Category: Data Source

Unexpected Inflation and the Redistribution of Wealth

by  Alex Tabarrok in

We have a great new MRU video giving students some practice with unexpected inflation and the redistribution of wealth. As always, we like to teach a bit of history with our economics so you might also gets some perspective on William Jennings Bryan and the cross of gold. This video is part of a new Money & Inflation Unit Plan which has lots of excellent resources including lessons plans, interactive games and more on money and inflation for teachers of economics. All free, as always.

Of course, if you do teach principles of economics all of this wonderful material pairs beautifully with the best principles of economics textbook, Modern Principles.

What we know about road deaths during the pandemic

by  Tyler Cowen in

The study verified that the absence of traffic jams played some role in allowing drivers to reach dangerous speeds on too-wide roads, but the researchers also found that the most significant differences between their forecast and real-world death totals happened in the dead of night, when most roads have always been congestion-free.

Between 10 p.mm and 1:59 a.m., deaths were nearly 22 percent higher than expected; during the typical morning rush hours, by contrast, deaths were actually 6.3 percent lower than the model anticipated they’d be. The late afternoon and evening rush hour, meanwhile, “did not differ significantly from the forecast.”

…2020 also saw an increase in hit-and-runs, which clocked in at 31.2 percent higher than originally forecast.

…According to AAA, “about 70 percent of the entire increase in driver fatal crash involvement [between May and December of 2020] was specifically among males under the age of 40.” Tefft suspects that increase may have been particularly driven by the minuscule subset of young, male motorists who were emboldened to do risky things on the road when the world shut down, though the data doesn’t tell him exactly why.

The article has further points of interest.

Where are all the workers?

by  Tyler Cowen in

The subtitle of the paper is “From Great Resignation to Quiet Quitting”, here is the abstract:

To better understand the tight post-pandemic labor market in the US, we decompose the decline in aggregate hours worked into the extensive (fewer people working) and the intensive margin changes (workers working fewer hours). Although the pre-existing trend of lower labor force participation especially by young men without a bachelor’s degree accounts for some of the decline in aggregate hours, the intensive margin accounts for more than half of the decline between 2019 and 2022. The decline in hours among workers was larger for men than women. Among men, the decline was larger for those with a bachelor’s degree than those with less education, for prime-age workers than older workers, and also for those who already worked long hours and had high earnings. Workers’ hours reduction can explain why the labor market is even tighter than what is expected at the current levels of unemployment and labor force participation.

Dain Lee, Jinhyeok Park, and Yongseok Shin wrote that new NBER working paper, important work for understanding our current time.

“Unveiling the Price of Obscenity”

by  Tyler Cowen in

Does legitimating sinful activities have a cost? This paper examines the relationship between housing demand and overt prostitution in Amsterdam. In our empirical design, we exploit the spatial discontinuity in the location of brothel windows created by canals, combined with a policy that forcibly closed some of the windows near these canals. To pin down their effect on housing prices, we apply a difference-in-discontinuity (DiD) estimator, which controls for the precise location of brothel windows and the effect of other policies and local developments. Our results show that the housing prices are discontinuous at the bordering canals, and this discontinuity nearly disappears after closures. The discontinuity is also found to decrease with the distance to brothels, disappearing after 300 yards. Our estimates indicate that homes right next to sex workers were 30 percent cheaper before the closures. This result seems unrelated to the presence of other businesses, such as bars and cannabis shops. Instead, the price discount is partly explained by petty crimes. However, 73 percent of the effect remains unexplained after controlling for many forms of crime and risk perception. Our findings suggest that households tend to be against the visible presence of sex workers and related nuisances, reaffirming their marginalization.

That is from a new paper by Erasmo Giambona and Rafael P. Ribas, via a highly reputable man.

Are scientific breakthroughs less fundamental?

by  Tyler Cowen in

From Max Kozlov, do note the data do not cover the very latest events:

The number of science and technology research papers published has skyrocketed over the past few decades — but the ‘disruptiveness’ of those papers has dropped, according to an analysis of how radically papers depart from the previous literature.

Data from millions of manuscripts show that, compared with the mid-twentieth century, research done in the 2000s was much more likely to incrementally push science forward than to veer off in a new direction and render previous work obsolete. Analysis of patents from 1976 to 2010 showed the same trend.

“The data suggest something is changing,” says Russell Funk, a sociologist at the University of Minnesota in Minneapolis and a co-author of the analysis, which was published on 4 January in Nature. “You don’t have quite the same intensity of breakthrough discoveries you once had.”

