Category: Data Source

South Appalachia > North Appalachia

by  Tyler Cowen in

The ARC classifies 27.2 percent of North Appalachian counties as distressed but only 9.6 percent of South Appalachian counties that way. Over 70 percent of counties in South Appalachia have grown in population since the 2020 Census. North Appalachia lost 17,131 people in total, while South Appalachia gained 127,585. The difference in net in-migration is even more stark. While the North posted positive net domestic in-migration of 22,563, the South tallied almost 300,000—13 times as high. The story is similar for jobs, with the North losing 227,049 positions since the pre-pandemic year of 2019, while the South actually exceeded its pre-Covid levels by 66,377. In other words, much of South Appalachia is seeing a population inflow and is growing in both population and employment.

Here is much more from Aaron M. Renn, of interest and with good maps, and for the pointer I thank Terry O’Connor.

The Relentless Rise of Stablecoins

by  Alex Tabarrok in

1. In 2022, stablecoins settled over $11tn onchain, dwarfing the volumes processed by PayPal ($1.4tn), almost surpassing the payment volume of Visa ($11.6tn), and reaching 14% of the volume settled by ACH and over 1% the volume settled by Fedwire. It is remarkable that in just a few years, a new global money movement rail can be compared with some of the world’s largest and most important payment systems.

2. Over 25mm blockchain addresses hold over $1 in stablecoins. Of these, ~80%, or close to 20mm addresses, hold between $1 and $100. For a sense of scale, a US bank with 25mm accounts would rank as the 5th largest bank in the US by number of accounts. The massive number of small-dollar stablecoin holdings indicates the potential for stablecoins to provide global financial services to customers underserved by traditional financial institutions.

3. Approximately 5mm blockchain addresses send stablecoins each week. This number provides a very rough proxy for global users regularly interacting with stablecoins. These ~5mm weekly active addresses send ~38mm stablecoin transactions each week, representing an average of over 7 weekly transactions per active address.

4. Stablecoin usage has decoupled from crypto exchange volumes, indicating that significant stablecoin transaction volumes may be driven by non-trading/speculative activity. Since December 2021, centralized exchange volumes are down 64%, and decentralized exchange volumes are down 60%. During this period, stablecoin volumes are down only 11%, and weekly active stablecoin addresses and weekly stablecoin transactions are up over 25%.

5. Of the ~5mm weekly active stablecoin addresses, ~75% transact less than $1k per week, indicating that small/retail users likely represent the majority of stablecoin users.

6. The outstanding supply of stablecoins has grown from less than $3bn five years ago to over $125bn today (after peaking at over $160bn) and has shown resilience to the market downturn with the market cap of stablecoins currently down ~24% from its peak, compared with a ~57% decline for the overall crypto market cap.

7. Less than 1/3rd of stablecoins are held on exchanges. Most are held in externally owned accounts (not exchanges or smart contracts).

8. The majority of stablecoin activity uses Tether (USDT). Tether represents 69% of stablecoin supply, and YTD has accounted for 80% of weekly active addresses, 75% of transactions, and 55% of volumes.

9. Most stablecoin activity occurs on the Tron and BSC blockchains. Year-to-date, the Tron and BSC blockchains collectively account for 77% of weekly active addresses, 75% of transactions, and 41% of volumes.

10. The Ethereum blockchain is used for higher value transactions (on average). Despite accounting for just 6% of active wallets and 3% of transactions, the Ethereum blockchain is home to 55% of stablecoin supply and settles close to 50% of weekly stablecoin $ volume.

These are all from a Bevan Howard report, The Relentless Rise of Stablecoins (requires email).

Market Response to Racial Uprisings

by  Tyler Cowen in

Defund the police was never really in the cards:

Do investors anticipate that demands for racial equity will impact companies? We explore this question in the context of the Black Lives Matter (BLM) movement—the largest racially motivated protest movement in U.S. history—and its effect on the U.S. policing industry using a novel dataset on publicly traded firms contracting with the police. It is unclear whether the BLM uprisings were likely to increase or decrease market valuations of firms contracting heavily with police because of the increased interest in reforming the police, fears over rising crime, and pushes to “defund the police”. We find, in contrast to the predictions of economics experts we surveyed, that in the three weeks following incidents triggering BLM uprisings, policing firms experienced a stock price increase of seven percentage points relative to the stock prices of nonpolicing firms in similar industries. In particular, firms producing surveillance technology and police accountability tools experienced higher returns following BLM activism–related events. Furthermore, policing firms’ fundamentals, such as sales, improved after the murder of George Floyd, suggesting that policing firms’ future performances bore out investors’ positive expectations following incidents triggering BLM uprisings. Our research shows how—despite BLM’s calls to reduce investment in policing and explore alternative public safety approaches—the financial market has translated high-profile violence against Black civilians and calls for systemic change into shareholder gains and additional revenues for police suppliers.

