while Chicago and Boston saw their offenses grow 55.5 percent and 54 percent, respectively. Elsewhere, Washington D.C. and Las Vegas saw growth in their murder offences, albeit at a slower pace of less than 20 percent.

New York’s homicide count went up by nearly 40 percent with Mayor Bill de Blasio stating that the figures should worry all New Yorkers and it has to stop.

Here is the full link.  Via Noah.

Our aggregate demand shortfall?

by  Tyler Cowen in

From Ben Casselman: “…unlike with most measures of the economy, retail sales are actually ABOVE their prepandemic level. Up 2.6% from February, and 2.9% over the past year. So not a clean story like with jobs.”

And from Larry Summers: ” Total household income is 8% above what anybody thought it would be before Covid.”

There are very real macroeconomic problems right now, but please keep the following in mind while drawing up a “demand-based” stimulus plan.  Focus on public health!

Ireland fact of the day, coming soon to a state near you

by  Tyler Cowen in

Some experts estimate this could mean, if we do not accelerate the pace of vaccination, one million deaths for the United States.

Who Runs the AEA?

by  Tyler Cowen in

That is a new paper by Kevin D. Hoover and Andrej Svorenčík:

The leadership structure of the American Economics Association is documented using a biographical database covering every officer and losing candidate for AEA offices from 1950 to 2019. The analysis focuses on institutional affiliations by education and employment. The structure is strongly hierarchical. A few institutions dominate the leadership, and their dominance has become markedly stronger over time. Broadly two types of explanations are explored: that institutional dominance is based on academic merit or that it based on self-perpetuating privilege. Network effects that might explain the dynamic of increasing concentration are also investigated.

I wonder how the AEA budget will hold up now that interviews can be done by Zoom and meeting attendance is not required.

Via the excellent Kevin Lewis.

We are more risk-averse for other people

by  Tyler Cowen in

From Pavel D. Atanasov:

Are we more inclined to take risks for ourselves rather than on someone else’s behalf? The current study reviews and summarizes 28 effects from 18 studies (n=4,784). Across all studies, choices for others were significantly more risk-averse than choices for self (d=0.15, p=0.012). Two objective features of the choices moderated these effects: potential losses and reciprocal relationships. First, self-other differences in risk preferences were significant in the presence of potential losses (k=14, d=0.33, p<.001), and not significant (k=14, d=-0.06, p=0.473) in the gains-only domain (Q=12.56, p=<0.001). Choices for others were significantly more risk-averse when decision makers were reciprocally related to recipients (k=6, d=0.33, p=0.018) but no different in the absence of such a relationship (d=0.11, p=0.115). Reciprocal relationship was a marginally significant predictor (Q=2.02, p=0.155). Results are shown separately by publication status and by context (medical, economic game, hypothetical choice). A relational model of surrogate risk taking is proposed to explain the pattern of results, which emphasizes the importance of chooser-recipient relationships, and the tendency of choosers to minimize anticipated blame from losses, rather than maximizing credit for gains. Implications for benefits design, medical and managerial decision making are discussed.

At least that is what the science says.

How will we interpret data on the new strain?

by  Tyler Cowen in

Instead of exploding relative to a baseline of 0 cases (like in March), the new strain will be exploding relative to a baseline of around 200,000 cases per day. As a result, day-to-day random noise will completely mask any increase in infections from the new strain until it becomes dominant — around day 40 in the above chart. This means that if people use the overall numbers to guide their levels of precaution, our reaction time could lag by two or three weeks compared to March — as if we had locked down in early April instead of mid-March.

Now, this isn’t entirely a correct comparison because the rate of exponential growth will be much below 1.36; a reasonable guess might be 1.12. (You can get this by assuming R = 1.6 and assuming a generation time of 4 days.) But the overall point is the same: because any increase in the prevalence of the new strain will be masked by noise in current COVID levels, the new strain won’t be evident in overall numbers until it starts contributing hundreds of thousands of daily infections.

That is from Eric Neyman, good points thought note we will have independent measures of the spread of the new strain, with shorter lags than is currently the case.

Sudan estimate of the day

by  Tyler Cowen in

…researchers have just declared that there was a huge, hidden outbreak in the capital of Sudan. In the absence of a good death registration system, they used a molecular and serological survey and an online one distributed on Facebook, where people reported their symptoms and whether they’d had a test. The researchers calculated that Covid-19 killed 16,000 more people than the 477 deaths confirmed by mid-November in Khartoum, which has a population roughly the size of Wisconsin’s.

Here is the full NYT article by Ruth Maclean.  The main theme of the piece is that Africa may not have escaped Covid by nearly as much as we had thought.

The racialization of international trade preferences

by  Tyler Cowen in

…we find that white individuals have become less supportive of trade than minorities and that whites are more likely than minorities to favor trade with highly similar countries. We suggest that minority support for trade is due to four well‐documented differences in the psychological predispositions of whites and minorities in the United States. Minorities have lower levels of racial prejudice, are lower in social dominance, and express less nationalism than whites. At the same time, there is evidence of rising ingroup racial consciousness among whites. Each of these characteristics has been independently linked to trade support in a direction encouraging greater support for trade among minorities. As the United States grows ever closer to becoming a “majority minority” nation, the racialization of trade attitudes may stimulate shifts in the likely future of America’s trade relationships.

That is from a new paper by Diana Mutz, Edward D. Mansfield, and Eunij Kim.  Via the excellent Kevin Lewis.