The authors reasoned that if a study was highly disruptive, subsequent research would be less likely to cite the study’s references, and instead cite the study itself. Using the citation data from 45 million manuscripts and 3.9 million patents, the researchers calculated a measure of disruptiveness, called the ‘CD index’, in which values ranged from –1 for the least disruptive work to 1 for the most disruptive.

The average CD index declined by more than 90% between 1945 and 2010 for research manuscripts (see ‘Disruptive science dwindles’), and by more than 78% from 1980 to 2010 for patents. Disruptiveness declined in all of the analysed research fields and patent types, even when factoring in potential differences in factors such as citation practices…

The authors also analysed the most common verbs used in manuscripts and found that whereas research in the 1950s was more likely to use words evoking creation or discovery such as, ‘produce’ or ‘determine’, that done in the 2010s was more likely to refer to incremental progress, using terms such as ‘improve’ or ‘enhance’.

Here is the piece, and here is the original research by Michael Park Erin Leahey, and Russell J. funk.

Wealth across the generations

by  Tyler Cowen in

“The main takeaways:

  • Millennials are roughly equal in wealth per capita to Baby Boomers and Gen X at the same age.
  • Gen X is currently much wealthier than Boomers were at the same age: about $100,000 per capita or 18% greater
  • Wealth has declined significantly in 2022, but the hasn’t affected Millennials very much since they have very little wealth in the stock market (real estate is by far their largest wealth category)”

That is from Jeremy Horpendahl (no double indent performed by me), via Rich Dewey.

Lead and violence: all the evidence

by  Tyler Cowen in

Kevin Drum offers a response to a recent meta-study on the link between lead and violence, blogged by me here.

I’ll take this moment to explain why the lead-violence connection never has sat that well with me.

Let’s say we are trying to explain why 2022 America is richer than the Stone Age.  We could cite “incentives, policy, and culture,” noting that any accumulated stock of wealth also came from these (and possibly other) factors.  You might disagree about which policies, or which cultural features of modernity, and so on, but the answer to the question pretty clearly lies in that direction.

Now let us say we are trying to explain why America today is richer than Albania today.  You would do just fine to start with “incentives, policy, and culture.”  You could add in some additional factors, such as superior natural resources, but you would be on the same track as with the Stone Age comparison.  You would not have to summon up an entirely new theory.

Why is Nashville richer than Chattanooga?  Again, start with “incentives, policy, and culture,” noting you might need again supplementary factors.

Broadly the same theory is applying to all of these different comparisons.  Across time, across space, across countries, and across cities.  There is something about this broad unity that is methodologically satisfying, and it helps confirm our view that we are on the right track in our inquiries.

Now consider the lead-crime connection.  Insofar as you elevate the connection as very strong, you are tossing out the chance of achieving that kind of unity.

Why was violent crime so often more frequent in earlier periods of human history?  It wasn’t lead, at least not for most periods, perhaps not for any of the much earlier periods.

Why was there more peace in Ethiopia five years ago than in the last few years?  Again, whatever the reasons it wasn’t a change in lead exposure.

Why is the murder rate in Haiti today much higher than during the Duvaliers?  Again, no one thinks the answer has much to do with changes in lead exposure.  Mainly it is because political order has collapsed, and the country is ruled by gangs rather than by an autocratic tyranny.

How about the violence rate in the very peaceful parts of Africa compared to the very violent parts?  Again, lead is rarely if ever going to be the answer to that one.

So we know in the true, overall model big changes in violence can happen without lead exposure being the driving force.  Very big changes.  In fact those big changes in violence rates, without lead being a major factor, happen all the time.

And many of those big changes are mysterious in their causes.  It really isn’t so simple to explain why different parts of Africa have different murder rates, often by very significant amounts.  You can hack away at the problem (e.g, Kenya and Tanzania have very different histories), but there is no simple “go to” theory.  Furthermore, since both violence and peace often feed upon themselves, in a “broken windows” increasing returns sort of way, the initial causes behind big differences in violence outcomes might sometimes be fairly slight and hard to find.

That to my mind makes “the true model” somewhat biased against lead being a major factor in changes in violence rates.  In the broader scheme of things, lead exposure seems to be a supplementary factor rather than a major factor.  It doesn’t rule out lead as a major factor, either logically or statistically, if you wish to explain why U.S. violence fell from the 1960s to today.  But the true model has a lot of non-lead, major shifts in violence, often unexplained or hard to explain.