That is from a new NBER working paper by Bocar A. Ba, Roman Rivera, and Alexander Whitefield.

What’s Behind Her Smile? Health, Looks, and Self-Esteem

by  Tyler Cowen in

Looks matter!:

This paper examines how improving dental health affects economic, social, and psychological outcomes. In a randomized experiment, we provide a low-income group in Chile free dental care, including prostheses, and find significant and persistent impacts on men’s and women’s dental and self-perceived mental health. For women, treatment generates steady improvement in self-esteem, a higher likelihood of smiling when photographed, short-run improvements in employment and earnings, and improvement in partner interactions. We find no impact for men in any of these dimensions. Heterogeneity analyses suggest that treatment effects on labor market outcomes are larger for women with more severe visible dental issues at baseline. In summary, we find that increasing access to dental care, including cosmetic elements, improves important aspects of people’s lives.

That is from a forthcoming paper by Francisco A. Gallego, Cristian Larroulet Philippi, and Andrea Repetto.  Via Maxwell G.

Excess All-Cause Mortality in China After Ending the Zero COVID Policy

by  Tyler Cowen in

In this cohort study across all regions in mainland China, an estimated 1.87 million excess deaths occurred among individuals 30 years and older during the first 2 months after the end of China’s zero COVID policy. Excess deaths predominantly occurred among older individuals and were observed across all provinces in mainland China, with the exception of Tibet.

So what is the proper sarcastic headline here?  “I guess that flu was worse than we thought!”?  Or “How is it that China ran out of ivermectin?”  Here is the new JAMA piece, via Rich Dewey.

To be clear, I never thought Zero Covid was a sustainable policy for China.  The real criminal negligence lies with CCP leadership, which turned down opportunities to pursue joint mRNA vaccine production — with the West of course — earlier on.

Which businesses mix the classes best?

by  Tyler Cowen in

Casual restaurant chains, like Olive Garden and Applebee’s, have the largest positive impact on cross-class encounters through both scale and their diversity of visitors. Dollar stores and local pharmacies like CVS deepen isolation. Among publicly-funded spaces, libraries and parks are more redistributive than museums and historical sites. And, despite prominent restrictions on chain stores in some large US cities, chains are more class diverse than independent stores. The mix of establishments in a neighborhood is strongly associated with cross-class Facebook friendships (Chetty et al., 2022).

That is from a new paper by Maxim Massenkoff and Nathan Wilmers.  Via Scott Lincicome.

What makes for a good Royal Navy senior officer?

by  Tyler Cowen in

In most studies of talent, it is very difficult to get the top performers to respond or offer data.  This paper is a major exception to that general limitation:

This paper assesses the impact of general intelligence, as well as specific personality traits, and aspects of motivation, on performance, potential, and advancement of senior leaders. A questionnaire survey was conducted on the full population of 381 senior officers in the Royal Navy with an 80% response rate. Performance, potential, and rate of advancement were established direct from the organization’s appraisal system; intelligence, personality traits and motivation were assessed, at the time of the study, using the Verify G+ Test, Occupational Personality Questionnaire, and Motivation Questionnaire. Findings suggest differences in motivation are more important than differences in general intelligence, or personality traits, in predicting assessed performance, potential within, and actual rate of advancement to, senior leadership positions. This is a rare example of a study into very senior leaders, validated against both formal appraisal data and actual rates of advancement. As a consequence of this study the Royal Navy has started to use psychometric-based assessments as part of the selection and development of its most Senior Officers.

Here is the full (gated) paper by Mike Young and Victor Dulewicz.  I’ll pull out and repeat the key sentence there: “Findings suggest differences in motivation are more important than differences in general intelligence, or personality traits, in predicting assessed performance, potential within, and actual rate of advancement to, senior leadership positions.“

The Impact of Vaccines and Behavior on U.S. Cumulative Deaths from COVID-19

by  Tyler Cowen in

It is hard to think of a topic area where the Republican Party, the right-wing, and (many by no means all) MR commentators are so far off base.  Here are some new results from Andrew Atkeson:

…I find that vaccines saved 748,600 lives through June 2023. That is, without vaccines, cumulative mortality from COVID-19 would have been closer to 1.91 million over this time period. In answering the second question, I find that behavioral efforts to slow the transmission of the virus before vaccines became widely administered were critical to this positive impact of vaccines on cumulative mortality. For example, with a complete relaxation of these mitigation efforts, vaccines would have come too late to have saved a significant number of lives. Earlier deployment of vaccines would have saved many lives. I find that marginal changes in the strength of the behavioral response to COVID-19 deaths within the range of those responses estimated with the model have a significantly impact on cumulative COVID-19 mortality over this time period.