Addendum: I am also surprised by Kevin’s comment that there isn’t likely to be much publication bias in lead-violence studies.  I take publication bias to be a default assumption, namely the desire to show a positive result to get published.  That hardly seems unlikely to me at all.  And in this particular case there is even a particular political reason to wish to pin a lot of the blame on lead exposure.  Correctly or not, people on the Left are much more likely to elevate lead exposure as a cause of social problems.

And to repeat myself, just to be perfectly clear, it strikes me as unlikely that the effect of lead exposure on violence in zero is the last seventy years of the United States.

A new paper on the Industrial Revolution

by  Tyler Cowen in

I have not yet read it, but surely it seems of importance:

Although there are many competing explanations for the Industrial Revolution, there has been no effort to evaluate them econometrically. This paper analyzes how the very different patterns of growth across the counties of England between the 1760s and 1830s can be explained by a wide range of potential variables. We find that industrialization occurred in areas that began with low wages but high mechanical skills, whereas other variables, such as literacy, banks, and proximity to coal, have little explanatory power. Against the view that living standards were stagnant during the Industrial Revolution, we find that real wages rose sharply in the industrializing north and declined in the previously prosperous south.

That is by Morgan Kelly, Joel Mokyr, and Cormac Ó Gráda, forthcoming in the JPE.  Here are earlier versions of the paper.

The future of public transit?

by  Tyler Cowen in

Via the excellent Samir Varma.

Does reducing lead exposure limit crime?

by  Tyler Cowen in

These results seem a bit underwhelming, and furthermore there seems to be publication bias, this is all from a recent meta-study on lead and crime.  Here goes:

Does lead pollution increase crime? We perform the first meta-analysis of the effect of lead on crime by pooling 529 estimates from 24 studies. We find evidence of publication bias across a range of tests. This publication bias means that the effect of lead is overstated in the literature. We perform over 1 million meta-regression specifications, controlling for this bias, and conditioning on observable between-study heterogeneity. When we restrict our analysis to only high-quality studies that address endogeneity the estimated mean effect size is close to zero. When we use the full sample, the mean effect size is a partial correlation coefficient of 0.11, over ten times larger than the high-quality sample. We calculate a plausible elasticity range of 0.22-0.02 for the full sample and 0.03-0.00 for the high-quality sample. Back-ofenvelope calculations suggest that the fall in lead over recent decades is responsible for between 36%-0% of the fall in homicide in the US. Our results suggest lead does not explain the majority of the large fall in crime observed in some countries, and additional explanations are needed.

Here is one image from the paper:

Image

The authors on the paper are Anthony Higney, Nick Hanley, and Mirko Moroa.  I have long been agnostic about the lead-crime hypothesis, simply because I never had the time to look into it, rather than for any particular substantive reason.  (I suppose I did have some worries that the time series and cross-national estimates seemed strongly at variance.)  I can report that my belief in it is weakening…

In-Person Schooling and Youth Suicide

by  Tyler Cowen in

School attendance, possibly through mechanisms of status competition and bullying, seems to raise the rate of youth suicide:

This study explores the effect of in-person schooling on youth suicide. We document three key findings. First, using data from the National Vital Statistics System from 1990-2019, we document the historical association between teen suicides and the school calendar. We show that suicides among 12-to-18-year-olds are highest during months of the school year and lowest during summer months (June through August) and also establish that areas with schools starting in early August experience increases in teen suicides in August, while areas with schools starting in September don’t see youth suicides rise until September. Second, we show that this seasonal pattern dramatically changed in 2020. Teen suicides plummeted in March 2020, when the COVID-19 pandemic began in the U.S. and remained low throughout the summer before rising in Fall 2020 when many K-12 schools returned to in-person instruction. Third, using county-level variation in school reopenings in Fall 2020 and Spring 2021—proxied by anonymized SafeGraph smartphone data on elementary and secondary school foot traffic—we find that returning from online to in-person schooling was associated with a 12-to-18 percent increase teen suicides. This result is robust to controls for seasonal effects and general lockdown effects (proxied by restaurant and bar foot traffic), and survives falsification tests using suicides among young adults ages 19-to-25. Auxiliary analyses using Google Trends queries and the Youth Risk Behavior Survey suggests that bullying victimization may be an important mechanism.

That is from a new NBER working paper by Benjamin Hansen, Joseph J. Sabia, and Jessamyn Schaller.  I am reminded of my earlier Bloomberg column on Covid and school reopening.

How happy are Americans (and Danes) anyway?

by  Tyler Cowen in

That is the topic of my latest Bloomberg column, here is one excerpt:

Two economists, David G. Blanchflower of Dartmouth and Alex Bryson of University College London, have come up with a new and more intuitive way to measure well-being. The results are striking. If you consider US states as comparable to countries, 16 of the top 20 political units in the world for well-being are in the US — including the top seven.

Many happiness surveys ask individuals how satisfied they are with their lives. That is one way of phrasing the happiness question, but it has its biases. It tends to favor nations where people have a strong sense of self-satisfaction — or, if you want to put a more negative gloss on it, where the people are somewhat smug. Those are some of the studies in which Finland and Denmark come in first.

The genius of this most recent study is that it considers both positive and negative affect, and gives countries (and US states) separate ratings for the two. In other words, it recognizes there is more than one dimension to well-being. It lists four variables as part of negative affect: pain, sadness, anger and worry. Positive affect consists of four measures: life satisfaction, enjoyment, smiling and being well-rested. So life satisfaction is only one part of the measure.

One interesting result is that nations that avoid negative affect are not necessarily the same as those which enjoy the highest positive affect. Some countries — including the US — have a lot of extremes. Americans tend to go to the limit on both the upside and the downside.

Bhutan is an extreme contrast along these same lines. Measured only by positive affect, the Bhutanese are No. 9 in the world, an impressive showing. But for negative affect they rank No. 149 — in other words, they experience a great deal of negative emotion, perhaps due to the extreme hardships in their lives. Considering both positive and negative affect, they come in at No. 99, not a bad showing for such a poor country (better, in fact, than the UK’s 111.)

Denmark’s positive affect puts it only at No. 71, befitting the popular image of a country where not everyone is jumping for joy. Arkansas has a better positive affect, coming in at No. 67. But Denmark rates higher overall (38, to Arkansas’s 72) because Arkansas shows higher negative affect (87, to Denmark’s 66).

Measuring both positive and negative affect, the 10 happiest political units in the world are, in order: Hawaii, Minnesota, North Dakota, South Dakota, Iowa, Nebraska, Kansas, Taiwan, Alaska and Wisconsin. Of the top 50 places, 36 are US states (I include the District of Columbia, No. 16). China is No. 30.

Here is the original study.  The Danes are #111 for smiling!

They deserve at least a “pass” for this one

by  Tyler Cowen in

In Fall 2014, Wellesley College began mandating pass/fail grading for courses taken by first-year, first-semester students, although instructors continued to record letter grades. We identify the causal effect of the policy on course choice and performance, using a regression-discontinuity-in-time design. Students shifted to lower-grading STEM courses in the first semester, but did not increase their engagement with STEM in later semesters. Letter grades of first-semester students declined by 0.13 grade points, or 23% of a standard deviation. We evaluate causal channels of the grade effect—including sorting into lower-grading STEM courses and declining instructional quality—and conclude that the effect is consistent with declining student effort.

That is from a new NBER working paper by Kristin Butcher, Patrick McEwan, and Akila Weerapana.

Zero-Sum Thinking and the Roots of U.S. Political Divides

by  Tyler Cowen in

We examine the causes and consequences of an important cultural and psychological trait: the extent to which one views the world in zero-sum terms – i.e., that benefits to one person or group tend to come at the cost of others. We implement a survey among approximately 15,000 individuals living in the United States that measures zero-sum thinking, political and policy views, and a rich set of characteristics about their ancestry. We find that a more zero-sum view is strongly correlated with several policy views about the importance of government, the value of redistributive policies, the impact of immigration, and one’s political orientation. We find that zero-sum thinking can be explained by experiences of an individual’s ancestors (parents and grandparents), including the amount of intergenerational upward mobility they experienced, the degree of economic hardship they suffered, whether they immigrated to the United States or were exposed to more immigrants, and whether they had experiences with enslavement. These findings underscore the importance of psychological traits, and how they are transmitted inter-generationally, in explaining current political divides in the United States.

That is from a new paper by Sahil Chinoy, Nathan Nunn, Sandra Sequeira, and Stefanie Stantcheva.  The paper has many interesting particular results, here is one:

Respondents living in Utah exhibit the least zero-sum thinking, on average, and respondents living in Montana, Oklahoma and Mississippi exhibit the most. Importantly, there is no significant geographic clustering and the geographic distribution of zero-sum beliefs is not obviously correlated with that of political leanings.

And this:

If a respondent was born outside the U.S., then they tend to have a less zero-sum view of the world.

African-Americans have more zero-sum thinking than average, and also this:

Zero-sum thinking is also associated with more liberal [TC: the wrong word, right here the misuse is especially glaring!] economic policies and a political alignment with the Democratic Party rather than the Republican Party.

Recommended.