Here is the full paper.  By the way, in case you are wondering I did write some columns arguing we should reopen the schools (and I strongly encouraged my own institution, GMU, to reopen in the fall of 2020, when asked for advice.  Mercatus reopened once our landlord allowed us to.).  But I am glad that for instance normal NBA games with full crowds were not up and running in the usual manner in November of 2020.

Dominican Republic fact of the day

by  Tyler Cowen in

Sam Peltzman on American happiness

by  Tyler Cowen in

Sam is still writing good papers:

Since 1972 the General Social Survey (GSS) has asked a representative sample of US adults “… [are] you …very happy, pretty happy, or not too happy?” Overall, the population is reasonably happy even after a mild recent decline. I focus on differences along standard socio demographic dimensions: age, race, gender, education, marital status income and geography. I also explore political and social differences. Being married is the most important differentiator with a 30-percentage point happy-unhappy gap over the unmarried. Income is also important, but Easterlin’s (1974) paradox applies: the rich are much happier than the poor at any moment, but income growth doesn’t matter. Education and racial differences are also consequential, though the black-white gap has narrowed substantially. Geographic, gender and age differences have been relatively unimportant, though old-age unhappiness may be emerging. Conservatives are distinctly happier than liberals as are people who trust others or the Federal government. All above differences survive control for other differences.

Here is the SSRN link, via the excellent Kevin Lewis.

The Rise in American Pain

by  Tyler Cowen in

A significant literature has documented trend increases in pain among Americans over the last two or three decades. There is no single explanation seeming to work well for the increase. We show that, rather than resulting from a smooth upward trend, the increase was almost entirely concentrated in the 2007-2010 period, the time of the Great Recession, a result not uncovered in prior work. The disproportionate increase in pain among the less educated is also shown to have occurred primarily at the time of the Recession, with either little or no trend before or after. The Recession jump occurred only at older ages and, by cohort, primarily only at the ages when they experienced the Recession. However, the jump is difficult to explain, for while there was a temporary decline in employment during the Recession, it is unclear why there it should be followed by a permanent increase in pain. We assess a number of explanations related to family structure, the deterioration of family life, hysteresis, and biopsychosocial channels. While some factors have potential explanatory power, the rise in pain continues to be mysterious and deserves further research in light of our new findings.

Very important in my view.  That is from a new NBER working paper by Sneha Lamba and Robert A. Moffitt.

David J. Deming now has a Substack

by  Tyler Cowen in

Forked Lightning, he is from the Harvard Kennedy School, and he is a co-author on the piece with Chetty and John N. Friedman featured on MR earlier today.

In his inaugural post he explains some further results from the paper in more detail:

The second part [of the paper] shows the impact of attending an Ivy-Plus college. Do these colleges actually improve student outcomes, or are they merely cream-skimming by admitting applicants who would succeed no matter where they went to college?[2]

We focus on students who are placed on the waitlist. These students are less qualified than regular admits but more qualified than regular rejects. Crucially, the waitlist admits don’t look any different in terms of admissibility than the waitlist rejects. We verify this by showing that being admitted off the waitlist at one college doesn’t predict admission at other colleges. Intuitively, getting in off the waitlist is about class-balancing and yield management, not overall merit. The college needs an oboe player, or more students from the Mountain West, or whatever. It’s not strictly random, but it’s unrelated to future outcomes (there are a lot of technical details here that I’m skipping over, including more tests of balance in the waitlist sample – see the paper for details). We also show that we get similar results with a totally different research design that others have used in past work (see footnote 2).

Almost everyone who gets admitted off an Ivy-Plus college waitlist accepts the offer. Those who are eventually rejected go to a variety of other colleges, including other Ivy-Plus institutions. We scale our estimates to the plausible alternative of attending a state flagship public institution. In other words, we want to know how an applicant’s life outcomes would differ if they attended a place like Harvard (where I work) versus Ohio State (the college I attended – I did not apply to Harvard, but if I did I surely would have been *regular* rejected!)

We find that students admitted off the waitlist are about 60 percent more likely to have earnings in the top 1 percent of their age by age 33. They are nearly twice as likely to attend a top 10 graduate school, and they are about 3 times as likely to work in a prestigious firm such as a top research hospital, a world class university, or a highly ranked finance, law or consulting firm. Interestingly, we find only small impacts on mean earnings. This is because students attending good public universities typically do very well. They earn 80th-90th percentile incomes and attend very good but not top graduate schools.

The bottom line is that going to an Ivy-Plus college really matters, especially for high-status positions in society.

In a further Substack post, Deming explains in more detail why the classic Dale and Kruger result (that, adjusting for student quality, you can go to the lesser school) no longer holds, due to limitations in their data.  Of course all this bears on the “education as signaling” debates as well.

By the way, it took the authors more than five years to write that paper.  Deming adds: “The paper is 125 pages long. It has 25 main exhibits (6 tables and 19 figures), and another 36 appendix exhibits.”

Here is Deming’s home page.  He is a highly rated economist, yet still underrated.